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Cepi 26 november
The EU's 2030 Climate and Energy Framework aims for a 40% reduction in greenhouse gas emissions and a 27% increase in renewable energy, with various binding and indicative measures for implementation. The framework includes adjustments to the EU Emissions Trading System to enhance price stability and support industrial innovation, particularly in low-carbon technologies. Additionally, it emphasizes addressing carbon leakage risks and fostering collaboration for innovation in industrial sectors.
Cepi 26 november
- 1. The EU’s 2030climate and energy framework: What’s in it for industrial sectors? CEPI European Paper Week 2014 Tomas Wyns, tomas.wyns@vub.ac.be
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- 3. 20 20 20 20% GHG reductions by 2020 ref. 1990 Implemented through ESD (-10% ref. 2005) EU ETS (-21% ref. 2005) 20% Renewable Energy by 2020 Implemented through RE Directive 20% Energy Savings by 2020 ref. BAU Implemented through EED EPBD Ecodesign CO2 & cars Binding Binding Indicative EU-wide target for EU ETS (LRF 1.74%) National targets under ESD National targets under RE-directive Indicative targets for MS (EED) Binding measures (EED, EPBD, …)
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- 5. 40 27 27 40% GHG reductions(*) by 2030 ref. 1990 Implemented through ESD (-30% ref 2005) EU ETS (-43% ref 2005) 27% Renewable Energy by 2030 Implemented through new governance system National Energy Plans Review of RE directive?! 27% Energy Savings by 2030 ref. BAU Implemented through new governance system National Energy Plans Reviews of EED, EPBD, Ecodesign CO2 & cars ?! Binding Binding (at EU level) Indicative NO national binding targets EU-wide target for EU ETS (LRF to 2.2%) National targets under ESD Possible future: indicative targets for MS or binding measures (*) “at least 40% domestic
- 6. EU ETS: what’son the table (cap) • Market Stability Reserve should increase price stability and hence investor certainty (ongoing - uncertainty over starting date), Council supports EC proposal. • (21% reduction in 2020 going up to) -43% in 2030, ref. 2005 for ETS sectors, through • increased Linear Reduction Factor (1.74-2.2%) brings EU ETS more in line with long-term (2050) targets (-80 to -95%)
- 7. EU ETS: what’son the table (carbon leakage) • Existing carbon leakage measures will not expire (as long as no comparable efforts undertaken in other major economies) • Appropriate levels of support for sectors at risk of losing int’l competitiveness • Benchmarks to be periodically reviewed (tech. progress in sectors) • Direct and indirect carbon costs taken into account (but in line w state aid rules) • Future allocation “better aligned” with changing production levels
- 8. EU ETS: supportingmodernisation and industrial innovation • New Entrants Reserve 300 to be renewed and extended (NER 400) • Scope extended to low-carbon innovation in industrial sectors • New reserve to address capital intensive investments in low-income Member States (e.g. energy efficiency, energy sector infrastructure)
- 9. EU (ETS) 2030:some personal reflections (i) • Annual allocation adjustment based on actual production will be difficult (could be a curse in disguise). • Additional allowances should be linked (more) with (physical) investments • Cross-sectoral correction seems to remain in place but… does LRF have to be 2.2% for industry and power sector (e.g. 2% for industry and 2.4% for power)?
- 10. EU (ETS) 2030:some personal reflections (ii) • Ensure EU wide level playing field for carbon leakage protection (not the case now) • Industrial demand side management not mentioned in Council conclusions • NER for industrial low-carbon innovation: Finally! (see next slides)
- 11. Industrial policy andinnovation NER 400
- 12. NER 400: Industriallow-carbon innovation • Should focus on capital and risk intense (large scale) demonstration projects aiming towards commercialisation post 2030 • Create toolbox of risk-sharing instruments (grants, equity participation, loans, loan-guarantees, …) • Facilitate upfront capital access through project milestones • Industrial co-benefits should be acknowledged (e.g. productivity increase, resource efficiency, …) • Encourage cross-sectoral/cross-company collaboration
- 13. Coda: The non-negligiblerisk of innovation leakage Kuang-Hsi Chen, Taiwan Cement Corporation & Heng- Wen Hsu, Industrial Technology Research Institute, Taiwan: First cement CC(S) demonstration Thank you! Feb. 2014: “Archer Daniels Midland Company and Rennovia, Inc. announced today that ADM has committed to a $25 million equity investment in the privately held company, which develops catalysts and processes for the cost-advantaged production of chemical products from renewable feedstocks.” For more information please contact: Tomas.Wyns@vub.ac.be Successful testing of HIsarna (ULCOS) pilot blast furnace in Ijmuiden. But will demo phase be build in Europe?! Inert Primary Aluminium Anodes “This new technology would have a significant opportunity in growth markets (e.g. Russia and China) that have made commitments to Greenhouse Gas reductions.” US Department of Energy