56 1. INTRODUCTION Jn 2001 the European Commission issued a proposal for a European Directive to establish a EU-wide cap-and-trade scheme for Greenhouse Gas (GHG) emissions, notably carbon dioxide (CO,). This scheme is one of several measures taken at EU-level to prevent or minimise the effects of climate change. it aims to push operators of certain installations to reduce CO2 emissions to a desired level whilst making sure this happens at lowest possible overall costs. Combined Heat and Power (CHP, alsa known as cogeneration) is considered one ofthe key ıneasures to reduce CO2 eınissions in a cost-effıcient way. The Eınissions Trading Scheme should therefore, in principle, encourage CHP. Yet, its potential implications on CHP have not been explored in detail. This paperconsiders possible probleıns that could emerge during the 2005-08 pilot period ofthe scheme, and suggests ways of overcoming them. 2. THE PROPOSED EMISSIONS TRADING SCHEME According to the current proposal (European Commission 2001 a), the Emissions Trading Scheme would be first launched fora three-year pilot phase between 2005-08. During this initial period, the scheme would be limited to CO2 emissions (IJ from certain activities including O mineral oil refineries and coke ovens O ferrous ınetals, cement clinkers, glass, glass fibre, ceraınics, pulp, paper and board industries with a certain capacity O combustion installations with a rated thermal input of more than 20 MW.<2ı it is estimated that these sites - their total number in the EU territory is 4-5000 - will emit approximately 46% of the predicted EU CO2 emissions in 2010. Under the proposed Directive, they would require a "greenhouse gas eınission perınit" allowing theın continued operation subject to the requireınents set in the eınissions trading regiıne. Each site would then be given a certain aınount of eınission allowances for a specified period, whereby one allowance gives the concession to eınit one tonne ofCO2 equivalent. Holding 50,000 allowances thus gives the right to emit 50,000 tonnes of CO2• Allowances would be allocated to activities carried out within one installation or several installations on the saıne site, the capacities of which would be added together. Iınportantly, it is proposed that during the pilot period 2005-08 allocation should be at no cost< 3 l and based on the historical eınission record ofthe sites ("grandfathering"). For each tonne of CO, emitted from a site, the operator would need to submit an allowance. lfthe site emits less CO, than allowances held, then-these ınay be banked from one year to the next, or they ınay be sold to another coınpany that does not ıneet its CO2 target and therefore needs additional allowances. Operators which emit CO2 without submitting the necessary allowances, would during the pilot period face a penalty of€ 50 per tonne CO2 in excess (€ 100 after 2008). Because allowances would be recognised across the EU without further negotiation the Directive would create a European market for allowances. In soıne sectors the potential for cbeaper cost-reduction schemes is greater than in others. With an EU scheme, the price ofallowances would be similar wherever the plant is located. On the basis ofthis comınon price, eınissions trading plant ınanagers can decide whether or not to reduce emissions themselves, or buy additional allowances froın others who can reduce theirs at lower cost. Fixing the total amount ofallowances to distribute amongstthe installations covered by the Directive would be essentially left to Meınber States. Yet, it should take into account the aınount of CO2 which the Meınber State is allowed to eınit pursuant to the Kyoto Protocol in combination with the EU Burden Sharing Agreeınent; and the proportion of overall national eınissions which the installations covered by the Directive generale. National allocation plans would have to be drawn up stating the total aınount of allowances and the method to allocate theın, based on objective and transparent criteria. Based on the experiences made, the method ofallocation in the period 2008-2012 would then bedetermined. 3. co2 SAVINGS FROM COMBINED HEAT AND POWER An iınportant measure to reduce CO2 emissions is the installation or upgrade ofa CHP scheme. Schemes covered by the Directive would include: O any CHP installation, regardless of its capacity, on an industrial site subject to mandatory participation in the Emissions Trading Scheıne (e.g. refineries, large metal industries, paperproducers ete.) O any CHP planı with a rated fuel input of ınore than 20 MW This includes two different types of CHP applications: O industrial CHP, which often supplies heat at a high teınperature level, where the site usually consumes ali heat and a large part of the CHP electricity produced, and which often has a very long annual operation time in excess of 6000 hours. O District Heating, which supplies heat at a lower teınperature level and exports both its entire electricity and heat output. Because a major part ofthe heat load depends on the need for space heating due to cliınatic conditions, it may run during the suınıner period in non-CHP mode (i.e. as condensing power plant). 1 Accordiııg ıo ılıe proposa/ ılıe greeııhoııse gases CH, N,O. HFCs. PFCs aııd SF6 woıı/d be iııclııded at a /aıer sıage. Tlıe Eııropeaıı Parliaıııeııı recoııııııeııded in Ocıober 2002 ro keep ıhe optioıı of their earlier inc/usion iııto ıhe sclıeme. To daıe, no final agreement has been reached on tlıis issue. 2 Tlıe Eııropean Parliame111 favours ıhe mandatoıy participaıion of more acıivities, including ılıe clıemical and aluminium indusıries. 3 A sıııa/1 perceıııage ofa/lowaııces (aboııı 15%) ıııiglıı be aııcıioııed as a resıılı of a proposed Parliaıııeııı aıııeııdıııeııı. ECOGENERATION WORLO
RkJQdWJsaXNoZXIy MTcyMTY=