December 5, 2017
Ireland faces €450 million fine for not meeting EU climate targets
December 5, 2017
Ireland could face EU fines of more than €450 million in 2020 for missing its legally binding targets on reducing greenhouse gas emissions, Dr Paul Deane, of University College Cork’s Environmental Research Institute has said, according to an article in the Irish Times.
New figures from the Irish Environmental Protection Agency (EPA) show greenhouse gas emissions increased by 3.5 per cent in 2016 to an estimated 61.19 million tonnes of CO2 equivalent.
The rise was attributed to increased activity in the dairy and energy industries and the transport sector:
It is the second year in a row that Irish greenhouse gas emissions have increased, with the EPA noting that “Ireland has not managed to decouple emissions from economic growth”.
According to the article, Ireland has committed to reducing carbon emissions by 20 per cent by 2020 and increasing the amount of energy taken from renewable sources. “Progress was made on these commitments while economic activity decreased during the recession years, but the State has since fallen back to 2009 emissions levels.”
So what happens when an EU country does not meet the (legally binding) targets? To be honest, I was not able to find any information on that on the EU websites, but Deane “estimated that based on current emissions, Ireland could face EU fines of some €455 million in 2020 for failing to meet its reduction targets.”
He said this was about 25 per cent lower than a previous projection of €610 million. The lower number reflects the falling cost of carbon credits, which, he said, “are typically purchased in lieu of fines”. Credits have become cheaper “because most EU states are now expected to meet or exceed their climate targets. This will effectively allow Ireland and other laggard countries to buy their way out of the fines for less.”
In the Irish energy sector, “emissions increased by 6.1 per cent in 2016. This is underpinned by an increase in demand for electricity and more electricity generation from gas. In 2016, decreases were observed in coal and peat use and also renewable energy sources (ie wind) due to weather conditions.”
Deane said “the big offender in the renewable energy sector was home heating, and that a heavy reliance on fossil fuels such as oil, gas and peat for heating buildings makes it an outlier internationally.”
Ireland is one of less than a handful of EU member states where emissions are increasing, and the 2020 targets will be missed. This table (from the European Environment Agency) shows the progress Member States have made towards meeting their greenhouse gas emissions, renewable energy and energy efficiency targets:
Biofuels battle in Brussels heats up again
December 5, 2017
The struggle over biofuels in EU legislation continues unabated.
The industry committee of the European Parliament voted on 28 November to to reinstate a ‘renewable’ energy target for transport in 2030.
Such a target already exists for 2020, but the European Commission wants to get rid of it, because it does not want to promote the use of food-based crops for biofuels. The Commission instead wants to replace it by a target for “advanced biofuels”, i.e. not based on food crops.
But the ITRE committee turned out to be sensitive for the arguments of the agriculture lobby. According to NGO’s Transport & Environment (T&E) and Oxfam a renewable energy target in transport, if it were adopted by the full European Parliament and ultimately became law, would “continue subsidising the use of high-emitting, food-based biofuels, would increase emissions in transport, push up global food prices and negatively impact people around the world who live from the land.”
Marc-Olivier Herman, EU economic justice policy lead at Oxfam International, said: “The obligation to use biofuels in transport has left a trail of destruction around the planet. People have been deprived of their right to land and are subject to abuse by companies operating in the supply chain of European biofuel producers. Today’s proposal from the Parliament’s industry committee means even more food for fuel and more devastation in many countries around the world, from Indonesia to Peru. Members of the European Parliament must stop this madness at the plenary vote in January.”
The industry committee, however, also voted in favour of a 10% blending mandate for advanced fuels, including advanced biofuels and renewable electricity.
But the NGO’s are not happy with this proposal either. According to them, it “lacks an adequate sustainability framework. This means this target is too high to be sustainable.”
T&E and Oxfam note that “MEPs supported widening the definition of advanced biofuels to anything that is not produced from food or feed crops. Under such a definition, unsustainable feedstocks, including co-products of the palm oil industry would qualify as advanced biofuels. In principle, the raw materials for advanced biofuels should be limited to waste and residues, which comply with the waste hierarchy, cascading use and strong sustainability criteria.”
In fact, the NGO’s assessment is confirmed by the biofuel industry itself. According to a survey from Verband der Deutschen Biokraftstoffindustrie (VDB), “The European Commission’s proposed binding obligations for advanced biofuels in the Renewable Energy Directive II (RED II) cannot be met because of a lack of private investment in the sector.”
“The commission suggests that investors will spend €900mn/yr on advanced biofuels from 2021, but a survey of investor confidence by the consulting division of global energy and commodity price reporting agency Argus reveals that none of the 26 private-sector stakeholders that responded has committed any funds to developing advanced renewable fuels”, notes VDB.
The VDB commissioned the independent survey from Argus to understand whether the biofuels industry expects RED II to provide sufficient incentive to spur investment in advanced biofuels and what effect the directive’s reduction in support for conventional biofuels will have on investor confidence.
“Even with binding targets for renewable fuels, respondents indicated that they would be hesitant to invest because of the issues surrounding legislative support and uncertainty around technology,” the report’s author, Argus consulting manager Tom Searle, said. “81% of the respondents indicated that the reduction in support for conventional biofuels would reduce investor confidence in advanced renewable fuels.” (The full report of this survey can be found here: European biofuel industry survey regarding the RED II proposal)
China invests €600 million in lignite power plant in Bosnia
December 5, 2017
Just when you thought China was going all-renewable and climate-friendly, the China Exim bank and Bosnian power utility Elektroprivreda BIH on 27 November signed a massive loan agreement, for a €613 million loan, for the building of the 450 MW Tuzla unit 7 lignite power plant in Bosnia-Herzegovina.
Reacting to this news, CEE Bankwatch Network, the Center for Ecology and Energy from Tuzla and Ekotim from Sarajevo pointed out that the signing is premature as the project is still far from ready.
Ioana Ciuta, Energy Co-ordinator at CEE Bankwatch Network, said: “The fact that there’s an occasion to sign this loan agreement doesn’t make the project ready, quite the opposite – it is without the Parliament’s approval and haunted by legal and procedural challenges. The environmental permit is still being challenged in court, there is no energy permit, and the loan guarantee has not been approved by the State Aid Council”.
Denis Žiško from Center for Ecology and Energy, Tuzla, adds that: “Tuzla 7 still does not have a definite location, let alone permits, for ash disposal. A proposal to locate it in Šički Brod is facing resistance from the local population.”
He called the loan signing a “death sentence for the population of Tuzla canton”, adding that “According to our [2013 study Impacts of Coal Fired Power Generation in Tuzla) carried out with the Health and Environment Alliance, between 2015-2030, 39,000 life-years will be lost as a result of the Tuzla and Banovići power plants, with total health-related economic costs of EUR 810 million.”
Pippa Gallop, Research Co-ordinator at CEE Bankwatch Network, said, “While China is making strong steps forward at home in reducing coal use, it needs to demonstrate more leadership abroad by implementing its ‘Green Credit Directive’ for overseas investments. China Eximbank has failed to take into account the lack of environmental permit for the ash disposal site and has avoided disclosing information on its due diligence on the project. If China Eximbank finances projects like Tuzla 7 and others in the pipeline, there won’t be much left to inspire confidence about China’s green leadership.”
What is particularly noteworthy about the Chinese deal is that, according to Bosnian media reports, European Union credit institutions have declined to finance the project as it fails to meet the bloc’s strict environmental requirements.
National electricity markets in EU “robust” – but interdependent
December 5, 2017
Under “normal conditions”, there “should not be any risk to security of supply” in the European electricity market, according to the ENTSO-E’s Winter Outlook 2017/2018, published on 29 November.
However, “in case of cold spells and low generation availability, ENTSO-E’s analysis suggests that risks can materialise in several countries and mainly during the second week of January.”
“Under severe conditions, margins are indeed expected to be tight in Great Britain, France, Belgium, Poland and Italy. However, the risk of not having enough generation capacity to cover demand is contained in probability.”
ENTSO-E notes that “This year’s analysis is more refined than the 2016/2017 edition as lessons from last winter have been taken on board. Last winter, Europe’s power system has indeed faced tensions due to an unforeseen cold spell combined with low availability of nuclear generation in France.”
Moreover, “instead of considering situations that only happen in 1 year out of 10, the Winter Outlook 2017/2018 looks at worst-case situations that could occur in 1 year out of 20. This allows to cover more potential risks.”
Looking at the report in a bit more detail, what is important to observe is that many EU countries may depend on electricity imports to keep the lights on when circumstances are bad.
Even under normal conditions, several EU countries could need imports for at least one week:
Under more severe conditions, the import needs become quite high:
The ENTSO-E report also contains a “gas disruption sensitivity analysis” to find out what would happen if gas transit through Ukraine was halted for two months.
The conclusion is that the European electricity system is “robust”, even “in the event of a high demand situation with a simultaneous interruption of gas transit through Ukraine.”
ENTSO-E analyses show that the electricity security of supply would be maintained for two reasons:
- Electricity systems are well interconnected and some non-affected neighbouring countries can support the electricity supply by exporting more; and
- Some gas fired generations could be switched to substitute fuels or expected unavailable gas fired generation capacity is of low order magnitude.
Just to be clear: the sensitivity analysis applies to the risks of a gas disruption to the electricity system, not the heating system.