from Sunday Herald, 11 April 2010
Big businesses are in for a pollution and profit bonanza because of loopholes in the European scheme to limit climate emissions opened up by the economic recession.
New figures reveal that companies will now be able either to boost their climate pollution - or to sell unused pollution permits for millions of pounds, enabling others to increase their emissions.
The climate-wrecking boon for businesses has arisen because the recession has caused emissions across Europe to fall below the caps imposed by the European Commission for the first time.
Companies in Scotland that stand to gain include INEOS, the English petrochemical company which runs three polluting plants at Grangemouth, and Lafarge, the French-owned company that operates a cement works near Dunbar in East Lothian.
The prospects were “potentially disastrous”, according to Dr Richard Dixon, director of the environment group, WWF Scotland. “As it stands businesses across Europe will be able to make more profit by exploiting this loophole to carry on polluting pretty much as usual,” he told the Sunday Herald.
“The recession has done what governments and businesses have been failing to do - made big cuts in climate change emissions. The problem now is that this messes up the European trading scheme, which was based on assuming healthily growing economies every year.”
Dr Dixon called on Europe to raise its target for cutting climate emissions from 20% to 30% by 2020. “The trick now is to grow back from recession without growing all that carbon dioxide back as well,” he argued. “This means targeting job creation at low-carbon jobs in renewables, public transport and zero-waste.”
The European emissions trading scheme was launched in 2005. Covering more than 10,000 industrial plants across the continent, it is the main tool for cutting greenhouse gas emissions to try and limit dangerous climate change.
The scheme works by giving companies a limited number of legal permits to pollute, which can be traded if they cut their pollution. It is meant to act as an incentive to reduce emissions.
But it has been criticised because pressure from industry has resulted in the caps being set too high, allowing companies to carry on polluting without any financial penalties.
This problem has now been made hugely worse by the economic downturn. Because businesses have closed, or shrunk, emissions have plummeted so that they are now well below the caps.
An analysis of the trading scheme, based on figures released last week, shows that between 2008 and 2009 emissions dropped by 11% across Europe and by around 6% in Scotland. This has left industry with a huge surplus of pollution permits, equivalent to 140 million tonnes of emissions.
The overall figure, however, masks a key difference between industrial sectors. Fossil fuel power stations, which spew out vast amounts of pollution (see tables below) still ended up short of permits, while steel, cement and other heavy industries had 30% more permits than they needed.
If the heavy industrial companies sold off their excess permits at today’s prices, they would profit by over £2 billion, according to the analysis by Sandbag, a campaigning organisation that focusses on emissions trading.
In Scotland, emissions from the big power stations at Longannet, Cockenzie and Peterhead in 2009 all outstripped their permits. But pollution from the power plant at Grangemouth run by INEOS was 400,000 tonnes below its permitted amount, while emissions from the Lafarge cement works in Dunbar were 280,000 tonnes short.
What this means, according to Bryony Worthington from Sandbag, is that power companies will have to buy pollution permits from the other industries. This would result in Scottish electricity consumers subsidising other industries, she said.
She pointed out that Scotland’s efforts to cut climate pollution would be thwarted if excess pollution permits were simply sold to industry elsewhere. “Industry lobbying has successfully scared decision makers away from setting meaningful caps which has made the trading scheme a much weaker policy than it needs to be,” she argued.
“Too many permits have been handed out to heavy industrial sectors. This is like trying to persuade someone to give up smoking by handing them piles of free packs of cigarettes.”
Vincent Mages, the climate change director for Lafarge In Paris, accepted that the company had a surplus of pollution permits because of the recession. But he argued that it was just a short-term blip that would be corrected as the world came out of the downturn.
“What happened in 2009 was a very specific situation and hopefully it will not last,” he told the Sunday Herald. “We are confident that the European emissions trading scheme is robust and effective.”
Lafarge had already cut its worldwide emissions by 20% relative to production since 1990. The next phase of the trading scheme, starting in 2013, would ensure more reductions, Mr Mages said.
INEOS insisted that it was committed to a programme of minimising the impact of its operations on the environment. “The company has invested hundreds of millions of pounds in this programme and we continue to deliver real environmental improvements,” said a company spokeswoman.
Spanish-owned Scottish Power, which runs Longannet and Cockenzie power stations on the Firth of Forth, pointed out that it had won tens of millions of pounds from the government to test technologies for capturing and storing the carbon emissions from Longannet
“The twin challenges facing the energy industry are to continue to provide secure supplies of electricity as long-term demand forecasts continue to rise, whilst reducing the environmental impact of meeting this demand,” said a company spokesman.
The Scottish government pointed out that emissions falling faster than anticipated would help Scotland achieve its targets. “We continue to press for an increase in the European Union target for 2020 from 20% to 30%,” said a government spokesman.
Top ten climate polluters in Scotland
plant / emissions (million tonnes of carbon dioxide equivalent in 2009)
Longannet power station / 7.3
Cockenzie power station / 3.0
Peterhead power station / 2.8
Grangemouth refinery / 1.7
Grangemouth chemical plant / 0.9
Grangemouth combined heat and power plant / 0.8
Fife ethylene plant / 0.6
Grangemouth power station / 0.6
Dunbar cement works / 0.4
Sullom Voe power station / 0.3
Top ten climate polluters in UK
Drax power station / 19.9
Cottam power station / 8.4
Ratcliffe on Soar power station / 7.6
Longannet power station / 7.3
West Burton power station / 7.2
Eggborough power station / 5.5
Teesside iron and steel works / 5.4
Port Talbot steelworks / 5.3
Fiddlers Ferry power station / 5.2
Scunthorpe iron and steel works / 5.1
Top ten climate polluters in Europe
Belchatow power station, Poland / 29.5
Niederaussem power station, Germany / 26.3
Jänschwalde power station, Germany / 23.3
Drax power station, England / 19.9
Weisweiler power station, Germany / 19.0
Neurath power station, Germany/ 17.9
Frimmersdorf power station, Germany / 16.8
South Brindisi power station, Italy / 13.0
Agios Dimitrios power station, Greece / 12.9
Lippendorf power station, Germany / 12.8
Source: WWF Scotland
Pollution can also be the consequence of a natural disaster. For example, hurricanes often involve water contamination from sewage, and petrochemical spills from ruptured boats or automobiles.
Posted by: Climate change and energy efficiency | 09 June 2010 at 09:31 AM