More about the Kyoto protocol
The
background of the Greenhouse Gas Emission Trading and impact calculation model
for the pulp-and paper industry
From December 1 through 11, 1997, more than 160 nations met in Kyoto, Japan,
to negotiate binding limitations on greenhouse gases for the developed nations,
pursuant to the objectives of the Framework Convention on Climate Change of
1992. The outcome of the meeting was the Kyoto Protocol, in which the developed
nations agreed to limit their greenhouse gas emissions, relative to the levels
emitted in 1990. The United States agreed to reduce emissions from 1990 levels
by 7 percent during the period 2008 to 2012. (Source; Energy
Information Administration)
The European Union has ratified the Kyoto protocol on behalf of its
Member States. The outcome is that EU will reduce its fossil carbon dioxide emissions
level of year 1990 by 8 % by the end of year 2012.
To achieve the goal that is stated in the Kyoto Protocol EU have a model to
meet its obligations by trading emission allowances within the Community. The
work is divided into two phases: the first phase runs 2005 - 2007 and the second
phase 2008 - 2012. The initial focus is on carbon dioxide. Carbon dioxide from
bio-mass is considered climate neutral and is not a part of emission trading but
it has to be reported to the national authorities. From 1 January 2005, Green
House Gases (GHG) emissions permits will be required by all installations under
EU ETS (EU Emission Trading Scheme) providing that they are not temporarily
excluded. Exclusion requires that national policies are in place giving
corresponding conditions. Allowances are transferable between legal persons
within the Community. The member states shall allocate some allowances free of
charge (on an average of 95%) for the first phase and a lower amount for the
second phase The member states shall take in account the need to provide access
to allowances for new production capacity during the coming period. Penalties
for infringements will be €40 per ton of carbon dioxin for the first phase and
€100 for the following phases. (This will be on top of paying a market price
for the excess emissions i.e. emission allowances.) The names of the failing
operators will be made public.
The time table of the emission trading political process looks like this; the
European emission trading started 1 January 2005 and allowances and emissions for
year 2005 must be in the national register by 30 March 2006. During 2006 guidelines for Kyoto 1 (2008 to 2012)
will be presented and new allocation plans start.
To meet these challenges the Emitter (a whole industry Group/Company or a
single Carbon dioxide emitting production unit depending on the circumstances)
must estimate the Kyoto impacts both from a national and a business perspective.
Emitters can participate in the development of National Allocation Plans through
national federations, trade associations and in national networks. This work has
a political agenda only, where the required information is used for setting the
National Emissions Quotas and Allowances. From the business perspective the most
important issue is to develop a model for facilitating emission calculation and
planning for short and long terms, in the strive to minimize carbon dioxide
emission costs while maintaining a high production level. Together with a minimum
of work, and a high internal certainty preparation has more of an economic
approach, where the focus is on economic restrictions for production, rather
than on the limitations of fossil fuels on the market. Such a calculation model
should hence serve as a base for a dialogue between Emitters and Customers.
Sometimes it can be difficult for the Emitter to distinguish the
perspective that is in focus when inquiries come from different parties requesting
similar or identical information. The important fact is that once emission
data are retrieved, they must be saved for two reasons: Firstly for documentation
purposes in order to keep a transparent data collection and secondly for multi
usage of the data when similar questions/inquiries are received.
To estimate the impact of the EU ETS and the Kyoto Protocol for the Emitter it is essential to
establish an emission forecast for its own energy production and for purchased energy
for the years 2005 to 2007 and 2008 to 2012. Indirect costs of external energy
prizing also has to be projected as well as costs for the emissions allowances.
A calculation model for estimating the Greenhouse Gas Emission Trading impact
for the pulp- and paper industry is presented
here.
|
