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Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” Tallinn Apr 17th 2009 Satu Hassi, Member of European Parliament www.satuhassi.net

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Page 1: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Climate friendly energy for Europe”We are in the beginning of a Green industrial revolution”

Tallinn Apr 17th 2009Satu Hassi,

Member of European Parliamentwww.satuhassi.net

Page 2: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU has listened to scientists (1)

1990: 1st IPCC report: “The unequivocal detection of the enhanced (= anthropogenic) greenhouse effect is not likely for a decade or more”

1991: First European Community strategy on reducing GHG emissions

1992: UN Framework Convention on Climate Change (Rio de Janeiro)

Page 3: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU has listened to scientists (2) 1995: 2nd IPCC report: “The balance of evidence suggests a

discernible human influence on global climate” 1996: EU Council: “Global average temperatures should not

exceed 2 degrees C above pre-industrial” (that time understanding: CO2 < 550 ppm”)

1997: Kyoto Protocol EU offer in Kyoto: -15 % (vs 1990 by 2008-2012) if

other industrialized countries adopt comparable targets

EU Kyoto target -8 %, average of industrialized countries -5,2 % (US -7 %)

Page 4: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU has listened to scientists (3) 2001: 3rd IPCC report: “Most of the observed warming over the last

50 years is likely to have been due to the increase in GHG concentrations” 2001: US withdraws from Kyoto Protocol 2001: EU campaigns for continuing negotiations on the

implementation rules of Kyoto 2001: Marrakech Accord makes Kyoto Protocol ratifiable 2002: EU ratifies Kyoto 2005 Kyoto Protool enters into force 2005: Start of EU CO2 emission trading system (ETS)

Page 5: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU has listened to scientists (4) 2005: European Parliament: Industrialized countries should

cut emissions 30 % by 2020 and 60-80% by 2050 2007: 4th IPCC report: “Most of the observed increase in globally av’d

temperatures since the mid-20th century is very likely due to the observed increase in anthropogenic GhG concentrations”

2007: EU Commission: +2 oC means max 450 ppm CO2-eq, globally 50 % emission cuts by 2050

2007: EU Summit agrees post 2012 climate targets

Page 6: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU Summit 9.3.2007 Global warming should be limited below +2°C

compared to pre-industrial time To avoid dangerous climate change

•As a part of an international agreement EU will cut emissions (from 1990 level)

- 30 % by 2020 - 60-80 % by 2050

•Even without an international agreement EU will cut emissions by 20% by 2020

•20 % share of renewable energy by 2020, 10% in transport

Page 7: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Arctic Sea summer ice minimum 1979 & 2005 (NASA) www.vulnerablearctic.net

Page 8: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Arctic Sea summer ice minimum 1979 & 2007 (NASA)

www.vulnerablearctic.net

Page 9: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Source: WHO, 2003: Climate change and human health: risks and responses.

IPCC forecast with uncertainty IPCC forecast

with uncertainty

Page 10: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Paradigm change: Coming to mainstream thinking:

• We need a new industrial revolution to tackle triple challenge: climate change, energy security, economic crisis

• Power sector must be decarbonized• Decentralized renewable energy production + intelligent

grids change the energy system in a similar way as small computers and Internet have changed the information system

• Green New Deal - intelligent economic recovery

Page 11: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Expressions of paradigm change Mr Barroso, President of the EU Commission: We

need a new industrial revolution, EU must be in the forefront

Ban Ki Moon, UN Secretary General: Climate as the defining challenge of our era, green new deal for economic recovery

IEA (International Energy Agency): Clean energy new deal. ”Blue scenario” by IEA 2008.

Page 12: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU climate and energy package is based on the “3 x 20” decision

Legislative files: Reform of the emissions trading system (ETS) from 2013 Effort sharing (burden sharing) between member countries for reducing

other GHG emissions (e.g. transport, housing, agriculture) (ES) Directive on renewable energy sources (RES) Legal framework for carbon capture and storage (CCS)

Related new legislation:

Including aviation into CO2 emission trading Legal limits for CO2 emissions from cars Decisions on banning incandescent light bulbs (2009-2012) and limiting

standby power first to 1 W, later 0,5 W.

Page 13: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Directive on Renewable Energy Sources

Page 14: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Renewable Energy – 20 % binding target for EU by 2020 By 2020 at least 20% of the EU energy

consumption to be produced from renewable energy sources.

Binding target for each member country MS have to submit Renewables Action Plans (RAPs)

in June 2010. RAP’s will include measures to improve energy efficiency.

Safeguards national support schemes (feed in tariffs)

Increased transparency Better access to grid for “green” electricity

Page 15: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Renewables in transport (biofuels)

10% renewables target for transport by 2020. Originally meant just biofuels. Changed to cover all renewables

in transport (including “green” electricity/ hydrogen in electric or hydrogen vehicles).

For biofuels greenhouse gas saving requirement 35 % (compared to conventional fuels), rising to 50% in 2017 and 60% for new installations.

Sustainability criteria to limit the environmental damage caused by biofuels, indirect land use included.

To incentivise non food/feed sources, each unit coming from second generation biofuels (e.g. from waste and algae) multiplied by and “green” electricity in transport by 2,5.

Page 16: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Wind has bypassed nuclear in new investments Around 2000 wind power exceeded nuclear in terms

of globally installed new power capacity. 2000-04 new global nuclear capacity ca. 3000 MW/yr,

2004-07 ca. 2000 MW/yr. 2004-06 average global growth of wind power 13 300

MW , more than 6,5-fold to new nuclear capacity. 2007 new wind power capacity +27%, and over 20 000

MW. 2007 new wind power capacity 10-fold compared to

new nuclear.

Page 17: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Global additions of electric energy generating capacity by year and technology Amory Lovins, Nuclear Engineering International, December 2005

Page 18: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Europe: Net capacity additions/reductions in 2007 (MW)

European Wind Energy Association "Pure Power - Wind Energy Scenarios up to 2030"

Page 19: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Renewable energy 2007 The REN21 Renewables Global Status Report Pre-Publication Summary for UNFCCC COP-13 Worldwatch institute, UNEP, German Government

Production capacity using renewable energy in 2007 ca. 240 GW (large hydro excluded)

6% of total global energy capacity (4 300 GW) CO2 saving 5 bln tn/yr Global market in 2007 was 100 bn €, growth 60 % in one

year > growth of mobile telecom in 1990ies. China and India moving towards top In many fields of renewable energy China is among the

top 3 countries

Page 20: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Employment in the renewable energy sector

2006 globally ca. 2,5 million jobs, in Germany 235 000.

Allianz: In 2020 renewable energy will employ more in Germany than the car industry.

Each terawatt hour produced by renewables generates 250-300 new jobs. Employment by renewable energy 2-5 fold compared to nuclear power and fossils.

Page 21: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Finnish Olkiluoto 3 nuclear power station – sad lesson of broken promises May 2002 the Parliament gave the permission

for 5th nuclear reactor in Finland It was sold as the most cost effective and

reliable way to meet the Kyoto target

Page 22: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Finnish Olkiluoto 3 nuclear power station – sad lesson of broken promises (2) Construction started in spring 2005, planned

timetable was 4 years – which would have meant a world record timetable for the world´s biggest nuclear reactor

During every year of construction almost one more year of delay announced

Now (spring 2009) announced delay 3,5 years, plant estimated to start operation 2012

Page 23: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Finnish Olkiluoto 3 nuclear power station – sad lesson of broken promises (3) In 2002 the cost difference between nuclear

and non-nuclear Kyoto scenarios was estimated to 0,1-0,3 % of GDP in 2010, or 0,2-0,6 bn €.

Purchasing price of OL3 was 3,2 bn euros (fixed price and timetable)

2009 Areva estimated the construction cost to be 4,7 bn €.

TVO has demanded 2,4 bn € as compensation for delay.

Who will pay the difference of 7,1 – 3,2 bn?

Page 24: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Finnish Olkiluoto 3 nuclear power station – sad lesson of broken promises (4)

Scandals of quality and safety problems started very soon, autumn 2005 it turned out that too porous concrete was cast for the foundation.

After that a long list of quality and safety problems STUK 2006: Main constructor has failed to provide safety

education for sub-constructors and to communicate the special quality requirements linked to building a nuclear power station

Critical safety report by STUK in English www.stuk.fi/stuk/tiedotteet/en_GB/news419/_files/12222632510022546/default/investigation_report.pdf

Summary: www.stuk.fi/stuk/tiedotteet/2006/en_GB/news_419

Page 25: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Finnish Olkiluoto 3 nuclear power station – sad lesson of broken promises (5) STUK, the Finnish radiation and nuclear safety

authority complained in November 2008 that too often they have had to intervene, Areva and TVO have not done the quality control of sub-contractors.

Main problems: too porous concrete in the foundation, problems in the welding of the steel containment of the reactor building, wrong material of the main pipelines and construction design faults of the turbine building.

Page 26: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Independent, 16 January 2008 Power failure: What Britain should learn from

Finland's nuclear saga:- It was hailed as the template for all future

reactors – but then they tried to build it.“ Olkiluoto 3 serves as a potent warning that

the construction of nuclear power plants remains an unpredictable and potentially costly business. “

Page 27: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Nobel price laureat (physics) Carlo Rubbia, European Parliament 19.11.07:

2005 fossil dependency • Global 81 %• China 82 %• USA 88 %

2007 world energy consumption equals to a ”machine” with capacity of 15 TW (1 TW = 1 000 000 MW)

Business as usual would make this ”machine” to grow to 30-35 TW by 2050

2050 ”fossil budget” ca. 6 TW 2050 necessary non-fossil capacity at least 24-29 TW

Page 28: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Potentials/ Rubbia:

15 TW nuclear = 15 000 * 1 GW (1000 MW) reactors ~ one new 1 GW reactor each day for 41 years.

Radiation of the Sun 15 TW to an area 200 km * 200 km = 0,1 % of the global sunny deserts

Page 29: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Daniel B Botkin: Oct 21th 2008 International Herald

Tribune

With present use feasible uranium reserves run out in 80 years.

If present use of fossil would be replaced by nuclear instantaneously, uranium would run out in less than 5 years.

If all necessary CO2 emission reductions from now on would be done via nuclear, feasible uranium reserves would run out by 2019 and all known uranium reserves by 2038.

Page 30: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Supergrid Growth of renewable energy can be accelerated by

strengthening the power transmission grid ”Supergrid”: Connecting EU-countries (and North-

Africa) with a low loss high voltage DC grid Each form of renewable energy can be produced in the

optimal geographical location Connecting of large area smoothens fluctuations of

production and consumption

Page 31: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Smart grid Smart grid communicates to the consumers

• real time consumption -> consumers better aware of how to cut unnecessary consumption

• real time price of electricity -> helps to adapt the real time consumption to the real time production

Smart consumption devices detect automatically overconsumption/ overproduction, and adapt their switching on/off. Enables using of plug-in hybrid cars for energy storage

Supergrid and smart grid central elements of Green industrial revolution in Europe

Page 32: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Revision of EU Emissions Trading System 2013-

Page 33: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

GHG Target:

-20% compared to 1990

-14% compared to 2005

EU ETS-21% compared

to 2005

Non ETS sectors -10% compared to 2005

27 Member State targets, stretching from -20% to +20%

Page 34: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU ETS review 2013 (1)

Linear target towards 2020 with yearly binding targets 2013-2020, pathway beyond 2020

Target will be tightened after an international agreement New sectors: e.g. chemicals & aluminium (2005-2012: Power,

steel, paper, cement, oil refineries) Allocation of emission permits EU-wide (2005-2012 each

government has allocated to installations in their territory) Allocation principle: Auctioning for power sector, in other

sectors phasing in of auctioning, free allocation for sectors in risk of carbon leakage (2005-2012 mainly free allocation)

Page 35: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Cap setting

-20%

-30%

2083 Mtyr

Gradient: -1.74%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

EU ETS after 2013 (1)

Page 36: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU ETS review (2)

Separate legislation on aviation, which will be included to ETS in 2012 (all flights departing from or arriving to EU, also foreign carriers)

International shipping will be included in 2013 if IMO does not act before

Political commitment to earmark 50 % of the auctioning revenues to climate related purposes, including assistance to developing countries for climate mitigation and adaptation

Page 37: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU ETS review, main fights (1) Allocation principle

• Result: Full auctioning to power sector from 2013, limited derogation for old power stations in 10 new member countries (former eastern bloc), ends in 2020

• Phasing in of auctioning to manufacturing sectors, 20 % auctioning in 2013, 70% in 2020, 100% in 2027

Definition of carbon leakage• Result: too wide criteria, covers 96 % of non-power

emissions covered by ETS. These sectors get 100% free allocation up to a sectoral benchmark, subject to a decreasing overall cap for the sector. Review of carbon leakage criteria after an international climate deal.

Page 38: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi
Page 39: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

EU ETS from 2013, main fights (2)

Quantity and quality of CDM/JI:•Result: Offsetting max 50 % of absolute emission

reductions• Improved criteria for quality of projects

Earmarking:•Result: Political commitment of earmarking 50 %

of auctioning revenues, not legally enforceable

Page 40: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Effort sharing between EU member countries of reduction of non-ETS GHG emissions 2013-2020

Page 41: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Effort Sharing Emission Trading System and Effort Sharing together form the

EU cap Country specific targets for 2020 for each member country.

Targets between +20% … -20% (compared to 2005). Base year 2005 in order to eliminate ”hot air” from Kyoto

Protocol. Linear pathway, yearly targets also legally binding. Sanctions

for non-compliance. Allows trading between member countries and used of CDM/JI

credits. Commitment to tighten target after an international deal.

Reference to global -50 % by 2050.

Page 42: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Effort Sharing, main fights Sanctions

• Result: Non compliance -> corrective action plan + deduction of the extra tons from the quota of next year, multiplied by 1,08. Fines also possible, but not automathic.

Quantity and quality of CDM• Result: Quantitative limit for each year 3 % of the emissions

of 2005, 1 % more for some countries. If fully used, 80 % of the absolute emission reduction between 2005 and 2020 could be offset.

Page 43: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Non ETS & use of CDM/JI-credits –Article 4

20202005 08 10 13

Effort

CDM

3%-X%

Emissions

-2+2%

Starting point

Page 44: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

CO2 emissions from cars

Page 45: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

CO2 from cars -background

1990-2005 EU CO2 emissions from transport: +32%. At the same time other sectors on average: -9.5%. In 2005 passenger cars caused 13 % of CO2 emissions from EU.

1998 European car industry gave a voluntary promise to reduce CO2 emissions from new cars to 140 g/km by 2008 with a view to 120 g/km to be achieved by 2012 (average of new cars).

2007 average CO2 emissions from new passenger cars in EU were 158 g/km.

Page 46: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

CO2 from cars, new legislation

Commission proposal in December 2007: average fleet limit for new cars 130 g/km in 2012 (=49 MPG)

Massive lobbying by car industry lead to 3 years “phasing in”, meaning that in reality the limit is effective only in 2015. Fines were reduced compared to original proposal.

Changes also in the counting rules to ease the targets. Does not incentivise speeding up of development of fuel

efficiency compared to business as usual. Long term target 95 g in 2020 (=65 MPG). Not legally

enforceable without a review of the legislation in 2014.

Page 47: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi
Page 48: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

20

25

30

35

40

45

50

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

MIL

ES

PE

R G

ALL

ON

(C

AFE

test

cycl

e)

JAPAN

UNITED STATES

EUROPEAN UNION

CHINA AUSTRALIA

CANADA

S. KOREA

CALIFORNIA

Dotted line: Proposed or contestedSolid lines: Enacted

Source: Passenger Vehicle Greenhouse Gas and Fuel Economy Standards: A Global Update, ICCT. December 2008 update.

Actual and Projected Fuel Economy for New Passenger Vehicles by Country/Region, 2002-2022

100

120

140

160

180

200

220

240

260

280

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

GR

AM

S C

O2

PER

KIL

OM

ETER

(N

ED

C T

ES

T C

YC

LE)

JAPAN

UNITED STATES

EUROPEAN UNION

CHINA

AUSTRALIA

CANADA

S. KOREA

CALIFORNIA

Dotted line: Proposed or contestedSolid lines: Enacted

Source: Passenger Vehicle Greenhouse Gas and Fuel Economy Standards: A Global Update, ICCT. December 2008 update.

Actual and Projected GHG Emissions for New Passenger Vehicles by Country/Region, 2002-2022

Page 49: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

20

25

30

35

40

45

50

2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

MIL

ES

PE

R G

ALL

ON

(C

AFE

test

cycl

e)

JAPAN

UNITED STATES

EUROPEAN UNION

CHINA AUSTRALIA

CANADA

S. KOREA

CALIFORNIA

Dotted line: Proposed or contestedSolid lines: Enacted

Source: Passenger Vehicle Greenhouse Gas and Fuel Economy Standards: A Global Update, ICCT. December 2008 update.

Actual and Projected Fuel Economy for New Passenger Vehicles by Country/Region, 2002-2022

Page 50: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Directive on Carbon capture and storage

Page 51: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Carbon capture and storage directive Directive sets out the legal framework for CCS

(administrative processes for requests for exploration and storage and the procedures to follow after the closure/sealing of storage sites)

Financing of first CCS installations (part of ETS legislation)

First CCS projects (also renewable energy projects representing not yet commercial technologies) will receive 300 million ETS emissions allowances to finance pilot projects.

Page 52: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Carbon capture and storage, main fights Emission performance standard for all new

power generation -> not adopted, but included in review in 2015.

Double CO2 crediting of first CCS demonstration projects to finance them -> yes but technology neutral, covers also renewable energy projects

Enhanced oil recovery -> allowed

Page 53: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

What does the climate package cost?

Direct cost: increased energy and non CO2 mitigation cost to meet both targets domestically: 0.45% of GDP in 2020, or some €70 billion.

Increased energy cost of 150 € per family by 2020, 3 € per week.

Macro-economic GDP effects: GDP growth reduced by some 0.04-0.06% between 2013 and 2020

These are conservative estimates, based on oil price of $60 per barrel.

Impact on employment is stable (projected between -0.11% and +0.05%) but differences between sub-sectors

Page 54: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Thank you.

[email protected]

Page 55: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Emissions Trading System review

EU wide total cap for the ETS sectors with harmonised allocation (45% of EU emissions, ETS to deliver 2/3 of total reduction effort by 2020)

ETS reduction pathway continues beyond 2020 with mandatory review of the linear factor by 2025

Principle of full auctioning to power sector maintained although with derogation for 10 new MSs

Principle of transition to full auction to industry sectors not exposed to significant leakage risk

Aluminium production (CO2 and PFCs) and chemical industry included (CO2 and N2O)

Increase in share of emissions covered around 5% compared to 2008-2012 period

Review on the criteria relating to potential carbon leakage in review by 2011 (possible Future Allowance Import Requirement, FAIR)

Page 56: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Emissions Trading System review

Commitment to implement the internationally agreed target with reference to the -30% target. Full automatism in moving to -30% target was not maintained.

International shipping included in EU targets and Community measures by 2013

Comitology process for assessing CDM/JI offset environmental and sustainability quality and for banning certain projects /types.

CDM/JI use limited to 50% of the reductions between 2008-2020 (quota for 2008-2013 period represented already 45% of reductions until 2020).

CDM/JI project types limited to those recognised in ETS for 2008-2012, i.e. no nuclear project

Voluntary 50% earmarking of action revenue for climate purposes with reference to contributions to developing countries

EU spring summit 2009 will make proposals about EU contribution in terms of financing for the international post-2012 agreement

free allocation based on ex-ante, best performance benchmarking with free allocation to process waste gas related emissions

CCS and renewables demonstration get double crediting representing 300 Mton allowances (€9 bio with 30€/ton)

Page 57: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Emissions Trading System review 10 new MS may apply for derogation for free allocation to power sector

(from 70% to 0% free allocation in 2020). Required that corresponding revenues to be invested in improving the grid, the efficiency of power sector or diversifying energy mix.

Transition to full auction sectors not subject to leakage risk starting from 20% auction in 2013, 70% auction in 2020.

Carbon leakage criteria, as it is now, covers 96% of the non-power emissions under ETS. These sectors get 100% free allocation (to the benchmark level, and subject to reducing cap).

European Council to discuss the leakage sectors before publishing of the list, as a unprecedented case, mentioned in legislative text.

88% of allowances to be auctioned distributed to MSs based on 2005 emissions; 10% based on GDP/capita to favour lower income countries and additional 2% to MSs that loose the most from changing base year from 1990 to 2005

MS may give state aid up to 15% to new high efficiency and renewable power stations

Mechanism to introduce early auction if carbon price more than triples for more than 6 month

Page 58: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Effort Sharing Effort sharing and ETS form the EU emissions cap. ES covers the non-ETS sectors such as transport, buildings,

services, smaller industrial installations, agriculture and waste. Enforceable EU-27 binding effort sharing by 2020, in co-decision

for the first time. Binding linear pathway, not just a target for 2020. All Member States need to make an effort regardless of the large

variation of individual targets (+/-20% compared to 2005). Up to 1,9 billion tonnes of “hot air” removed from the system

when changing base year within EU from 1990 to 2005). Harmonised rules on use of external credits for non-ETS sector. Contains commitment to implement the internationally agreed

target and has reference to the 30% target, although automatism in moving to -30% target after international agreement was not maintained.

Page 59: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Effort Sharing Mandatory replacement of any underachievement of targets, with

abatement factor of 1,08% Reference to 30% target in objective (art 1), MS need to take higher

target into their reporting and projections. Reference to further reductions beyond 2020 to be introduced in review

by 2016 Qualitative guidance and reporting on use and quality of CDM/JI credits. Commission reporting on additional Community measures and

assessment with proposals by 2012 of the 20% energy efficiency target. Maritime emissions to be included in Community reduction targets and

measures by 2013 if IMO has not progressed by end of 2011 EU to finance GHG reductions in developing countries in line with +2C

target. Allowed quota for CDM/JI offsetting: European Council decided for 3%

of 2005 emissions +1% extra quota for 12 MS. This represents a potential of offsetting appr 80% of the reductions .

Page 60: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

CO2 in cars – Compliance mechanism/penalties

Non-compliance is disincentivised by financial penalties. Council introduced a so-called window of flexibility until 2018

whereby manufacturers that miss their emissions limit by under 3 g/km pay reduced fines:

1 g/km overshoot pays €5 per car; 2 g/km €5 per car for the 1st gram and €15 for 2nd gram; 3 g/km €5 and €15 and €25 per car for the 3rd gram. Only year 2019 will the full compliance penalty of €95 g/km

per car apply. This represents a loophole of at least 3 g/km until 2019.

Page 61: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

CO2 in cars – supercredit, eco-innovation & 2020 target

Supercredit: Cars that emit less than 50 g/km will be counted 3.5 times in 2012 reducing each year until 2016.

This represents a loophole of at least 2 g/km until 2016. Eco-innovation: Up to 7 g/km of the co2 emissions reductions

can be delivered through so-called 'eco-innovation' (additional emissions reduction technologies that are not included in the test procedure) until the current test cycle system is reviewed

This represents a loophole of at least 7g/km until the test procedure is reviewed.

The overall average EU co2 emissions limit for 2012 would be only 162 g/km (EU fleet current average is 158 g/km)

Legislation also includes a non-binding target of 95 g/km for 2020.

Page 62: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi
Page 63: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

2030

4 3 27 26 25 24 23 22 21 20

10 0

9 8

20

30

40

-10

-100 -110 -120 -130 -140 -150 -160

-20 7

-40 -50 -60 -70 -80 -90

0 1 10 11 12 13 14 15 16 17 18 19 2 6 5

-30

Cost of abatement EUR/tCO2e

Insulation improvements

Fuel efficient commercial vehicles

Lighting systems

Air Conditioning

Water heating Fuel efficient vehicles

Sugarcanebiofuel

Nuclear

Livestock/soils

Forestation

Industrialnon-CO2

CCS EOR;New coal

Industrial feedstock substitution

Wind;lowpen.

Forestation

Celluloseethanol CCS;

new coal

Soil

Avoided deforestation

America

Industrial motorsystems

Coal-to-gas shift

CCS; coal

retrofit

Waste

Industrial CCS

AbatementGtCO2e/year

Stand-by losses

Co-firingbiomass

• ~27 Gton CO2e below 40 EUR/ton (-46% vs. BAU)

• ~7 Gton of negative and zero cost opportunities• Fragmentation of opportunities

Smart transit Small hydro

Industrial non-CO2 Airplane efficiency

Solar

Global cost curve of GHG abatement opportunities beyond business as usual

www.vattenfall.com/climatemap

Page 64: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Uhkaako hiilivuoto? IEA: Tähän mennessä ei havaintoja ”hiilivuodosta”

EU:n ilmastotoimien vuoksi Potentiaalinen uhka päästörajoitusten kiristyessä,

ellei päästöjä rajoittavien maiden määrä kasva Kattava kv. sopimus ensisijainen Hiilivuotouhka vain joillakin sektoreilla &

alasektoreilla, ei koko teollisuudessa Hiilivuotoargumentilla ajetaan päästöoikeuksien

ilmaisjakoa muillekin –> windfall-voittojen uhka

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Page 66: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi
Page 67: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Green New Deal Vastaavasti kuin Rooseveltin ”New Deal” auttoi

elpymään 30-luvun lamasta, taloutta voidaan nyt elvyttää investoimalla ilmastonsuojeluun, ”uuteen teolliseen vallankumoukseen”.

EU:n ilmastopaketin arvioitu hinta 70 mrd €/v. EU-maat myöntäneet pankkitukea (ml takaukset)

n 1500 mrd € EU-elvytyspaketti 200 mrd € (komission esitys)

Page 68: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Maailman energian tuotanto 2003

Fossiiliset polttoaineet hallitsevat

Source: IEA, Martinot

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

Page 69: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Maailman uudet energiainvestoinnit, 2000 - 2005Uusiutuvat hallitsevat

Source: Eric Martinot; BP

Annual Rate of Growth

0

5

10

15

20

25

30

35

Page 70: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Global additions of electrical generating capacity by year and technology

Amory Lovins, Nuclear Engineering International, December 2005

Page 71: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Rahavirrat uusiutuviin EREC, European Renewables Energy Council Futu[r]e investments –publication

Investoinnit kaupallisiin uusiutuvan energian muotoihin kasvaneet ennätysvauhtia

Tuuli- ja aurinkoenergia ja biomassa jo paikoin kilpailukykyisiä markkinaehdoin, ilman tukia.

Energia-ala globaaleista investoinneista n. 18 % uusiutuviin (v. 2007 n. 100 mrd €).

Page 72: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Eurooppa:

7 vuoden ajan eniten uutta sähköntuotantokapasiteettia on rakennettu maakaasuun ja tuulivoimaan

Saksan koneenrakennusteollisuuden työllisyys kasvaa nopeasti, tuulivoima keskeinen syy

EU:n uusiutuvan energian tavoite on myös teollisuuspolitiikkaa: halutaan olla kasvualan kärjessä

Page 73: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Texas: Yksi ainoa investoija, T Boone Pickins aikoo

seuraavien 4 vuoden aikana rakentaa 2 700 tuulivoimalaa, teho yhteensä 4000 MW (2,5 kertaa Olkiluoto 3)

Sähköä miljoonalle kotitaloudelle

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Page 75: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Independent, 16 January 2008 Power failure: What Britain should learn from

Finland's nuclear saga:- It was hailed as the template for all future

reactors – but then they tried to build it.

“ Olkiluoto 3 serves as a potent warning that the construction of nuclear power plants remains an unpredictable and potentially costly business. “

Page 76: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Maailman ydinvoima-alan tilannekatsaus 2007 Mycle Schneider ja Antony

Froggatt Vuonna 2007 maailmassa 339 ydinreaktoria. Vuonna 2002 reaktoreja oli 344 (huippuvuosi). Kapasiteetti on kasvanut lähinnä vanhojen

laitosten tehoa nostamalla. Vuoden 2004 jälkeen on käynnistetty 9 reaktoria

mutta suljettu 10, joista 8 vuonna 2006. Koska uusia reaktoreja ei merkittävästi rakenneta,

ydinvoimalaitosten keskimääräinen käyttöikä on koko maailmassa kasvanut tasaisesti, ja on nyt 23 vuotta.

Page 77: Climate friendly energy for Europe ”We are in the beginning of a Green industrial revolution” by Satu Hassi

Impact on GNP: 1 non-nuclear, 2 nuclear