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Emissions Trading Reforms Raise Price Of Pollution Permits
Policymakers say a higher price is essential to encourage more greenhouse gas reductions across Europe’s industry Damian Carrington guardian.co.uk , Wednesday 3 July 2013 The EU emissions trading scheme, the largest in the world and now being replicated in China, is intended to tackle climate change by reducing CO2 emissions across Europe’s industry. Photograph: Ina Fassbender/Reuters[/color] Critical reforms to Europe ‘s flagship scheme for cutting carbon emissions were passed for the first time on Wednesday in the European parliament. The move immediately caused the price of pollution permits, currently near rock bottom, to rise. Policymakers believe a higher price is essential to encourage more greenhouse gas reductions. The EU emissions trading scheme, the largest in the world and now being replicated in China, is intended to tackle climate change by reducing CO2 emissions across Europe’s industry. But a huge oversupply of permits, owing to the economic crisis causing production to drop, and because of lobbying by industry, caused the price paid to emit a tonne of carbon to crash in recent years . The short-term fix approved on Wednesday will delay the release of permits for 900m tonnes of carbon, cutting the oversupply, and member states will now decide how to implement the plan. German MEP, Matthias Groote, who steered the reforms through the parliament, said: “We shall not let the ETS be the victim of short-term concerns. Structural reform of our emissions trading system will follow to ensure it remains the cornerstone of EU’s climate policy.” “The symbolic nature of this vote cannot be underestimated,” Rob Elsworth, from carbon trading thinktank Sandbag. “The parliament has shown that it sides with climate ambition and has silenced those looking to kill the EU carbon market.” EU commissioner for Climate Action Connie Hedegaard also welcomed the vote. “We must have a well-functioning carbon market to boost innovative low-carbon technologies in Europe,” he said. Ed Davey, the UK’s energy and climate change secretary, said the vote was an important step forward. “We need a stable carbon market so we get a more certainty for investors so emissions reductions can be achieved at the lowest cost possible.” Analysts suggest that only the cancellation of permits, not merely a delay, will be sufficient to drive up carbon prices to the level that ensures industry acts to cut emissions. But amid intense industry lobbying it has been politically difficult to make any reforms: a proposal to delay – or backload – permits was defeated in the European parliament in April , causing the carbon permit price to fall by almost half on the day. On Wednesday, the vote was carried by 344 to 311 votes. However, energy intensive industry groups said they were disappointed at “interference” in the market. Ian Rodgers, director of UK Steel, said: “The parliament not only took the wrong decision on backloading, but also rejected an amendment which would have provided much needed [financial] support for industries that face significant barriers to reduce emissions.” Rhian Kelly, CBI Director for business environment, said: “British business is committed to the ETS as the cornerstone of EU energy and climate change policies [but] the commission must also improve support for those businesses most at risk from any future reforms.” MEPs rejected a number of proposals intended as compromises to industry. BNEF carbon analyst Konrad Hanschmidt said: “This was more bullish than the market had anticipated.” Nick Robins, at HSBC bank, said: “This will provide a modest – but temporary – boost to the market. More importantly, we expect that this will provide positive momentum for [future] structural reform of the ETS.” The carbon price rose 10% to €4.75 by mid-afternoon on Wednesday but remained about 50% down on its 12-month high of €9. The EU’s four biggest nations – UK, France, Germany and Italy – and at least eight other member states are in favour of strengthening the EU emissions trading scheme , as are dozens of major companies including Shell, E.ON, SSE, ENEL, Unilever and Ikea. David Hone, Shell’s chief climate change adviser, said: “The ETS is the most cost-effective approach to meeting Europe’s energy needs and reducing emissions over time. It is in urgent need of reform and backloading is an important first step.” The reform was also opposed by MEPs in the Conservative EPP grouping, including all but one Conservative MEP who defied David Cameron to vote against the backloading. Cameron wanted an even more ambitious backloading, of 1,200m permits. The UKLibDem’s European environmental spokesman and MEP Chris Davies said: “Conservative MEPs have turned their back on the future and shown their contempt both for the needs of British industry and the policies of the coalition government.” The ETS was launched in 2005, to allow the buying and selling of permits and ensure carbon was cut where it was cheapest to do so. Prices crashed during the first trading period to near zero in 2007, because of the over-allocation of permits. But traders dismiss that collapse, blaming it on early errors in the experimental phase of the market. The carbon price hit a peak of €32 in April 2006 and traded above €30 in 2008. Wednesday’s reforms will mean backloading can only happen once before 2020. Analysts believe the backloading of 900m permits could raise carbon prices to €15, but say prices above €20 are needed to give utilities sufficient incentive to make serious switches to lower carbon energy generation. Greenpeace’s Joris den Blanken said: “The Parliament unexpectedly rejected a further weakening of the plan, but there is still not too much to celebrate. As soon as the suspended allowances are allowed to re-enter the system, the carbon market will be back to square one.” He said 2.2bn allowances must be cancelled before 2020 to restore the credibility of the ETS.[/font][/color] Continue reading
Pöyry Releases Biocoal White Paper in Conjunction with PAM-Sponsored Biomass Conference
PRESS RELEASE June 18, 2013, 8:05 p.m. ET Pöyry Releases Biocoal White Paper in Conjunction with PAM-Sponsored Biomass Conference Pöyry announces biocoal white paper in conjunction with CMT’s Biomass Pellets Trade & Power in Seoul, September 9-10, 2013, co-hosted by EnerOne and sponsored by Pellet Association Malaysia (PAM) SEOUL, South Korea–(BUSINESS WIRE)–June 18, 2013– Global biomass and renewable power leaders will convene at the Biomass Pellets Trade & Power conference supported by Premium Sponsors Pellet Association Malaysia (PAM) and Agensi Inovasi Malaysia (AIM). PAM establishes common practices and standards and promotes Malaysian pellets internationally, aligning itself with AIM, the Malaysian National Innovation Agency driving innovation agenda and National Biomass Strategy. Asia’s renewable energy outlook is blooming, especially in biopower as consumption in China, Japan and South Korea grows. National Renewable Energy Policy in Japan and South Korea promotes biomass consumption growth, with co-firing in Japan’s power plants projected to increase while South Korea’s biomass usage expands to 10 million t/yr by 2020. The Biomass Pellets Trade & Power presents key country experts, Mr. Ken Kojima, Managing Director of Pellet Club Japan, and Professor Gyu-Seong Han of Chungbuk National University, elaborating on Japan’s and South Korea’s biomass market respectively. A market led by Europe, the global biomass market is expected to expand, with Asia driving up demand for wood and palm pellets and agricultural residues. Leading European biomass trader and power utilities will share markets and operational insights, with EDF Trading Markets’ Mr. Nicholas Tsirigotis on global wood pellets supply and trade dynamics, and Mr. Jens Price Wolf on DONG Energy’s experience in converting existing coal to wood pellets fired power plant. South Korea’s top power utilities, Korea Southern Power (KOSPO), Korea East-West Power (EWP), Korea South-East Power (KOSEP), Korea Western Power (KOWEPO) and Korea Midland Power (KOMIPO) will also lend perspectives on current biomass-based power generation projects and expectations of biomass supply. Onto biocoal, Mr. Andreas Teir, Director of Global BioFutures Practice, Pöyry, and author of “Biocoal — Bioenergy Game Changer in Asia?” white paper, shares more insights on Asia’s biocoal market potentials. Sharing on wood and palm pellets supply, sustainability, agricultural residue, collaborations and biomass market in Malaysia, Canada, US and Russia include Ekman & Co AB, Eco-Frontier, Indufor Asia Pacific, Global Green Synergy Sdn. Bhd., The National Bioenergy Union (Russia) and Firefly AB. http://www.cmtevents…0929&pu=222519 CONTACT: Centre for Management Technology Hafizah Adam, +65 6346 9218 hafizah@cmtsp.com.sg SOURCE: Centre for Management Technology Continue reading
How Might The US Engage At The UNFCCC?
Posted July 3, 2013 President Obama’s recent speech on climate change marks a welcome shift for an Administration that has been largely silent on the issue for some time now and puts into context the climate teasers that were dropped into the Inauguration and State of the Union addresses. As many commentators have now discussed, the speech focused mainly on the steps that the USA will take to deliver on its Copenhagen pledge. Whether theses steps will be sufficient remains to be seen, but they are nevertheless concrete and doable, which are two important prerequisites for success. But the very end of the speech was perhaps the most important turning point for me, in that it marks the first real attempt by the USA to guide the global political process on climate change since, perhaps, the mid 1990s when the Kyoto Protocol was hammered out. Of course the Administration put tremendous effort into the process in the lead-up to Copenhagen and President Obama went to the negotiations along with many other leaders, but at that point in time his Presidency was less than a year old, which in the context of the UNFCCC process is really not very long. There just hadn’t been enough time for the new Administration to really make its mark. On the back of the following three short paragraphs are we now going to see the USA in the driving seat, and what will that mean? With over three years left in the Obama Presidency, there is certainly time to guide the international climate process. And finally, my Administration will redouble our efforts to engage our international partners in reaching a new global agreement to reduce carbon pollution through concrete action. Four years ago, in Copenhagen, every major country agreed, for the first time, to limit carbon pollution by 2020. Two years ago, we decided to forge a new agreement beyond 2020 that would apply to all countries, not just developed countries. What we need is an agreement that’s ambitious — because that’s what the scale of the challenge demands. We need an inclusive agreement -– because every country has to play its part. And we need an agreement that’s flexible — because different nations have different needs. And if we can come together and get this right, we can define a sustainable future for your generation. The current state of the international post 2020 discussion remains lacklustre at best. Although there is some progress on items left over from the Copenhagen era, for example the Green Climate Fund, almost nothing has transpired on what might happen in the period after 2020. Further, a series of national pledges under some sort of international umbrella of ambition is highly unlikely to deliver any real shift in global emissions, more structure is needed. In the mid 1990s the USA did set the agenda and drive the pace with its idea of building a global carbon market, starting with clearly defined ambition in developed countries, supported by carbon pricing instruments (most notably the AAU) and strong compliance. Many countries adopted this approach and the EU embraced it by cascading its own obligations into an internal carbon market, as did New Zealand and eventually Australia. Although such a Kyoto style framework is not on the agenda now, there is still much to learn from its implementation as I have discussed in earlier postings . In particular, a new market mechanism which mimics the role of the AAU for those that wish to link their domestic carbon is one possible option. This could at least lay the foundations for a global carbon market. Difficult though it may be, key architecture questions are on the table today, yet progress in addressing them is at a standstill. This is where American (and European) leadership is required. Simply trying to coax ever greater pledges out of the likes of China and India isn’t a route to success, rather a clear and robust framework needs to emerge that will drive energy investment down a lower emissions pathway and trigger one technology in particular, carbon capture and storage (CCS). Love it or hate it, carbon pricing remains a key deliverable . CCS will eventually be triggered by a carbon price, but in the interim an international agreement needs to ensure that this technology appears on a near commercial scale in a dozen or so countries / regions (e.g. North America, EU, Russia, Oceania, Gulf States, South Africa, China and India). Continue reading
