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Climate Change Agreements Workshop

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Title: Climate Change Policy Update RCSG 17 October 2013 Author: Sturgeonn Last modified by: sturgeonn Created Date: 10/17/2013 8:14:40 AM Document presentation format – PowerPoint PPT presentation

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Title: Climate Change Agreements Workshop


1
Welcome
  • Climate Change Agreements Workshop
  • 28 November 2014

2
Programme
1045 Session 1 - How the Climate Change Agreements (CCAs) work
CCA overview timelines
Participants CCA commitments
Eligibility and targets
1200 COFFEE
1215 Session 2 Maintenance of CCAs
1230 Changes to CCAs
Claiming Climate Change Levy (CCL relief)
1245 LUNCH
1400 Session 3 CCA performance reporting
1415 CCA performance calculations and reporting to CIABATA
Managing compliance and possible audits
1500 Roundup / TEA / further QA
3
Session 1 - How the CCAs work
4
How the CCAs work
  • CCA overview timelines
  • Participants CCA commitments
  • Eligibility and targets

5
CCA overview principles and benefits
  • Join through the sector association for your
    activity
  • Eligibility energy intensive industries exposed
    to international competition
  • Facilities with Environmental Permitting
    Regulation part A installations
  • Participants commit to challenging but achievable
    energy efficiency targets to 2020 in exchange for
    relief from the Climate Change Levy (CCL)
  • CCA facilities are also exempt from the Carbon
    Reduction Commitment (CRC) and its 16/tCO2
    annual charge for all emissions
  • A more sustainable instrument for industry to
    contribute to carbon reductions..

6
CCA overview - roles
  • The Department of Energy and Climate Change
    (DECC) sets CCA policy
  • The Environment Agency (EA) is the Administrator
    implements policy and administers the scheme
    through a web-based Register
  • CIABATA is a subsidiary of CIA
  • Represents CCA participants interests with DECC
    and EA
  • Negotiates targets with DECC
  • Sector interface with EA administration of new
    entrants and supports sites ongoing
    participation
  • Collects performance against targets for
    on-reporting to EA and assists with changes to
    agreements

7
Chemical sector CCA target negotiation
  • DECC proposed 13.5
  • CIABATA negotiated 11.2
  • 230 sites, individual targets as per survey
  • 50m p.a. Climate Change Levy saving
  • 90 power
  • 65 gas
  • 25m p.a. CRC Energy Efficiency Scheme saving
  • 7m compliance costs per target period

8
Duration of CCAs and CCL relief
Target review
Sign-up CCL relief 1 Apr 2013
CCL relief renewed 1 Jul 2015
Scheme ends 31 Mar 2023
Certification
Targets
Baseline
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Targets 2013-2020 4 consecutive target periods Targets 2013-2020 4 consecutive target periods Targets 2013-2020 4 consecutive target periods Targets 2013-2020 4 consecutive target periods
Jan13 Dec14 Jan15 Dec16 Jan17 - Dec18 Jan19 - Dec20
9
CCA overview - compliance
  • Examination against CCA targets every 2 years
  • CCA Performance Calculation Spreadsheets for
    detailed calculations
  • CIABATA web-forms to report headline data
  • Target shortfalls are met by paying a 12/tCO2
    buy-out price
  • Target overachievements can be used for own
    compliance with future targets
  • Sanctions for
  • Non-reporting and misreporting
  • Failing to comply with targets
  • Failing to notify EA of changes / provide
    information EA request

10
EA Reduced Rate Certificate
11
How the CCAs work
  • CCA overview timelines
  • Participants CCA commitments
  • Eligibility and targets

12
Participant agreement documents
Document With Comment
Underlying agreement EA Target and operator obligations
Participation agreement CIABATA Obligations to each other
Facility eligibility form EA Defines eligible facility Only supplied for charges on pre-existing CCA eligibility definition (PP4 eligibility form)
Bottom-up Data Survey CIABATA Baseline data and target submission 2019-2020 targets tightened by 0.1 in negotiation with DECC
13
3 chemical sector CCA agreements Sign-up is
electronic
Environment Agency
Underlying Agreement (entered by email assent)
Umbrella agreement
Participating company
CIABATA
Participation Agreement (Entered by agreement to
enter Xls form)
14
Underlying agreement
Eg CIA/T00259

15
Eg CIA/F00259
Not included for Novem in energy targets as same
as baseline energy
16
(No Transcript)
17
Underlying Agreement - settings and terminology
Item Comment
Facility Participating site or part of site
Target unit A facility or group of facilities covered by a CCA target
CCA contacts Responsible Person (gives legal assent) Administrative Contact (manages the CCA) Facility Contact (not in UA works with admin contact)
Target currency Novem in energy energy efficiency Absolute in energy
Target reduction on base year From Bottom-up Data Survey EITHER - Reduction in Novem ratio (energy efficiency ratio) OR - absolute energy in GJ
18
Sanctions
  • Penalty for minor infringements (10 CCL saving
    in 2008)
  • Failure to report on time
  • Failure to meet other info request
  • Failure to notify EA of need for a variation
    (within 20 working days)
  • Minor infringement penalty buy-out-fee
  • Failure to meet target (error in milestone
    report)
  • Decertification reporting but not complying
  • Termination failure to report or pay a penalty

19
How the CCAs work
  • CCA overview timelines
  • Participants CCA commitments
  • Eligibility and targets

20
Facility eligibility form (pre-existing PP4
eligibility form)
  • Eligibility form defines the activities within
    the CCA Facility covered by the CCA (usually
    whole site)
  • At sign up new forms submitted for
  • New entrants / facilities
  • Eligibility changes, e.g. making use of 70/30
    rule (formerly 90/10)
  • Categories of activities
  • Eligible process Permitted activities /
    activities listed in part 2 of the Environmental
    Permitting Regulations 2010 (updates)
  • Directly associated activities - on-site, support
    eligible process, capable of affecting emissions
    (Q7)
  • 70/30 activities non-EPR, lt30 of whole site
    consumption OR activities up to addition 3/7ths
    if gt30

21
Eligibility 70/30 rule shares of energy
(primary fuel input basis)
storage air / water abatement waste treatment
EPR processes (incl pilot plant for commercial
purposes)
Offices / canteen Ind gases RD
22
CCA targets Bottom-Up Data Survey
Section Content
General information Site(s) covered, eligibility changes and contacts
Target Unit Summary Summary of baseline consumption, throughput and energy efficiency and projected targets
Baseline fuel summary Baseline (2008) consumption by fuel
Efficiency drivers Projected penetration of energy efficient technologies
Product mix sheets Supports Novem approach - one per product group in the CCA target unit
23
Look in product mix sheet(s) for throughput
measurement basis
24
F e e d s t o c k s
Primary fuels (P) Oil Gas Coal Waste Renew-
ables
Site boundary
Electricity from the grid
P
Final consumption (F)
Process energy consumption for
chemicals production by-products
3rd party high efficiency electricity steam
generators
P
F
P
P
P
P
F
Other steam - from chemical plants?
F
On-site generation of electricity and steam by CHP
P
F
25
Energy and throughput accounting rules (1)
  • Include ALL energy combusted for direct and
    indirectly supplied heat and power
  • Exclude
  • Use of energy as feedstock
  • Exothermic heat
  • Energy regulated under the EU Emissions Trading
    Scheme (EU ETS)
  • On-supplies
  • Include
  • By-products and waste and used as fuel
  • Renewable energy

26
Energy and throughput accounting rules (2)
  • Gross calorific value (GCV) basis in Gigajoules -
    use specific supplier factors where possible, own
    analysis of non-standard (on-site fuels) or
    specific or nearest standard factor (consistency
    the key).
  • Secondary fuels must be on a primary fuel input
    basis
  • Average Grid generation efficiency factor x2.6
  • CHP plants - algorithms to assess inputs to
    non-renewable (gas-fired) schemes that on-supply
    and/or export to the grid and to all renewable
    schemes
  • Throughput measure(s)
  • See Bottom-Up Data Survey for throughput measures
    for product group(s)

27
F e e d s t o c k s
Primary fuels (P) Oil Gas Coal Waste Renew-
ables
Site boundary
Electricity from the grid
P
Final consumption (F)
Process energy consumption for
chemicals production by-products
3rd party high efficiency electricity steam
generators
P
F
P
P
P
P
F
Other steam - from chemical plants?
F
On-site generation of electricity and steam by CHP
P
F
28
EU Emissions Trading Scheme (EU ETS)
  • Targets CCA Target Facility excludes energy
    regulated by the EU ETS within the CCA Facility
    (usually leaving grid electricity)
  • Whole CCA Facility entitled to CCL relief,
    recertified if meet both
  • CCA Target Facility Target
  • EU ETS permit requirements
  • Therefore eliminates policy overlaps with no loss
    of CCL relief simplification?
  • Problem of volatile grid imports if CHP is
    carved-out - some have opted to use CHP Special
    Reporting Method (SRM) to address this
  • Throughput measure throughput (eg tonnes) x
    grid intensity factor
  • Where grid intensity grid use / (CHP grid
    power) delivered basis

29
Target currency
  • Novem in energy (energy efficiency)
  • Relative target provides for growth but difficult
    to meet in a recession
  • Novem eliminates product mix distortions
  • Absolute energy
  • Absolute target suited to falling throughput and
    / or large efficiency gains,
  • Target is tightened if throughput falls below 90
    of baseline (2008) levels

30
Product mix approach (Novem)
  • Energy efficiency Specific Energy Consumption
    (SEC)
  • energy consumption, GJ
  • throughput (eg in tonnes)
  • Relative energy target ratio (EER)
  • ? projected throughput(s) x target SEC(s)
  • ? projected throughput(s) x 2008 SEC(s)
  • expected energy consumption
  • reference use (baseline adjusted for expected
    throughput)
  • Pure efficiency measure, free of product mix
    distortions
  • Target can be adjusted for actual product mix at
    reconciliation

31
Novem approach is free of product mix distortions
Relative energy ratio 2013/14 energy
consumption reference energy consumption Site
target EER 3.0 / 3.0 1.000 P.mix
approach EER 15,000 / 18,000 0.833
32
Summary / conclusions
  • CCAs are a more sustainable instrument for
    industry to contribute to carbon reductions
  • Supporting data for Underlying Agreement
    commitments is in the Bottom-Up Data Survey
  • Changes and updates are there any to notify
    baseline data errors, eligibility, contacts?
  • Are there preparations needed for performance
    reporting?
  • Dry-run this year
  • Formal exercise (2 Feb 2015 to 20 Mar 2015)
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