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position papers
25 Sep.2013

EU-US Transatlantic Trade and Investment Partnership: additional bilateral market openings and regulatory convergence to deliver competitiveness and a level playing field

The talks between the EU and US for a Transatlantic Trade and Investment Partnership (TTIP) began in Washington on 8 July. These negotiations aim to achieve ambitious outcomes in three broad areas: a) market access, b) regulatory issues and non-tariff barriers, and c) rules, principles and new modes of cooperation to address shared global trade challenges and opportunities.


The EU is the world leader in paper exports and the US is its main trading partner. Around 4.5 million tonnes of pulp and paper are traded between the two areas every year. Importantly, this trade has been free of import tariffs since 20041. The European and the US paper industry together accounts for more than 40% of the global production.


CEPI supports launching negotiations with the US, aiming at the full liberalisation of bilateral trade in goods and services. In addition, we believe the EU-US TTIP gives an opportunity to explore further trade liberalisation in raw materials and energy. CEPI views the TTIP’s biggest potential benefits as being the elimination, reduction and prevention of unnecessary “behind the border” obstacles to trade and investment. This is of primary importance, especially for the companies operating on both sides of the Atlantic.


We hold the TTIP should envisage convergence in a wide range of areas, including not only wood legality and renewable energy legislation but also standards for paper for recycling. This convergence should deliver reductions in both compliance costs and administrative burdens.


In parallel, the TTIP should create a basis for genuine international leadership as well as providing new momentum to developing and implementing international regulations and standards. Overall, CEPI believes it represents a strong potential driver of mutual job
creation, economic growth and competitiveness.


Non-discriminatory access to US gas is a ‘sine-qua-non’ condition


The TTIP negotiations have to ensure no discrimination or restriction regarding access to energy within the transatlantic market, particularly natural gas in the US.


Natural gas provides 40% of the European pulp and paper industry’s energy needs, next to the over 50% bioenergy in our fuel mix. Many of the most efficient power plants run on natural gas. Significantly, while gas prices in Europe have doubled since 2003 and are expected to keep rising, shale gas has brought US gas prices to extraordinary low levels.


CEPI holds the TTIP should lead to a common strategy to reduce energy and raw material export restrictions at the global level. It should set rules to provide an open, stable, predictable, sustainable, transparent and non-discriminatory framework for traders and investors worldwide.


Tariffs on the pulp and paper industry’s raw materials and chemicals have to be eliminated on both sides on the agreement’s entry into force

CEPI calls for tariff elimination to occur on the agreement’s entry into force, with transition periods, if any, being kept as short as possible for sensitive products. In addition to wood and paper for recycling, the pulp and paper industry is a major user of non-fibrous raw materials and chemicals. Imports of chemicals into the EU are still affected by tariffs2 and starch imports also subject to substantial tariffs3 to enter EU markets.


Cooperation on rules and standards mean higher efficiency, lower compliance costs
and a reduced administrative burden


The European and US paper industries, as founding members of the ICFPA4, have both actively promoted sustainable forest management and fought illegal logging at the global level while also increasing recycling.

The US and EU have taken major steps regarding wood legality, with the former having implemented the Lacey Act for several years and the latter having recently adopted the Timber Regulation. CEPI firmly believes that the convergence of the two schemes in terms of scope and requirements should be aimed at and the declaration systems simplified as much as possible. However, an end to the illegal wood trade can only be achieved through a push at a global level.

Equally, convergence would also deliver mutual benefit in recycling. We believe paper for recycling grades definitions5 requires harmonisation on both sides of the Atlantic.

We call for increased cooperation between EU and US standardisation bodies to reduce redundant and burdensome testing, harmonisation of certification requirements and further development of international standards.

Convergence on climate change and energy policies is needed to avoid highly distorting measures and deliver higher results at the global level

The European paper industry has made strong and clear commitments to sustainable development and mitigating climate change, transparently reporting on its progress.

However, regulatory convergence is required to deliver on climate change mitigation and environmental protection objectives. Consequently, CEPI believes EU and US policies aiming at reducing greenhouse gas emissions and promoting bioenergy and biofuels should converge to raise efficiency and reduce  distortion.

We view the TTIP as being a platform to address the most distortive forms of subsidies and scenarios where government interference is distorting markets. For example, US fuel tax credits have highly distorted competition with Europe in recent years, without any significant environmental benefits.
 

Carbon neutrality of biomass and sustainability criteria should be jointly promoted for the sustainable sourcing and conversion of solid biomass, irrespective of the final wood use. This convergence process should bind both parties at all administrative levels (EU Member States and the US state governments) to ensure a maximum efficiency and effectiveness.

Future regulation developments: the need for increased consultation and cooperation

CEPI considers it essential to promote cooperation between regulators from both sides at an early stage. A framework for future cooperation has to be set up, where procedures for consultation and impact assessment are considered. Ex-ante impact assessments on trade and investments flows should be carried out when preparing regulatory initiatives, with only compatible regulations being adopted. This should be done through an effective, evidencebased bilateral consultation mechanism, with its outputs shared transparently.

Furthermore, the TTIP should include provisions on ex-post analysis of existing regulations that come up for review. We consider it essential to avoid missing opportunities to both increase compatibility and coherence as well as remove unnecessary regulatory complexity.

Cooperation on new and emerging issues such as nano-materials would help prevent future trade irritants. We believe mutual consultation at an early stage should become common practice, triggered whenever US agencies or the European Commission start developing new criteria or legislation.

Beyond the agreement, the TTIP should remain a dynamic, ‘living’ agreement with sufficient flexibility to incorporate new areas and issues over time.

CEPI will contribute to a successful TTIP by delivering relevant sectoral provisions to be included in the agreement through a constructive dialogue with its US counterpart.
 

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1 As a result of the WTO Uruguay Round sectoral agreement of 1994.
2 HS Chapters 28, 29, 32, 35 and 38 with average ad valorem import tariffs of 5-6%.
3 HS Chapters 11 and 35 with import tariffs up to 224 euros / tonne.
4 International Council of Forest and Paper Associations - http://www.icfpa.org/
5 European standard EN 643.²

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27 Mar.2013

Revision of Weights & Dimensions - European Shippers' Council Position

Conclusions from the position:

The ESC believes the Directive should be revised having in mind changes that can allow industry to respond to these pressures and in a way that can foster growth and competitiveness in the European transport sector. The ESC’s position includes a series of changes to the Directive, all intended to improve efficiency and environmental standards of the road transport of goods while pursuing the goal of a true Single European Transport Area. The alternatives supported by the ESC would achieve a decrease in the number of road freight journeys and the number of trucks on the road. At the same time they would result in a reduction in the number of drivers needed as well as less congestion on Europe’s roads. Also, and considering the economic crisis faced by Europe, these options would signify a decrease in transport costs while improving European industry’s competitiveness. These suggestions would also mean the reduction of fuel consumption and emissions, following the environmental improvements recognised by the Commission. In conclusion the ESC urges the Commission to engage in a comprehensive dialogue with all stakeholders to find the best ways to implement the necessary changes to the Directive.

To read the full position in pdf format, please click on Download here.

CEPI is a member of the European Shippers’ Council.

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26 Mar.2013

Sulphur limits in marine fuel: temporary exemptions and costefficient accompanying measures are the solutions

A new directive(1) bringing the European Union's regulation on marine fuel sulphur content in line with international requirements set out under the international maritime convention on pollution prevention known as MARPOL entered into force on 17 December 2012. The objective of this directive is to address the problem of air pollution from maritime transport by lowering sulphur emissions.

The European paper industry is extremely concerned by the impact of these measures on competitiveness and jobs in the 13 EU Member States bordering the SECA(2), while no substantial environmental and health benefit is to be expected because of the resulting “modal back shift” – from maritime transport to road transport. To the contrary, subsequent higher GHG emissions are expected(3) in contradiction with the EU White Paper on Transport.

In a previous position paper(4), the European paper industry expressed its support to the International Maritime Organisation (IMO) efforts to address the problem of air pollution from maritime transport at global level by lowering sulphur emissions. Some European paper companies have even been in the forefront to reduce voluntarily sulphur emissions since the 1990s.

Because of the lack of low sulphur fuel and technical devices that could lead to actual reduction of sulphur emissions more cost-efficiently by 2015, the implementation of these measures is expected to have a cost of around 300 million euros for the pulp & paper industry located in the North of Europe related to an estimated increase in shipping costs of 20-45% further to a 50-80% price increase in marine fuels. The threat on RoRo and RoPax vessels is very serious as they represent between 30% and 60% of the volumes transported from/to Finland and Sweden. The cost is expected to reach 4 billion euros for the whole economy of these countries per year from 2015, mainly due to the substantial increase of the onshore diesel price(5). Thousands of direct jobs will be put at risk, as well as numerous indirect jobs. These rules will, as trade barriers do, disturb substantially supply chain management and trade flows and further distort competition within the EU and with foreign countries.

The problem is the too tight time schedule and the lack of alternative solutions. Exhaust-gas cleaning system – the scrubbers - technology has improved, but so far there is only a limited number of test installations in operation and no manufacturing company can guarantee its functioning with the harsh conditions at sea. Because of technical and cost reasons, only a limited number of vessels could consider this technology as a possible solution. In the long term, LNG is among the most promising solutions from an environmental and economic aspect. That’s the reason why CEPI supports the launching by the EU Commission of a Clean Fuel Strategy(6) but as technology implementation and infrastructure are proceeding relatively slowly, it won’t be an option before 2020 at the earliest and only new vessels will be in a position to benefit from it by that time.

Several European countries expressed their concerns regarding the potential impact on their economy and were of the opinion that ways to mitigate the impact of these measures should be explored, including temporary exemptions in IMO as it is the only realistic option at present.

The EU Commission, which is conducting an impact assessment study - to be available end 2013, should help identify pragmatic solutions to mitigate the impact on the European industry’s competitiveness. To this aim, the EU Commission’s ‘Toolbox’ should be further developed to allow cost-efficient solutions, while a boost should be given to low sulphur fuel supply and abatement technologies. Member States and EU Commission should indeed support investments in these areas but also in LNG infrastructure on the long term. In the meantime, no fine should be imposed on companies by Member States.

The set-up of a platform(7), aiming at getting expertise and recommendations of stakeholders – including industry representatives and shippers, on the implementation of the Sulphur directive is crucial and the European paper industry can give a valuable contribution.

The EU Commission has adopted in October 2012 an ambitious Communication on Industrial Policy aimed at boosting the competitiveness and output of its manufacturing sector and have its share increased to 20 percent of GDP by 2020, up from 16 percent today.

In a context of severe economic recession, CEPI urges Member States and EU Commission to help identify pragmatic solutions and not penalise industrial sectors that depend heavily on maritime transport.

For more information, please contact Bernard Lombard, CEPI Competitiveness & Trade Director, at b.lombard@cepi.org, Tel: +32 2 627 49 00

 

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1 Directive 2012/33/EU of the European Parliament and of the Council of 21 November 2012 amending Council Directive 1999/32/EC as regards the sulphur content of marine fuels.
2 The Sulphur Emission Control Area includes the Baltic Sea, North Sea and English Channel, i.e. Finland, Sweden, Norway, the Baltic States, Poland, Germany, Denmark, the Netherlands, Belgium, and to some extent United Kingdom and France.
3 Institute of Shipping Economics and Logistics’ study “Die weitere Reduzierung des Schwefelgehalts in Schiffsbrennstoffen auf 0,1% in Nord- und Ostsee im Jahr 2015: Folgen für die Schifffahrt in diesem Fahrtgebiet“, September 2010.
4 “Marine fuel: Lowering sea transport emissions requires pragmatism and flexibility”, CEPI Nov. 2010.
5 Consequences of the EU Sulphur Directive, SWECO, October 2012.
6 Proposal for a Directive on the deployment of alternative fuels infrastructure, COM(2013) 18/2.
7 The European Commission proposed the set-up of the European Sustainable Shipping Forum.

 

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26 Mar.2013

Commission's proposal for a general data protection regulation-Position of the paper and print value chain

Our associations are part of the paper and print value chain - including paper manufacturing, paper converting, printing, postal services and direct marketing – and are committed to safeguarding the protection of personal data.

We acknowledge that recent globalisation trends and technology developments create the need for a review of the existing legal framework, i.e. Directive 95/46/EC on Data Protection, to ensure the privacy of personal data of European citizens. In this context, we welcome the Commission’s proposal for a general data protection Regulation as published on 25 January 2012.

The European strategy for growth and competitiveness emphasises the need for the development of the single European market with free movement of goods, services, labour and capital. With data being an integral part of this process, the ability to use and move data within the European Union must be considered as an essential requirement of a revised legislation. A balance needs to be found between consumer protection requirements and businesses’ development needs.

The review of the existing framework is primarily aimed at tackling the growing development of online technology. However, in doing so, the risk is to destabilise the more ‘traditional’ side of the communication industry, which is not being questioned for its ability to protect personal data.
As members of the paper and print value chain, we herewith wish to address some aspects of the proposed Regulation affecting postal direct mail.


“Legitimate interest” and “right to object”

We welcome the Commission’s proposal acknowledging the “legitimate interests” of the controller to process data (article 6) and retaining the “right to object” for data subjects at any time of the processing of personal data (article 19). And we strongly support the application of the latter to postal direct mail purposes (article 19.2) as it ensures the safeguarding of the efficient legal framework, which has been in place for nearly two decades and which has been complemented with self-regulatory initiatives from the business community.

In order to safeguard the efficient legal framework applicable to the postal direct mail, it is crucial that the “legitimate interest” of the controller to process data is being maintained and the “right to object” is not being replaced by a “prior consent” approach.

Measures based on profiling

Article 20 of the proposed Regulation relates to the activities of profiling. We are surprised to see that companies’ legitimate interest for doing profiling is not recognised in the draft legislation.

Profiling allows for the identification of categories of individuals (not for the identification of individuals), thereby ensuring that companies target the right audience with relevant information. Without profiling, the postal direct mail business will effectively become a doorto- door mail drop service. This is not in the interest of consumers, nor of companies, who would have to support unnecessary costs.

While profiling has indeed become more complex with the advent of OBA, (online behavioural advertising), the Commission must not ignore traditional profiling activities that remain valid today. Banning all profiling activities would seriously hamper businesses’ capacity to advertise, via postal direct mail, products and services to the relevant customer, thus limiting offers on the market and preventing customers from having a choice and getting the best out of the internal market.

Consequently we are of the opinion that the companies’ legitimate interest for doing profiling should be recognised as proposed in the Recommendation CM/Rec(2010)13 of the Committee of Ministers to member states on the protection of individuals with regard to automatic processing of personal data in the context of profiling.

Contact:
CEPI – Confederation of European Paper Industries – www.cepi.org
FEDMA – Federation of European Direct and Interactive Marketing – www.fedma.org
FEPE – European Envelope Manufacturers Association – www.fepe.org
INTERGRAF – European Federation of Print and Digital Communication – www.intergraf.eu
Paper Chain Forum – www.paperchainforum.org
POSTEUROP – European Postal Operators – www.posteurop.org

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21 Feb.2013

Position on the Commission proposal to back-load (set-aside) EU ETS allowances

In July, the European Commission issued a proposal to postpone the auctioning of an as yet undefined number of CO2 Allowances until towards the end of the third trading period. The purpose is to ensure the ‘orderly’ functioning of the EU ETS. This is likely to be the first step in further regulatory proposals to intervene in Phase 3 with the overt intention of reducing the existing cap on emissions. This cap is already set to meet the EU’s requirement to reduce EU ETS emissions by 21% by 2020 from a 2005 baseline.
While supporting the EU ETS as a policy instrument to meet the EU’s climate objectives, the Alliance of Energy Intensive Industries is opposed to any modification of the EU ETS rules which would damage further industry’s competitiveness. The EU must stick to the 2020 target formula agreed upon under the third Climate and Energy package and must not revise it unilaterally unless the carbon leakage issue is solved by a binding international climate agreement.
The proposed interference within the agreed policy framework will simply increase the costs for industry. By hampering predictability and by increasing regulatory risk of further intervention, it will also deter investments at a time when the EU economy is struggling to find a way out of the crisis.
Instead, policy makers should focus on the post-2020 policy framework and endeavour to work out a scheme that makes the EU more competitive.
In this context, the ‘back-loading’ initiative is inappropriate, and the Alliance of Energy Intensive Industries therefore calls for the rejection of the back-loading proposal for the following reasons:


1. No artificial cost increase: the back-loading proposal will inevitably lead to direct and indirect EU-only CO2 cost increases, affecting the energy-intensive businesses and private consumers, at a time when growth and value creation are needed to combat the economic crisis. Rising energy and CO2 prices do not create overall value or jobs. They will hamper Europe’s economic recovery and diminish the global competitiveness of European industry.


2. The carbon market is functioning. The carbon price today reflects the economic downturn exactly as it should do.


3. The proposal puts an end to the notion of the ETS as a market-based instrument. Trying to manipulate carbon prices through political intervention will now require a risk calculation based on the likelihood of further political intervention.


4. In the absence of an international climate agreement providing level playing field, higher carbon prices do not bring forward breakthrough technologies but do increase carbon costs and potentially carbon leakage instead. It's worth recalling that the ETS is technology-neutral - neither intended to promote one technology over another, nor to lead to the emergence of new technologies. So only the mitigation objective matters, not the carbon price.


5. Business needs predictability and transparency: political intervention to change rules, often through Comitology, creates instability. Piecemeal interventions in the market hamper predictability and deter investments.


6. Consult Industry in order to look forward: the EU should look forward and link its post-2020 climate and energy policy to industrial competitiveness, working with industry on solutions based on technical feasibility and economic viability. Amendment of the present EU ETS must also remove barriers and risks for EU growth, taking into consideration binding mitigation commitments by third countries and their impact on sectors and sub-sectors, so as to secure an international level playing field for EU industries.

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Plenary debate on backloading necessary                                                                                                                                               

20 February 2013

Dear Member of the European Parliament,


On January 24th the EP Industry Committee strongly rejected the Commission proposal amending the EU ETS Directive, clarifying provisions on the timing of auctions of greenhouse gas allowances (backloading). Conversely, on February 19th the Environment Committee voted in favour of the rapporteur’s compromise amendments in support of the Commission proposal. The Committee rejected the position of the Industry Committee and decided to vote at its 26 February meeting on whether or not to give the rapporteur a mandate for negotiating a first reading agreement with the Council Presidency and the Commission.


There are significant differences between the view of the Industry and the Environment Committee but in fact in the two Committees combined there were more votes opposing backloading than in favour. This highlights the wide differences in views and the importance of having a full, democratic and transparent plenary debate on this crucial issue for the EU. The plenary debate, followed by a vote, would allow all MEPs to express their views and provide required political support for the final decision before negotiations with the Council Presidency and the Commission, which might commit Parliament, are opened.


This is an important debate for EU competitiveness and deserves full consideration by all the institutions. So the Alliance of Energy Intensive Industries, representing the interests of over 30.000 European companies, asks you and your political group to support this view. We are opposed to backloading because it pushes up energy costs in the EU for industrial and individual energy users alike, without any environmental benefit. In the current economic climate the measure is unnecessary and ineffective. The ETS continues to function as designed and is on target to achieve its emission reduction targets ahead of schedule at the lowest possible cost.


We thank you in advance for taking the above into consideration.


Yours sincerely,


Dr. Annette Loske, IFIEC                                              

Gordon Moffat, EUROFER                                                      

Hubert Mandery, Cefic


For the Alliance of Energy Intensive Industries

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14 Feb.2013

New Packaging Directive Annex confirms: industrial cores are not packaging

An amendment to Annex I of the Packaging and Packaging Waste Directive on packaging definitions has been published in the Official Journal of the European Union.

The amendment harmonises the list of products being defined as “packaging”, which now includes rolls, tubes and cylinders. The amendment also lists exceptions, which are valid for industrial cores used in the paper industry.
The relevant paragraph for industrial cores in the Annex reads:
“Rolls, tubes and cylinders around which flexible material (e.g. plastic film, aluminium, paper) is wound, except rolls, tubes and cylinders intended as parts of production machinery and not used to present a product as a sales unit”

Industrial cores fall under the list of exceptions since they are:

  • “intended as parts of production machinery” in the downstream printing and converting machines, where a defected core would lead to rejection of the whole roll of paper as it would not run in the machine as intended.
  • “an integral part of a product and it is necessary to contain, support and preserve that product throughout its lifetime and all elements (paper and the core) are intended to be used together” as referred to in Article 3, criterion i of the Directive
  • reused many times.
  • not “used to present a product as a sales unit” as paper is sold “per tonne” and not “per core”. Examples of products where “tubes and cylinders” are used as sales units and therefore are clearly packaging are potato crisps (Pringles), tennis balls and badminton shuttlecocks sold inside a sealed tube.

Hence, the Confederation of the European Paper Industries (CEPI) concludes that industrial cores are not packaging. CEPI will inform its national associations and relevant industry sectors on its view and advocate the transposition and implementation of the Directive to adopt the same interpretation.

The Commission Directive of 7 February 2013 amending Annex I to Directive 94/62/EC on Packaging and Packaging Waste enters into force 1 March 2013. Member States have to comply with this Directive by 30 September 2013 at the latest.
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Additional information:

Jori Ringman-Beck, CEPI Director Recycling, Product, Environment; +32 478 255 070, j.ringman-beck@cepi.org

Commission Directive of 7 February 2013 amending Annex I to Directive 94/62/EC of the European Parliament and of the Council on Packaging and Packaging Waste:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:037:0010:0012:EN:PDF

Other EU language versions: http://eur-lex.europa.eu/Result.do?checktexts=checkbox&TypeAffichage=sort_key&page=1&idReq=1&Submit22=GO
 

About CEPI

CEPI aisbl - The Confederation of European Paper Industries
The Confederation of European Paper Industries (CEPI) is a Brussels-based non-profit organisation regrouping the European pulp and paper industry and championing industry’s achievements and the benefits of its products. Through its 18 member countries (17 European Union members plus Norway) CEPI represents some 520 pulp, paper and board producing companies across Europe, ranging from small and medium sized companies to multi-nationals, and 1000 paper mills. Together they represent 25% of world production.

 

 

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25 Sep.2012

Solid Biomass Sustainability Criteria

 

CEPI is of the opinion that sustainability criteria for the sustainable sourcing and conversion of solid biomass should address primarily potentially adverse effects of a strong increase of the use of solid biomass for energy including from imports. Since the 2020 renewable energy target ultimately aims at reducing greenhouse gas emissions, solid biomass criteria should primarily be carbon related and include efficiency principles.


Regarding forest management, the criteria should apply irrespective of the final use of the wood. They should be limited to the criteria set out below, since further detailed forest management criteria would conflict with national forest policies, go beyond the intention to ensure carbon neutrality and ignore the specificities of Sustainable Forest Management in the different parts of Europe.


In addition to the carbon and forest management related sustainability criteria applying to the sourcing of biomass, energy conversion of biomass eligible for support should be subject to efficiency principles to ensure the positive substitution effect of carbon neutral biomass.
Solid biomass shall be taken into account for the purposes of the Renewable Energy Directive/eligible for support only if it fulfils the following:


1. Biomass sourcing
1.1 Carbon sustainability:

Forest biomass shall come from countries with mandatory LULUCF accounting. If biomass is procured from non-LULUCF accounting countries, credible proof has to be given that the harvesting rate in this country does not exceed 100% and the biomass does not come from land conversion. Where there is overharvesting at the country level, the operator has to give sufficient proof that there is no overharvesting at the relevant regional level of the biomass origin


1.2 Forest management

Forest biomass shall come from legal sources. Verification: Compliance with the provisions of the EU Timber Regulation EC/995/2010.
Forest biomass shall come from forests that are managed in accordance with the principles and criteria of sustainable forest management as defined by the Helsinki Resolution H1: General Guidelines for the Sustainable Management of Forests in Europe.
Outside of Europe they shall at least correspond to the criteria or guidelines for sustainable forest management as adopted under the respective international and regional initiatives (ITTO, Montreal Process, Tarapoto Process, UNEP/FAO Dry-Zone Africa Initiative).


2. Biomass conversion
2.1 Greenhouse Gas Savings criterion:

The GHG saving should be at least 50% (60% from 2018) compared to the national fossil fuel based generation of electricity and heating and cooling.
In addition to the sustainability criteria on carbon and forest management, installations eligible for support for the use of solid biomass for energy generation should be subject to efficiency principles to ensure the positive substitution effect of carbon neutral biomass.


Resource efficiency principles:
Heat and electricity based on solid and gaseous biomass should be produced at an overall efficiency of at least 70% (lower for small installations (e.g. < 1 MW) or where CHP cannot be applied). Member states should not support but further even avoid the use of biomass in coal plants with the current low efficiencies. Supporting co-firing of biomass in coal plants at low efficiencies is an environmentally harmful subsidy.


Cascading approach to forest raw material principles:
The development of the energy use of biomass can only be considered in the light of an application of a "cascading approach", a principle that aims at promoting, whenever it applies, the most efficient use of natural resources with a view to optimize the creation of value, ideally firstly for food, then products and finally for energy. A supply policy for forest biomass – which ideally should also be allocated some support funding - must include this cascading use principle and allow all needs to be met.

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24 Sep.2012

No support for co-firing biomass in coal plants

 

CEPI calls upon the European Commission and member states to remove support for co-firing of wood in coal plants which only produce electricity. In addition CEPI asks not to resort to mandatory co-firing shares. Biomass that has a use as raw material should not be used as a source of energy. CEPI calls to promote the transition towards much more efficient coal plants.


The European Commission has published a communication on the future of Renewable Energy Sources in Europe. A future binding target is amongst the issues to discuss. The situation in Europe has however dramatically changed. As the economic crisis continues member states have less appetite for and funds available for support schemes.


One of the Renewable Energy Sources is Biomass. Carbon neutrality of biomass can contribute to the European CO2 reduction targets. Biomass is a renewable, recyclable and climate friendly raw material. It is the basis for the much needed Bio economy in Europe.
The renewable energy directive of 2007 (2009/28/EC) stated that ”In the case of biomass, Member States shall promote conversion technologies that achieve a conversion efficiency of at least 85 % for residential and commercial applications and at least 70 % for industrial applications”. This language was not strong enough, although it gives a clear direction. Member states should not support but further even avoid the use of biomass in coal plants with the current low efficiencies. Supporting co-firing of biomass in coal plants at low efficiencies is an environmental harmful subsidy. This applies as well to national policies building on mandatory co-firing shares.


Efficient use of biomass does not include the use of biomass for co-firing in coal plants which only produce electricity. The current average efficiency of coal plants is between 30% and 35%. Burning wood, the main biomass source, in coal plants at these efficiencies is a waste of raw material, not a climate reduction measure. The same applies to biomass fired power stations without combined heat and power.

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24 Sep.2012

Why raise costs when growth is needed - CEPI position on measures artificially increasing the carbon price in EU ETS (backloading)

 

CEPI calls upon the European Commission and member states to abandon the proposed measures for back loading of EU ETS credits, meant to artificially increase the carbon price in the EU Emission Trading System. The European pulp and paper industry strongly questions the idea of increasing the costs for energy to industry and consumers in a time where growth and value creation are needed to battle the crisis.
The European Commission published its proposal to artificially increase the carbon price by delaying auctioning of EU ETS credits (changing the auctioning profile or back loading). This measure is the first of two measures. The second measure could take credits out of the market (set aside) or be a revision of the EU ETS legislation as a whole.
The measure is aimed at increasing the carbon price in the emission trading market. It does not change the achievement of the carbon reduction targets, as these are secured by the legal framework. Although the back-loading proposal might be less harmful than other proposals for set aside, price floors or changing the linear reduction factor in ETS/unilaterally changing the climate targets, it is still one step too far.
There are 10 strong arguments against this proposal:


1. The EU should not raise energy costs in times of crisis! The higher carbon price leads to higher energy costs when there is no need at all. Increasing costs does not create value or jobs, especially when done unilaterally. The US industry sees a large reduction in gas prices; the EU raises the costs of energy. We agree with the EU that a growth agenda is hugely important. Increasing costs is not part of this.


2. The ETS delivers its objective. The European ETS guarantees the EU climate target being met. The system is designed to this at the lowest cost for society. The carbon price today reflects the economic downturn exactly as the system should and functions well.


3. This ends the notion of the ETS as a market.
The EU ETS was created to be a market. Already political decisions have great impact. This final measure is the end of the ETS as we know it, now becoming a designed system for a pre-set carbon price.


4. EU’s biggest risk is regulatory uncertainty. In order to grow the EU needs investments by industry in Europe. 2013 already sees a planned massive overhaul of the EU ETS with new allocation rules. 2014 already has uncertainty with the proposed re-evaluation of free allocation to the industry (the carbon leakage list). Not even before this has started, the back-loading proposal changes the rules again, announcing even more changes ahead. Regulatory uncertainty becomes a barrier to investments in the EU.


5. The proposal takes a huge risk.
The measure brings a price floor into the system, but not a price cap. So far the political interference with the EU ETS market has not worked as planned. There are no guarantees that any additional measures will not spin out of control, either by crashing the market when the back-loaded credits are put back in or by exponential increases in the carbon price when the economy would pick up.


6. The just proposed link to the Australian ETS adds another unknown factor in the mix. The EU now links its carbon market to the Australian market, also expected to lower the carbon costs for Australia, but increase the costs for Europe. It is completely unclear how these measures interfere which each other. The future and benefit of CDM credits should be examined in this mix of measures as well.


7. Carbon prices do not bring breakthroughs in technology. The answer to reduce carbon emissions is breakthrough technology, which is a policy area failing in the EU. Higher carbon prices have no impact on the creation of this technology.


8. The ETS has been given a double function that is the problem
. The problems raised underlying the proposal have to do with the double function of the carbon market, where the price set in ETS also has to bring renewable energy to the market, create global carbon markets, stimulate the energy sector to invest in new power plants, etc. etc. etc. A higher carbon price will do so, as in times of higher prices these events have not happened either or were pushed by other measures. But these measures come at a cost for actors inside the system. The one size fits all system no longer works.


9. There is a direct company impact. Although there are surpluses in the emission trading market, the vast majority of installations in the trading period has a shortage of credits and has to buy these on the market as of 2013. This measure directly increases the costs of these companies, and indirectly via the electricity price for all industry and consumers.


10. There are strong legal doubts that the back loading is possible. Several legal opinions show that measures to artificially increase the carbon price do not fit the ETS directive legal framework.

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