Petrochemicals encompassed in a package of proposals to achieve 20% cut in EU greenhouse gas emissions by 2020

25-Jan-08

Proposals unveiled earlier this week on 23 January for reform of the EU emissions trading system (ETS), will impact the chemicals sector by extending the system to hitherto exempted activities and to nitrous oxide (N2O) emissions. The changes are part of a package of proposals aimed at achieving a 20% cut in EU greenhouse gas emissions by 2020. To date, the ETS regime of tradeable emission permits has covered carbon dioxide (CO2) emissions from some 10,000 major sources across Europe such as power generation, oil refining, and production of iron, cement and glass. The European Commission now proposes to include CO2 emissions from petrochemicals and ammonia production. For N2O emissions, ETS will be extended to production of nitric, adipic and glyoxylic acid, as well as emissions of perfluorocarbons from the aluminium sector. But to meet its ambitious greenhouse gas targets, the proposals also say there must be a bigger contribution from renewable energy to the total EU energy mix - rising from its current share of 8.5% to 20% by 2020. However, 'burden-sharing' arrangements will mean that legally binding national targets will range between 49% for Sweden to just 10% for Malta and 15% for the UK. The Commission package is based on targets endorsed by the 27 EU member state governments in March, 2007. States have said that 2020 EU target for greenhouse gas emissions could be raised to 30% by 2020 - if other industrialized nations sign a global agreement to replace the current Kyoto Protocol. Further components of the package aim to establish a framework in EU law for carbon capture and storage projects. But the proposals keep a controversial commitment to increasing use of biofuels in the EU transport sector to 10%.