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The EU’s 2030 climate and energy framework: What’s in it for industrial sectors? Presentation by Tomas Wyns (IES) at the European Paper week 2014. How can the EU's climate policy (e.g. EU ETS) help industrial sectors innovate and become more competitive.

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  • 1. The EUs 2030 climate and energy framework:Whats in it for industrial sectors?CEPI European Paper Week 2014Tomas Wyns, tomas.wyns@vub.ac.be

2. 2020 3. 20202020% GHG reductionsby 2020 ref. 1990Implemented throughESD (-10% ref. 2005)EU ETS (-21% ref. 2005)20% Renewable Energyby 2020Implemented throughRE Directive20% Energy Savingsby 2020 ref. BAUImplemented throughEEDEPBDEcodesignCO2 & carsBindingBindingIndicativeEU-wide target forEU ETS (LRF 1.74%)National targets underESDNational targets underRE-directiveIndicative targets for MS(EED)Binding measures (EED,EPBD, ) 4. 2030 5. 40272740% GHG reductions(*)by 2030 ref. 1990Implemented throughESD (-30% ref 2005)EU ETS (-43% ref 2005)27% Renewable Energyby 2030Implemented throughnew governance systemNational Energy PlansReview of RE directive?!27% Energy Savingsby 2030 ref. BAUImplemented throughnew governance systemNational Energy PlansReviews of EED,EPBD, EcodesignCO2 & cars ?!BindingBinding (at EU level)IndicativeNO national bindingtargetsEU-wide target for EUETS (LRF to 2.2%)National targets underESDPossible future: indicativetargets for MS or bindingmeasures(*) at least 40% domestic 6. EU ETS: whats on the table (cap) Market Stability Reserve should increase pricestability and hence investor certainty (ongoing -uncertainty over starting date), Council supports ECproposal. (21% reduction in 2020 going up to) -43% in 2030,ref. 2005 for ETS sectors, through increased Linear Reduction Factor (1.74-2.2%)brings EU ETS more in line with long-term (2050)targets (-80 to -95%) 7. EU ETS: whats on the table (carbon leakage) Existing carbon leakage measures will not expire (as long asno comparable efforts undertaken in other major economies) Appropriate levels of support for sectors at risk of losing intlcompetitiveness Benchmarks to be periodically reviewed (tech. progress insectors) Direct and indirect carbon costs taken into account (but in linew state aid rules) Future allocation better aligned with changing productionlevels 8. EU ETS: supporting modernisation andindustrial innovation New Entrants Reserve 300 to be renewed andextended (NER 400) Scope extended to low-carbon innovation inindustrial sectors New reserve to address capital intensiveinvestments in low-income Member States (e.g.energy efficiency, energy sector infrastructure) 9. EU (ETS) 2030: some personal reflections (i) Annual allocation adjustment based on actualproduction will be difficult (could be a curse indisguise). Additional allowances should be linked (more)with (physical) investments Cross-sectoral correction seems to remain in placebut does LRF have to be 2.2% for industry andpower sector (e.g. 2% for industry and 2.4% forpower)? 10. EU (ETS) 2030: some personal reflections (ii) Ensure EU wide level playing field for carbonleakage protection (not the case now) Industrial demand side management notmentioned in Council conclusions NER for industrial low-carbon innovation: Finally!(see next slides) 11. Industrial policy and innovationNER 400 12. NER 400: Industrial low-carbon innovation Should focus on capital and risk intense (large scale)demonstration projects aiming towards commercialisation post2030 Create toolbox of risk-sharing instruments (grants, equityparticipation, loans, loan-guarantees, ) Facilitate upfront capital access through project milestones Industrial co-benefits should be acknowledged (e.g.productivity increase, resource efficiency, ) Encourage cross-sectoral/cross-company collaboration 13. Coda: The non-negligible risk of innovation leakageKuang-Hsi Chen, Taiwan Cement Corporation & Heng-Wen Hsu, Industrial Technology Research Institute,Taiwan: First cement CC(S) demonstrationThank you!Feb. 2014: Archer Daniels Midland Company andRennovia, Inc. announced today that ADM hascommitted to a $25 million equity investment in theprivately held company, which develops catalysts andprocesses for the cost-advantaged production ofchemical products from renewable feedstocks.For more information please contact:Tomas.Wyns@vub.ac.beSuccessful testing of HIsarna (ULCOS) pilot blastfurnace in Ijmuiden. But will demo phase be build inEurope?!Inert Primary Aluminium AnodesThis new technology would have a significant opportunityin growth markets (e.g. Russia and China) that have madecommitments to Greenhouse Gas reductions. USDepartment of Energy