Study: Airlines stand to make £2.7 billion profit from EU climate scheme
The aviation industry could make up to £2.7 billion profits through the EU Emissions Trading Scheme according to a new report published on 18th December by the Institute for Public Policy Research (ippr). ippr’s report comes ahead of an ...
read moreThe aviation industry could make up to £2.7 billion profits through the EU Emissions Trading Scheme according to a new report published on 18th December by the Institute for Public Policy Research (ippr).
ippr’s report comes ahead of an announcement by the EU Commission on including the aviation industry in the EU Emissions Trading Scheme (EU ETS).
ippr argues that the EU should require member states to auction the credits to emit greenhouse gases to airlines. The ippr says that if the airlines are simply given the credits they will pass on emissions credit costs to passengers, leaving the industry to pocket up to £2.7 billion in windfall profits. The report shows that the UK energy industry made around £1 billion windfall profits in the first year of the EU ETS when it was given free emissions credits. ippr says that the profits from an auction should be used to fund low-carbon transport and fuels.
ippr’s report also recommends that:
- the trading scheme should cover all flights to and from EU airports which would cover three times as many flights than if the scheme covered just internal EU flights
- the trading scheme covers all greenhouse gases emitted by aeroplanes not just carbon dioxide, which would increase its effectiveness five fold
- individual countries develop a broad package of measures to address the climatic impacts of flying and the growing demand for air travel, which accounts for 5-12 per cent of Europe’s greenhouse gas emissions.
Simon Retallack, head of ippr’s climate team, said:
“When it comes to preventing climate change, there is no such thing as a cheap flight. Including aviation in the European Union Emissions Trading Scheme is a step in the right direction. But the EU should not repeat the mistake it made with the energy sector and give the aviation industry free emissions credits, handing the airlines a windfall of up to £2.7 billion. The EU should take a strong lead on curbing emissions from airline flights and clip the aviation industry’s wings.”
minimizeSource: ippr -
Tue, 26 Dec 2006
Category: business
Commission takes legal action over missing national allocation plans
The European Commission has decided to send four Member States final written warnings that they will face Court action unless they rapidly submit national allocation plans for the second trading period of the EU Emissions Trading Scheme from 2008 to ...
read moreThe European Commission has decided to send four Member States final written warnings that they will face Court action unless they rapidly submit national allocation plans for the second trading period of the EU Emissions Trading Scheme from 2008 to 2012. The Commission is also taking infringement action against seven Member States for failing to provide complete reports on their progress in limiting or cutting greenhouse gas emissions.
The Commission is sending final written warnings to Austria, Denmark, Hungary and Italy for failing to submit national allocation plans (NAPs) for the second trading period of the EU Emissions Trading Scheme (EU ETS). This is despite a first written warning sent in October (see IP/06/1364). The deadline for submitting the plans was 30 June 2006 and is laid down in the Emissions Trading Directive.[1] If a Member State does not respond to a final written warning, or if the Commission is not satisfied with its response, the Commission can take it to the European Court of Justice.
The Commission is also taking action against seven Member States for failing to provide complete reports on their progress in limiting or cutting greenhouse gas emissions. These reports are required by a 2004 EU Decision on monitoring emissions and implementing the Kyoto Protocol. They are needed by the Commission to prepare annual reports on Community emissions under the UN Framework Convention on Climate Change and the Kyoto Protocol. The deadline for Member States to submit the reports was 15 January 2006. The seven Member States have provided some but not all of the information needed.
France, Germany, Poland and Slovenia are to receive first written warnings. Estonia, Luxembourg and Spain are being sent final written warnings since they have failed to provide complete reports despite first written warnings earlier this year.
NAPs fix the total number of emission allowances issued by a Member State and determine how many allowances each individual installation covered by the ETS will receive. This cap makes the NAPs for 2008-2012 an important element in Member States' strategies for achieving their emission targets under the Kyoto Protocol, which have to be met during the same period.
Once Member States submit complete NAPs the Commission has three months to assess them. The Commission attaches a high priority to taking its decisions on all NAPs by early 2007 so that conditions for trading in 2008-2012 are established and known by market operators in good time before the next trading period starts on 1 January 2008. This requires those Member States that have not yet done so to submit their NAPs as soon as possible.
On 29 November the Commission conditionally approved NAPs for 2008-2012 for a first group of 10 Member States: Germany, Greece, Ireland, Latvia, Lithuania, Luxembourg, Malta, Slovakia, Sweden and the UK.
Environment Commissioner Stavros Dimas said: "The European Emissions Trading Scheme (ETS) plays an important role in fighting climate change and for meeting the EU Kyoto targets. Under the scheme, Member States were obliged to send their national allocation plans by June 30th. Four Member States have not yet submitted theirs and France has recently withdrawn its NAP. For the good functioning of the Emissions Trading Scheme we will have no choice but to take them to court if they do not send their allocation plans soon. It is also important that Member States meet their obligations to provide complete information to the Commission on their emissions progress as soon as possible."
minimizeSource: EU-Commission -
Wed, 13 Dec 2006
Category: climatepolicy
Civil Penalties issued under EU Emissions Trading Scheme
The Environment Agency has for the first time penalised four companies more than £750,000 for failing to account for their carbon emissions during the first year of the European Union Emissions Trading Scheme (EU ETS). Targeting the most carbon ...
read moreThe Environment Agency has for the first time penalised four companies more than £750,000 for failing to account for their carbon emissions during the first year of the European Union Emissions Trading Scheme (EU ETS).
Targeting the most carbon intensive industrial operators, the EU ETS provides financial incentives for industry to become more efficient and reduce the greenhouse gas emissions that are contributing to climate change.
Environment Agency Chief Executive, Barbara Young said:
"The European Emissions Trading Scheme is our most important mechanism for reducing the greenhouse gas emissions that cause climate change - so it’s vital that everyone plays by the rules. The Stern Review explained unequivocally that if we do not reduce emissions by at least 60% over the next 40 years, the cost in both human and economic terms will be catastrophic.
"The Environment Agency has successfully invested a lot of time and effort engaging with industrial operators to ensure a rigorous, consistent and effective approach to regulating the EU ETS. As a result, more than 99% of operators in England and Wales met their obligations during the first year of the scheme and these companies should be commended.
"Unfortunately 4 companies out of 535 in England and Wales failed to surrender sufficient carbon dioxide allowances by the due date to cover their emissions. This is the cornerstone of the scheme. As such they are liable to automatic civil penalties."
The companies are Alphasteel, Scandstick, Daniel Platt, and Mars (UK) (trading as Masterfoods). They have been issued with a combined total of €1,127,840 (£758,810.73) in civil penalties.
The details of the penalties are:
-Alphasteel, a steel recycling company from Newport in south Wales, were issued a civil penalty of €839,120 (£564,559.93) for failing to surrender any allowances for 2005 by the 30 April 2006 deadline.
- Daniel Platt, ceramic tile company from Stoke-on-Trent, were issued a civil penalty of €181,480 (£122,099.74) for failing to surrender any allowances to account for 4,537 tonnes of verified emissions by the 30 April 2006 deadline.
- Mars (UK) (trading as Masterfoods), a foodstuffs company from Peterborough, were issued a civil penalty of €78,080 (£52,532.22) for failing to surrender allowances for 2005 by the surrender notice deadline. Mars UK verified emissions for 2005 were 1,952 tonnes.
- Scandstick, an adhesive products company in Cambridgeshire, were issued a civil penalty of €29,160 (£19,618.84) for failing to surrender sufficient allowances to account for 729 tonnes of verified emissions for 2005. Scandstick only surrendered 1,219 allowances but had verified emissions of 1948 tonnes.
"The EU Emissions Trading Scheme is the centrepiece of Europe’s efforts to address climate change in the industrial sector to help achieve agreed targets under the international Kyoto Protocol for reducing greenhouse gas emissions. Under the protocol the UK has agreed to reduce greenhouse gas emissions by 12.5% by 2010. The scheme will also contribute to the UK’s domestic goal of reducing CO2 emissions by 20% by 2010," Barbara Young said.
From January 2005, large industrial operators across the United Kingdom were asked for the first time to monitor, verify and report their greenhouse gas emissions. Each company in the scheme was given allowances to emit a certain amount. If they emitted more than this they had to buy additional allowances. If they emitted less, they could sell their allowances to other operators. At the end of 2005, operators had until the April 30, 2006 to surrender all allowances to the Environment Agency.
Under the EU ETS Directive, member states must impose civil penalties on installations of €40 for each tonne of carbon dioxide emitted, if they fail to surrender allowances equal to their emissions by the due date.
"Last week the European Commission underlined the importance of the Emissions Trading Scheme by tightening the greenhouse gas allowance levels for Phase II of the scheme1, which runs from 2008 to 2012. The Commission reduced total allowances by almost 7 per cent below the 2005 level that was proposed by member countries.
"It demonstrates the need to ensure that allowances in the carbon market are scarce and a sustainable price of carbon is achieved. Integrity of the Scheme is also vital to its success. The Environment Agency is committed to playing its part in ensuring scheme participants comply with their obligations under the Scheme."
minimizeSource: EPA -
Tue, 12 Dec 2006
Category: climatepolicy
Greenhouse gas emissions set to rise as new sources for transport fuel are used
The use of low-quality sources of petroleum, such as tar sands, will dramatically raise global greenhouse gas emissions according to a new study. The work is reported in the paper Risks of the oil transition, published in the new Institute of ...
read moreThe use of low-quality sources of petroleum, such as tar sands, will dramatically raise global greenhouse gas emissions according to a new study. The work is reported in the paper Risks of the oil transition, published in the new Institute of Physics open-access electronic-only journal, Environmental Research Letters (ERL).
Lead author Professor Alex Farrell of the University of California, Berkeley said: “Liquid fuels for transportation are increasingly coming from a wide range of sources other than conventional petroleum. We call this the oil transition and we conclude that the environmental risks associated with this transition are much bigger than the risk to a country’s economy or the security of their fuel supply.”
Tar sands are currently one of the biggest unconventional sources for petroleum. Bitumen, a very think mixture of organic liquids, is mined from the tar sands. Natural gas is then bubbled through the bitumen to separate the impurities, mostly sulphur. The use of natural gas for removing impurities and then in refining tar sands into oil is a highly energy intensive process itself, even before the resulting oil is refined into gasoline and then burned in vehicles.
The sulphur separated in the production combines with Hydrogen to form H2S, the characteristic 'rotten egg' compound. Solid sulphur is then separated out, yielding vast pyramids of yellow sulphur blocks which are stacked and stored on the site.
“We have calculated that production of fuels from low-quality and synthetic petroleum, such as tar sands, could have greenhouse gas emissions 30%-70% greater than the emissions from conventional petrol. Tar sands are already being used as a source for petrol, with over one million barrels refined each day in Alberta, Canada. With oil selling for $60/barrel on the international market, the $30/barrel production cost for tar sands is no longer an obstacle to production as it used to be.”
Professor Farrell continued: “The enormous abundance of fossil fuel reserves means that the real challenge for the future is not dealing with scarcity of supply but managing the transition from traditional sources such as oil fields to new unconventional sources whilst protecting the environment and balancing the changes that the transition will bring to the global economy and the security of supply for individual countries.”
minimizeSource: www.iop.org -
Fri, 08 Dec 2006
Category: business
IFC and IETA to Collaborate on Business Solutions to Climate Change
The International Finance Corporation, the private sector arm of the World Bank, and the International Emissions Trading Association today agreed to join their efforts to support business-friendly and market-driven solutions that address climate ...
read moreThe International Finance Corporation, the private sector arm of the World Bank, and the International Emissions Trading Association today agreed to join their efforts to support business-friendly and market-driven solutions that address climate change.
T
he two organizations will undertake together activities to increase the awareness and participation of the private sector in the greenhouse gas market and to develop the basis for carbon trading. They will also support capacity building to facilitate participation in the carbon market by the private sector in developing and transition countries. In addition, they will exchange information on developments in the carbon market.
Rachel Kyte, IFC Director of Environment and Social Development, said, “Partnering with the leading trade association in the field of greenhouse gas emissions will allow us to keep a close eye on the needs and requirements of the carbon market and will provide us with an additional platform to present our carbon finance products. We look forward to working with IETA to develop new, business-friendly instruments to address climate change.”
Andrei Marcu, IETA’s CEO, said, ”IFC is one of the important actors on the global greenhouse market as the private sector arm of the World Bank Group. IETA represents all the leading business participants in the carbon market, and working together with IFC represents a natural partnership. This memorandum of understanding formalizes an excellent ongoing relationship.”
Using its extensive experience in project finance, IFC identifies and structures emission reduction transactions and in developing new financial products that help minimize key risks in the carbon market.
IETA is involved in the design and implementation of various emissions trading schemes around the world, promoting an integrated view of the emissions trading system as a solution to climate change. It engages in discussions on regulatory issues and in the creation of systems and instruments that will ensure effective business participation.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit www.ifc.org.
About IETA
IETA is a not-for-profit business organization dedicated to ensuring that the objectives of the United Nations Framework Conference on Climate Change for climate protection are met through the establishment of effective global systems for businesses to trade in greenhouse gas emissions in an economically efficient manner, while maintaining social equity and supporting environmental integration. IETA is active in the European Union, North America, and at the UNFCCC level promoting market mechanisms to bring about solutions to environmental problems. IETA’s membership is currently 139 companies, of which 51 percent represent project developers, intermediaries, financial institutions, brokers, verifiers, legal firms, and others engaged in a new economic activity as a result of the carbon market. The other 49 percent represent industrial organizations that will want to use Certified Emission Reductions to meet existing or future regulatory constraints. For more information, visit www.ieta.org
minimizeSource: IETA -
Thu, 07 Dec 2006
Category: climateprotection
US CO2 Emissions Seen Growing 1.2% A Year Through 2030
The Annual Energy Outlook 2007 (AEO2007) reference case, released on Tuesday by the Energy Information Administration (EIA), reflects the evolution of energy markets in an era of high prices by projecting growth in nuclear capacity and generation, ...
read moreThe Annual Energy Outlook 2007 (AEO2007) reference case, released on Tuesday by the Energy Information Administration (EIA), reflects the evolution of energy markets in an era of high prices by projecting growth in nuclear capacity and generation, more biofuels (both ethanol and biodiesel) consumption, growth in coal-to-liquids (CTL) capacity and production, growing demand for unconventional transportation technologies, and accelerated improvements in energy efficiency throughout the economy.
Details concerning CO2 emission are:
Carbon dioxide emissions from energy use are projected to grow at an average annual rate of 1.2 percent per year, from 5,945 million metric tons in 2005 to 7,950 million metric tons in 2030, reflecting growth in fossil fuel demand. The carbon dioxide emissions intensity of the U.S. economy is projected to fall from 538 metric tons per million dollars of GDP in 2005 to 353 metric tons per million dollars of GDP in 2030, an average decline of 1.7 percent per year.
Total energy demand is projected to increase from 100.2 to 131.2 quads between 2005 and 2030, an average annual increase of 1.1 percent, in a scenario where the U.S. gross domestic product (GDP) grows at an average annual rate of 2.9 percent.
Other highlights of the AEO2007 include:
Real world crude oil prices (2005 dollars), which are expressed in terms of the average price of imported light low-sulfur crude oil to U.S. refiners, are projected to decline gradually from their 2006 average level through 2015 as new supplies come to market in response to the higher prices and expanded exploration and development investments. After 2015, real prices begin to rise as demand continues to grow and higher cost supplies are brought to market. In 2030, real world crude oil prices are projected to reach over $59 per barrel in 2005 dollars, or about $95 per barrel in nominal dollars (Figure 2).
The net import share of total liquids supply, including crude oil and refined products, drops from 60 percent of total liquids supply in 2005 to 54 percent in 2009 and then increases, reaching 61 percent in 2030 (Figure 3). Imports of refined petroleum products account for 20 percent of total net imports in 2030.
Average real natural gas wellhead prices are projected to fall from today’s high levels to just under $5 per thousand cubic feet (mcf) (2005 dollars) by 2013 as increased drilling brings on new supplies and new import sources become available. After 2013, natural gas wellhead prices are projected to increase gradually, to about $6 per mcf in 2030 (equivalent to $9.63 per mcf in nominal dollars).
Major contributors to growth in natural gas supply include LNG imports, the completion of an Alaskan natural gas pipeline in 2018, and domestic unconventional production. Net LNG imports are projected to increase from 0.6 tcf in 2005 to 4.5 tcf in 2030, Alaskan production reaches 2.2 tcf by 2030, and unconventional production grows to 10.2 tcf in 2030, accounting for 50 percent of percent of domestic U.S. natural gas production in 2030 (Figure 4).
Projected real minemouth coal prices falls from $1.15 per million Btu ($23.34 per ton) (2005 dollars) in 2005 to $1.08 per million Btu ($21.51 per ton) in 2019 as prices moderate following the rapid run up that has been seen in last few years and relatively low-cost western mines continue to capture a larger share of the market. After 2019, the growing use of coal in new power plants leads to a gradual increase in coal prices. They reach $1.15 per million Btu ($22.60 per ton) in 2030.
Coal use for new electric generating capacity and CTL production grows rapidly. Coal consumption in the electric power sector is projected to increase from 25.1 quads in 2020 to 31.1 quads in 2030, and coal use at CTL plants is projected to increase from 0.4 quads in 2020 to 1.8 quads in 2030. Projected coal consumption is very sensitive to possible future changes in energy or environmental policies that are not reflected in the AEO2007 reference case.
After reaching a peak of 8.3 cents per kilowatthour (kwh) (2005 dollars) in 2006, average delivered real electricity prices decline to a low of 7.7 cents per kwh in 2015 and then increase to 8.1 cents per kwh in 2030. Without adjustment for inflation, average delivered electricity prices in the AEO2007 reference case are projected to reach 13 cents per kwh in 2030.
Coal remains the primary fuel for electricity generation. The coal share of generation increases from 50 percent in 2005 to 57 percent in 2030. The natural gas share of generation increases from 19 percent in 2005 to 22 percent around 2016, before falling to 16 percent in 2030. Over the entire period from 2005 to 2030, 156 gigawatts of new coal-fired generating capacity is projected to be added in the AEO2007 reference case, including 11 gigawatts at CTL plants and 67 gigawatts at Integrated Gasification Combined Cycle plants. Possible future changes in energy or environmental policies could significantly impact these projected generation shares.
Consumption of renewable fuels is projected to grow from 6.5 quads in 2005 to 10.2 quads in 2030. More than 50 percent of the projected demand for renewables is for grid-related electricity generation, including combined heat and power, and the rest is for dispersed heating and cooling, industrial uses, and fuel blending.
minimizeSource: Energy Information Administration (EIA) -
Wed, 06 Dec 2006
Category: climatepolicy
ECX: Total Volumes Passes 500 million tonne Bar
The carbon market has heralded much change this past year. Daily average volume for November 2006 in ECX CFI Futures Contracts : 2.9 million tonnes carbon dioxide EU Allowances. Proportion of screen-traded futures has increased over the past few ...
read moreThe carbon market has heralded much change this past year.
Daily average volume for November 2006 in ECX CFI Futures Contracts : 2.9 million tonnes carbon dioxide EU Allowances.- Proportion of screen-traded futures has increased over the past few months in relation to OTC trades cleared on the exchange (EFPs). November saw a total of 65.3 million tonnes CO2 traded of which 25.8 million tonnes were screen-traded futures and 39.5 million tonnes were EFPs.
- Total volume since ECX's launch on 22 April 2005 has passed the 500 million tonne mark as of 31 November 2006 (94 million tonnes traded in 2005 with another 412 million tonnes traded this year to date).
- Open interest for ECX Futures Contracts currently rests at 101 million tonnes.
- EU ETS Phase II contract prices have been experiencing upward pressure these past days following European Commission's announcment for tighter allocations in the NAPs for 2008-2012.
minimizeSource: European Climate Exchange -
Mon, 04 Dec 2006
Category: emissiontrading
Hungary to auction CO2 emissions allowances
BUDAPEST — Hungary is offering for sale 1,200,000 EU Allowances through electronic auctions on 11 and 18 December 2006. The Hungarian Ministry of Finance is to sell EU Allowances (EUAs) through electronic auctions to be conducted on the ...
read moreBUDAPEST — Hungary is offering for sale 1,200,000 EU Allowances through electronic auctions on 11 and 18 December 2006.
The Hungarian Ministry of Finance is to sell EU Allowances (EUAs) through electronic auctions to be conducted on the euets.com trading platform, operated by the Vertis group.
The Hungarian State has allocated 31.7 million emission allowances annually in the first phase (2005-2007) of the EU Emissions Trading Scheme (EU ETS) to Hungarian installations. According to the Hungarian National Allocation Plan, 2.5% of the total amount, 2.4 million EUAs, may be issued for payment.
The transactions will be fully cleared and physically settled. Two auction rounds will be held, on 11 and 18 December. The lowest batch size will be 1,000 EUAs.
In addition to the members of euets.com, which operates in Central and Eastern Europe, members of any of the Climex Alliance partner exchanges may directly participate in the auction. The Climex Alliance partners are euets.com, New Values, APX Group and Sendeco2. Further participants may join the auction and submit bids through brokers who are members of any Climex Alliance partner exchange.
The official announcement of the auction can be found on the website of the Hungarian Ministry of Finance. News and details of the auction will be available on the homepage of the euets.com exchange.
Download the announcement of the auction here. (
86 kB)
minimizesource: www.euets.com -
Tue, 28 Nov 2006
Category: emissiontrading
New Green-e Retail Greenhouse Gas (GHG) Product Certification Standard
In the wake of the harrowing predictions included in the Stern Review on the Economics of Climate Change, and in light of other similar reports recently in the press, the Center for Resource Solutions (CRS) announced that the new Green-e will be ...
read moreIn the wake of the harrowing predictions included in the Stern Review on the Economics of Climate Change, and in light of other similar reports recently in the press, the Center for Resource Solutions (CRS) announced that the new Green-e will be released for stakeholder comment in the next few weeks.
CRS is developing the new standard with the Green-e GHG Advisory Group, comprised of key environmental organizations, government agencies, businesses, and advocacy organizations who work on climate change issues.
The Green-e Program is developing this new certification standard to provide consumer protection and market support to the emerging retail greenhouse gas reduction market and the growing number of consumers who choose to decrease their own contribution to global warming by purchasing greenhouse gas reductions. Recent press coverage of voluntary greenhouse gas reduction programs highlights the need for a well designed standard that ensures customers are getting high quality reductions and are protected from double counting and misleading marketing practices.
Growing public and business interest in voluntary climate action, along with predictions in the Stern Report that highlight the need to take immediate action, have added an additional level of urgency to CRS’s work. “For consumers wanting to use their market power to bring about change, certification and verification of greenhouse gas reduction products will give them the reassurance that their purchase is making a difference,” said Dr. Jan Hamrin, president of CRS.
For 10 years, CRS has developed standards for renewable energy in a complex electric regulatory environment. CRS brings that valuable experience to the table in the creation of this new standard for retail greenhouse gas reduction products. The CRS consumer protection standards use transparent, open, stakeholder-driven processes to ensure consensus-based standards that are widely accepted by stakeholders.
minimizeSource: Center for Resource Solutions (CRS) -
Mon, 27 Nov 2006
Category: business
Australia: $60 Million for world’s largest carbon capture and storage project
The Australian Government will provide $60 million to support the world’s largest carbon dioxide capture and storage project in Western Australia, the Minister for the Environment and Heritage, Senator Ian Campbell said on Thursday. The ...
read moreThe Australian Government will provide $60 million to support the world’s largest carbon dioxide capture and storage project in Western Australia, the Minister for the Environment and Heritage, Senator Ian Campbell said on Thursday.
The funding, from the Australian Government’s $500 million Low Emissions Technology Demonstration Fund, will support the Gorgon project operator Chevron with its CO2 Injection project.
“This project, which will capture carbon dioxide from the Gorgon gas field and inject it deep underground, has the potential to reduce Australia’s greenhouse gas emissions by up to three million tonnes each year,” Senator Campbell said.
“The Australian Government’s funding provides for a commercial-scale demonstration project involving liquefying the carbon dioxide so it can be piped to the injection site, injecting it 2.5km underground into a geological structure. There will be long-term monitoring of the stored carbon dioxide to ensure its safety.
“Australia’s reserves of coal and gas are critical to our economic prosperity. Technological advances are needed to allow us to better use these resources more cleanly, and to capture and store their greenhouse gas emissions to prevent them from entering the atmosphere.
“Large scale commercial use of carbon capture and storage technologies offer Australia’s energy sector its single largest opportunity to reduce greenhouse gases. Scientific estimates suggest that up to 25 per cent of Australia’s carbon dioxide emissions could be stored in underground reservoirs each year.
“Through the Australian Government’s low emissions technology fund we’re forging ahead with a broad portfolio of technologies, including large-scale solar power, brown coal drying, oxy-firing of black coal, and enhanced gas recovery from coal seams with carbon dioxide sequestration.
“Lessons we learn from these demonstration projects will be used throughout Australia and internationally. Through the Asia Pacific Partnership on Clean Development and Climate (AP6), Australia has an opportunity to share its knowledge and shape a low emissions future throughout some of the fastest growing economies in the world.
“Climate change is a global challenge, and the work we are funding and supporting in Australia will have a substantial impact on emission reduction options the world can choose from in the future,” Senator Campbell said. He said the project must still clear all relevant State and Commonwealth environmental approvals.
minimizeAustralian Minister for the Environment and Heritage -
Fri, 24 Nov 2006
Category: business
Belarus gets access to Kyoto emissions trading
Kyoto Protocol signatory states gave their consent to including Belarus into the environmental treaty's Annex B at UN climate talks in Kenya earlier this month, giving the country access to emission quota trading. As Vladimir Tarasenko, a ...
read moreKyoto Protocol signatory states gave their consent to including Belarus into the environmental treaty's Annex B at UN climate talks in Kenya earlier this month, giving the country access to emission quota trading.
As Vladimir Tarasenko, a departmental head with the Ministry of Natural Resources and Environmental Protection, told BelaPAN, Belarus will now have to observe its commitments regarding carbon dioxide emissions.
Since Belarus is allowed to emit more than it actually does, it can sell its unused emission quota to industrialized nations whose emission levels exceed the limits set by the treaty. An amendment to the Kyoto Protocol formalizing Belarus' inclusion into Annex B has to be ratified by Minsk and at least 75 percent of the signatory states before the country is allowed to trade in greenhouse gas emissions.
minimizeSource: Indeco -
Wed, 22 Nov 2006
Category: climatepolicy
Despite increases Africa left behind in the carbon market
A report on the state of the carbon market that focuses on Africa, shows that the continent that will be hardest hit by climate change is also the continent that has benefited least from the carbon market. In the first nine months of 2006, the ...
read moreA report on the state of the carbon market that focuses on Africa, shows that the continent that will be hardest hit by climate change is also the continent that has benefited least from the carbon market.
In the first nine months of 2006, the carbon market grew to nearly $22 billion, more than doubling in value over the almost $11 billion recorded in 2005. Almost $3 billion of that was from the project-based market. But although Africa doubled its share of the project-based market, that still only represents 5.1% of the total.
All of that is reported in the State of the Carbon Market Report–a Focus on Africa (, 180 KB) presented last Thursday at the United Nations Climate Change Conference in Nairobi, Kenya. The report prepared by the World Bank follows from an annual carbon market report by the World Bank and the International Emissions Trading Association (IETA) highlighting the trends of the global market for carbon emission reductions. The World Bank data shows that Africa’s numbers account for a very small share of the overall carbon market and occur even though the investment climate across many African countries has improved over the past several years.
Carbon finance provides an opportunity for industrialized country companies and governments to meet their greenhouse gas emission reductions commitments through emissions trading, or in exchange for investments that reduce greenhouse gas emissions in transition economies and developing countries. That is made possible by flexible mechanisms of the Kyoto Protocol, in the case of developing countries, the Clean Development Mechanism (CDM) which brings clean energy technologies and hard currency to developing countries from the sale of carbon emission reductions.
Despite notable gains over the past year, African projects still represent a low fraction of the entire CDM pipeline. As of the end of October 2006, 19 projects from Sub-Saharan Africa were in the CDM project pipeline, out of a total of 1274 projects for all developing countries. The World Bank itself has concluded seven deals in Sub-Saharan Africa.
“Much of what we are seeing can be easily explained,” said Karan Capoor of the Africa region of the World Bank and co-author of the report with Philippe Ambrosi also of the World Bank. “Many African countries have thin energy and industrial sectors with limited opportunities to reduce carbon emissions, certainly relative to countries such as China and India.”
But Capoor added “African countries could greatly benefit from the carbon market if the rules of the Kyoto Protocol and other regimes would allow credits from the forestry and agriculture sectors–these are the most important sectors for African economies and poor people’s livelihoods. Areas that could bring major opportunities for Africa to participate in the carbon market are either not eligible under the Kyoto Protocol and other carbon reduction regimes, or are difficult to access.”
Carbon sequestration from avoided deforestation and from agriculture——potentially important areas for climate mitigation and important in many African economies——has been systematically excluded from the Clean Development Mechanism (CDM). At the same time, CDM-eligible assets from afforestation and reforestation are excluded from entry into the large European Union-Emissions Trading Scheme (EU ETS), substantially limiting their market value and potential share in the multi-billion dollar global carbon market. The Africa share of the CDM market is lower than the share of African countries to developing nations in Foreign Direct Investment (FDI) over the past few years, which has been around 10%. (World Development Indicators 2006).
However the report points out that there is potential for CDM in Africa and opportunities for development. African countries have led the way in finding innovative ways to sequester carbon through afforestation and reforestation activities that also deliver strong local community, environmental and economic benefits. For example in Kenya, the Green Belt Movement Project–for which an emissions reductions agreement was signed this week–is a small-scale CDM project that will reforest about 1,800 hectares of indigenous species within the Mount Kenya and Aberdares regions of Kenya. The activities included in the project are expected to sequester around 0.375 million tons of carbon dioxide equivalent by 2017.
The report goes on to say that the CDM can only be relevant in many parts of Africa if it encourages more clean energy choices, including the ability and the ease of use of the CDM as a tool to bring more clean generation to the grid, e.g. regional hydroelectric and/or gas projects; encourages distributed and off-grid energy access; and promotes cleaner and modern biomass resources.
The Ken Gen Geothermal project signed this week in Nairobi, Kenya, is a prototype of the kind of CDM projects that could blossom across Africa. Under this agreement, the World Bank Community Development Carbon Fund (CDCF) will purchase emission reductions at Olkaria II Geothermal Expansion project estimated at 900,000 tons of carbon dioxide equivalent through 2014.
KenGen is expanding the Olkaria project to generate an additional 35 megawatts which will be injected into the grid in the next two years. By utilizing the geothermal resources of Olkaria to generate electricity, the project will displace electricity produced by fossil-fuel powered plants in the electricity grid equivalent to 150,000 tons of carbon dioxide per year.
minimizeSource: World Bank -
Tue, 21 Nov 2006
Category: emissiontrading
ETS review moots Europe-wide emissions cap
London: A key review of the future of the EU Emissions Trading Scheme (ETS) is to consider replacing the current system of country-by-country caps on emissions with a single, Europe-wide cap. It will also consider expanding the scheme to include ...
read moreLondon: A key review of the future of the EU Emissions Trading Scheme (ETS) is to consider replacing the current system of country-by-country caps on emissions with a single, Europe-wide cap. It will also consider expanding the scheme to include additional sectors and greenhouse gases.
The European Commission has issued a statement setting the agenda for its forthcoming review, saying it will concentrate on four key areas: expanding the scope of the scheme; further harmonisation between member states and more predictability; robust enforcement of the rules; and how to link the EU ETS with similar schemes in different countries.
At the moment, each member state is allocated a number of allowances, which it then distributes to those industrial installations - such as factories and power plants - covered by the scheme. This effectively caps carbon dioxide emissions from trading sectors at this level.
"The result of this nationally-driven process is that the national allocation plans differ from each other and many stakeholders have raised concerns that such differences are having an impact on the internal market," the statement says, explaining that the review will look at a single Europe-wide cap as one solution.
The statement confirms that the review will also consider whether extra gases could be brought within the EU ETS after 2012, including nitrous oxide from ammonia production and methane from coal mines.
But the review will not consider whether aviation should be included after the current phase of the EU ETS ends in 2012. Instead, the Commission will propose legislation on aviation "within the next few months".
Environment Commissioner Stavros Dimas said: "The EU ETS is a clear proof of the EU's commitment to take resolute action against climate change and reach the EU's Kyoto targets. We now need to see how we can further improve the scheme. The better its design, the easier it will be for other countries to adopt similar policies."
The review will also consider ways to harmonise how member states deal with installations built after the start of emissions trading and what happens to an installation's allowances if it closes down.
It will judge whether the trading periods, known as phases, should be longer. The first phase, which began in 2005, is three years long, and the second phase is five years long. A survey of companies, government bodies, industry associations and other market participants, published alongside the Commission's statement, found that 90% of companies and market intermediaries want future phases to last 10 years or more.
The review will also consider how the EU ETS might link with other emissions trading schemes around the world, such as the schemes currently in development in the north-eastern states of the US and Australia.
minimizeSource: Environmental-Finance -
Fri, 17 Nov 2006
Category: emissiontrading
US could cut carbon emissions by 15% at 'no cost'
London, 16 November: About 15% of the carbon dioxide (CO2) emissions predicted for the US in 2025 could be avoided at almost no cost by expanding the use of renewables to provide 25% of the country's electricity and motor fuels, according to a Rand ...
read moreLondon, 16 November: About 15% of the carbon dioxide (CO2) emissions predicted for the US in 2025 could be avoided at almost no cost by expanding the use of renewables to provide 25% of the country's electricity and motor fuels, according to a Rand Corporation study.
Increasing the renewables capacity to 25% in these two sectors would mean US annual spending on energy would most likely change by only ±2% in 2025, the researchers said. Rand estimates annual US energy spending will hit $1.3 trillion by then.
In effect, Rand says it would cost the US nothing to avoid 1 billion tonnes of CO2 emissions in 2025 and it would lower emissions of other power plant pollutants, including sulphur dioxide and mercury.
Oil prices significantly lower than forecasted changed the conclusions only slightly, as the costs of renewables technologies were the biggest influence on future energy spending, the researchers said. On present trends, the cost of renewable technology is likely to fall by 20% by 2025.
The 25% by 2025 target - adopted by the Energy Future Coalition, which commissioned the Rand research - would also mean a cut in oil consumption of 2.5 million barrels of oil per day, or about a fifth of forecasted consumption.
The 25% target also meant lower demand for - and therefore reduced prices for - conventional energy sources, with oil 4%, natural gas 6% and coal 16% cheaper. However, electricity would be 16% dearer, the researchers said.
They also found that in 2015, with a renewables penetration of 10%, energy spending by the US would be less than in 2025, suggesting that renewables could produce significant savings soon. After 2015, sites for renewable power generation or biofuel production would become harder to find, and thus more expensive.
Renewables today provide about 6% of total US energy demand.
minimizeSource: Environmental Finance -
Thu, 16 Nov 2006
Category: climatepolicy
New monthly record on Powernext® Carbon
A new monthly volume record was registered with 3 389 000 tonnes of CO2 traded during the month of October 2006, which represents a daily average of 154 045 tonnes. Powernext Carbon strengthens its leading position among European CO2 organised spot ...
read moreA new monthly volume record was registered with 3 389 000 tonnes of CO2 traded during the month of October 2006, which represents a daily average of 154 045 tonnes. Powernext Carbon strengthens its leading position among European CO2 organised spot markets with more than 80% of the market share in October.
Moreover, the following companies have started trading on Powernext® Carbon:
- ORBEO SAS
- MARCEAU TRADE SAS
- MORGAN STANLEY & CO.
- INTERNATIONAL LIMITED
- HEMLOCK (LUX) SARL
- PETUM s.r.o.
- CONSUS FRANCE SARL
There are now 59 trading members on Powernext Carbon. JP MORGAN VENTURES ENERGY CORPORATION also started trading on Powernext Day-Ahead on November 1st. 53 trading members are now active on Powernext Day-Ahead.
minimizeSource: Powernext® Carbon -
Fri, 10 Nov 2006
Category: emissiontrading
Asia Carbon’s 2nd CER auction sees bids above EUA prices but no deals
Thursday, November 9, 2006, London – Asia Carbon Exchange’s second independent CER auction on Tuesday saw no deals concluded, according to a senior company executive. ACX chief operating officer Vinod Kesava told Platts Wednesday that ...
read moreThursday, November 9, 2006, London – Asia Carbon Exchange’s second independent CER auction on Tuesday saw no deals concluded, according to a senior company executive.
ACX chief operating officer Vinod Kesava told Platts Wednesday that despite bids reaching a high of €10.00 – a price which was higher than the December 2006 EU Allowance price at that time – sellers refused to budge from an offer range between €13.50-18.00.
At the time of the auction, prices for 2006 EUAs had slumped to around €9.30, Kesava said.
A total of eight Clean Development Mechanism projectsoffered CERs; the sources were all in the renewable energy field and included wind power, biomass, landfill gas recovery and hydro power. The buyers were from Japan and Europe.
An additional feature of this auction was that it was the first instance where issued CERs were offered. Kesava said a large international financial company offered around 100,000
CERs that have already been issued by the CDM’s Executive Board.
He added that the issued CERs were offered at the lowest price of €13.50, while the forward CERs from projects all sought the higher prices.
Kesava acknowledged that CER prices have been linked to EUA prices due to the European market’s predominance, but was intrigued by the tendency of CER buyers to link their bid prices to Phase 1 EUA prices, when it is clear that most CERs will be delivered during Phase 2 of the EU Emissions Trading Scheme.
“This implies the fact that CERs can be banked for use in the EU ETS Phase II and they are already being traded in the secondary market to be either used for the Kyoto Protocol’s emission reduction targets and/or used for arbitrage based on its economic-driven value,” he said.
The bid for CERs at prices above those for December 2006 EUAs consolidates the unique value of the flexible mechanisms and perhaps represents the beginning of independent pricing for CERs, Kesava added.
The next ACX auction is scheduled for November 21.
minimizeSource: Asiacarbon / ACX -
Fri, 10 Nov 2006
Category: emissiontrading
Strong Impact of Asia in the Carbon Market
BEIJING (IETA/Wordlbank) - In the first nine months of 2006, the carbon market grew to nearly $22 billion, more than doubling in value over the almost $11 billion recorded in 2005. This and other current statistics are revealed in the State of the ...
read moreBEIJING (IETA/Wordlbank) - In the first nine months of 2006, the carbon market grew to nearly $22 billion, more than doubling in value over the almost $11 billion recorded in 2005. This and other current statistics are revealed in the State of the Carbon Market Report update released today at Carbon Expo Asia in Beijing by the World Bank and the International Emissions Trading Association.
“All the data show that the carbon market is becoming a powerful financial force supporting clean development,” said Karan Capoor, co-author of the report with Philippe Ambrosi, also of the World Bank. “To put this into perspective, the almost $22 billion is four times the GDP of Mongolia and more than twice the GDP of Lao PDR, and the year is not even over.”
Up to the end of September, Asian countries accounted for 84% of total volumes in the CDM market. China continues to dominate the project-based market with 60% of the volume of projects transacted (down from 73% in 2005) with India next with a 15% share of the market volume (up from 3% in 2005).
The carbon market encompasses both project-based transactions # Clean Development Mechanism, CDM in developing countries and Joint Implementation, JI in countries with economies in transition#where a buyer purchases certified emission reductions from a project that reduces greenhouse gas emissions compared with what would have happened otherwise, and trading of greenhouse gas emissions allowances allocated under existing cap-and-trade regimes such as the European Union Emissions Trading Scheme (EU ETS), as well as the voluntary carbon market, for example in the United States and Australia.
The European Union’s Emissions Trading Scheme (EU ETS) dominated the market in terms of value, accounting for nearly US$19 billion of the total carbon market worth, with project-based transactions well on track to be worth over US$3 billion by the end of the year. The overall volume of CDM transactions in developing countries in the carbon market remains steady although prices are up over 2005.
“The GHG market has performed well in terms of market functioning, but what is more important, it is delivering in terms of catalyzing green investments at a more rapid pace than expected,” said Andrei Marcu, Executive Director of the International Emissions Trading Association (IETA).“It is a real change in terms of the availability of finance to address environmental problems in developing countries. We will continue to work to ensure that all countries benefit equally from carbon finance and that projects have a strong sustainable development component, especially on the energy side.”
Much of the China volume came from industrial gas projects like HFC-23, a byproduct of HCFC22, a gas used for refrigerants, but the days of those types of projects may be numbered in China.
“We do not encourage more HFC projects,” said Lu Xuedu, Deputy Director of China’s Office of Global Environment Affairs, Ministry of Science and Technology. “We would prefer to have more energy efficiency and renewable energy projects that could help alleviate poverty in the countryside.”
CDM market data shows that renewable energy and energy efficiency projects are gaining market share, now accounting for 26% of total project-based volumes, more than doubling from 11% in 2005. Last year energy efficiency was nearly missing from the market data and now it has emerged accounting for nearly 14% of total CDM volumes. Renewable energy is also increasing, accounting for 12% of the CDM market with wind energy accounting for half of this, tripling from 2% last year.
“Clean energy is clearly benefiting from the carbon market, said Joëlle Chassard, Manager of the Carbon Finance Unit at the World Bank, “but its true potential for sustainable development can only be realized if there is a strong policy signal for its continuation into the longer term.”
As the carbon market continues to grow, there is indeed much concern over what will happen beyond the Kyoto Protocol’s first commitment period (2008-2012). Developments in carbon trading outside the Kyoto Protocol are noteworthy. Progress in mandatory greenhouse gas emission regulation in the United States is happening with the California and the Northeastern States trading schemes. Both regimes are setting long-term targets, sending a market signal well beyond 2012 as they both acknowledge a need for market-based mechanisms. The Northeastern States trading regime allows for an interface with Kyoto Protocol credits and other mandatory regimes.
minimizeSource: IETA -
Mon, 30 Oct 2006
Category: emissiontrading
Study: Deep-sea sediments - an innovative solution for storing CO2 safely
Curbing current emissions of anthropogenic carbon dioxide (CO2) is one of the most pressing technical and economical challenges of our time, especially since these emissions play a major role in climate change. In order to stabilise atmospheric CO2 ...
read moreCurbing current emissions of anthropogenic carbon dioxide (CO2) is one of the most pressing technical and economical challenges of our time, especially since these emissions play a major role in climate change. In order to stabilise atmospheric CO2 concentrations, several alternatives have been proposed for the long-term storage of the CO2 captured during fossil fuel combustion. These include storage in various geologic formations, injecting CO2 directly into the deep ocean and chemically transforming CO2 into less reactive compounds. All these alternatives present different disadvantages including gas leakage, potential impacts on the surrounding ecosystems, and high implementation costs.
Recently, American researchers have proposed a fourth storage option that combines some of the beneficial elements of the other three and also overcomes some of their limitations - injecting CO2 into deep-sea sediments. The scientists evaluated the possible changes in the physicochemical characteristics and possible long term fate of the stored gas.
According to the authors, injecting pure CO2 into the world's oceans at depths of at least 3,000 meters, and below several hundred meters of marine sediments, represents a virtually unlimited, safe and permanent storage solution for this gas.
This option presents some advantages in comparison with alternatives proposed previously. The combination of low temperature and high pressure at the afore-mentioned ocean depths turn CO2 into a liquid denser than the surrounding water thus preventing the possibility of escape and facilitating virtually permanent storage. Furthermore, at sufficiently low temperature and high pressure, CO2 forms solid crystals, further boosting the system's stability. In such conditions the CO2 would be stored safely, even after major geological disturbances such as earthquakes.
Moreover, injecting CO2 into deep-sea sediments rather than directly into the ocean would minimise potential damage to marine ecosystems and would ensure that the gas would not eventually be released into the atmosphere due to the mixing action of natural ocean currents.
The current study proposes an innovative solution for the storage of man-made CO2. Further assessment of the mechanical and technical feasibility of injecting this gas at ocean depths of 3,000 meters is now needed.
minimizeSource: fona -
Mon, 16 Oct 2006
Category: business
E.ON UK applies to build new £1bn supercritical coal-fired power units in Kent
E.ON UK, the company that runs Powergen, has today submitted a scoping statement to statutory consultees(1) over its plans to build two new 800MW supercritical units at its Kingsnorth coal-fired power station in Kent. The application is for what ...
read moreE.ON UK, the company that runs Powergen, has today submitted a scoping statement to statutory consultees(1) over its plans to build two new 800MW supercritical units at its Kingsnorth coal-fired power station in Kent.
The application is for what could be the UK’s first highly efficient supercritical coal-fired units, which will reduce carbon emissions by almost two million tonnes a year compared to the existing units if built. The two 800MW units would be built next to the existing station, which has four units, and would be carbon capture ready.
The move is part of the company’s commitment to reducing its carbon intensity(2) by 10% by 2012, compared with 2005. The new units will operate at an efficiency of 45% and above, compared to the existing units’ efficiency of around 36%. E.ON UK has already reduced its carbon intensity by 20% since 1990.
Dr Paul Golby, Chief Executive of E.ON UK, said: “This proposal is another example of E.ON planning for tomorrow’s energy today. It’s only by looking at building new power projects such as this, together with new renewables, our clean coal station at Killingholme and our proposed gas-fired stations at Grain and Drakelow, that we can help ensure the UK’s lights stay on for decades to come while also reducing our emissions. Alongside that, these new, highly efficient, coal-fired units offer the UK a diversity of supply which will mean we don’t become overly reliant on a single fuel source for our power. This could also open a new chapter in cleaner coal generation in the UK because the supercritical units could reduce CO2 emissions by up to 1.8m tonnes(3) a year. If approved, Kingsnorth units 5 and 6 would also be built to be carbon capture ready, meaning that we could store carbon dioxide underground to ensure it’s never released into the atmosphere. However, this further development would be dependent upon the development of new technology and the creation of a suitable long-term framework to make its deployment viable.”
The new station, which would use direct cooling and so would have no cooling towers, would be capable of producing enough power for around 1.5m homes, roughly the same as the existing units. It would be built next to the existing four 485MW coal-fired units, which will cease operation and be demolished once the new units are fully operational and proven.
E.ON UK is also considering making the new units capable of burning biomass with coal, although that would be dependent on the continuation of the current framework for biomass co-firing.
They would also be fitted with a flue-gas desulphurisation plant, which removes sulphur dioxide and, with selective catalytic reduction, oxides of nitrogen. They could eventually be fitted with amine ‘scrubbers’ or other carbon capture technology to remove the CO2 before emission.
The new units would only start generating commercially once the existing units had ceased operation, which must be by the end of 2015 under the strictures of the EU’s Large Combustion Plant Directive.
If feasible, the new station’s carbon capture and storage equipment would be built on the site of the old units once demolished.
E.ON UK has already applied for S36 consent to build two new gas-fired power stations, at Drakelow in Derbyshire and at the Isle of Grain in Kent, and is conducting a feasibility study into building a clean coal power station at Killingholme in Lincolnshire.
In addition, as well as closing Kingsnorth by the end of 2015, the company is also ending production at another, older, coal-fired power station, at Ironbridge in Shropshire.
The company is currently building the UK’s largest dedicated biomass power station at Lockerbie and has around 1,300MW of wind farm schemes in various stages of development. It has also recently created a marine arm to investigate the possibility of tidal and wave power.
As well as operational reductions, the company is looking to reduce its non-operational carbon footprint by making its buildings more energy efficient and is reviewing ways to reduce business mileage.
minimizeE.ON UK -
Thu, 12 Oct 2006
Category: business
Spanish Nap favours coal plants, says Iberdrola
Spain’s second-largest utility Iberdrola has accused the country’s environment ministry of showing favouritism towards coal-fired plants when drawing up Spain’s phase two national allocation plan (Nap). Iberdrola has called for ...
read moreSpain’s second-largest utility Iberdrola has accused the country’s environment ministry of showing favouritism towards coal-fired plants when drawing up Spain’s phase two national allocation plan (Nap). Iberdrola has called for clean technology to take priority in the 2008-12 Nap and has criticised the draft for assigning more emissions allowances to coal-fired plants than to combined-cycle gas turbine (CCGT) units.
“Coal plants not only recuperate the cost of CO2 [carbon dioxide], but actually get a subvention for being the most polluting plants,” the utility said.
The company accused the environment ministry of using emissions factors that are “clearly favourable” to coal plants over CCGTs when determining emissions allocations for 2008-12.
In the Nap, the environment ministry claims that 0.92kg of CO2 is produced for every KWh of power generated by a coal plant. But Iberdrola said it is possible to produce just 0.75kg CO2/KWh in coal-fired plants.
Ibedrola said the Nap is unfavourable to CCGT producers, as the ministry estimates that just 0.34kg CO2/KWh is produced by a CCGT when the average CO2 production from a CCGT plant in Spain is 0.37kg/KWh.
Iberdrola is Spain’s largest CCGT producer, with more than 8,100MW of installed CCGT capacity in the country.
Spain has proposed a relatively strict phase two Nap and plans to reduce the number of allowances that it distributes in 2008-12 by almost 24pc compared with Nap 1, to 145mn t/yr.
Spain is the industrialised country that is furthest from meeting its Kyoto protocol targets. Greenhouse gas emissions last year were 52pc above the 1990 baseline, and the country is committed to limiting emissions to just 15pc above the baseline by 2012.
The environment ministry said it had no comment to make on the issue.
minimizeSource: http://www.argusmediagroup.com -
Thu, 28 Sep 2006
Category: climatepolicy
Nord Pool expands market reach
Lysaker- Nord Pool ASA enters into new markets in the Baltics. Growing interest for the financial and EUA markets has resulted in two new market participants from Estonia and Lithuania. The new companies are UAB E-energija from Lithuania and Eesti ...
read moreLysaker- Nord Pool ASA enters into new markets in the Baltics. Growing interest for the financial and EUA markets has resulted in two new market participants from Estonia and Lithuania.
The new companies are UAB E-energija from Lithuania and Eesti Energia from Estonia, and both will be clearing clients in the financial market. Nord Pool wants to attract more customers from the Baltics to the markets for financial power contracts and EUA. With the new customers from Estonia and Lithuania the Nord Pool ASA group has over 400 members from 14 countries.
- ”We decided to join the Nordic power exchange due to several reasons. Security, attractive fees, liquidity, large turnover and possibilities to trade on several commodities. We simply believe that there are good business opportunities for Baltic companies on Nord Pool,” says responsible for EUA in E-energija, Arturas Strolia.
The Baltic and Nordic power markets will at the end of 2006 be connected through the Estlink cable between Estonia and Finland. This gives Baltic power producers and industry companies incentives to become members at the Nord Pool financial and EUA markets. Hence, Nord Pool (financial market) has already received applications from other Baltic companies that want to become members at the Nordic power exchange.
- “Due to rapidly growing business and industry activities in the Baltics towards the Nordic countries, the Baltic region is very interesting for us. The new power interconnection between the Nordics and Baltics emphasize this fact. The financial market in general will benefit from the new members, connecting a new power market to Nord Pool,” says Tanja Ilic, senior vice president sales, Nord Pool ASA.
minimizeSource: Nord Pool -
Thu, 28 Sep 2006
Category: emissiontrading
ABP and PGGM put millions in Climate Trade
The Dutch Pension Funds ABP (NATIONAL CIVIL PENSION FUND) and PGGM will invest heavily in climate change. With some hundreds of millions dollars both funds are the largest investors in Carbon Fund II of Climate Change Capital (CCC), a prominent ...
read moreThe Dutch Pension Funds ABP (NATIONAL CIVIL PENSION FUND) and PGGM will invest heavily in climate change. With some hundreds of millions dollars both funds are the largest investors in Carbon Fund II of Climate Change Capital (CCC), a prominent specialist in the rapidly growing trade in Co2-emission allowances. Spokesmen of both pension funds confirmed the investments on sunday evening, although ABP refused to comment on the significance of the amount.
The Carbon Fund II, with $1 billion, intends to become the largest private fund dealing in Co2-emission rights.. So far the fund has accumulated $830 million, more than half of which comes from the Netherlands according to sources at CCC. Other participants in the fund are a large British energy company and a group of international banks that specialise in emerging markets.
The importance of the project becomes clear from the fact that the World Bank processes $8 billion annually on the climate change market. According to the Dutchman Peter Koster, CEO of the European Climate Exchange, it is also a good sign for the environment that large pension funds such as ABP and PGGM have discovered the relatively new market of Co2-emission rights. “It shows that Co2 emission allowances have become an integral part of the financial market.”
The “green aspect” that is associated with the trade is certainly not unimportant, according to Koster: “But don’t forget, this is just business.” And a rapidly growing business sector as well. The European Climate Exchange traded $275 million in Co2-emission allowances this year already, representing a value between €5 and the €6 billion. Last year the exchange, which had just been established in 2005, processed approximately $95 million in Co2-emission allowances.
The principle of emissions trading seems to work to the advantage of industrialised countries. According to the Kyoto-protocol every country gets a quota for Co2 emissions. However, one can purchase the right to pollute by investing elsewhere in “cleaner” industries.
minimizeSource: ECX -
Tue, 12 Sep 2006
Category: emissiontrading
Firms trade £400m of carbon credit with China
Leading private sector companies claimed yesterday to have joined the battle against climate change with a groundbreaking deal worth up to £400m to buy 29.5m tonnes of carbon credits from China. The deal will allow a Chinese chemical company to ...
read moreLeading private sector companies claimed yesterday to have joined the battle against climate change with a groundbreaking deal worth up to £400m to buy 29.5m tonnes of carbon credits from China.
The deal will allow a Chinese chemical company to construct a special system for eliminating super greenhouse gas, HFC 23. It in turn will sell carbon permits to companies such as Centrica, owner of British Gas, allowing it to meet its carbon reduction targets while continuing with its current rate of emissions. (..)
minimizeread more: The Guardian -
Tue, 12 Sep 2006
Category: emissiontrading
Asia Carbon Exchange’s August 24th auction hits record high price for CERs In Vietnam
Asia Carbon Exchange (ACX), the world’s first CDM-focused exchange is pleased to announce that its first independent auction held last Thursday, August 24th, yielded a record high price for CERs from a Viet Nam project, to-date. The auction ...
read moreAsia Carbon Exchange (ACX), the world’s first CDM-focused exchange is pleased to announce that its first independent auction held last Thursday, August 24th, yielded a record high price for CERs from a Viet Nam project, to-date. The auction demonstrated a transaction of 230,000 CERs of the total volume of 460,000 CERs or 50% of the total volume, collectively offered from Brazil, Sri Lanka and Viet Nam.
The Vietnamese project, a hydro-power plant will be commissioned in late 2008 and will fully begin to generate CERs from 2009. The project is currently at the validation stage as far as the CDM project cycle is concerned. The CERs from the project were transacted between the counter-parties at 6.75 EUR per ton and only 80% of the total volume was offered for sale to mitigate the delivery risk, as has been the practice.
In the previous auction, the transacted highest price for a Vietnamese CDM project was 5.70 EUR.
Vinod Kesava, Chief Operating Officer of the Asia Carbon Group of companies which includes ACX said, “Once again our platform has demonstrated the need for a trading system that allows for price discovery and transparency for the carbon markets to fully appreciate and mature in accordance with the key objectives of the Kyoto Protocol. This is especially relevant for the CER and ERU markets which had evolved without a basis for price with an exception of comparison to the EU allowance spot and futures markets. ACX is now in the process of listing buyers from Japan and Canada in keeping with their objective of operating a global platform. In addition, ACX has been approached increasingly by buyers of VERs in the marketplace to achieve their corporate social responsibility (CSR) objectives. ACX intends to use different trading methods including the auction system to bridge this demand and is already in the process of aggregating VERs.
The next CER auction is scheduled to be held in September 2006.
minimizeSource: Asian Carbon Group -
Wed, 30 Aug 2006
Category: emissiontrading
Climate policy in Sweden
The threat of the already ongoing climate change is taken very seriously all over the world. Sweden has a strategy for reducing national emissions of greenhouse gases. At the same time, Sweden´s efforts in the negotiations around climate change are ...
read moreThe threat of the already ongoing climate change is taken very seriously all over the world. Sweden has a strategy for reducing national emissions of greenhouse gases. At the same time, Sweden´s efforts in the negotiations around climate change are largely channelled through the EU.
Most of the world´s climate researchers agree that the Earths climate systems are changing. They also agree that the consequences may be dramatic. Therefore the threat of climate change is taken very seriously all over the world. Climate change could have serious negative effects for agriculture, community planning, economies and ecosystems.
Climate objectives and strategy
The Swedish Parliament has endorsed the goal of reducing national emissions of greenhouse gases by at least four per cent on average below 1990 levels by 2008 - 2010. Moreover, the environmental quality objective of reduced climate impact implies that Swedish emissions of greenhouse gases should decline by up to 50 per cent from present levels by 2050 or emissions below 4.5 tonnes of carbon dioxide equivalents per person per year. The current national average for emissions per Swedish resident is about eight tonnes per year.
In order to reach its objectives, the Government has drawn up a strategy with guidelines for Swedish climate policy (Government Bill 2001/02:55, Swedens climate strategy), which the was adopted by the Swedish Parliament. The strategy includes the following:
- Continued green tax reform including higher carbon dioxide taxes in exchange for lower taxes on labour. In the Fiscal Policy Bill of 2005 Government proposes that this tax shift should amount to a total of SEK 3,6 billion for the year 2006
- Measures in the transport policy sector, including tax relief for environmentally friendly cars and biofuels. There is a tax relief for cars classified as a taxable benefit using environmentally-friendly fuels or environmentally-friendly technology. In the Fiscal Policy Bill of 2005 Government suggests that the tax exemption for carbon dioxide neutral propellants should be extended until 2013.
- Information to increase awareness of climate change.
- Climate investment programmes enabling municipalities, companies and others to apply for grants to take measures reducing greenhouse gas emissions. For 2006 Government has proposed extended allocation for climate investments by SEK 200 million for 2006 and SEK 320 million for 2007 and 2008.
- Preparations for implementing the flexible mechanisms of the Kyoto Protocol. In accordance with the climate strategy, the Government is at present carrying out a review of progress and will a new climate bill during the autumn of 2005.
Greenhouse gas emissions in Sweden are going down
Swedish emissions of greenhouse gases declined by 3.5 per cent between 1990 and 2002, according to the annual report to the EU Commission and the Secretariat of the United Nations Framework Convention on Climate Change that Sweden delivered in March-April 2004. Emissions from heating in smaller plants and single furnaces, for example, have fallen by 38 per cent since 1990. This is due to a reduction in the use of oil-fired heating and greater use of alternative heating methods. District heating has been extended and at the same time the use of biofuels has increased. The tax on carbon dioxide has probably played an important role.
Increased emissions from traffic
Emissions from traffic, however, are increasing. Carbon dioxide emissions from the transport sector rose by about 10 per cent between 1990 and 2002. The Government is concerned about the increased emissions from traffic and takes the view that this trend must be broken to enable Sweden to bring down its emissions of greenhouse gases in the long term.
Swedish climate action through the EU
Since climate is a global issue, it must be addressed by the international community. International climate cooperation is organised via the UN Framework Convention on Climate Change and the Kyoto Protocol. The regulatory framework developed under the Kyoto Protocol is the result of very extensive international negotiations over a period of years. Sweden and the EU have consistently taken a proactive part in this work. Since beginning of 2005 the Kyoto Protocol has entered into force. A first meeting of the parties (MOP) will take place in Montreal later this year with important discussions on a post-Kyoto regime.
Swedish action in the climate area is largely channelled via the EU, which has given Swedish efforts considerable weight in the international negotiations. The EU takes concerted action for the Member States within the UN Framework Convention on Climate Change and the Kyoto Protocol, though the EU countries individually are parties to the Convention. The EU countries coordinate their work, e.g. by presenting their negotiating positions jointly. The EU is also a proactive force in the international negotiations.
Implementation of the Kyoto Protocol highest priority
The implementation of the Kyoto Protocol is a matter of the highest priority for Sweden and the EU. Work on implementation falls into two areas. Firstly, the EU must take steps to ensure that the Member States can meet their commitments. Secondly, the EU must introduce and develop the regulatory system that has been agreed internationally so as to show that it does actually lead, in a cost-effective manner, to global, fair emissions reductions.
Over the past years, the EU has taken a number of decisions that prove that the EU is determined to fulfil the ambitious targets set. In this regard the start of a European Emissions Trading Scheme (ETS), which was launched in January 2005, is an important step. Moreover, an amendment to the directive linking the project-based mechanisms of the Kyoto Protocol with the emissions trading system is currently being implemented. Further, a decision on monitoring of greenhouse gases, as required by the Kyoto Protocol, has been adopted. Negotiations are also under way on a regulation on fluorinated greenhouse gases (HFC, FC and SF6). Later this year the EU will launch the second phase of the European Climate Change Programme (ECCP) with measures to curb emission of greenhouse gases.
minimizeGovernment Offices of Sweden -
Mon, 28 Aug 2006
Category: climatepolicy
Carbon capture and storage technologies: Where do we stand?
In a Norwegian context, gas-fired power plants with carbon capture and storage can help reduce our greenhouse gas emissions, improve the energy balance, and potentially supply environmentally friendly electricity to Europe and electrify the ...
read moreIn a Norwegian context, gas-fired power plants with carbon capture and storage can help reduce our greenhouse gas emissions, improve the energy balance, and potentially supply environmentally friendly electricity to Europe and electrify the continental shelf. Internationally, the same technology has a great potential application in coal-fired power plants.
How far have we come today when it comes to capturing and storing CO2?
By Nils A. Røkke and Ola Maurstad
Perhaps nowhere else in the world does carbon capture and storage (CCS) rank higher on the political agenda than in Norway. Modern gas-fired power plants that emit CO2 are referred to in Norway as old-fashioned technology, even though they represent the cutting edge in high technology. Although such power plants will help reduce emissions in many countries, Norway uses mostly hydropower, so gas-fired power will actually increase greenhouse gas emissions. The government’s Soria Moria Declaration appears to resolve the gas-power debate by declaring the government’s intent to support gas-fired power that uses CCS technology. For the research community that the Gas Technology Center at NTNU-SINTEF represents, it is exciting to study technology that can help Norway meet its Kyoto targets through action — and not just through emissions trading. In the shorter term, the capture of CO2 can be used in enhanced oil recovery (EOR) and improve profitability. In the longer term, we envision a storage solution in geological structures under the seabed.
The growth in global energy consumption has mainly been met through increased consumption of fossil fuels, such as coal, oil, and natural gas. Burning fossil fuels causes the carbon in the fuel to react with oxygen from the air, creating CO2 and releasing heat that can be used as energy. Technologies for CO2 capture and storage are a fascinating solution because they allow the continued use of fossil energy, but with highly reduced emissions. Typically, 80-90% of the CO2 can be captured in this way. This technology can play a key role on the road to more sustainable energy systems and should be seen in connection with reducing energy demand, increasing energy efficiency, and increasing production of renewable energy.
Areas of application
It is easiest to use the technology on major point sources of emissions from combustion of coal, oil, and natural gas, as well as biomass. As a point of interest, it is worth mentioning that biomass is “CO2 neutral” if its removal is compensated by new growth. Applying CCS technology in addition will then actually result in a net removal of CO2 from the atmosphere (negative emissions). Internationally, however, research is focused mainly on coal-fired power plants, while in Norway it is focused on gas-fired power plants — which can probably be explained by looking at the resources in the different countries. Although energy production represents a greater potential for emissions reductions, emissions from various industrial processes such as cement production represent “low-hanging fruit” (low costs) for CCS. Here, process flows with high concentrations of CO2 often represent opportunities for relatively simple and inexpensive CO2 capture.
Why hasn’t the technology been realized?
Despite considerable attention and the introduction of many new technological solutions, no power plants with CCS of any reasonable size have been realized so far. This is true for both gas-fired power plants and coal-fired power plants, both in Norway and throughout the rest of the world. If technological solutions based on commercially available components are available, why aren’t the power plants being constructed? The main reason is the cost and the associated financial risk. Capturing CO2 requires significant investment. For a gas-fired power plant that produces 400 MW (megawatt) of electricity, a carbon capture system for waste gas would double the investment costs. Moreover, capture and compression of CO2 for transport requires an increased use of natural gas, thus increasing the fuel costs per produced kWh el (kilowatt hour of electricity). Transporting CO2 from the power plant to a storage area or EOR application requires an infrastructure, such as pipelines. Several numbers have been tossed around among various actors with respect to the costs of CCS. As we do not yet have experience from a realized large-scale facility, all of these are associated with uncertainty. This is illustrated in the recent report “Carbon dioxide capture and storage,” where the IPCC estimates a cost in the area of USD 20-70 per ton CO2 emissions that are prevented.
Where does the technology stand today?
CCS technology for gas-fired and coal-fired power plants is divided into three main categories: a) post-combustion, b) pre-combustion, and c) oxy-fuel. Post-combustion means that CO2 is captured in an exhaust-scrubbing system after combustion (end-of-pipe solution). This technology is the most technologically mature, and can in principle be attached to a power plant without being tightly integrated into the power plant. Pre-combustion technology converts natural gas or coal to a hydrogen-rich gas while capturing CO2 at the same time. This hydrogen-rich gas is used afterwards as a fuel in a gas-fired power plant so that the exhaust contains very little CO2. This technology is considered somewhat more complex but also mature, with commercially available components.
Internationally, there is a lot of focus on integrated gasification combined cycle (IGCC) as an environmentally friendly way to exploit coal, and there are several pilot facilities. Here, coal is gasified to a hydrogen-rich mixture that is burned in a gas-fired power plant where CO2 can potentially be removed from the fuel flow so that the exhaust contains very little CO2. With the technology oxy-fuel, the combustion takes place with pure oxygen instead of air (which mixes in large amounts of nitrogen and complicates the capture of CO2 from the waste gas) so that the exhaust contains only water vapor and CO2, which is both inexpensive and can easily be separated by cooling. However, oxygen production demands an expensive and energy-intensive air-separation facility. The oxy-fuel technology is more mature for coal than for natural gas. This is because combustion of coal can take place in a boiler, while the necessary modifications that have to be made in today’s gas turbines to accept the new fuel mix will result in unacceptably poor performance. Because it is an expensive process that can take a number of years, gas turbine producers must be convinced that a considerable market exists before they invest. A number of other power plant concepts with CCS that do no fit squarely into these three categories are also being worked on. Many of these new concepts include membranes and fuel cells, which will require a break-through in material technology.
In the United States, CO2 from natural sources is being re-injected into the ground for EOR on a commercial basis. They also have experience with transporting CO2 in pipelines. Shipping of liquid CO2 is also possible. When it comes to storage, the Norwegian Sleipner project is the world’s first and largest. Here, CO2 is separated from a well flow with natural gas (because buyers in Europe do not want too much CO2 in the natural gas they purchase) and is injected into the saline aquifers under the ocean floor.
Importance of efficiency
The efficiency of a gas-fired power plant is a measurement of how effectively the energy in the natural gas is utilized. It is defined as produced electric power delivered to the grid divided by the natural gas’s lower calorific value (a measure of the chemical energy in natural gas). The efficiency determines the consumption of natural gas and how much CO2 is formed per kWh electricity produced. Increased efficiency means lower consumption of natural gas, less formation of CO2 (less must be captured), and usually also lower emissions of NOx and other polluting gases. As a rule, increased investment should result in greater efficiency; however, energy producers do not wish to maximize efficiency, but rather to minimize production costs of electricity. High gas prices and increased quota process for CO2 are, however, factors that will give added incentive for greater efficiency.
At the Norwegian University of Science and Technology (NTNU), we have evaluated a number of different gas-fired power plants with carbon capture. Figure 1 shows the efficiency from thermodynamic calculations we have carried out for several energy processes. The most noteworthy aspect of the figure is that it shows that a number of different technologies have been proposed and that carbon capture leads to reduced efficiency. However, future gas-fired power plants based on components such as membrane reactors and fuel cells represent a great potential for improvements in the longer term.
Further research does not restrict action
As already mentioned, additional investment is required to implement CCS. An additional feature of today’s technology is a reduction in the efficiency (of about 10 percentage points). This corresponds to an increased fuel consumption of over 20 percent. There is thus good reason to seek improvements for the sake of both costs and resources. Further investment in research should nevertheless not hinder the possibilities we see already with the use of current technology. On the plus side, it is possible for Norway to re-inject the CO2 for EOR in the North Sea. This can generate considerable value. Likewise, for every ton of CO2 we remove, we save about 20-25 euros in quota costs.
In total, CCS can turn out to be a good and future-oriented solution that can be profitable for Norway. It is more future-oriented of us to implement the entire CO2 chain in Norway than to buy quotas. This implies increased Norwegian value added because we ourselves further refine our natural gas into environmentally friendly energy that can be sold abroad. It is unlikely Norway would profit from selling lumber as much as it would by turning that same lumber into paper? The same applies to natural gas. However, we will emphasize that some strategic steps must be taken to realize CCS. Someone has to take the risk in the value chain and start up, and the only natural actor that can do this in a market-oriented economy is the state. Our new government has acknowledged this in the Soria-Moria declaration: “The Government will cooperate with developers of gas-fired power plants regarding facilities for carbon capture, and contribute financially to that this can be implemented as soon as possible.” (Authors’ translation.) We will watch the developments with great anticipation and will be happy to contribute our expertise so that the government will successfully meet these goals.
About the authors
Nils A. Røkke: is Chairman of the Gas Technology Center NTNU-SINTEF and President of Gas Technology SINTEF.
Ola Maurstad: is a post-doc researcher at the Norwegian University of Science and Technology (NTNU).
minimizeSource: CICERO -
Tue, 28 Mar 2006
Category: business
