Energy and Climate Change

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energy and climate change
06 Sep.2013

Extra emission cut should be wake-up call

The European Commission just announced it will cut free allocation of emission credits to industry with an additional 6% in 2013 - adding up to a startling 18% extra cut by 2020. The decision is very harsh as even the most carbon efficient companies in Europe will not receive the credits they need to operate.

It is time to make a reality check on all recent and misleading statements implying that EU ETS does not impact European industry.

The idea was simple. Industries receive free allocation of credits based on a benchmark. Only the 5% best installations receive what they need, all others have to buy carbon credits.

The decision on the so-called C-factor is part of the ETS directive. However, the factor was thought to come into force only at the end of the 2013-2020 trading period. It will now apply from the start and will be very high by 2020. This sheds a completely new light on the discussions around backloading in Brussels in the last months. Several hundred million Euros will be added to the already uncompetitive energy costs in Europe, just for the paper industry alone.

The publication of the C-factor takes place without the paper mills knowing their exact 2013 allocation yet, which causes increasing unrest in the industry. CEPI calls upon the Commission to publish the 2013 allocation data immediately.

“The huge cut in allowances is very disappointing for CEPI members, and a wakeup call for the discussions on ETS in Europe”, said Marco Mensink, CEPI Deputy Director General. “The European Commission will have to give maximum clarity on the calculations made. Not even two years ago the Commission was working on innovation tools based on an expected surplus of free credits, which would not have to be allocated. Now we start the period with a 6% shortage for this year alone.”

This information should have been on the table in the backloading debate where proponents of strong measures stated that the industry will not have to buy any credits in the coming period. This is simply not true. This is a wake-up call for the Member States as well.

European CEOs were just told today that investments in Europe face another layer of costs. Carbon leakage is real – it is the loss of investments Europe urgently needs.


For more information, contact Daniela Haiduc at (d.haiduc@cepi.org), mobile: +32 473 562 936.

Note to the Editor

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 950 paper mills. Together they represent 24% of world production.

European Commission documents announcing the C-factor:

http://ec.europa.eu/clima/policies/ets/cap/allocation/docs/20130905_nim_en.pdf - page 14

http://ec.europa.eu/clima/policies/ets/cap/allocation/docs/20130905_scuf_en.pdf

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04 Sep.2013 ,

The cloud begins with coal - An overview of the electricity used by the global digital ecosystem

The cloud begins with coal
Big data, big networks, big infrastructure- An overview of the electricity used by the global digital ecosystem

A study by Digital Power Group

The information economy is a blue-whale economy with its energy uses mostly out of sight. Based on a mid-range estimate, the world’s Information-Communications-Technologies (ICT) ecosystem uses about 1,500 TWh of electricity annually, equal to all the electric generation of Japan and Germany combined -- as much electricity as was used for global illumination in 1985. The ICT ecosystem now approaches 10% of world electricity generation. Or in other energy terms – the zettabyte era already uses about 50% more energy than global aviation. This recent study (August 2013) by Digital Power Group includes interesting facts about the use of electricity by smart phones and tablets.

You can read the complete paper at : http://www.tech-pundit.com/wp-content/uploads/2013/07/Cloud_Begins_With_Coal.pdf?c761ac&c761ac.

 

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10 Jul.2013

EEA report: Bioenergy production must use resources more efficiently

Using biomass for energy is an important part of the renewable energy mix. However, bioenergy production should follow EU resource efficiency principles, according to a new report from the European Environment Agency (EEA). This means extracting more energy from the same material input, and avoiding negative environmental effects potentially caused by bioenergy production.


The report, ‘EU bioenergy from a resource efficiency perspective’, primarily looks at the potential for energy from agricultural land, although it includes forest and waste biomass in the overall analysis. Bioenergy should be produced in line with EU objectives to use resources more efficiently, the EEA report says. This means reducing the land and other resources needed to produce each unit of bioenergy and avoiding environmental harm from bioenergy production. According to the EEA analysis, the most efficient energy use of biomass is for heating and electricity as well as advanced biofuels, also called ‘second generation’ biofuels. First generation transport biofuels, for example, biodiesel based on oilseed rape or ethanol from wheat, are shown to be a far less efficient use of resources.


Download the report here: http://www.eea.europa.eu/pressroom/newsreleases/bioenergy-production-must-use-resources
 

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16 Apr.2013 ,

Why the European Parliament needs to reject back-loading - Recommendation by the Alliance of Energy Intensive Industries

Today the European Parliament will vote on the Commission proposal amending the Emissions Trading Directive (ETS) so as to allow the Commission to withhold emission allowances from the ETS market and increase carbon and energy prices in Europe despite the fact that the 21% reduction target of the ETS will be achieved and despite the fact that we are in a deep economic crisis with 26 million European's without jobs, 10 million more than in 2008.

The Alliance of Energy Intensive Industries calls upon Members of the European Parliament to follow the opinion of ITRE and the combined majority of Members of ITRE and ENVI which rejected the Commission proposal in the committee votes in January and February and to support Amendment 20 which rejects the Commission proposal.

The Commission proposal is the first step to intervene in Phase 3 of the EU emissions trading system (ETS) by withholding 900 million emissions allowances from the market, with the intention to cancel these in a second step and therewith increasing the existing cap beyond 21%.


While supporting the 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 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 and private consumers. 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 and ensures affordable energy for the industry.

Please click here for a more detailed recommendation of the Alliance.
 

The AEII includes 15 European sector federations representing over 30.000 companies and 2.6 million directly employed people:
CEFIC, Cembureau, Cerameunie, CEPI, EuLA, EuroAlliages, Eurochlor, EUROFER, Eurogypsum, Eurometaux, Europia, EXCA, Fertilizers Europe, GlassAlliance, IFIEC.
 

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09 Apr.2013 ,

Growth and Employment first: Energy-Intensive Industries warn against competitiveness impacts of proposed changes to the EU ETS

The increase in ETS prices targeted by the Commission through short-term intervention will further increase energy prices and by the same token, competitive imbalance between EU and overseas Energy Intensive Industries. The revision of the EU ETS Directive, which would leave more room for the Commission to intervene in the timing of auctions, also induces greater uncertainty for industry. Therefore, the Alliance of Energy Intensive Industries urges Members of the Parliament and Member States’ representatives to reject this proposal, which will alter the nature of the EU ETS. If approved, this proposal will not prevent industry closures and carbon leakage but rather relocate investments in manufacturing industry outside Europe.


Following the fundamental divergence of views between the Industry Committee and the Environment Committee of the European Parliament, all Members of the European Parliament will be asked to vote on the Commission proposal amending the EU ETS Directive, which should lead to a change in the timing for auctioning emission allowances (so-called “back-loading”).


The Alliance of Energy Intensive Industries, currently representing more than 30.000 enterprises and directly employing more than 2.5 Million people in the EU, urges the European Parliament and Member States to reject the Commission’s proposal on the following ground:

  • Increase in ETS costs will push up operating costs for manufacturing industries that emit CO2 directly. Despite partial relief through free allowances, this will affect competitiveness;
  • An artificial rise in ETS prices will push up electricity prices. Costs imposed on electricity providers will inevitably be passed on to private and industrial consumers through higher power prices. In the case of industrial energy consumers, recent Commission analysis highlighted that energy costs (electricity) in the EU are twice as expensive as in competing regions such as the US, Korea or Canada. Short-term intervention with the overt intention to artificially increase ETS costs will further add to this competitive disadvantage, as European industry cannot offset these additional costs.
     
  • Increasing uncertainty for investors will also further delay economic recovery. In the face of recent plant closures, restructuring and lay-offs throughout the whole value chain of European manufacturing industry, the EU should avoid intervention that would add to the cost burden of its economic base and make climate policy less predictable. The European industry has been struggling for almost four years with recession conditions brought about by the financial and economic crisis. Unemployment has climbed to 25.9 million or 10.7 per cent in the EU 27 in December 2012, a historically high level. Investments are much needed to reinvigorate industrial production and reestablish growth but the Commission proposal to intervene in the market would create a framework which no longer provides legal certainty.
    Any structural adjustment of the ETS should be the outcome of a thorough review of longerterm objectives, taking a broader view of climate, energy, industrial factors (i.e. technical and economic feasibility), while taking into account the global situation.
     
  • The proposed amendment of the ETS is unnecessary as the EU’s climate objectives will be met anyway. The EU’s carbon emission reduction objective for 2020 will be reached even at low price due to the limited number of allowances representing the overall cap of the EU ETS. Currently, the carbon price reflects the economic downturn exactly as it should do.
     
  • Energy Intensive Industries stand fully behind the ETS as a major instrument for Europe’s climate ambition. By rejecting back-loading, the Alliance wants to ensure that the EU-ETS stays as initially foreseen a cost-effective and market-based instrument and that its nature is not altered. The revision of the EU ETS Directive as proposed by the Commission would give additional and unjustified discretionary power to the Commission.

Energy Intensive Industries are ready to participate in establishing a framework for EU ambitions beyond 2020 which will address the longer-term picture.

For further information please contact: Daniela Haiduc, CEPI Communications and Public Affairs Manager d.haiduc@cepi.org or 0032 26274915.

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