As Copenhagen Summit Opens the Impact on Chemical Industry Remains Unclear

photo : Scandinavia Travel

With a huge political fanfare, the UN summit on climate change is opening today in the Danish capital Copenhagen, with delegates from 192 countries attending.

According to UN Climate Chief Yvo de Boer " The Copenhagen climate negotiations beginning Monday must yield an ambitious, sweeping agreement to capitalize on pledges by countries to fight global warming".

In the days and weeks leading up to this summit, there has been much political rhetoric but also an increasing level of heated debate, stirred up significantly by the leak of the so called "climategate" e-mails from the Climate Research Unit at the University of East Anglia in the UK.

If a deal is reached, the requirement to reduce CO2 emissions will have significant consequences for industry, both from a cost point of view (cap and trade and other proposed legislative changes) and a technology point-of-view (energy efficiency, carbon capture and storage and other green technologies).

At this stage, it is difficult to see whether an agreement can be achieved. There are major concerns in many countries, in-part relating to the scientific issues (particularly post "climategate") and partly about the impact on industry and consequently employment in those countries.

This blog's view is that the industry must vigorously implement a "sustainability agenda" looking to reduce energy consumption wherever possible and as quickly as is possible, using both energy efficiency programmes and new technologies. This is the right thing to do irrespective of the AGW debate.

Regarding climate change and AGW, a rational and open debate is needed as soon as possible. The 'science is settled' argument can only be finalised when all of the concerns have been discussed and addressed openly.

The current name calling tactics coming from both sides in the debate are totally unproductive and will only serve to polarise views further, making it even harder to achieve universal agreement and agree an implementation plan. Once a broad consensus is achieved, that is the time to decide on legislated targets and sequestration technologies such as CCS.

Climate Change Debate Continues

At the forthcoming carbon sequestration conference in London, US Energy Secretary Steven Chu will be speaking about carbon capture and storage (CCS). Mr Chu has has talked of 'overwhelming scientific evidence' that carbon emissions from fossil fuels are causing climate changes.

Although most national governments take the same line, sceptics point to the fact that global temperatures have fallen since 1998, which was the warmest year on record.

In Paul Hudson's fascinating BBC blog, the various arguments are spelled out. There are many points of view regarding the causes of global warming (natural vs man-made) and the validity of the various studies.

Very interesting and very pertinent as we approach the Copenhagen summit and the introduction of the various emissions trading bills around the world. To quote Paul Hudson ' The debate about what's causing global warming is far from over. Some would say it's hotting up.'

Carbon Trading Hitting Europe's Chemical Industry?

As the forthcoming Copenhagen Climate Summit in December gets
nearer, concerns are being voiced regarding the potential impact of the next phase of the EU Emissions Trading Scheme.

The UK Times newspaper has expressed serious concerns that the level of regulation in Europe is increasingly forcing companies to relocate in regions with less stringent regulation.

The European Commission has reacted to this threat of 'carbon leakage' by giving some exemptions to the compulsory purchase of carbon credits when the next phase of the Emissions Trading Scheme comes into force. The credits will be based on benchmarks for each industrial sub-sector. The principle is that the most efficient are rewarded, whilst the less efficient have an incentive to invest and improve.

The principle is laudable, but in a global marketplace, it can only work in practice if all regions of the world adopt the same standards. If not, the effect can only be to speed up the migration of refining and chemical industries to other regions outside of Europe.

Higher feedstock and labour costs are already making things difficult for European manufacturers. Whilst there is no doubt that a drive to reduce emissions is necessary, a solution has to be found to ensure that regulation affects all regions equally.