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EU-ETS

EMS

The EU ETS is the cornerstone of the European Union’s drive to reduce its emissions of man-made greenhouse gases. The aim is to stop the growth in emissions of greenhouse gases by 2020 at the latest and then reduce them sharply - by at least half of 1990 levels by 2050, and more after that. The EU ETS is the world’s biggest emissions trading market, accounting for over three-quarters of international carbon trading. The EU ETS covers more than 11,000 power stations and manufacturing plants across the 28 EU member states. Aviation operators flying within and between most of these countries are also covered. In total, around 45% of total EU emissions are limited by the EU ETS. From 2018 shipping will also come under the auspices of the EU ETS. This will apply to ships of all nationalities from their last non-EU port of call, through EU waters and on to their first non-EU port of call. It is estimated that this will account for circa 90% of all EU maritime emissions.

Initially each EU Member State was allocated a reduction target and an overall allowance (National Alocation Plan) depending on their capability of achieving the targets within that state's economic limits. These were then divied up by each state between their electricity, refining, iron & steel, cement, glass & ceramics, paper & pulp industrial sectors. This resulted in allocations being made on a sector-by-sector and company-by-company basis. Each allowance gave the holder the right to emit one tonne of CO2, the main greenhouse gas or equivalent. Phase 3 (2013-2020) of the EU-ETS sees more industrial sectors coming under the auspices of the EU-ETS and the addition of equivalent limits for both Nitrous oxide (NOx) and perfluorocarbons (PFCs), two more powerful greenhouse gases.

The first EU-ETS trading period commenced in 2005, with a second trading period commencing in 2008 and the current third stage having just come into force in 2013.

The EU ETS works by limiting the overall emissions from certain high-emitting industry sectors. This limit or cap is then reduced year-on-year (1.74%pa 2013-2020) to ensure that each member state's contribution to the EU's overall emissions are gradually reduced to reach targets set for 2020 and then by 2.2%pa (2021-2030) to achieve the 2030 targets. These targets are set relative to baseline emission levels for each of the pollutants within the scope of the EU ETS. The list of environmental pollutants is gradually increasing as is the list of industrial sectors falling under the EU ETS. The pollutants currently capped by the EU ETS are Carbon dioxide (CO2); Methane (CH4); Nitrous Oxide (N2O); Hydrofluorocarbons (HFCs); Perfluorocarbons (PFCs) and Sulphur Hexafluoride (SF6). The pollutants capped are dependent upon the industry sector.

The limits are gradually being decreased to deliver overall reduction figures of 21% from 2005 baseline and 43% lower by 2030.

Operators of activities specified within the EU ETS must hold a greenhouse gas emissions permit and develop a Monitoring Plan and report their emissions of greenhouse gases specified in relation to their activity. Within their limits, companies can buy and sell emission allowances as needed. This ‘cap-and-trade’ approach gives companies the flexibility they need to cut their emissions in the most cost-effective way. By allowing companies to buy a proportion of their credits from emission-saving projects around the world, the EU ETS also acts as a major driver of investment in clean technologies and low-carbon solutions, particularly in developing countries. Allowances can be used only once. Companies have to surrender allowances for every tonne of CO2 (or the equivalent amount of N2O or PFCs) covered by the EU ETS that they emitted in the previous year: heavy fines are imposed if they do not hand in enough allowances to match their emissions.

Industries capped by the EU ETS should be aiming to reduce their CO2 equivalent outputs by 1.74%pa linearly from 2013 to 2020 and then 2.2%pa up to 2030.

SES can help a company reduce its CO2 output by:

1	Accurately determine, on a site-wide basis, the amount of CO2 produced by equipment such as boilers, burners, turbines, heaters, furnaces, calciners, kilns, ovens, dryers, engines, and thermal or catalytic post-combustion units with a thermal input of >3MW.
2	Prepare an application for a Greenhouse Gas Emissions Permit and develop the required Monitoring Plan
3	Identify any inefficient equipment and recommend replacements.
4	Improve process energy efficiency
5	Install an ISO14001 EMS and regularly audit resource and energy consumption and actively reduce it as part of an ongoing commitment to reduce environmental impact.
6	Reduce a company's Carbon Footprint which has a beneficial impact on its net carbon emissions and therefore helps save on purchase of Carbon Allowances.
7	Another way that SES can reduce a processes CO2 output is by advising on biomass heat production (counts as zero emission) or by biomass generation of electrical power on one site that is then shipped via the national distribution grid to a remote location and used to replace other forms of heat production thus replacing CO2 emissions on the remote site with zero rated emissions on the generating site.