The document discusses the UK chemical industry's views on the European Commission's Green Paper on energy strategy. It supports the key goals in the paper, including: (1) completing the EU's internal gas and electricity markets to increase competition; (2) ensuring security of energy supply and solidarity between member states; and (3) developing a strategic energy technology plan to promote low-carbon technologies. However, it also expresses concerns about rising energy costs and the need to balance climate policy with maintaining industrial competitiveness.
Introduction to the EU Emission Trading SystemLeonardo ENERGY
The EU ETS Directive is the centrepiece of the European Union’s climate policy. It has created the European Union’s Emissions Trading Scheme (EU ETS), which is a unique and quite com-plex system.
The EU ETS establishes a scheme for greenhouse gas emissions allowances trading within 31 European countries. Its functioning is based on a “cap and trade” principle, which sets a cap on the total amount of greenhouse gases that can be emitted by all participating installations. Within the cap, companies receive or buy emission allowances which they can trade with one another as needed.
Today, the EU ETS covers almost half of EU’s emissions and is part of the daily life of a large number of companies.
The EU ETS Directive represents the backbone of EU’s action against climate change, but it also works in combination with several other pieces of legislation in a delicate balance.
Our European system has very much evolved during the last 15 years. The existing legislation operates until 2020. It has set a greenhouse gas emissions reduction target in line with EU’s 2050 low carbon economy roadmap. The time has also come to discuss the post-2020 period and the European Commission will soon put forward a new proposal with a 2030 emissions reduction target.
Being the first one to have been setup, the European scheme is analysed and taken as exam-ple in other regions of the world where emissions trading starts being implemented.
This course aims at giving a presentation of the EU ETS Directive, the main features of the sys-tem, the balance with other pieces of EU legislation and at offering perspectives for the on-coming review of the scheme.
Poyry - Europe’s energy future – the shape of the beast - Point of ViewPöyry
Decarbonisation requires large scale investment by European energy companies, but threatens their existing revenue streams. Financial investors are becoming wary of the power sector, and new sources of capital are urgently required. Meanwhile, Europe faces a policy dilemma; whether to rely on markets and a strong CO2 regime, or to build national solutions with government-channelled investment. Whichever way this dilemma is
resolved, the traditional role of the electricity companies must adapt: embracing innovation is the first necessary step to the future world.
Introduction to the EU Emission Trading SystemLeonardo ENERGY
The EU ETS Directive is the centrepiece of the European Union’s climate policy. It has created the European Union’s Emissions Trading Scheme (EU ETS), which is a unique and quite com-plex system.
The EU ETS establishes a scheme for greenhouse gas emissions allowances trading within 31 European countries. Its functioning is based on a “cap and trade” principle, which sets a cap on the total amount of greenhouse gases that can be emitted by all participating installations. Within the cap, companies receive or buy emission allowances which they can trade with one another as needed.
Today, the EU ETS covers almost half of EU’s emissions and is part of the daily life of a large number of companies.
The EU ETS Directive represents the backbone of EU’s action against climate change, but it also works in combination with several other pieces of legislation in a delicate balance.
Our European system has very much evolved during the last 15 years. The existing legislation operates until 2020. It has set a greenhouse gas emissions reduction target in line with EU’s 2050 low carbon economy roadmap. The time has also come to discuss the post-2020 period and the European Commission will soon put forward a new proposal with a 2030 emissions reduction target.
Being the first one to have been setup, the European scheme is analysed and taken as exam-ple in other regions of the world where emissions trading starts being implemented.
This course aims at giving a presentation of the EU ETS Directive, the main features of the sys-tem, the balance with other pieces of EU legislation and at offering perspectives for the on-coming review of the scheme.
Poyry - Europe’s energy future – the shape of the beast - Point of ViewPöyry
Decarbonisation requires large scale investment by European energy companies, but threatens their existing revenue streams. Financial investors are becoming wary of the power sector, and new sources of capital are urgently required. Meanwhile, Europe faces a policy dilemma; whether to rely on markets and a strong CO2 regime, or to build national solutions with government-channelled investment. Whichever way this dilemma is
resolved, the traditional role of the electricity companies must adapt: embracing innovation is the first necessary step to the future world.
Webinar - The US energy savings potential and who pays for itLeonardo ENERGY
Several recent studies use bottom-up models to assess the potential for energy efficiency (or avoided emissions from greenhouse gases) and the costs of implementing such energy efficiency measure, representing these two dimensions in an energy efficiency supply curve. However, energy savings estimates are generally overly optimistic suggesting that the costs to achieve the energy efficiency potential are very low.
We revisit the energy efficiency supply curve approach, developing a model that accounts for key uncertainties and different perspectives on how energy efficiency potential can be tackled.
This model provides efficiency potential savings and associated costs for the US residential sector
Emissions Trading Media Briefing February 2009David Hone
An overview of emissions trading (cap-and-trade), how it works and a focus on allocation of allowances. This presentation was given by Shell to a group of London media representatives on February 18th 2009.
From Ugly Duckling to Superstar: how energy efficiency (almost) got to the to...FTI Consulting FR
Energy efficiency has long been promoted at European level. The European Commission has certainly made great efforts to support it and to ensure that energy savings can contribute to the EU’s energy priorities, namely reduction of carbon emissions, lowering of energy costs and increase of energy independence. The EU has introduced energy efficiency targets, created a regulatory framework to support energy efficiency and the uptake of energy efficient products and provided significant funding. However, so far energy efficiency has not lived up to its expectations, which is disappointing considering the huge amount of resources spent to promote it.
In this Energy Flash we look why the EU’s policies have so far have not had the desired effect, what is being done to change this and which sectors are best placed to benefit from the renewed efforts.
Highlights:
* Reports on the seminar “Electricity in the next decade” regarding “Low carbon electricity systems”.
* Captures the technologies involved as well as the views and findings of specialists active in the sustainable energy field.
* Describes low carbon electricity generation, networks and services.
* Looks at technology, impact, challenges faced and benefits of each stage.
* Provides an objective, scientific view on the electricity system of the next decade.
More than 20 years ago, the EU vowed to fight the newly identified danger of climate change. Over time, it has developed a policy which is two-fold: on one hand, it looks at ways to reduce greenhouse gas emissions inside EU borders and now has 2050 as horizon; on the other hand, it tends to lead by example and to push other big emitters to gather around similar emission reduction objectives.
Pursuing the idea of giving a price to carbon, the EU has put in place an instrument that would lead it towards decarbonisation: the Emissions Trading Scheme (ETS). Launched in 2005, it has today become a complex system which is being reproduced in other parts of the world. The ultimate vision is one of a global carbon market leading to a significant reduction of greenhouse gas emissions and thus mitigating the impact of climate change.
Does the EU Emission Trading Scheme ETS Promote Energy Efficiency?Leonardo ENERGY
This policy brief analyzes the main interacting mechanisms between the Energy Efficiency Directive (EED) and the EU Emission Trading Scheme (ETS). It presents a detailed top-down approach, based on the ODYSSEE energy indicators, to identify energy savings from the EU ETS.
The main task consists in isolating those factors that contribute to the change in energy consumption of industrial branches covered by the EU ETS, and the energy transformation sector (mainly the electricity sector).
Speaker:
Wolfgang Eichhammer (Head of the Competence Center Energy Policy and Energy Markets @Fraunhofer Institute for Systems and Innovation Research ISI)
The recordings of this webinar can be watched via:
https://youtu.be/TS6PxIvtaKY
Spring Seminar FUNSEAM
The Clean Energy Package and the Role of Renewables
Sofia Pinto Barbosa
Unit Renewable Energy and CCS Policy, DG ENERGY
European Commission
Madrid, March 23rd. 2017
FUNSEAM AND EDP RENOVÁVEIS
Determining primary energy factors for electricityLeonardo ENERGY
A primary energy factor (PEF) for electricity describes the ratio between end-user consumption of electricity and primary energy consumption. In recent years, the EU has implemented regulatory use of PEFs in the energy policy framework. As a result, PEFs now play a role in the regulation of production and consumption of electricity throughout Europe.
A key challenge is the lack of professional and/or political agreement on how the PEF shall be determined. Up until today, approaches used to determine PEFs have lacked foundation in objective methodologies, and the discussions have often been plagued by sectorial interest and political goals. Regulatory application of PEFs can create enormous challenges for European authorities and other energy market interests in the future. Depending on the case, the determination of a PEF may push end-users to alter their consumption of energy, decisions on energy efficiency and/or choice of energy fuels. Thus, PEFs may affect European countries’ ability to achieve long-term energy- and climate goals.
Presentation del Clean Energy Package de la Comisión European en el Winter Seminar de Funseam 2016, organizado por Funseam y Gas Natural Fenosa
Paula PinhoHead of Unit – Energy Policy CoordinationEuropean Commission – DG ENERGY
Webinar - The US energy savings potential and who pays for itLeonardo ENERGY
Several recent studies use bottom-up models to assess the potential for energy efficiency (or avoided emissions from greenhouse gases) and the costs of implementing such energy efficiency measure, representing these two dimensions in an energy efficiency supply curve. However, energy savings estimates are generally overly optimistic suggesting that the costs to achieve the energy efficiency potential are very low.
We revisit the energy efficiency supply curve approach, developing a model that accounts for key uncertainties and different perspectives on how energy efficiency potential can be tackled.
This model provides efficiency potential savings and associated costs for the US residential sector
Emissions Trading Media Briefing February 2009David Hone
An overview of emissions trading (cap-and-trade), how it works and a focus on allocation of allowances. This presentation was given by Shell to a group of London media representatives on February 18th 2009.
From Ugly Duckling to Superstar: how energy efficiency (almost) got to the to...FTI Consulting FR
Energy efficiency has long been promoted at European level. The European Commission has certainly made great efforts to support it and to ensure that energy savings can contribute to the EU’s energy priorities, namely reduction of carbon emissions, lowering of energy costs and increase of energy independence. The EU has introduced energy efficiency targets, created a regulatory framework to support energy efficiency and the uptake of energy efficient products and provided significant funding. However, so far energy efficiency has not lived up to its expectations, which is disappointing considering the huge amount of resources spent to promote it.
In this Energy Flash we look why the EU’s policies have so far have not had the desired effect, what is being done to change this and which sectors are best placed to benefit from the renewed efforts.
Highlights:
* Reports on the seminar “Electricity in the next decade” regarding “Low carbon electricity systems”.
* Captures the technologies involved as well as the views and findings of specialists active in the sustainable energy field.
* Describes low carbon electricity generation, networks and services.
* Looks at technology, impact, challenges faced and benefits of each stage.
* Provides an objective, scientific view on the electricity system of the next decade.
More than 20 years ago, the EU vowed to fight the newly identified danger of climate change. Over time, it has developed a policy which is two-fold: on one hand, it looks at ways to reduce greenhouse gas emissions inside EU borders and now has 2050 as horizon; on the other hand, it tends to lead by example and to push other big emitters to gather around similar emission reduction objectives.
Pursuing the idea of giving a price to carbon, the EU has put in place an instrument that would lead it towards decarbonisation: the Emissions Trading Scheme (ETS). Launched in 2005, it has today become a complex system which is being reproduced in other parts of the world. The ultimate vision is one of a global carbon market leading to a significant reduction of greenhouse gas emissions and thus mitigating the impact of climate change.
Does the EU Emission Trading Scheme ETS Promote Energy Efficiency?Leonardo ENERGY
This policy brief analyzes the main interacting mechanisms between the Energy Efficiency Directive (EED) and the EU Emission Trading Scheme (ETS). It presents a detailed top-down approach, based on the ODYSSEE energy indicators, to identify energy savings from the EU ETS.
The main task consists in isolating those factors that contribute to the change in energy consumption of industrial branches covered by the EU ETS, and the energy transformation sector (mainly the electricity sector).
Speaker:
Wolfgang Eichhammer (Head of the Competence Center Energy Policy and Energy Markets @Fraunhofer Institute for Systems and Innovation Research ISI)
The recordings of this webinar can be watched via:
https://youtu.be/TS6PxIvtaKY
Spring Seminar FUNSEAM
The Clean Energy Package and the Role of Renewables
Sofia Pinto Barbosa
Unit Renewable Energy and CCS Policy, DG ENERGY
European Commission
Madrid, March 23rd. 2017
FUNSEAM AND EDP RENOVÁVEIS
Determining primary energy factors for electricityLeonardo ENERGY
A primary energy factor (PEF) for electricity describes the ratio between end-user consumption of electricity and primary energy consumption. In recent years, the EU has implemented regulatory use of PEFs in the energy policy framework. As a result, PEFs now play a role in the regulation of production and consumption of electricity throughout Europe.
A key challenge is the lack of professional and/or political agreement on how the PEF shall be determined. Up until today, approaches used to determine PEFs have lacked foundation in objective methodologies, and the discussions have often been plagued by sectorial interest and political goals. Regulatory application of PEFs can create enormous challenges for European authorities and other energy market interests in the future. Depending on the case, the determination of a PEF may push end-users to alter their consumption of energy, decisions on energy efficiency and/or choice of energy fuels. Thus, PEFs may affect European countries’ ability to achieve long-term energy- and climate goals.
Presentation del Clean Energy Package de la Comisión European en el Winter Seminar de Funseam 2016, organizado por Funseam y Gas Natural Fenosa
Paula PinhoHead of Unit – Energy Policy CoordinationEuropean Commission – DG ENERGY
From Brussels to Paris and Beyond - ON Energy Report November '15MSL
MSLGROUP's latest edition of ON Energy Report looks at the evolving European Energy landscape in the context of the forthcoming jamboree that is COP21. With carbon reduction at the top of the agenda, we take a look at some of the challenges and opportunities that we face, and some of the communications needs that the industry has to grapple with.
For future updates, please contact Nick Bastin, Partner, CNC and Head of MSLGROUP’s EMEA Energy Practice at nick.bastin@cnc-communications.com.
Do share your queries/feedback with our team at @CNC_comms or reach out to us on twitter @msl_group.
Responding To Continual Energy Market ChangeCTRM Center
The European power and gas industry is currently going through a period of very rapid change that has potentially far reaching consequences. While change is certainly no stranger to the industry, it requires players in the industry to constantly re-evaluate their business process and technology infrastructures in order to adapt and thrive.
The role of electricity in heating and coolingLeonardo ENERGY
Following the European Commission’s Heating & Cooling Strategy Consultation Forum, held in Brussels on September 9th, very significant opportunities exist within the heating and cooling sector to better connect the EU’s electricity and thermal energy markets.
The use of electricity in heating and cooling helps to increase the penetration of renewables, improve efficiency, lower carbon emissions and save significant investment costs in renewables integration. However, crucial to these uses is the promotion of efficient electrothermal technologies.
1. Green Paper: A European Strategy for Sustainable, Competitive and Secure Energy
For further information contact Page 1 of 4
Helen Bray, Head of Competitiveness and Utilities Claudia Hamill, European Adviser
brayh@cia.org.uk +44(0)20 7963 6718 hamillc@cia.org.uk +32(0)2 401 6812
The Chemical Industries Association (CIA) represents around 140 companies ranging from
multinationals to SMEs from a sector which, in total, has 200,000 employees across every region of
the UK. The chemical industry is one of the UK’s most important industrial sectors, accounting for
11% of manufacturing gross value added
1
As well as being major consumers of both gas and
electricity for heating and power, our members use gas and oil as feedstocks to produce key
intermediates for use by other manufacturing sectors as well as final products for households,
ranging from paints to detergents, fragrances to pharmaceuticals. The chemical industry faces
global competition and UK assets are predominantly owned by companies headquartered
overseas. They can take the decision to manufacture outside of the UK or Europe where energy
prices are less volatile and security of supply can be guaranteed.
The industry supports the principles underlying the Green Paper which covers a number of
main issues that are very important to the UK chemical industry, such as (i) liberalisation of
EU energy markets, (ii) competitiveness, (iii) energy efficiency, and (iv) security of energy
supplies.
The following considers the six high-level points from the Green Paper in turn.
1. The EU needs to complete the internal gas and electricity markets.
CIA agrees that the second electricity and gas directives on unbundling need to be fully
implemented to create competition and allow industrial consumers the choice to source
energy at competitive prices. We agree that full structural unbundling should be
considered. Unbundling of distribution from supply is required so that there are no
commercial conflicts of interest, for example, there should be gas release schemes to
enable gas to be traded and plant divestment to ensure that there are no dominant players.
Action is required now in continental Europe as it took many years to liberalise the UK
market.
The CIA supports a closer collaboration between Member States and this may be achieved
through the formation of a European energy regulator to look at cross-border issues. We
agree that such a regulator could have decision-making powers for common rules and
approaches such as a European grid code and would work together with the network
operators.
We support the initiative for a European Centre for Energy Networks, which could bring the
network operators together in a formal body to assist work on developing a European Grid
Code. We are aware that in many Member States the lack of interconnection creates
security of supply problems. In addition, action needs to be taken to free up capacity
reserved for former incumbents under electricity and gas long term contracts.
2. The EU needs to ensure that its internal energy market guarantees security of
supply and solidarity between Member States.
1 ONS, Annual Business Inquiry
2. Green Paper: A European Strategy for Sustainable, Competitive and Secure Energy
For further information contact Page 2 of 4
Helen Bray, Head of Competitiveness and Utilities Claudia Hamill, European Adviser
brayh@cia.org.uk +44(0)20 7963 6718 hamillc@cia.org.uk +32(0)2 401 6812
CIA supports increased data transparency through creation of an European energy supply
observatory, enhancing transparency on security of energy supply issues within the EU.
The table below shows the how Member States have different levels of gas information
transparency.
Transmission
System Operator
Public Gas Information
When is the data
published?
National Grid (GB) Daily information Two days delay
Fluxys (Belgium) Monthly information 18 months delay
Gaz de France
(France)
Daily information
1 month delay
Gas Transport
Service (Netherlands)
Daily information
Indicative information (not actual),
1 year delay
1 day delay
E.on Ruhrgas
(Germany)
Aggregate annual information
1 year delay
Source: The Office for Gas and Electricity Markets (Ofgem)
We require improved transparency on energy stocks at the European level, so that all
storage system operators implement the Guidelines for Good TPA Practise for Storage
System Operators (GGPSSO). If this happens, the benefit will be that consumers and the
rest of the market will have knowledge on the amount of gas in store in Europe, and the
market will be able to trade on actual data, and less on market sentiment and rumour.
The CIA welcomes the discussion of a new legislative proposal concerning gas stocks to
ensure that the EU can react to shorter-term emergency gas supply disruptions in a
manner that ensures solidarity between Member States.
3. The Community needs a real Community-wide debate on the different energy
sources
Primary energy supplies should be diverse in order to minimise risks to both supply and
price, and to provide inter-fuel competition. We are very concerned by the projected
growing dependency on gas: we believe that renewable sources alone will be unable to
plug the gap left by closing ageing nuclear and coal fired stations, and look to both a new
generation of nuclear plants and clean coal technology as means of providing baseload
power. The use of gas as a raw material for manufactured products, and its flexibility in use
as a domestic or smaller scale industrial fuel, mean it should as far as possible be reserved
for these purposes.
We note that the Green Paper would like to introduce a Strategic EU Energy Review to
offer a clear European framework for national decisions on the energy mix, and we look
3. Green Paper: A European Strategy for Sustainable, Competitive and Secure Energy
For further information contact Page 3 of 4
Helen Bray, Head of Competitiveness and Utilities Claudia Hamill, European Adviser
brayh@cia.org.uk +44(0)20 7963 6718 hamillc@cia.org.uk +32(0)2 401 6812
forward to discussing the contents of the EU Energy Review with the EU Commission. We
support the fact that fuel mix should be a decision up to each Member State but better co-
ordination is required to ensure that energy networks are reliant.
4. Europe needs to deal with the challenges of climate change in a manner
compatible with its Lisbon objectives
The CIA's aim is to achieve a sustainable UK chemical industry by supporting innovation,
competitiveness and playing a positive role in society whilst reducing our impact on the
environment. As intensive energy users, energy efficiency is always at the top of our
agenda.
While it is right that the EU should lead by example on climate change actions, our
preference would be to see this take place within long term, international climate change
commitments which engage the other main global market blocks. Failing this there is a
difficult balance to strike between leading by example and over-committing the EU in
relation to global competitors, there is a danger of compromising our ability to meet the
Lisbon objective of sustainable environmental and economic progress.
We agree that Europe must act now on energy efficiency and renewable energy to address
climate change. However, we also believe it to be equally urgent that action should be
taken outside of market based policy instruments to put more effort into developing the
technological solutions needed to produce the fundamental step-change carbon reductions
needed in the longer term, eg: for nuclear waste and carbon capture and storage as cited in
the green paper.
It is also important that the EU seeks action across all sectors of the economy. Energy
intensive industries, including the chemical industry, have been the early focus of the
governments’ efforts to improve energy efficiency and reduce carbon emissions. Indeed, in
the UK, industry’s share of total final energy consumption is decreasing: the DTI’s Energy
Indicators 20052
, shows transport at 36%, households 30%, industry 21% and services and
agriculture 13%. We therefore applaud many of the measures outlined for the domestic,
transport and non-energy intensive sectors, as there is significant potential to improve
energy efficiency in these sectors. We support in principle the promotion of an international
agreement on energy efficiency, although clarification is needed at to what sectors this
concerns or how this would interact with post-Kyoto discussions.
We agree that market based instruments can be a cost effective and flexible means of
securing reductions in emissions of greenhouse gases and recognise that EU ETS is a
central plank of EU climate change policy. However, it is important that such schemes are
well designed and compliment each other. Indeed, we believe that that the current policy
mix provides more than sufficient incentives for energy intensive companies to be efficient.
2 Chart E11.2
4. Green Paper: A European Strategy for Sustainable, Competitive and Secure Energy
For further information contact Page 4 of 4
Helen Bray, Head of Competitiveness and Utilities Claudia Hamill, European Adviser
brayh@cia.org.uk +44(0)20 7963 6718 hamillc@cia.org.uk +32(0)2 401 6812
A key concern is that UK companies are paying for their indirect CO2 emissions from
electricity more than once and this is placing industry at a disadvantage to global
competitors. This arises because the EU ETS leads generators to pass through full costs
to electricity prices but companies also pay energy tax through the Climate Change Levy,
which meets the requirements of the Energy Products Directive. In combination with the
UK’s Renewables Obligation, these instruments add around 20% to the cost of electricity.
We therefore require more information before considering whether we could support a
Europe-wide “white certificates” system of tradable certificates, for example, which sectors
would this cover.
5. A strategic energy technology plan
The chemical industry will continue to work hard to add to the considerable gains already
made, although it is becoming more difficult to maintain the past rate of savings because
the chemical industry – throughout Europe - has always had to be very energy efficient in
order to compete effectively in global markets. However, the chemical industry can also
contribute in many ways to reducing energy consumption in other sectors of the economy,
for example through building insulation materials, lightweight components for transport and
other engineering applications, battery and fuel cell components and low temperature
detergents.
We therefore agree that the EU needs an appropriately resourced strategic energy
technology plan to help promote the development of promising energy technologies that
should also help to create the conditions to bring such technologies efficiently and
effectively to the EU and the world markets. We also believe that this could also be
supplemented by more coordination on an international basis with industry sectors capable
of developing relevant technologies with more direct support for such work.
6. A common external energy policy
We are particularly supportive of pan-European coordination of infrastructure planning and
construction, and in pursuing a dialogue at European level with major energy suppliers. We
agree that by such means it should be possible to diversify the EU’s sources of energy.
We agree that at Community level on the aims of an External Energy Policy and on the
actions needed at both Community and national level to achieve it.
There is major new investment required to ensure the security of EU energy supplies,
notably new gas and oil pipelines and liquefied natural gas (LNG) terminals as well as the
application of transit and third party access to existing pipelines.
We agree that efforts should be intensified in the G8 to secure rapid ratification by Russia
of the Energy Charter Treaty and conclusion of the negotiations on the Transit Protocol.
The EU, as one voice needs to engage with all strategic partners that will play a role in the future of
Europe's energy supplies.
* * * * * * *