Greece blows smoke at the EU

The cash-strapped country suggests looser rules on greenhouse gas emissions in order to boost economic growth.

Πηγή: ALJAZEERA
By John Psaropoulos
March 5 2014

Athens, Greece - Officials here are raising the prospect of softer greenhouse gas emissions rules for European Union members that are in an economic recession. The economically stricken country floated the idea two days after the European Commission launched an ambitious new plan to curb emissions. It was an apparent bid to pit the EU Council of Ministers, which Greece is presiding over until June, against the European Commission.

Europe has set itself a goal of largely decarbonising its energy industry by 2050. The Commission's goal is to reduce greenhouse gas emissions by 40 percent below 1990 levels by 2030. The main mechanism for achieving that is the EU Emissions Trading Scheme, or ETS, the world's largest carbon market.

Beginning this year, European industry must pay for every tonne of carbon dioxide it emits (or any other greenhouse gas it emits in CO2-equivalent terms), because the ETS will stop handing out almost a billion euros' ($1.37b) worth of free offsets after eight years of operation. The idea is to offset carbon emissions and encourage the use of more environmentally friendly sources of energy.

Greek Environment and Energy Minister Yiannis Maniatis has proposed that strict adherence to these rules could cost Greece 1.1 percent of its economy and 32,700 jobs. "The obligation of European companies to buy all or part of their CO2 emissions rights leads to increased energy costs and adversely affects their competitiveness," a statement [Gr] from the ministry said.

For Greece, the rules mean an annual bill of about 540m euros ($700m) at current low carbon prices, a sum it can hardly afford to pay. The country's economy has shrunk by almost one-third in recent years, and is still in recession today.

Steel yields

In February, two of Greece's biggest iron and steel manufacturers said they were laying off or suspending about 320 workers, partly because of stagnant manufacturing and construction sectors, but mostly because of the high cost of electricity. Late last year Viohalko, a steel producer responsible for about 12 percent of Greece's exports, relocated its head office to Brussels, purportedly for similar reasons.


"Greek heavy industry pays more than twice as much for electricity as neighbouring Italy."

- Andreas Skindilias, CEO of Halyvourgiki

"If the present situation continues, steel manufacturing [in Greece] has an expiry date," Nikos Mariou, who manages steel manufacturer Sidenor, told a national newspaper.

"Greek heavy industry pays more than twice as much for electricity as neighbouring Italy," said Andreas Skindilias, the CEO of Halyvourgiki, one of the companies laying off workers. "They pay about 32 euros ($44) per megawatt hour. We pay 80 euros ($111). Spain and France are also cheaper. These are the countries we compete with for the North African market."

The Greek steel market has fallen from 1.8m tonnes before the crisis to about 350,000 tonnes, according to Halyvourgiki, so exports are the industry's only hope of survival here. "No industry in the world can survive with these energy rates," said Skindilias.

Greece already suffers from an unemployment rate of 28 percent, the highest in the EU, and the government appears to be galvanised by the prospect of further mass layoffs. It announced measures that could reduce energy costs by 150m euros ($200m), such as the so-called "interruptibility" measure, whereby power utilities can ask large consumers to interrupt their operations at short notice, to enable them to divert power to rising household demand. That significantly lowers generation costs, and utilities are prepared to pay for the facility.

The cost of carbon

Greece may think that its proposal to soften emissions rules will fall on sympathetic ears, because it is emblematic of a broader European concern. The continent suffers from high energy costs when compared with the United States, according to the International Energy Agency, a Paris-based think-tank. "Natural gas in the United States still trades at one-third import prices to Europe… European industrial consumers [pay] almost twice as much as their counterparts in the United States," said the International Energy Agency's2013 World Energy Outlook.

The goal Europe has set itself, however, is to produce cleaner energy at competitive rates. Greece faces a particular problem here. The country's worst carbon offender is its energy industry, responsible for more than three-quarters of the country's greenhouse gas emissions, as compared with a global average of two-thirds. Greek power plants pumped 92 million tonnes of CO2 into the atmosphere in 2011, the last year for which figures are available.

Much of those emissions came from the Public Power Corporation (PPC), the former state monopoly responsible for 70 percent of electricity production which now faces an estimated bill of 150m euros ($200m) for last year's CO2 emissions. That is almost 40 euros ($55) per household - and hundreds of thousands of households have had their power cut because they can't pay their bills. This is because the PPC still generates most of its electricity from lignite, a dirty form of coal that is currently Greece's only abundant energy resource. In fact, Greece is the world's 15th largest producer of coal, coming third in the EU after Germany and Poland.

The PPC will not divulge comparative figures, but claims that lignite-derived electricity is far cheaper than that generated from imported oil and gas. It is so committed to the fuel that it is preparing to invest 1.4bn euros ($1.8bn) in a new plant in northern Greece.

The Greek chapter of the World Wildlife Fund (WWF) commissioned a study showing that the new plant may not be viable once heavy industry weighs into the carbon market, raising the price of carbon offsets.

"This study has shown that in a few decades' time these units will even have negative cashflows under specific circumstances, and might also require tax exemptions and state support in general," said the WWF's Michalis Prodromou. "That is due to the change of the economic and energy environment as we head towards high energy efficiency policies, increased renewable energy penetration and so on."

The WWF has called on Greece to place greater emphasis on energy conservation, and to place a higher target than the EU-mandated 27 percent on energy from renewable sources.

Delayed deregulation

Lignite fuelled Greece's post-war recovery, and many people in the power industry argue that if Greece hopes to preserve its heavy industry, lignite must continue to form a part of its energy mix for the foreseeable future. But the record shows that its dominance as an energy source, and the PPC's exclusive right to mine it, have acted as a brake on cleaner energy and a functioning energy market.

Greece effectively delayed the EU-mandated liberalisation of its electricity market by six years, bowing to political pressure from the PPC's labour union. Since 2001, private investment has been in cleaner gas-fired plants and renewables, but these have had difficulty competing with the PPC because of the cheapness of lignite. The result was that many independent power producers pulled out of their investments.

In 2008, Greece became the first country to be suspended from emissions trading under the Kyoto Protocol, the world's first treaty reining in greenhouse gases, after the country inaccurately reported its carbon emissions.

Maniatis has been notably silent on the softening of emissions rules he requested. Both he and Deputy Minister Asimakis Papageorgiou turned down repeated requests for interview for this story, as did the PPC.

If history is any guide, the Greek government may be trying to protect the value of the PPC as it grooms the company for privatisation next year. Greek governments have spent years protecting state monopolies. They are still coming to terms with the European challenge to protect both industry and the environment.

First US carbon emissions standard proposed

The proposed standard will not apply to plants burning non-fossil fuels, such as biomass

Πηγή: TCEtoday
By Helen Tunnicliffe
March 28 2012

New power stations limited to 1,000 lb CO2/MWh.

THE US Environmental Protection Agency (EPA) has proposed the country’s first carbon dioxide emissions limit for new power stations over 25 MW.

The proposed standard will not apply to existing power stations, or those on which will be built in the coming 12 months. The standard, which will be implemented under the US Clean Air Act, would see an emissions limit of 1,000 lb (454 kg) per MW of electricity produced imposed on all new power stations with a capacity of 25 MW or more. In 2009, EPA declared that CO2 is a pollutant, following a Supreme Court ruling ordering them to investigate whether or not it and five other greenhouse gases were a risk to public health and the environment.

EPA says that new combined-cycle gas-fired power stations, which are the preferred type, will be able to meet the limits without modifications, and the proposals are in line with current investment trends. As such, the agency says that it does not expect any “notable” added costs or impacts on electricity price or reliability.

Coal-fired plants, however, are likely to need to employ other technology to reduce emissions, such as CCS. The regulations will allow the use of coal or coke in power stations, through a 30-year average option. This would mean such plants could be built, and add CCS technology as it becomes cheaper and more widely available. Plants opting for this would have to meet an initial standard of 1,800 lb CO2/MWh for the first ten years. For the remaining 20-year period, these plants would be required to reduce their emissions to 600 lb CO2/MW in order to meet the average.

The proposed standard will not apply to plants burning non-fossil fuels, such as biomass.

“Today we’re taking a common-sense step to reduce pollution in our air, protect the planet for our children, and move us into a new era of American energy,” said EPA Administrator Lisa Jackson in a statement. “Right now there are no limits to the amount of carbon pollution that future power plants will be able to put into our skies – and the health and economic threats of a changing climate continue to grow. We’re putting in place a standard that relies on the use of clean, American-made technology to tackle a challenge that we can’t leave to our kids and grandkids.”

Andy Furlong, IChemE’s director of policy and communications says that the US regulations mirror those in the UK, which proposed a 450 g CO2/KWh limit for new-build power stations in a White Paper published by the government in 2011.

“This will have the intended consequence of killing new unabated coal-fired power stations stone dead. Fans of CCS will be tempted to rejoice but there will be no activity in this area unless substantial government incentives are offered in conjunction with the carbon dioxide cap. Natural gas will come to the rescue in the US given its abundance of shale gas resources. The UK is not so fortunate given its greater dependence on imports, and the stark reality that it is located at the end of a very long pipe,” he says.

EPA will hold public consultations and is inviting public comment for 60 days on its website.

EU court upholds carbon trade plan for aviation

In this Jan. 9, 2010 file photo, an airplane lifts off at Berlin's Tegel airport during snowy and stormy weather. The European Union's highest court upheld on Wednesday, Dec. 21, 2011 the EU's right to impose its cap-and-trade carbon trading scheme on international airlines that use European airports, rejecting a suit brought by North American airlines.

Πηγή: AP
By ARTHUR MAX

Dec 21 2011

AMSTERDAM (AP) -- U.S. air carriers failed Wednesday to block an EU law charging airlines flying to Europe for their carbon pollution, yielding to a sweeping measure intended to curb climate-changing emissions from international aviation.

The European Court of Justice in Luxembourg dismissed arguments that imposing the European Union's cap-and-trade program on flights to and from European airports infringes on national sovereignty or violates international aviation treaties.

The lawsuit was brought by U.S. and Canadian airlines acting through the industry trade organization Airlines for America, but the protest was supported by China, India and other countries with international carriers.

The U.S. airlines said the regulation was tantamount to "an exorbitant tax," but the EU said the added costs would amount to a few dollars per ticket and would open the way for efficient airlines to make money rather than lose.

The carbon trading program, due to go into effect Jan. 1, is one of the widest-reaching measures adopted by any country or regional bloc to regulate emissions of greenhouse gases blamed for climate change. It aims to make airlines accountable for their carbon emissions, which contribute to global warming.

The EU said it had enacted the measure after the International Civil Aviation Organization, the U.N. regulatory agency for airlines, failed to take concrete steps to rein in carbon emissions, despite an ICAO resolution 14 years ago authorizing action.

Although only 3 percent of total human-caused carbon emissions come from aircraft, aviation is the fastest-growing source of carbon pollution.

The U.S. trade group said its members would comply with the EU directive "under protest," while reviewing legal options.

"Today's court decision further isolates the EU from the rest of the world and will keep in place a unilateral scheme that is counterproductive to concerted global action on aviation and climate change," Airlines for America said in a statement from Washington. "Today's decision does not mark the end of this case."

Under the scheme, each airline will be allocated pollution permits slightly less than its average historical emissions record. If it exceeds its limit, it can buy permits from other airlines that have emitted less than allowed and have leftover permits to sell. Emissions are counted for the entire route of an aircraft that touches down in Europe.

The intention is to induce airlines to emit less carbon by upgrading their fleets or becoming more efficient.

Connie Hedegaard, the European commissioner for climate action, said she was "satisfied" with the ruling and ready to work with the airlines on implementing it.

The EU law would exempt airlines if they take comparable measures to control their greenhouse gas emissions.

All revenue derived by the EU from the program will go toward fighting climate change, the EU says.

An organization of budget airlines, the European Low Fares Airline Association, welcomed the decision, which it said would compel the big carriers to follow the same rules as small airlines on internal European flights. It said 80 percent of aviation emissions originate from long-distance routes.

Environmentalists also hailed the judgment.

The EU has calculated the cost to passengers will be minimal, ranging up to euro12 ($15.70) on a one-way trans-Atlantic flight. For many flights it will be a euro ($1.32) or two.

But the airlines are receiving most of their permits for free for the first transition years. If the full market price of emissions is passed on to consumers - as happened with European utilities that received free permits - the airlines will benefit from windfall profits, say analysts and European legislators.

Peter Liese, the German lawmaker who ushered the bill through Parliament, said airlines should be paying about 1 euro ($1.32) to fly to the U.S. east coast, and any airline charging substantially more is either trying to "fool the passenger" or has "a very old and dirty fleet."

The ruling by the 13 judges said the EU was within its rights to impose the scheme on commercial airlines that choose to operate at European airports, and thus fall under EU jurisdiction.

It also rejected the appeal that the measures violate the Open Skies treaty prohibition against unilateral taxation or discriminatory treatment. It said the cost to the airline is subject to an open market, from which it also may profit, and is not a tax. It also treats all flights equally, as long as they land or take off from one of the EU 27's nations.

The directive, enacted in EU law in 2008, aroused an international protest beyond those airlines that joined the lawsuit.

The U.S. House of Representatives passed a measure two months ago directing the transportation secretary to prohibit U.S. carriers from participating in the program if it is unilaterally imposed.

Last week, U.S. transport secretary Ray LaHood and Secretary of State Hillary Rodham Clinton wrote to the EU commission reiterating Washington's objections on "legal and policy grounds," and said the U.S. would respond with "appropriate action." It did not elaborate.

"U.S. companies and citizens have to respect EU law, just like anyone else", said Jo Leinen, who chairs the European Parliament's environment committee. He said it would be "arrogant and ignorant" of U.S. lawmakers to pass legislation against the EU measure.

China and India complained about the issue at the recent 194-nation U.N. climate conference in South Africa. The New Delhi government reportedly told Indian carriers to defy the directive by refusing to submit carbon emissions data to the EU.

But the EU said all major international carriers, including those behind the lawsuit, were among some 900 airlines that have applied for free permits, and that it anticipated full compliance with the law.