Climate and energy policy 2030
On October 23, the European Council in Brussels agreed on the climate and energy policy framework for the period up to 2030: energy savings (indicative) of at least 27% (instead of the originally planned 30%), an increase in the percentage of renewable energies to at least 27%, and a decrease in CO2 emissions of at least 40%, all compared to 1990 figures. For industries covered by the emissions trading system (i.e., including the steel industry), an emissions reduction of 43% compared to 2005 was set.
The number of certificates available for auction under the emissions trading system will be reduced; an annual linear reduction of 2.2% (rather than the previously defined 1.74%), starting in 2021. In the future, there will be a reserve of pollution rights (2% of the number of certificates) for “poorer” EU nations who face particularly high modernization costs. One method of covering these costs is to auction off such “reserve certificates.” Furthermore, existing funding for innovation will be increased from 300 to 400 million certificates; in the future, business investments in low-carbon measures will also qualify for funding, rather than only receiving funding for low-carbon research as had previously been the case.
The following measures were defined to protect energy-intensive industries in the emissions trading system: the free allocation of certificates remains in effect, the benchmarks for free allocation will be reviewed periodically, taking “technological progress” into consideration in individual sectors. Taking both direct and indirect costs into account, the most efficient facilities in a sector should not be burdened by undue costs which encourage relocation of industries to other regions (“carbon leakage”). This is positive in principle, but it is questionable how the word “undue,” which can mean “excessive, inappropriate, not permitted,” will actually be interpreted. The future allocation of free certificates should also guarantee that actual production levels are better taken into account (it is currently based on historical data from 2005–2008). The European Council expressly emphasized that existing measures to protect against carbon leakage (relocation of CO2-intensive industries) will also remain in effect after 2020, provided that there are no comparable efforts to reduce CO2 in other significant, global economic regions. It has also explicitly committed itself to ensuring that the affected industries will be protected against loss of competitiveness.
The results of the European Council summit on energy can be summarized as follows: the Council has reiterated its commitment to ensuring “affordable” energy prices and improved pan-European integration of energy policies and infrastructure. The energy efficiency target of at least 27% was “only” indicatively set; it will be reviewed in 2020 and the goal of 30% remains the desirable target. This means that the 2020 target of 27% could be increased to 30%. Implementation is up to the member states which can also define higher targets. The Commission will also determine the sectors to which specific requirements for greater energy efficiency apply. This offers potential for additional discussions and definitely requires more precise definition.
The Council’s most recent decisions provide a thoroughly constructive and realistic framework approach, one that defines concrete objectives and specifies measures intended to minimize the risks associated with these objectives. However, only a framework has been established; it is now up to the Commission and the member states to define it in detail and implement it. It will be critical to more closely define the still unfinished provisions, which are intended to protect the industry against one-sided burdens in the international marketplace.
In particular, the primary objective must remain to establish a tiered certificate allocation mechanism (based on 100% free allocation for the top 10% “most environmentally friendly” facilities).
voestalpine Environmental Conference 2014
Information, networking, and the definition of concrete steps regarding the latest environmental topics were the focus of the Environmental Conference, where the Environmental Officers from the European voestalpine companies met in Linz in September.
The challenges in the environmental sector are becoming increasingly complex and extend far beyond the individual sites. Once again, this became clear at this conference. With the participation of all environmentally sensitive European locations (Austria, Germany, Sweden, France, and Hungary) for the first time, and with the inclusion of external experts, the conference examined EU environmental and climate policy, the life cycle assessment of steel, intensification of the environmental network, and environmental communication.
Life cycle assessment (eco-balance)
The life cycle assessment takes a comprehensive approach to a material’s life cycle, beginning with the extraction of raw materials, transport and energy costs, to sustainability effects of the entire production and value chain through to recycling and/or reuse. Steel has undisputed advantages over all competing materials as it can be recycled back into the production process with no loss in quality.
The current challenges primarily include European developments to establish environmental product declarations (EPDs) and create ecological footprints for products and processes. In order to guarantee objective, international comparability, a technically correct, uniform approach to indicators, methods of measurement, and valuation is necessary. The difficulty lies particularly in the need to standardize pre-existing and extremely varied standards, rules and regulations, both in Europe and globally, and formulating an appropriate response to significant life cycle complexity.
voestalpine’s cross-divisional and cross-departmental Life Cycle Assessment (LCA) Team is active both in international working groups and advocacy and special interest groups, as well as in appropriate research projects in order to influence and shape the developments surrounding this topic.