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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.
In 2007, CEPI was one of the first to propose a common framework enabling companies to undertake carbon footprints for paper and board products, as there was no standardised approach for their development at that time. Since then, three major internationally-recognised product-related carbon footprint protocols and frameworks have been published, namely:
− The “Greenhouse gases - Carbon footprint of products - Requirements and guidelines for quantification and communication” technical specification from the International Organization for Standardization (ISO/TS 14067:2013);
− The Product Life Cycle Accounting and Reporting Standard (Product Standard) from the World Resource Institute (WRI) and World Business Council for Sustainable Development (WBCSD) GHG Protocol published in 2011;
− The European Commission Product Environmental Footprint (PEF) Category Rules (PEFCR) for Intermediate Paper Products (Final Draft PEFCR for stakeholder consultation, May 2016);1
A revision of this common framework has now been undertaken to update the methods in order to be more aligned with the methods proposed in these guidance documents.
Buyers are more and more asking for the “carbon footprint” associated with the supply chain for the manufacture, distribution and disposal of products provided to them. Customers are asking for “carbon footprints” for different reasons:
− to meet public concerns
− to increase their own available information
− to improve their image and reputation
− to position against competition
− to compare different products
− to reduce the climate effect of their own activities.
The common framework aims to bring forward the attributes of our products and show the way to obtain the most useful information possible.
SÃO PAULO – The International Council of Forest and Paper Associations (ICFPA) eighth biennial International CEO Roundtable today took place in Berlin, Germany. More than 20 forest based industry CEOs and association leaders from around the world met to discuss industry innovation, sustainability aspects, current political aspects and future trends that may impact the industry at local and international levels.
“The global forest and paper industry stands firm in achieving its sustainability commitments based on its common values. Today’s conference provides us with an opportunity to reaffirm these values in today’s interconnected and fast-paced world,” said Peter Oswald, Mondi Group CEO designate (from 11 May 2017), who chaired the roundtable.
The CEOs discussed industry improvements in sustainability practices and innovation. They also watched the 3 global finalists of the Blue Sky Young Researchers and Innovations Award presenting their projects in a wide range of activities relevant to forest-based science, products using forest-based raw materials, process improvements or other innovations throughout the value chain. The global finalists of the Award and their respective projects can be found here
Keynote speaker Prof. Dr. Michael Huether, economist and director of the Institute der deutschen Wirtschaft, provided insights about the effects of Global Political Disruption on the forest based industry.
The next ICFPA International CEO Roundtable will take place in Canada in 2019.
Note to editor:
The ICFPA represents more than 30 national and regional forest and paper associations around the world which can be found here.
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.