Energy and Climate Change
PRESS RELEASE: Combined positive impact of European forests and the EU forestbased sectors for climate neutrality: the CO2 mitigation effect corresponds to about 20% of the EU’s annual emissions
Cepi, the Confederation of European Paper Industries, welcomes the new European Climate Law launched today by the European Commission as a key step forward in our common efforts to respond to global warming.
“Our industry is committed to doing its part: we have already achieved a 27% reduction of carbon emission from 2005 to date, a leading performance amongst the ETS sectors. With a supportive and stable regulatory framework, we plan to continue and improve progress, as stated in Cepi CEO initiative. We aim to be the most competitive and sustainable provider of solutions for a climate-neutral Europe in 2050” said Jori Ringman, Director General at Cepi, the Confederation of European Paper Industries.
The transition towards a carbon-neutral economy will have to build on strong European industrial value-chains. The European paper industry has already identified a joint vision for the Forest-based industrial value-chain, published in November, and is working to make the vision a reality.
According to our soon to be published study, the combined positive climate impact of European forest (forest sink) and forest-based sector’s net substitution effect (forest industry and forest products) reaches a total of more than -806 million tonnes of CO2e every year, which corresponds to about 20% of the EU’s annual emissions.
One of the main contributions of forest-based industries is to valorise and ensure healthy forests by fostering their ability to absorb CO2 from the atmosphere and enhance carbon storage. Likewise, almost as big as the forest sink in Europe, the contribution of the sectors’ low-carbon products is significant.
“Our study shows that informed consumer choices, moving from high-carbon products to low-carbon products, have an immediate and important impact on Europe’s goal to become carbon neutral”, Ringman says.
Cepi calls for an improved market access for recyclable and bio-based products, through a coherent product policy framework that allows for sustainable consumer choices.
This should go hand-in-hand with a policy framework that enables availability and access to responsibly sourced bio-based raw materials, through more support to sustainable forest management and high quality recycling in the paper industry.
Furthermore, reaching completely fossil-free value chains would require a plan for innovative solutions, with clear milestones for a timely and cost-efficient decarbonisation of the European energy system. “Advancing promptly in affordable supply of clean energy, in particular for gas, is an obvious prerequisite for achieving the new ambitious target set for 2030. We need the EU to plan energy transition with milestones matching today’s targets”, says Ringman.
These elements should be an integral part of European and national measures aimed at making the European Climate Law a reality.
PRESS RELEASE: The European paper industry is ready to rise to the climate challenge
The European paper industry welcomes the EU Green Deal Communication and the set of proposed actions planned for March 2020, in particular the European Climate Law, the New Industrial Strategy, the Circular Economy Action Plan 2.0 coupled with the Sustainable Products initiative and a new Forest strategy.
”The carbon neutrality objective requires the European pulp and paper industry to become even more sustainable, efficient and innovative. It demands that we continue on our transformational journey while maintaining our competitiveness. Our industry is up to the challenge”, said Jori Ringman, Director General at Cepi, the Confederation of European Paper Industries.
The European paper industry has already delivered a successful decoupling of carbon emissions from economic growth while reducing carbon emissions by 27% from 2005 to date, having product volumes increased and proved the climate friendliness of its products thanks to certified raw materials and a world class performance in recycling. We have delivered climate benefits for society.
“In this spirit of transformation and circularity, we have expressed our ambition to go even further for climate in our recent CEO initiative. It sets the path for the pulp and paper industry to become the most competitive and sustainable provider of solutions for a climate-neutral Europe in 2050, having a positive impact beyond our own emission reduction,” said Ignazio Capuano, incoming Cepi Chairman and CEO of Burgo group SPA.
The same consideration has led us to increase collaboration with other Forest-based industries: we have in common our starting raw material which is naturally renewable, and the objective of substituting fossil-fuel based materials while eradicating waste thanks to circularity and recycling.
The EU Green Deal will have to make space for climate-neutral, circular economy products such as wood-based products in our daily lives, if it wants to deliver on the carbon neutrality goal by 2050. In that it would be genuinely a deal that we would like to make with the society in Europe.”
This broader joint strategic vision with other Forest-based industries complements our climate strategy and is reinforced by the master plan designed with other critical European industries with a shared need for clean energy at a cost competitive price. EU Energy Intensive Industries are deeply rooted in our society and provide skilled jobs, technologies, solutions and materials to every possible economic sector.
The EU Green Deal will have to support rapid demonstrations of breakthrough technologies on an industrial scale through major R&D&I programmes and facilitate access to private finance.
Reaching climate neutrality will require acting systematically across value chains and sectors hence why we founded a cross-industry alliance, 4evergreen, to boost the contribution of fibre-based packaging in a circular and sustainable economy that minimises climate and environmental impact.
The alliance will increase awareness about the benefits of fibre-based packaging materials, advocate for EU legislation supporting product design for recyclability and call for the development of optimised collection systems and appropriate recycling infrastructures.
4evergreen was created as a forum to engage and connect industry members from across the fibre-based packaging value chain, from paper and board producers to packaging converters, brand-owners and retailers, technology and material suppliers, waste sorters and collectors.
Cepi has produced guidance to achieve even higher recycling targets while expanding the functionality of paper-based packaging. The Recyclability Guidelines give concrete guidance for designers to ensure functionality goes hand in hand with recyclability.
This collaboration is one more part of our comprehensive consumer-centred approach guided by the principle of climate mitigation, so that we can do our part in Europe’s transition to climate neutrality by 2050.
However, we cannot do this alone: governments have a vital role to play and we would ask the European governance to demonstrate leadership once again by helping us. We need the right policy environment in order to be the fertile ground for these seeds to blossom in.
European policymakers can support our efforts by:
a) Improving market access for recyclable and bio-based products, through a coherent product policy framework, to allow for informed consumer choices
b) Increasing availability and access to bio-based raw materials, through more support to sustainable forest management and high quality recycling
c) Promoting and rewarding decarbonisation investments by guaranteeing a coherent, stable and predictable regulatory framework, including a European Clean Energy Master Plan, with clear milestones for a cost-efficient energy transition
For more information about Cepi and its position on the European Green Deal, please contact Claire Couet, Cepi Public Affairs & Communications Director, at email@example.com.
PRESS RELEASE: Energy Intensive Industries
Energy Intensive Industries (EIIs) want to contribute in a constructive manner to the development of policies enabling the transition to a climate-neutral economy by 2050. We therefore call for a dialogue with the incoming European Commission, Member States and Parliament on the integration in the European Green Deal and the forthcoming industrial strategy of the recommendations of the Master Plan for a competitive transformation of EU EIIs.
Masterplan for a Competitive Transformation of EU Energy-intensive Industries
Report from the High-Level Group on Energy-Intensive Industries:
In December 2015, parties to the Paris Agreement committed jointly to keeping the global temperature increase to well below 2°C and to pursue efforts to limit temperature increase to 1.5°C above pre-industrial levels. In November 2018, following the invitations by the European Parliament and the European Council, the European Commission presented its Strategic Vision “AClean Planet for all”. This has contributed to an EU-wide informed debate with other institutions and stakeholde in view of adopting and submitting to the United Nations Framework Convention on Climate Change (UNFCCC) a long-term strategy by 2020, as requested under the Paris Agreement.
CEO INITIATIVE: Our contribution to EU 2050 climate neutrality
PRESS RELEASE: European paper industry CEOs declare a strategic interest in supporting the decarbonisation of our society
Climate change is a global crisis that demands urgent action and requires every actor in society to play his/her part in responding to the crisis. Industries have both a duty and an opportunity to become more sustainable, more efficient and more innovative.
“With the help of the new European Green Deal, we can reduce our impact on climate change while increasing production in Europe. Our industry has a strategic interest in being at the forefront of the decarbonisation efforts for 2050” said Ignazio Capuano, incoming Cepi Chairman and CEO of Burgo group taking over from Karl-Henrik Sundström, CEO of Stora Enso, during Cepi’s annual conference, Paper and Beyond, today in Brussels.
In this spirit, the CEOs representing the European paper industry outlined their plans to reach a climate-neutral Europe by 2050 in a declaration which was officially handed over to Clara De La Torre, Deputy Director-General of DG CLIMA and Timo Pesonen, Director-General of DG GROW, present along with other European Commission representatives.
The way forward finds its foundations in the very solid basis of our existing achievements. We have guaranteed the sustainability of our raw materials, improved the performance of our processes and proven the climate friendliness of our products.
Sustainable raw materials: our raw material is wood pulp, which is intrinsically renewable if coming from properly managed forest sources; this is why we have helped create a number of programmes for the certified sustainability of forests across Europe such as PEFC (Programme for Endorsement of Forest Certification and FSC (Forest Stewardship Council). We have expanded sustainable forest management practices in Europe and globally.
Decarbonised processes: we have delivered a successful decarbonisation of our operations of 27% from 2005 to date. Our sector is investing at a rate of more than €5 billion per year to decarbonise, with a commitment to making our production processes more efficient and decreasing our overall carbon footprint thanks to new technologies and collaboration with our partners. A step change is ultimately needed and supported by breakthrough technologies and solutions. We are committed to searching for them.
Climate-friendly products: world champions in recycling, we have worked with local authorities to improve separate collection of paper and board to boost the use of recycled fibres in new products. We now plan to push our model even further in a final goal of providing innovative sustainable solutions for a range of new sectors, for example textile, through new bio-based products.
To turn this ambition into reality, we call upon European policymakers to support our efforts by setting an appropriate legislative framework, namely:
- Improved market access for recyclable and bio-based products, through a coherent product policy and clear framework conditions for the new bioeconomy-related products
- More support for the sustainable management of forests and recycling schemes: forest-based raw materials should be made more easily available and accessible.
- A coherent, stable and predictable regulatory framework, with clear milestones for a cost-competitive energy transition, to promote and reward decarbonisation investments and guarantee access to clean energy.
Our final goal is to empower consumers, who will get a larger choice of climate-friendly products that are easily available and affordable.
REINVEST 2050 in the European Parliament, Strasbourg
Previously known as "To our roots and beyond", the second edition of our project REINVEST 2050 was launched with an event (see the video here) in the European Parliament on 12 February in Strasbourg. The exhibition was hosted by Members of the European Parliament Elsi Katainen (ALDE, Finland) and Ludek Niedermayer (EPP, Czech Republic).
It showcased 21 success stories about investments in innovation and ground-breaking technology best practices across the forest fibre industry carried out by 16 different companies based in 12 EU Member States.
The exhibition enabled over 12 MEPs and 20 industry representatives to measure how the pulp and paper industry is making, in practice, the energy and bioeconomy transition happen across Europe today.
MEP Elsi Katainen emphasized that "both politicians and industry are committed to reduce their CO2 emissions to meet the Paris Agreement objectives".
She mentioned related legislations such as LULUCF, the revised Energy Efficiency and Renewable Energy Directives, which were discussed and decided during the current European Parliament mandate.
In their speeches, MEPs Paul Brannen and Dario Tamburrano focused on the circular bioeconomy:
"I think there's an opportunity with what you would call the wider bioeconomy to really make some deep inroads into tackling climate change through a shift from making stuff from fossil fuels, into making stuff from wood as a feedstock. Paper is at the heart of that"
“Paper is one of the materials which is a great ally in order to build a circular economy”
Finally, MEP Anne Sander shed an industrial policy look on the event:
"Europe is in a leading position but we have to work in a clever way in order to set emission reduction goals that are reachable. It would be dramatic to set emission reduction standards and goals that would be so hard to achieve that they become an incentive for industry to move outside Europe"
The overall concept of REINVEST2050 is to stimulate competition between companies on low carbon solutions in order to create a domino effect and encourage the deployment of innovative solutions.
Is there an innitiative contributing to low-carbon emission societies in your country? Stay tuned and submit your project for the next edition of REINVEST2050.
Please visit our dedicated website for more information about the project and the event here.
All pictures from the event are featured here.
Renewable Heating in the Pulp and Paper Industry
Renewable Heating in the Pulp and Paper Industry. Assessing potential of innovative solutions will take place on 7 February in CEPI as a part of the European Industry Week 2019.
CEPI, together with the European Heat Pumps Association (EHPA) and Solar Heat Europe, will gather energy experts from the pulp and paper industry and new technology providers' professionals to discuss how and to what extent these innovative solutions could be integrated in our industry.
Meeting the EU 2030 climate change and energy targets, in view of the future implementation of the EU long-term strategy, will require a thorough rethinking of the way business operates.
Accessing cost-competitive and carbon neutral energy carriers will be extremely challenging. It is therefore imperative to timely bring to the market innovative solutions that are sustainable from an environmental, economic and social perspective.
The potential to expand the share of renewable heating in industry seems significant, but it remains largely untapped due to several factors. This event is designed to bring together technology providers and technology users, to bridge the knowledge gap and address existing barriers.
Policy briefing: decarbonising whilst being recycling pioneer
The challenge: decarbonising whilst being recycling pioneer
SUMMARY FOR POLICY MAKERS
Delivering a circular economy, needs a successful European recycling industry. In September 2017 the European Commission published its “New Industrial Policy Strategy”. One of the key levers to create jobs, boost Europe's competitiveness, foster investment and innovation in clean and digital technologies, whilst “building on Europe's leadership in a low-carbon and circular economy”. The European paper industry fully supports this approach. The industry has already reduced carbon emissions by 26% since 2005, (now accounting for less than 1% of EU GHG emissions), reduced energy consumption by 11%, while increased the share of renewable energies to almost 60% of final energy. The industry delivered a 72.5% paper recycling rate, (making the EU the best performing region in the world) whilst at the same time developing innovative bio-based products.
The full document can be downloaded below.
For more information about the briefing, please contact Nicola Rega, CEPI's Climate Change & Energy Director at firstname.lastname@example.org or (+32) 485 403 412.
CEPI becomes an associate member of the European Energy Forum
The Confederation of European Paper Industries (CEPI) is now an associate member of the European Energy Forum (EEF).
The EEF provides a place for knowledge-sharing and open dialogue on energy, climate and other energy-related issues. For over 20 years, this non-profit association enables its members representing all energy-related sectors to meet, get informed and debate in a setting where all views and ideas are welcome. By promoting dialogue and exchange of expertise, the EEF wants to ensure that stakeholders with different perspectives and interests have an occasion to understand each other’s position so as to work together in a constructive way. The discussions and other activities organised by the EEF every month touch upon all issues related to energy, always adapting to new challenges in a fast-changing EU energy system. The programme of activities takes into account the EU political agenda thereby reflecting the work of the European institutions. The EEF is chaired by MEP Jerzy Buzek. It is composed of 34 Active Members (MEPs) and 83 Associate Members from energy and energy-intensive organisations.
Associate membership of the EEF will provide CEPI with a platform to represent the views of its membership in the high-level discussions on energy-related topics and provide a forum to bring to the discussion the European forest-fibre and paper industry's unique position as both an entirely renewable and recycable industry leading on the EU's circular bioeconomy transition.
REDII – Sustainable use of wood wins over ill-placed market distorting subsidies
The European paper industry produces from wood a multitude of value-added products such as paper, carboard and other biobased materials and uses its residues for bioenergy.
With today’s vote the EU has sought to recognise the value of sourcing wood sustainably and preventing subsidies that distort markets and encourage the burning of wood for megawatts.
“The European Parliament realises that there is more value to the circular bioeconomy than turning wood into megawatts” says Sylvain Lhôte, Director General of the Confederation of European Paper Industries (CEPI).
MEPs have moved in favour of building upon existing sustainable forest management practices in Europe, the so-called “risk-based approach” rather than rendering the regulatory context more complex. At the same time ensuring that the availability of wood is taken into consideration is also a step in the right direction.
They have also sent a strong signal that the recovery of energy from waste must be strictly guided by the waste hierarchy and that the burning of paper-based material, which can be collected seperately and recycled, should be avoided.
The challenge is now in the hands of the Council to ensure that wood is used sustainably and that REDII remains consistent with the EU’s own goals of making the circular bioeconomy a reality in Europe.
Note to editor:
Guaranteeing that wood is sourced from sustainably managed forests and championing a high-performing recycling chain will be critical to securing the quantity and quality of the raw materials the industry uses as it transitions towards the low-carbon circular bioeconomy. Read more on how we can achieve this in the revised version of our ‘Investment Roadmap’.
For more information, please contact Ulrich Leberle, Raw Materials Director at email@example.com or by phone at (+32) 2 627 49 23
For press related enquiries, please contact Ben Kennard, Press Manager at firstname.lastname@example.org or by phone at (+32) 487 39 21 82
ETS reform restores regulatory certainty but gaps remain
Following today’s inter-institutional political agreement on the Emissions Trading System (ETS) the Confederation of European Paper Industries (CEPI) is broadly encouraged by improvements in the regulation for the 2021-2030 period.
“The conclusion of the ETS negotiations now restores the regulatory predictability needed for advancing industrial transformation. Investments in low-carbon technologies are core to what we stand for as an industry. A more stable regime and tools such as the ETS Innovation Fund will be crucial in accelerating the industry's transition towards a low-carbon circular bioeconomy” says Sylvain Lhôte, Director General of CEPI.
The final compromise text improves significantly the scheme with a more robust stability in carbon leakage provisions and firmer predictability in reviewing the benchmark values. The Innovation Fund will also act as a crucial mechanism in advancing the breakthrough technologies that will spur the industry’s low-carbon transition.
Nonetheless, several aspects of the text are lacking and these would need to be resolved. For instance, the Market Stability Reserve (MSR) was significantly amended without any prior assessment of its impact on “industrial competitiveness and the risk of carbon leakage”, even though this was an explicit requirement when amending the MSR decision. Likewise, no solution was found to effectively ensure compensation for indirect costs for exposed energy intensive installations. Finally, while the risk of a shortfall in free credits has been mitigated it has not been structurally eradicated thereby causing unnecessary regulatory risks. The impact of all of the above-mentioned aspects will become more evident by 2021, when all implementing legislation will be finalised. It is therefore imperative to swiftly finalise the full regulatory landscape by adopting all the implementing acts well ahead of 2021.
Note to editor:
Ensuring that the ETS also functions as a pro-investment tool is a core component of the European paper industries ‘2050 Investment Roadmap’. Check out our ‘Alignment matrix’ here to see how the ETS can provide a platform for catalysing and enabling industry transformation in Europe.
For more information, please contact Nicola Rega, Climate Change and Energy Director at email@example.com or by phone at (+32) 485 40 34 12
For press related enquiries, please contact Ben Kennard, Press Manager at firstname.lastname@example.org or by phone at (+32) 487 39 21 82Download here
Renewable Energy Directive: CEPI analysis of sustainability criteria for solid biomass fuels in the European Commission proposal for a Directive on the promotion of the use of energy from renewables (recast)
The sustainable forest management framework has evolved and strengthened over time balancing a market based demand for wood products and bioenergy with the other environmental and climate functions of the forest. More recently, the EU policy framework to support the use of energy from renewable sources has led to a strong increase of bio-energy use within short timeframes. The increased demand has led to rising imports of wood. To ensure the sustainability of the policy induced increase of bioenergy use and wood imports, the following issues have to be considered:
• Do the needs for wood biomass lead to any of the following critical consequences: resource depletion, land conversion, negative impacts on biodiversity?
• Is the direct burning of wood biomass an efficient use of a raw material that could first be used for higher value purposes?
• How could monitoring, reporting and verification ensure carbon sustainability?
CEPI believes that the Commission proposal provides in principle an appropriate response to the challenges caused by a policy induced increase in the use of biomass for energy.
CEPI welcomes the following principles:
1. Solid biomass fuels would only count towards the renewable energy targets if they comply with a number of forest management, LULUCF and greenhouse gas savings, and end use conversion efficiency criteria.
2. CEPI welcomes that the criteria are applied equivalently based on the type of biomass used and independently on which physical form (solid, gaseous or liquid) of the biofuels, bioliquids or biomass fuels produced.
3. There is a risk based approach for forest management and GHG criteria starting from the country level. Only if no evidence can be provided at country level, the forest holding level is considered. We believe however that an operator should have the possibility to assess the risk and proof sustainability at higher than forest holding level, if necessary information is available. The risk management system and the criteria refer to existing legislation, such as LULUCF accounting and environmental legislation.
4. The principle that the emissions from biogenic carbon are accounted as neutral in the energy sector is maintained as they are assumed to be already accounted in the LULUCF sector. We believe however, that for countries where emissions from LULUCF are not accounted, the criterion should be covered by the forest management criteria, especially the criterion that the long term production capacity of the forest is maintained.
5. Support to new conversions of coal based power stations to biomass with low efficiency would be ended from 2020. CEPI believes however, that Member States should be allowed to exempt above 20 MW installations from the CHP obligation based on climatic conditions.
6. The Commission proposes a system in which the burden of proof would be upon the energy producer rather than upon the individual forest owner. The criteria have to be fulfilled by installations of more than 20 MW fuel capacity, limiting the burden on small scale installations.
CEPI also believes that some provisions have to be improved:
1. Secure a functioning internal market: Member States should not have the possibility to go beyond the EU agreed sustainability criteria. This would hamper the functioning of the internal market and complicate the verification system.
2. Introduce meaningful LULUCF criteria at subnational level: For forest biomass from countries that do not account for LULUCF emissions it should be made clear that the core forest management criteria and especially the one on maintaining the long term production capacity of the forest should minimize the risk of LULUCF emission at the subnational level.
3. Review at the appropriate time: The review should take place in time before the post 2030 period, but a review in 2023 i.e. only after 3 years of application of the criteria is too early to be meaningful.
4. Ensure the forest management criteria are relevant, credible and implementable: CEPI proposes technical improvements to the forest management criteria at national and especially at the sublevel. CEPI is looking forward to a constructive dialogue with the European Commission services and other institutional and non-institutional stakeholders to ensure the forest management criteria are relevant, credible and implementable and will propose amendments in this respect.Download here
To our roots and beyond - Reducing emissions for the 2050 society
In a first of its kind project the Confederation of European Paper Industries (CEPI) has called upon its member companies to voluntarily exhibit innovative, emissions-reducing projects that centre on increasing energy efficiency and promoting the use of renewable energy sources. The ‘To Our Roots and Beyond’ project puts the focus back on the industry’s leading role in contributing to a sustainable, low-carbon society. The project demonstates how industry is taking responsibilty in reducing its carbon emissions, as well as taking a leading role in providing bio-based solutions to decarbonise society at large. In total, the project gathers 14 innovative case studies from 10 EU countries, involving 12 companies representing a diverse array of projects. The innovative projects which focus on energy efficiency and/or renewables are indicative of the diverse means the paper industry has at its disposal to reduce emissions whilst building upon its unique strength as an entirely renewable material.
Project website: www.cepi-rootsandbeyond.orgView Flipbook
European paper industry shows the way in innovative solutions for energy efficiency and renewables
In a first of its kind project the Confederation of European Paper Industries (CEPI) has called upon its member companies to voluntarily exhibit innovative, emissions-reducing projects that centre on increasing energy efficiency and promoting the use of renewable energy sources.
The ‘To Our Roots and Beyond’ project puts the focus back on the industry’s leading role in contributing to a sustainable, low-carbon society. The project demonstates how industry is taking responsibilty in reducing its carbon emissions, as well as taking a leading role in providing bio-based solutions to decarbonise society at large.
In total, the project gathers 14 innovative case studies from 10 EU countries, involving 12 companies representing a diverse array of projects. The innovative projects which focus on energy efficiency and/or renewables are indicative of the diverse means the paper industry has at its disposal to reduce emissions whilst building upon its unique strength as an entirely renewable material.
“Our industry has set a vision to unleash the full potential of the bioeconomy by 2050, driving both value creation and deep decarbonisation. This project demonstrates how we put words into action and what it takes, on the ground, to turn ¬vision into reality through smart industrial integration, innovation in energy efficiency or advanced use of renewables” says Sylvain Lhôte, Director General at CEPI
As part of its commitment to reducing emissions this project will be renewed on a bi-annual basis. This project will remain a permanent feature of the industry’s commitment to put into practice its vision outlined in its ‘2050 Investment Roadmap’. The project website, including a link to the brochure, can be found here.
About: CEPI 2050 Investment Roadmap
In February 2011 CEPI relaunched its Roadmap putting into action its vision to reduce emissions by 80% while creating 50% more added value. The Roadmap envisions the need for €44 billion additional investment - a 40% increase on current levels – to lead the transition towards a low-carbon bioeconomy by 2050.
Unlock demand side flexibility for European consumers, innovation and the climate
Signatories of this letter welcome the Clean Energy Package as the means to set in place new rules for a consumer-centred European energy system, by implementing the three stated EU objectives: putting energy efficiency first, achieving global leadership in renewable energies and providing a fair deal for consumers.
Demand side flexibility is a resource that not only benefits and empowers individual consumers, both private and professional, but also reduces total system costs, facilitates renewables integration and contributes to building Europe’s smart energy leadership.
This remarkable resource however suffers from important market failures that the ‘Clean energy for all Europeans’ package attempts to address. Signatories of this letter, all strong advocates for demand side flexibility, urge you to include the necessary proposals to develop demand side flexibility in the final legislation, and ensure consistent enforcement through thorough planning and reporting obligations in the Governance regulation report.
The stakes are high. Not delivering Europe’s demand side flexibility potential risks affecting Europe’s competitiveness, undermining its decarbonisation efforts, undermining its benefits for consumers and jobs and growth opportunities for Europe as a whole.
The following points highlight key steps necessary to develop demand side flexibility by creating functioning wholesale energy markets; opening markets to consumers and third parties; and remunerating demand side flexibility fairly.
1. Creating functioning wholesale energy markets
The electricity directive and regulation can significantly contribute to establishing well-functioning energy markets that reflect the availability or scarcity of supply and the adequacy of the network. In particular,
• Reform short-term markets functioning to help increase the overall flexibility of the power system (Electricity Regulation Chapter 2).
• Harmonise features of intraday and balancing markets to encourage trading of energy across borders, and as close as possible to the time of delivery (Electricity Regulation, Articles 5 and 7).
• Tackle overcapacity of generation to re-establish long term price signals for investors and minimise the risks that capacity mechanisms create for the development of efficient wholesale markets, as well as consumer empowerment, demand response and the deployment of innovative low carbon and energy efficiency technologies. The best way to minimise such risks is to:
o Only implement capacity mechanisms as a last resort, when proven strictly necessary by a European adequacy assessment which factors in the contribution of renewables, self-consumption and on-site generation (including cogeneration) and assesses flexibility needs (Electricity Regulation, Article 18).
o Ensure capacity mechanisms are open to all resources such as energy efficiency, demand response, storage, all generation technologies, and cross border capacity (to add to Electricity Regulation, Article 23).
o Review the need for capacity mechanisms regularly:
- So as to ensure consistency between procurement of capacity and the size of the adequacy concerns (to add to Electricity Regulation, Article 23) on the basis of the latest European resource adequacy assessment
- So as to ensure consistency with the overall competitiveness and decarbonisation objectives
o Ensure that the duration of the capacity contract is short enough to correspond to the regular reviews.
o Require Transmission System Operators (TSOs) to report on redispatch and countertrading measures they undertake, including underlying costs, and the level of effectiveness and openness of market-based curtailment or re-dispatching mechanisms to all energy resources. In turn, the creation of liquid and efficient markets and the deployment of demand side flexibility resources will reduce the need for additional measures to guarantee system adequacy.
2. Ensuring market access for consumers and third parties
Rules must be established and enforced so that demand-side resources have unhindered access to all energy markets (wholesale, balancing, ancillary services) in all timeframes, including through product requirements fit for supply and demand-side resources alike. This also means direct market access for consumers and new market entrants, including third party aggregators and ESCOs.
• Give consumers the right to participate in energy markets with dynamic price contracts. This includes providing customers information on actual time of use at near real time and the right to respond to price signals, as well giving consumers the right to sell flexibility independently of any contractual arrangements to procure energy, directly or through an (independent) aggregator. Smart metering is a pre-requisite as the certified basis for billing consumer using multiple tariffs for market-based pricing. It also forms the foundation for the development of additional consumer services (Electricity Directive, Articles 11, 17, 20, 21).
• Enable fair market access for Demand Response and service providers. Deployment of demand side flexibility has so far been impeded by outdated market rules, insufficient market access for service providers and ineffective price signals. Demand response should have non-discriminatory access to all markets (Electricity Regulation, Articles 1, 3, 4, 5, 6, 7, 11, 12, Electricity Directive, Articles: 3, 15, 16, 17) and Demand Response Aggregators should be enabled to access the market without prior agreement of other market parties who are often competitors (Electricity Directive Article 17).
• Network tariffs should be fully transparent and allow the development of self-consumption and self-generation. They should be based on the marginal costs of the use of the system and take into account the avoided capital (e.g. grid investments) and operational expenditures due to flexible generation and flexible load embedded at the local level, as well as avoided CO2 emissions. (Electricity Regulation Article 16; Electricity Directive Article 15).
• Accelerate the cost-efficient decarbonisation of the existing building stock, notably through reaping the flexibility benefits of technical building systems and other appliances to support consumer empowerment: set in place a proper framework for the deployment of infrastructures (i.e. on-site renewable electricity generation, high efficiency cogeneration, smart metering or electro-mobility) and of demand-responsive devices that will facilitate the buildings’ integration into a wider energy ‘eco-system’ where active prosumers self-generate, self-consume, aggregate, trade and sell surplus electricity to the grid. In this new setting, buildings will no longer be a load but a micro-energy hub contributing to consumer empowerment and cost-efficiency of the energy system. The smartness indicator of buildings should support consumer empowerment and the development of buildings as part of the energy system.
• Create a comprehensive framework for grid monitoring, so as to increase the visibility of flexibility, including demand-side flexibility. It should be based on information that TSOs and DSOs would publish regularly as regards to the performance of their networks , in particular the volumes and sources of curtailed energy (Electricity Directive, Article 59). Comprehensive reporting on grid evolution, together with appropriate tariff structure, will be an essential basis for cost-effective network management and enable the targeted acquisition of flexibility services from the market by system operators instead of CAPEX only investments (Electricity Directive, Article 32).
• Ensure enforceability of the right for citizens and businesses to self-generate, self-consume, and valorise their flexibility; (Electricity regulation Article 16; Electricity directive Article 15).
• Establish a constructive framework for energy storage which takes into account the specificity of the energy storage technologies, and recognizes that TSOs and DSOs should not own, develop, manage or operate storage assets, unless a market based procurement based on an open and transparent tendering procedure is proven of not being possible and is regularly reviewed. (Electricity Directive, Articles 36 and 54)
Signatories of this letter are convinced that such a way forward will provide consumers with the satisfaction of managing their own energy consumption while optimising their overall carbon and environmental performance.
European paper industry reaction to the US administration's withdrawal from Paris Agreement on climate change
"The US administration’s decision to step down from the Paris Agreement sadly puts at risk the global efforts needed to address climate change. It also regrettably reflects a view that climate action would undermine industry competitiveness. To make the case for action - and win back the US, Europe must decisively demonstrate that decarbonisation can go hand in hand with industrial competitiveness and investments. The European paper industry has a vision through its Investment Roadmap to decarbonise by 80%, create 50% more added value and increase its investment by 40% by 2050. This should be done in the background of a Paris Climate Change Agreement which provides a solid framework for climate action and fosters a global level playing field" says Sylvain Lhote, Director General at CEPI
Statement from the alliance of energy intensive industries on the clean energy for all Europeans package
We, the Alliance of Energy Intensive Industries representing more than 30,000 companies that are Europe’s largest energy consumers and together, directly employ more than 2.8 Million people, want to make a success of the Energy Union. We see it as a potential enabler of European industry’s competitiveness and a unique opportunity to deliver on Europe’s ambitious transition to a low-carbon energy system. Energy Intensive Industries make a series of recommendations to reach this ambition in an effective, secure and cost-conscious way that delivers value for investment to European economic contributors such as industry. The Alliance would welcome a new energy framework that:
- ENABLES INNOVATION IN INDUSTRY SECTORS THAT DEVELOP PRODUCTS AND TECHNOLOGIES leading to lower greenhouse gas emissions (GHGs) across value chains. Our industries offer low-carbon solutions to help Europe transitioning to a low-carbon, energy efficient region. Our products and innovative processes have a strong potential to enable greater energy efficiency or help the wider deployment of renewables;
- PUTS THE GLOBAL COMPETITIVENESS DIMENSION HIGH Our industries will be key in delivering several elements of the Clean Energy Package. The Governance of the Energy Union must acknowledge this and not relegate the competitiveness dimension as secondary to other aspects, but increase its prominence;
- SECURES INDUSTRY’S ACCESS TO COMPETITIVE, RELIABLE, AND SUSTAINABLE ENERGY through a fully liberalised European electricity market. The growing share of variable renewable energy production in the grid represents both a challenge and an opportunity for industry. Negative impact of system changes on industry and on security of energy supply must be avoided. Policy framework conditions should be nondiscriminatory, technology-neutral and predictable over the longer term to enable sustainable investment decisions;
- AVOIDS COSTLY AND UNNECESSARY OVERLAPPING LEGISLATION: The EU ETS and the Market Stability Reserve will lead to a higher price of carbon under the 2030 framework. It is therefore important that new measures do not overlap with ETS, adding an additional layer of obligations for industry, but rather target untapped potential laying in e.g. buildings or mobility sectors. Enabling better energy performance in those sectors would stimulate our economy and create new jobs and growth opportunities;
- CLEARLY DIFFERENTIATES ENERGY EFFICIENCY AND REDUCTIONS IN INDUSTRIAL ACTIVITY: looking at levels of energy consumptions in the different sectors of our economy, it is clear that so far the 2020 objective is being partly met through reduced levels of production. Our industries wish to contribute to growth in Europe while, at the same time, improving their energy efficiency performance; in this framework, it is relevant to assess reduction of energy consumption in relative terms;
- INTEGRATES RENEWABLE ENERGY SOURCES IN A COST-EFFICIENT MANNER: as long as it is in place, support to renewable energies must become cost-efficient and must focus on technology-neutral innovation. Support
schemes should be market-based and market responsive. They should only benefit technologies that are not yet mature, on a temporary basis.
As key players in the transition to a low-carbon economy, energy intensive industries and value-chain partners will provide constructive input into the decision-making process.
European paper industry reaction to Fertilizers Europe “alternative facts” in “Allowances balance calculation in the EU ETS” Ecofys report
On 15 May 2017 Ecofys published the report “Allowances balance calculation in the EU ETS”, commissioned by Fertilizers Europe.
The document is full of omissions in data collection and analysis. Although the authors acknowledge such shortcomings throughout the whole report, they still conclude that, even with improved accuracy “by performing an extensive data collection […] it is expected that the main conclusions of this study would remain the same”. In other words: the results would be the same, regardless of facts and figures.
Such a statement would be sufficient to disregard this alleged “objective study”.
Yet in CEPI we are strongly convinced that facts and figures are essential to developing informed decisions. CEPI facts and figures are backed by our in-house statistical team and are third-party verified. We believe this ethos should equally apply to others.
As the Ecofys document is built on an impressive amount of misleading or “adjusted” information, we believe it is imperative to rectify the claims against the pulp and paper industry:
1. Sector definition and cross-boundary heat flows
A whopping 20% of additional carbon emissions for our industry are not accounted for in the Ecofys report.
In the ETS, emissions from heat are allocated to the heat consumer, not the heat producer (where emissions effectively take place). Heat-related emissions are thus not counted under the ETS registry codes “pulp and paper” but under “combustion installation”, even if these emissions happen within the perimeter of the industrial site.
The impact of these emissions is massive: the sector actually moves from having a surplus to having a shortage of allocations.
Ecofys is well aware of the impact heat flows calculations has on industry allocation, particularly for the pulp and paper industry. Yet, it decides to disregard them, concluding that “indicatively” the pulp and paper industry has “an allowance surplus that carries long into phase IV”.
Clearly, by using “alternative facts”, anything can be “indicatively assumed”.
2. Emission levels in Phase III
Despite concrete achievements, our sector’s emission reductions have not matched the allocation reductions induced by the cross-sectoral correction factor. For example, in 2016 only our sector was 4% under-allocated.
Our sector is under-allocated and, unless major disruptions happen, will remain so until at least 2020. The regulatory impact post-2020 is still unknown.
Any increase in allocation surplus for our sector, as illustrated in the Ecofys report from 2014 to 2020, is unreal and unrealistic.
3. Emissions carried over from Phase II
First and foremost, the above-mentioned cross-border heat flow applies also here. The figures lack data on emissions from combustion installations in the paper industry. Had these figures been taken into consideration, they would have shown a cumulative surplus in line with other industrial sectors. This comes to no surprise as the pulp and paper industry, like all industries, was heavily hit by the economic and financial crisis.
Moreover, at the beginning of Phase II, in 2008, the pulp and paper industry had 872 open permits in the ETS. In 2013, at the beginning of phase III the open permits were reduced to 825.
Many of the installations that closed were small and medium enterprises, often family-owned. When an installation closes those allowances are gone: either released to the market or cancelled. There is no intra-company transfer.
Unused allowances released to the market could be in anyone’s account, including in fertilizer companies.
Assuming that all those allowances remained at the disposal of the pulp and paper industry for future use, painting the image that the sector is sitting on an immense amount of unused credits, is purely fictional.
4. Carbon intensity improvements (past, present, future)
The pulp and paper industry is proud of the achievements reached in reducing carbon emissions over the past years. Since 2005, when the ETS began, we have reduced our carbon intensity by around 21%.
This was the result of real investments and it lead to the creation of jobs and growth. In the recent years we have been investing 3.5 bn €/year, including investments in energy efficiency and higher use of renewable energy sources.
In fact, in some countries we have even achieved an impressive 75% emission reduction since 2005, without jeopardising international competitiveness.
The Ecofys report, on the contrary, retroactively assumes no historic emission intensity improvement occurred. Nor future emission intensity improvements are foreseen.
We strongly disagree.
5. The misplaced logic of “improvements are not possible”
The carbon footprint of the pulp and paper industry is already very low (0.7%of EU GHG emissions) and will further reduce.
We see tremendous potential in linking the low-carbon economy to the bioeconomy and the circular economy. Our mills are already producing cost-effective low carbon solutions to replace carbon intensive products.
For instance, looking at fertilisers:
• Bio-based fertilisers → ETS benchmark: 0.02 - 0.12 tCO2/t (pulp)
• Fossil-based fertilisers → ETS benchmark: 1.619 tCO2/t (ammonia)
There is definitely some untapped potential to be exploited!
The Ecofys report, on the contrary, assumes no improvement in carbon-intensity both in the past and the future. Meaning rewarding incumbents and putting up barriers to innovation.
We strongly disagree.
Climate change is a serious threat, and needs to be treated seriously. We need to refocus on investments in the EU economy, driving the transition towards a low-carbon economy where Europe leads by example
Within this context, the ETS needs to promote and reward those investing in low-carbon technologies and solutions.
All sectors are important and should be treated equally. And they all need to contribute.
The clock is ticking and 2021 is just around the corner. We need to close the ETS negotiations as soon as possible, to give industry the regulatory predictability needed to start planning the next wave of low-carbon investments.
“No trade-off on Fairness”: Recommendations from the Alliance for a fair ETS
The Parliament, the Council and the Commission enter now the trilogue negotiations that will shape the ETS directive after 2020.
We, the 17 signatories of this paper, energy-intensive sectors representing about 2 million jobs in the EU and comprising many SME’s, are fully committed in taking our share of responsibilities and reducing our emissions.
However, we are also very concerned by the impact that some proposed measures would have on our global competitiveness.
We stand by one principle: sufficient free allowances must be available to allocate every carbon leakage installation at the level of the benchmark, as to avoid additional direct and indirect costs, resulting from the implementation of the ETS that are not faced by our non-EU competitors.
This is true more than ever, especially when some measures, which have been proposed without any impact assessment on our sectors, might have a dramatic impact on our competitiveness if adopted without the necessary flexibility in the share of free allocation, like the permanent cancellation of allowances, or the doubling of the intake rate of the MSR.
We therefore ask the trilogue negotiators to acknowledge, in their final compromise, the mutual importance of our sectors for the EU economy, in particular for European jobs, and all our economic value chains by:
1) Ensuring enough free allowances are available to allocate all carbon leakage installations at the level of the benchmark. This is not a free lunch for industry as less than 5% of the installations will receive enough to produce, the remaining 95% will have to buy allowances. We therefore support the Parliament proposal to reduce the auctioning share by max 5% (from 57% to 52%) if the CSCF is necessary.
2) Rejecting any approach which aims at discriminating a few from other sectors exposed to carbon leakage risks, namely the “tiered CSCF” in the event that the 5% reduction mentioned above is not sufficient. This discrimination between industrial sectors goes against the principle set in the October European Council Conclusions that best performing companies in ETS carbon leakage sectors should not bear further carbon costs. Indeed, a tiered CSCF would entail that even best performers in most sectors would bear significant carbon costs.
3) Supporting the proposal from the Parliament by which the Innovation fund is fully financed from the auctioning share.
1. Cefic - European Chemical Industry Council
2. CEMBUREAU – European Cement Association
3. CEPI – Confederation of European Paper Industries
4. Cerame-Unie - European Ceramic Industry Association
5. EDG – European Domestic Glass Association
6. Epmf – European Precious Metals Federation
7. European Copper Institute
8. ESGA – European Special Glass Association
9. EUROALLIAGES - Association of European ferro-Alloy producers
10. EUROGYPSUM - Gypsum Industry
11. EuLA – European Lime Association
12. EXCA - European Expanded Clay Association
13. FEVE – The European Container Glass Association
14. FuelsEurope - European Petroleum Refining Industry
15. Glass Fibre Europe – The European Glass Fibre Producers Association
16. Nickel INSTITUTE
17. International Zinc Association