Tuesday, 16 December 2008

EU court backs carbon-trading system

Bloomberg News
Published: December 16, 2008

LUXEMBOURG: ArcelorMittal and other steel makers are not discriminated against under European Union air-pollution rules that exempt industries with similar greenhouse-gas emissions, the European Union's highest court said Tuesday.
ArcelorMittal, the world's biggest steel maker, asserts that EU lawmakers unfairly excluded the aluminum and chemical industries from 2003 legislation that capped emissions of carbon dioxide in line with the Kyoto Protocol, the international global-warming treaty. That exclusion put ArcelorMittal and other steel makers, which are included in the system, at a "complete disadvantage," lawyers for the company had told the European Court of Justice.
Alongside the steel industry, the current system includes electricity, paper and cement. But the court ruled that limiting the scope during the initial stage of the carbon trading system "may be regarded as justified."
"In view of the novelty and complexity" of the system, the EU "could lawfully make a step-by-step approach for the introduction of the allowance trading" system, the court ruled.
The court's decision eliminates concern that the European Union may need to rewrite the rules of its greenhouse gas trading market, the world's largest. Governments, including in the United States, are scrutinizing the program as they consider their own policies to help protect the climate.

The European emissions-trading system, started in 2005, requires companies that exceed their quotas for CO2 to buy permits from businesses that emit less.
ArcelorMittal, which is based in Luxembourg, had no immediate comment.
But Gordon Moffat, director general of the European Confederation of Iron and Steel Industries, said his group was disappointed by the ruling.
"This legislation is discriminatory in our view," he said.
ArcelorMittal had argued that the legislation establishing the EU emissions-trading system should not have differentiated between steel, aluminum and chemical industries, which all emit CO2.
Lawyers for the EU and the French government had argued that including other industries at the start would have complicated the system and harmed its effectiveness.
The court ruled that the European Union avoided difficulties by excluding the chemical industry, which "has an especially large number of installations, of the order of 34,000." Including it would have "increased the administrative burden" of managing the new system, it said.
The European Commission, the executive arm of the European Union, in January proposed adding the aluminum and chemicals industries to the system starting in 2013 as part of a tightening of the regulations.
The case may affect a separate case ArcelorMittal filed at a lower EU court seeking to partly annul the legislation and receive damages. The European Court of First Instance, the second-highest EU court, at a hearing in April said it would wait for a decision in this case before giving its own ruling.Arcelor and KDI are fined
Separately, ArcelorMittal, Klockner Distribution Industrielle and eight other steel companies were fined a record €575.4 million, or $791.2 million, by the French antitrust regulator for price fixing, Bloomberg News reported from Paris.
Three ArcelorMittal units were fined a total of €302 million and KDI was fined €169 million, the Conseil de la Concurrence said. The fine was the highest ever by the regulator.
Clients, which were primarily builders and small and mid-sized companies whose scale prevented them from negotiating better prices, alerted the French Finance Ministry after noticing "suspicious similarities" in the prices they were being quoted, the Conseil said.

Diesel, made simply from coffee grounds (ah, the exhaust aroma)

By Henry Fountain
Published: December 16, 2008

In research that touches on two of Americans' great obsessions — coffee and cars — scientists at the University of Nevada, Reno, have made diesel fuel from used coffee grounds.
The technique is not difficult, they report in The Journal of Agricultural and Food Chemistry, and there is so much coffee around that several hundred million gallons of biodiesel could potentially be made annually.
Dr. Mano Misra, a professor of engineering who conducted the research with Narasimharao Kondamudi and Susanta K. Mohapatra, said it was by accident that he realized coffee beans contained a significant amount of oil. "I made a coffee one night but forgot to drink it," he said. "The next morning I saw a layer of oil floating on it." He and his team thought there might be a useful amount of oil in used grounds, so they went to several Starbucks stores and picked up about 50 pounds of them.
Analysis showed that even the grounds contained about 10 to 15 percent oil by weight. The researchers then used standard chemistry techniques to extract the oil and convert it to biodiesel. The processes are not particularly energy intensive, Misra said, and the researchers estimated that biodiesel could be produced for about a dollar a gallon.
One hurdle, Misra said, is in collecting grounds efficiently — there are few centralized sources of coffee grounds. But the researchers plan to set up a small pilot operation next year using waste from a local bulk roaster.

Even if all the coffee grounds in the world were used to make fuel, the amount produced would be less than 1 percent of the diesel used in the United States annually. "It won't solve the world's energy problem," Misra said of his work. "But our objective is to take waste material and convert it to fuel." And biodiesel made from grounds has one other advantage, he said: the exhaust smells like coffee.

Solar tech company to invest $2.2B in US

The Associated Press
Published: December 15, 2008

CLARKSVILLE, Tennessee: Hemlock Semiconductor Corp., which makes materials used in solar power technology, plans to spend more than $2.2 billion to build a new plant in Tennessee and expand operations in Michigan.
The new plant in Clarksville carries an initial investment of $1.2 billion, though Tennessee officials project the total cost could reach $2.5 billion.
"The exact scale of this investment will be determined by market conditions," Rick Doornbos, Hemlock's president and CEO, said in a news release.
The expansion at the company's existing facility in Hemlock, Michigan, is projected to cost up to $1 billion and create 300 new permanent jobs. It is the third major expansion over the past five years, bringing the total investment there to as much as $2.5 billion.
Hemlock Semiconductor is a joint venture between Dow Corning Corp. and two Japanese companies, Shin-Etsu Handotai Co. and Mitsubishi Materials Corp.

It produces polycrystalline silicon, also known as polysilicon, a raw material used to make solar cells and semiconductor devices.
The Clarksville plant is designed to initially make about 10,000 metric tons of polysilicon, but will be able expand to more than double that capacity. The site is expected to require about 1,000 construction workers for up to seven years, and create between 500 and 800 new jobs at the plant.
The company said its expansion in Hemlock, about 50 miles northeast of Lansing, will allow it to begin manufacturing monosilane, a gas is used to manufacture thin-film solar cells and liquid crystal displays.
Dow Corning is a joint venture owned by The Dow Chemical Co., which also is headquartered in Midland, Michigan, and Corning, New York-based Corning Inc.

Obama breaks with Bush oil bosses and puts environment at top of agenda

• Nobel scientist designated US energy secretary• New 'climate tsarina' will coordinate agencies
Suzanne Goldenberg in Washington
The Guardian, Tuesday 16 December 2008

US president-elect Barack Obama yesterday announced a physics Nobel laureate as the incoming secretary of state for energy, stressing the need to develop new energy sources Link to this video
Barack Obama made his most decisive break with the past eight years of George Bush yesterday, claiming the creation of a new energy economy for the US as the defining issue of his presidency and naming a Nobel science laureate and a supporter of Al Gore to his cabinet.
The president-elect turned the roll-out of his new energy and environment team, made at a press conference in Chicago, into a chance to restate his commitment towards putting energy reform at the centre of his economic plan.
"We have heard president after president promising to chart a new course," he said. "This time has to be different."
His choice of the physicist Steve Chu as his energy secretary and the veteran regulator Carol Browner for the newly created White House post of "climate tsarina" received almost unanimously positive response from environmentalists. The professional credentials of both were seen as a sign of Obama's determination to change America's energy mix and deal with climate change.
Gene Karpinski, the head of the League of Conservation Voters, hailed Browner and Chu as "a green dream team".
Lester Brown, president of the Earth Policy Institute, said: "We can expect some strong initiatives reflecting the sense of seriousness and the urgency of doing something about climate change."
Chu, 60, won his Nobel prize in 1997 and is director of the Lawrence Berkeley National Laboratory. He is a committed advocate for action on climate change.
Obama held up Chu's appointment as a sign of his determination to break with the Bush administration, which recruited oil industry executives to the energy department and censored government scientific reports on global warming. The environmental protection agency saw its funding and powers drastically reduced.
"His appointment should signal to all that my administration will value science," he said. "We will make decisions based on facts."
But despite Chu's title, the greater responsibility for dealing with issues of energy and climate change falls to Browner, who will coordinate the different government agencies that deal with energy policy.
Obama's decision to create a new co-ordinating post for her was seen as a further sign of his seriousness on climate change. Reid Detchon, director of the Energy Future Coalition, called the move "visionary and overdue".
Browner, who headed the environmental protection agency under Bill Clinton, has worked with Gore, and called climate change "the greatest challenge ever faced". She is expected to pick up on her efforts to give the EPA the authority to regulate the carbon emissions that cause climate change. That initiative was blocked by the Bush administration. She has also supported California's efforts to reduce car emissions at a faster pace than under federal law.
Lisa Jackson, a chemical engineer and former environmental policy official from New Jersey, is to head the EPA, which regulates air quality. Nancy Sutley, an environmental officer in California, becomes head of the president's Council on Environmental Quality.
Obama's economic team has been criticised for being too strongly allied with Wall Street, but he has given out repeated signals that he intends to move ahead with legislation to deal with climate change. He reaffirmed that commitment yesterday, saying there was still an urgent need to develop alternative energy sources, despite the recent drop in oil prices and the economic crisis.
However, there were some cautionary notes sounded about Obama's choices yesterday. Chu, despite his sterling reputation as scientist, has little experience of politics. There were also reports that Browner would be competing for influence against other presidential advisers, such as General Jim Jones, Obama's national security adviser, and Lawrence Summers, his economic adviser.

Obama Picks Team for EPA and Energy

CHICAGO -- President-elect Barack Obama is pushing to give U.S. energy policy a California-style makeover, choosing for key energy and environmental posts people who advocate more aggressive steps against climate change.
Obama's Advisers
Mr. Obama introduced Monday the people who will advise him on energy and environmental policy, including several figures who either hail from the Golden State or have called for emulating California's policies in the fight against climate change.
"Consistently, California has hit the bar" on environmental policy, "and the rest of the country has followed," Mr. Obama said during the news conference here.
Mr. Obama's picks in the energy and environmental arena signal a sharp break with Bush administration, in contrast with Mr. Obama's choices for some national-security and economic posts, who reflected a tilt toward continuity.
Mr. Obama's nominee for Energy secretary is Steven Chu, a Nobel Prize-winning physicist who is director of the Lawrence Berkeley National Laboratory in California. Mr. Chu has praised California's approach to energy conservation, and called for aggressive steps on climate change.
Mr. Obama also named Carol Browner, who headed the Environmental Protection Agency during the Clinton administration, to be the White House czar coordinating climate policy. Ms. Browner has said publicly that the next president's priority should be to direct the EPA to reconsider the decision by President George W. Bush's current EPA administrator, Stephen Johnson, to deny California a waiver from the Clean Air Act that would have allowed the state to regulate greenhouse-gas emissions from automobiles.
To head the EPA, Mr. Obama named Lisa Jackson, former head of New Jersey's Department of Environmental Protection, who led her state's effort to implement auto greenhouse-gas standards modeled after California's. Los Angeles Deputy Mayor Nancy Sutley was nominated to run the president's Council on Environmental Quality.
Mr. Obama, meanwhile, appears poised to round out his energy and environmental team by naming Democratic Sen. Ken Salazar of Colorado as Interior secretary. Mr. Salazar fought the Bush administration's efforts to allow oil-shale development in the West, but has also worked with Republicans on legislation to allow for some increased offshore drilling in exchange for greater spending on low-carbon technology.

Mr. Obama's picks add to the growing number of Californians who will influence U.S. energy policy. That group includes House Speaker Nancy Pelosi, who has made addressing global warming a priority; Senate Environment Committee Chairman Barbara Boxer; and Rep. Henry Waxman, who last month defeated Rep. John Dingell (D., Mich.) for the chairmanship of the House Energy and Commerce Committee, after arguing he was better qualified to push climate-change legislation than Mr. Dingell, a longtime ally of his home state's auto makers.
Mr. Chu has held up California's policies on conservation as a model for the rest of the U.S., noting in a speech in Washington earlier this year that the state's real gross domestic product has grown by a factor of two since the early 1970s, even as electricity consumption per person has risen only moderately.
Opponents of California's policies note that the state pays relatively high electricity rates.—Laura Meckler and Jonathan Weisman contributed to this article.
Write to Stephen Power at stephen.power@wsj.com

Be realistic about Heathrow expansion

Rejecting growth at our main airport would not make the slightest practical difference to the future of the planet

Willie Walsh
guardian.co.uk, Monday 15 December 2008 13.00 GMT

Aviation is absolutely committed to neutralising and then reducing its climate change impact.
Emissions trading will become a reality in three years' time and advances in engine and airframe technology, lower carbon fuels and operational changes will all have major effects on the industry's carbon footprint.
Global warming is an urgent, complex issue, which many environmental scientists admit they do not fully understand.
I make no claims for a full understanding. What I do know is that global warming is global. Which is why I question the view that expansion of one airport, Heathrow, means catastrophe for the planet.
Heathrow is our national hub. It is a big airport for the UK, but its runway capacity is much smaller than rival hubs in Europe, the Middle East and elsewhere. That is why it offers a smaller route network, and is more vulnerable to delays.
A third runway at Heathrow would not open before 2020. By then, the EU emissions trading scheme will have applied to airlines for eight years. Carbon emissions will have been capped at 2005 levels – and if airlines want to fly more (from Heathrow or any other airport in Europe), they will be able to do so only if they pay for equivalent emissions reductions elsewhere.
Net C02 emissions in the atmosphere will not increase as a result of expansion at Heathrow.
It is absolutely right that aviation should meet its full environmental costs. In fact, through the UK's uniquely heavy and rising level of air travel taxation (air passenger duty), UK airlines already do – with something to spare.
We must see things in perspective. If we closed every UK airport tomorrow, we would reduce global C02 emissions by 0.1%.
And if we decide not to build a third runway at Heathrow, we will not reduce absolute emissions one iota.
As the economy recovers, demand for travel will grow. If that demand cannot be met at Heathrow, it will simply transfer to rival international hubs such as Paris, Frankfurt or Amsterdam (which already have four or five runways each).
Lack of runway slots at Heathrow will force people living in the north of England, Scotland and Northern Ireland to fly long-haul via continental hubs. So emissions will grow at those airports instead.
For residents of the south-east, the lack of new runway capacity will mean that the direct long-haul network will continue to wither – and they too will have to become accustomed to inconvenient indirect flights via overseas hubs.
And as we buckle our straitjacket, other countries will laugh. France, Germany, the Netherlands and Spain already have their extra capacity. Dubai will continue progress on its new six-runway hub, and China with building its 97 new airports in the next 12 years. There are many other examples.
Let's face reality. Rejecting growth at Heathrow would not make the slightest practical difference to the future of the planet.
It would make a huge difference to the ability of UK employers to win and maintain business in a global economy. Multi-national businesses do not have to locate in Britain. If global connections look permanently better elsewhere, they will move.
I want to beat climate change. Aviation is on the brink of neutralising its climate change impacts, and will go on to reduce them. Global warming is global. It is not about Heathrow.

Cooling on Global Warming

Germany and the rest of Europe are getting more rational on climate change.

By BENNY PEISER From today's Wall Street Journal Europe
Participants at last week's United Nations climate conference in Poznan, Poland, were taken aback by a world seemingly turned upside-down. The traditional villains and heroes of the international climate narrative, the wicked U.S. and the noble European Union, had unexpectedly swapped roles. For once, it was the EU that was criticized for backpedalling on its CO2 targets while Europe's climate nemesis, the U.S., found itself commended for electing an environmental champion as president.
The wrangle over the EU's controversial climate package at a separate summit in Brussels wrong-footed the world's green bureaucracy. The EU climate deal was diluted beyond recognition. Instead of standing by plans to cut CO2 emissions by 20% below 1990 levels by 2020, the actual reductions might be as trivial as 4% if all exemptions are factored in.
The Brussels summit symbolizes a turning point. The watered-down climate deal epitomizes the onset of a cooling period in Europe's hitherto overheated climate debate. It may lead eventually to the complete abandonment of the unilateral climate agenda that has shaped Europe's green philosophy for nearly 20 years.
The reasons for the changing political atmosphere in Europe are manifold. First, the global economic crisis has demoted green policies nearer to the bottom of the political agenda. Saving the economy and creating jobs take priority now.
Second, disillusionment with the failed Kyoto Protocol has turned utopian thinking into sobriety. After all, most of the Kyoto signatories failed to reduce their CO2 emissions during the last 10 years. There are also growing doubts about the long-term viability of the EU's Emissions Trading Scheme. The price of carbon credits has collapsed as a result of the financial crisis. The drop in demand and the recession are likely to depress carbon prices for years to come. As a result, the effectiveness of the extremely volatile scheme is increasingly questioned.
Third, a number of countries have experienced a political backlash over their renewable energy schemes. Tens of billions of euros of taxpayers' money have been pumped into projects that depend on endless government handouts. Each of the 35,000 solar jobs in Germany, for instance, is subsidized to the tune of €130,000. According to estimates by the Rhine-Westphalia Institute for Economic Research, green subsidies will cost German electricity consumers nearly €27 billion in the next two years.
Perhaps even more important is the growing realization that the warming trend of the late 20th century has, for the last 10 years or so, essentially come to a temporary halt. The data collected by international meteorological offices confirm this. This most peculiar fact is rarely mentioned in policy debates, but it certainly provides decision makers with a vital respite to reconsider their climate policy options.
Above all, Europe's politicians have recognized that green taxes have turned into liabilities that may undermine economic stability and their chances of re-election. As German radio Deutsche Welle put it last week: "With the recession tightening its grip on the German economy, [Chancellor Angela] Merkel is betting that job reassurance is more important to the average worker than being a pioneer in tackling climate change."
Nowhere has the fundamental change of the political landscape been more pronounced and less expected than in Germany. For more than 20 years, Europe's economic powerhouse has been the major bastion of green politics.
In the 1990s, Angela Merkel steered and implemented Europe's Kyoto policy as Germany's first environment minister. Now serving as chancellor, she was hailed as Europe's climate savior after playing host to last year's G-8 summit in Heiligendamm. Only 18 months later, however, she no longer wears a halo. As a result of a concerted campaign by Germany's heavy industry, as well as growing opposition from within her Christian Democratic party, Mrs. Merkel has been forced to abandon her green principles and image.
The deepening economic crisis seems to transform the mood of the German public. Next year's general election looms large, and voters right now are worried about the economy and jobs, and not green issues. In early December, more than 10,000 angry metal workers and trade unionists -- most of them from Germany -- protested outside the European Parliament in Brussels against the EU's climate policy, which they fear will increase unemployment.
For many international observers, the ease with which Mrs. Merkel overturned her celebrated climate policy has come as a shock. But she was almost the last member of her Christian Democratic party willing to accept that a change in strategy was necessary given the immense costs of the EU's original climate plans. In fact, her party demanded that Mrs. Merkel veto the climate package if German industry did not receive an exemption from the Emissions Trading Scheme's auctioning of carbon credits. The exemption was duly granted.
Perhaps the most critical factor for Mrs. Merkel's almost unchallenged about-face is the vanishing strength of the Social Democratic Party, whose members were once among the most forceful climate alarmists. Mrs. Merkel's junior coalition partner has lost much of its support in recent years. And amid growing fears of a deepening recession, there are also signs of a split within the party on climate and energy issues.
At the forefront of the left-wing opposition to the EU's climate policy has been EU Industry Commissioner G√ľnter Verheugen. The German Social Democrat has been arguing throughout the year that the climate targets should only be accepted if "truly cost-effective solutions" could be found. Other prominent dissenters in his party include Hubertus Schmoldt, the head of the mining, chemical and energy industrial union, who has recently called for a two-year postponement of the climate package.
In part as a result of German -- as well as Italian and Polish -- objections, Europe's climate package did not survive in its original form. The inclusion of a revision clause, pushed by Italy, is particularly significant as it makes the EU's climate targets conditional on the outcome of international climate talks. If the U.N.'s Copenhagen conference in 2009 fails to seal a post-Kyoto deal, it is as good as certain that some of the EU's targets will be further cut. By linking its decisions to those of the rest of the world, Europe has begun to act as a more rational player on the stage of international climate diplomacy.
Instead of yielding to the siren calls of climate alarmists, European governments would be well advised to focus their attention on developing pragmatic policies capable of safeguarding their industries, labor forces and environment at the same time.
Mr. Peiser is the editor of the international science policy network CCNet.

The U.K.'s Energy Awakening: Government Needs to Wield Power

Free Markets Can't Be Left Alone to Face Challenges

In a sign of how the U.K.'s political orthodoxy has changed in the wake of the partial nationalization of the banking industry, Gordon Brown's government now appears to have its sights on the energy sector.
Ed Miliband, the U.K. energy and climate-change secretary, said in a speech last week that building new power stations or wind farms, reducing carbon-dioxide emissions and cutting bills for struggling households "are all challenges which the market alone cannot be guaranteed to solve." These problems require a "strategic role" by the government, he said.
His comments heralded a potentially significant policy shift in a country that has long advocated allowing its energy industry to operate with little interference. Energy ministers who served under Mr. Brown's predecessors would boast that Britain had the most liberalized gas and electricity market in the world, and berate European governments over their state-dominated markets.
Getty Images
The U.K. government, under pressure to replace aging nuclear plants and other infrastructure, might get more active in the energy sector.
Even Britain's Conservative Party, architect of utility privatization, is changing its tune. Peter Luff, a Conservative member of Parliament and chairman of the Business and Enterprise Select Committee, said that the government could no longer rely on the market alone to meet the country's energy needs.
"A radical rethink is now required if the lights are to stay on," Mr. Luff said, as his parliamentary committee called on Mr. Brown to take action in the energy industry "just as the government has been quick to respond to the crisis in the banking sector."
That was a sharp turnaround for Mr. Luff, who back in July said improvements to the energy market "can best be made through improving market design...and by continuing to work for liberalization of European markets."
The calls for government to take a bigger role come as policy makers fret over how the U.K. will meet its future energy needs as the country's energy infrastructure ages. Many of the U.K.'s nuclear-power facilities are nearing retirement, but there are doubts that the private sector, uneasy over energy-market volatility, can or will take on the risk of financing a new generation of plants. In addition, the U.K. has pledged to get 14% of all its energy from renewable sources by 2020, but the government acknowledges that the current level of private-sector investment will yield just 5%.
Meanwhile, as the toll from the recession mounts, several government officials have called on utilities to reduce fuel prices for consumers.
Mr. Miliband, the energy secretary, so far hasn't made known any specific plans, but he said he intends to discuss the issue at a summit in London this Friday for energy ministers from the main oil-producing and -consuming countries. Mr. Brown announced plans for the meeting in June, when oil prices were near a record high. Now that prices have tumbled, however, the government's biggest worry isn't how to pay for fuel but bringing it to market in the first place.
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Plans to tax polluting ships

The shipping industry should be taxed for polluting the atmosphere, according to industry heads.

By Louise Gray, Environment Correspondent Last Updated: 5:55PM GMT 15 Dec 2008

Heavy industry in Europe already pays to pollute through an "emissions trading scheme". This system limits pollution by charging any business that emits more than a certain amount of carbon dioxide.
Now the UK-based Chamber of Shipping has called for a similar scheme for the global shipping business.
It would be very difficult to police but could cut pollution substantially as the industry produces thousands of tonnes of greenhouse gases every year.
Chamber of Shipping president Martin Watson said shipping goods is better for the environment than air freight but causes nearly three per cent of global carbon dioxide emissions.
"We need to take whatever action is needed to try to limit those emissions – but without accidentally causing freight to be shifted from ships to other, less carbon-friendly forms of transport. That would be catastrophic in terms of total emissions."
The challenge that faces the industry and legislators is identifying who is responsible for a ship's emissions as although ships may be owned by one person, the goods being transported could be owned by another person and the transportation required by a third party. Also ships, by their very nature, move between countries, making it easy to avoid national carbon regulation unless that regulation is applied on an international level.
But Peter Lockley, head of transport policy at environmental group WWF-UK, said it would encourage cleaner technology on ships and the money raised could be used to develop green technology in the developing world.
"I'm very pleased that the UK shipping industry is advocating an emissions trading system for ships and I look forward to working with them to refine and build support for the proposal. "If designed well, the scheme would put a price on maritime carbon emissions, speeding up the drive for cleaner ships and helping to pay for low-carbon development in poorer countries. It would position shipping as a progressive and responsible industry, and I very much hope that it will be part of a global climate change deal [to replace the Kyoto Protocol] next year in Copenhagen."