European Energy News Summary

Rising EU emissions in economic downturn and criticism of the EU ETS

Newly released figures from the European Environment Agency show that there was an increase in greenhouse gas emissions in the European Union in 2010.

Emissions increased by 2.4% on the previous year, equivalent to an extra 111m tonnes of carbon dioxide, making it more difficult for Europe to meet its international commitments to cut carbon dioxide by 2020. The increase comes despite the economic recession and efforts to tackle climate change through policy.

According to the European Environment Agency, the increase was due to a colder winter and, in part, to economic recovery in some areas.

Nevertheless, the EU remains on course to meet its target to cut emissions under the 1997 Kyoto protocol and is still likely to meet its self-imposed target  to cut emissions by 20%  from 1990 levels by 2020.

Meanwhile, the CEOs of 13 of Europe’s biggest Airlines have joined forces to express their dissatisfaction over the EU’s Emissions Trading System (ETS). The airline bosses claimed that the ETS is highly detrimental to economic growth at a time when Europe’s economy is struggling.

The ETS obliges companies using European air space to buy carbon allowances to offset each tonne of their carbon emissions. Prices for carbon permits in the ETS have fallen by 60% over the course of the last twelve months and calls have been made for the European Union to intervene to reduce the supply of carbon permits in a market which many claim is hugely over-supplied.

For more information on the recent criticism of the ETS, please click here.

For more information on the increase in European greenhouse gas emissions, please click here.


New EU rules on Sulphur Emissions from Ships

EU Member States have agreed on new legislation to limit the maximum sulphur content of shipping fuels.

The new legislation will come into effect in Europe at the end of the decade. Currently, marine fuels with high sulphur content create air pollution estimated to cause 50,000 premature deaths in Europe per year.

From 2020, the maximum sulphur content of fuels will be limited to 0.5% for all ships. The limit currently stands at 3.5% for cargo vessels and 1.5% for passenger ships.

For more information on the new legislation on sulphur emissions, please click here.



IEA Shale Gas Strategy

According to the IEA report – ‘Golden rules for the Golden Age of Gas’ –  shale gas has the potential to bridge the transition to a decarbonised economy, if a series of social, regulatory and environmental rules are followed. The chief economist at the International Energy Agency (IEA) has described an increase in unconventional gas production as a ”good move” if it is to replace coal.

The report sets out a rulebook for the extraction of unconventional gas which, if followed, could increase the overall financial cost of development for a typical shale-gas well by an estimated 7%, according to the IEA.

The report recommends substantial operating changes be adopted by industry. It suggests that drilling sites should be chosen to minimise social and environmental impacts and that environmental monitoring should be more extensively conducted and better communicated to the public.

Furthermore, it suggests that a general performance standard for wells should be introduced with robust rules on well design, construction, cementing and integrity that isolate gas bearing formations from other strata.

According to a separate Scottish Widows report, the climate impact of shale could be GREATLY minimised if companies used a technology known as ‘green completio’ to capture the ‘fugitive’ methane.

The IEA has predicted that the share of gas in the global energy mix will triple by 2035 to 1.6 trillion litres, representing 25% of the global energy mix, second only to oil. Unconventional gas will make up 32% of that figure, the IEA report says, fuelling a ‘golden age’ for gas.

For more information on the IEA report please click here

To read the IEA’s report ‘Golden Rules for a Golden Age of Gas’, please click here.

For information on shale gas in the UK, please click here.



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