Austraila Delays Emissions Trading Scheme

Australia has postponed the implementation of its proposed emissions trading scheme until 2012 at the earliest, according to news reports.

In justifying the postponment, Prime Minister Kevin Rudd said that by 2012, when the current Kyoto deal expires, governments around the world would need to make clear their new carbon reduction commitments.

Kevin Rudd has been under significant pressure from within Australia and in particular from Tony Abbott, the leader of the opposition Liberal Party.

Australia's move follows on from the uncertainties over the Cap and Trade bill in the US, which has slipped down the political agenda in recent months. These moves leave Europe increasingly isolated on the issue and has led to some member states questioning the wisdom of unilateral action on climate change. Other member states have suggested the imposition of carbon taxes at Europe's borders, to protect the competitiveness of Europe's industries.

This blog continues to argue that all manufacturing industries need a strong sustainability agenda, with increased use of renewables and a strong focus on new technologies to reduce energy consumption and waste. Government support should be for the development and implementation of such technologies, rather than trying to implement regional schemes which will do little to drive a global improvement in energy efficiency but which will lead to relocation of manufacturing plants and jobs.

As for carbon taxes, they are highly complex to implement, given the range of products to which they will need to be applied. They are virtually impossible to link back to energy efficiency and will be ultimately passed on to the consumer, thereby driving inflation.

Cap and Trade Under Pressure as Republicans Win in Massachusetts

photo : Cleveland.com

The recent victory of Scott Brown in the recent US Senate by-election in Massachusetts is likely to put further pressure on the proposed Cap and Trade legisation.

The new senator actively campaigned against the legislation and his election reduces the Democrat majority in the Senate, making such bills harder to pass.

The election is significant. Brown highlighted two main issues in his campaign - the proposed healthcare reforms and cap and trade. His victory reflects the increasing concern voiced by the US chemical industry regarding the likely impact of cap and trade on industry and jobs.

It is being suggested that the bill could be watered down to focus on renewable energy alone. This blog has long promoted a sustainability agenda and agrees that increased use of renewables should be one element of this approach. There should also be a strong focus on new technologies to reduce energy consumption and waste. The chemical industry should be aiming for efficiency on a global basis. Regional schemes, such as cap and trade in its current form, are not the solution.

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.

Cap and Trade Debate Rages in Senate

photo : Greensolutionsmag

As noted last week, the Cap and Trade bill was recently approved by  the US Senate Committee on Environment and Public Works, an important first stage in the approval process. Yesterday it was the turn of industry groups to present testimony to the Senate Finance Committee on the impact of the legislation on refinery and petrochemical jobs in the US.

The National Petrochemical and Refiners Association (NPRA) expressed its view that the total cost to US refiners would exceed $67 billion per year based on the total cost of both refinery and consumer emissions. NPRA believes that this would simply drive refining and petrochemical production overseas, with a huge impact for the US economy, significantly increasing unemployment whilst having little no net impact on global CO2 emissions.

As the world rushes towards Copenhagen, do we need to take a step back and really consider what we are doing here?

Firstly, polls show that very many people remain unconvinced about anthropogenic global warming, despite "the science is settled" statements of many national governments and the alarmist approach taken to promote the need for action. To leave this question unresolved in the minds of so many risks creating major social and economic issues in the future.

Secondly, we need to ensure that whatever course of action is agreed is implemented on a truly global basis, so that the chosen strategy can meet its stated aims, without simply leading to a redistribution of manufacturing assets around the globe.

Friday News Round Up

Friday again, so time to update on some previous posts and share some other news

• In the UAE, Borouge has announced that preparatory work has started on the site for the Borouge 3 project. The contract for the 1.5 million tonne ethane cracker was awarded to Linde Group back in July. The complex will also include PP, PE, butane and associated infrastructure and marine facilities.

• Evonik has annouced that it will permanently close two plants at the Munchmunster Chemical Park, impacting over 100 jobs. The plants, which produced cyanuric chloride and acetocyanahydrin had been idled since the end of 2008.

• A fire in a PVC unit at Rompetrol Rafinare's Petromida Refinery has killed two workers and injured two others. The cause of the fire are not yet known. The incident follows another fatality at the site in October due to gas intoxication.

• A key US Senate committee has approved the 'cap and trade' bill. The committee approved the vote by 10-1 although opponents have criticised the committee, which is made up entirely of Democrats, for putting US jobs at risk. The bill must pass through 4 further committees before it can go to the Senate for a vote.

• Finally, the UK Daily Telegraph has reported the story of a man, Darren Young, who has become allergic to his wife due to an intolerance to polyethylene glycol. Any contact with the chemical causes swelling and a soaring heart rate. This means that he cannot go near his wife if she is wearing any kind of cream or body lotion. The allergy started after Mr. Young was given a steroid injection to treat a problem with his foot.

Friday News Round Up

Friday again, so a good time to update on various past stories and share some news snippets.

• Problems persist at Lavéra, with Arkema forced to prolong its force majeure on PVC. This was due to on-going problems on the Vinyl Chloride Monomer plant at Lavéra. According to the La Provence newspaper, issues included a minor chlorine leak which led to site emergency procedures being initiated. Arkema report that there was no adverse environmental impact.

• The UK chemical cluster at Wilton was again in the news. It was announced that a study will  be conducted with businesses on the Wilton site to understand their immediate and future needs, and the outcome will dictate what extra action is needed to support them.

• The American Chemical Society (ACS) are holding a small & medium business Webinar to give participants an opportunity to learn about trends in the chemical industry that can impact jobs and businesses. Scheduled for Thursday, Oct. 22, 2-3 p.m. Eastern Time, the free webinar will feature my colleague Paul Hodges, author of the  ICIS "Chemicals and the Economy'" blog. The webinar's topic is "What you need to know about Chemistry and the Economy! Secrets to finding hidden opportunities."

          Registration details are available by following this link.

• The debate about climate change rages on ahead of the Copenhagen Summit. Paul Hudson's BBC blog has led to many exchanges of views, with another senior BBC reporter, Peter Sissons also joining the debate. Cap and Trade is very much the hot topic right now (please pardon the pun), so we can expect this debate to intensify in coming weeks.

Cap and Trade Debate Divides US Opinion

photo : greensolutionsmag

Whilst the Emissions Trading System debate rages in Europe, the proposed US 'Cap and Trade' legislation is dividing opinion across the Atlantic.

The legislation has the same aims; to cut the nation's emissions of greenhouse gases and generate an upsurge in alternative and renewable fuel use.

Opponents argue that the higher price of carbon in the US and Europe will have the opposite effect, making hydrocarbon fuels even more attractive in less regulated parts of the world.

A number of Democrat Senators have written to President Obama, stating that they will not support the climate change bill unless the legislation contains a 'border adjustment provision' - an import tariff in most people's lexicons.

Protectionism definitely isn't the way to address climate change - it will create far more problems than it solves and will likely lead to retaliatory actions by other countries, with catastrophic effects.

As with the ETS, Cap and Trade is based on the very best intentions but in a global market place, global solutions are required, otherwise all that will result is a redistribution of manufacturing facilities to other locations, rather than a true reduction in emissions.