cepi 26 november

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The EU’s 2030 climate and energy framework: What’s in it for industrial sectors? Tomas Wyns, [email protected] CEPI European Paper Week 2014

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The EU’s 2030 climate and energy framework: What’s in it for industrial sectors? Presentation by Tomas Wyns (IES) at the European Paper week 2014. How can the EU's climate policy (e.g. EU ETS) help industrial sectors innovate and become more competitive.

TRANSCRIPT

Page 1: Cepi 26 november

The EU’s 2030 climate and energy framework: What’s in it for industrial sectors?

Tomas Wyns, [email protected] CEPI European Paper Week 2014

Page 2: Cepi 26 november

2020

Page 3: Cepi 26 november

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, …)

Page 4: Cepi 26 november

2030

Page 5: Cepi 26 november

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

Page 6: Cepi 26 november

EU ETS: what’s on 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%)

Page 7: Cepi 26 november

EU ETS: what’s on 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

Page 8: Cepi 26 november

EU ETS: supporting modernisation 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)

Page 9: Cepi 26 november

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)?

Page 10: Cepi 26 november

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)

Page 11: Cepi 26 november

Industrial policy and innovation

NER 400

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NER 400: Industrial low-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

Page 13: Cepi 26 november

Thank you!

For more information please contact:

[email protected]

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