Industry news-Conservative Policy Proposals

Speaking at the Conservative Party Conference yesterday, Greg Clark (Shadow DECC Secretary) signaled his intentions to give the green light on 5GW of new ‘Clean’ Coal powered stations under a Conservative government, as well as begin preparations for a new generation of nuclear stations for 2017.

The Conservatives have also committed to smart metering, as well as a upgrading of the national grid and an extension of the infrastructure to expand to offshore power generation to connect wind-farms and marine energy.

Other policies to emerge include giving local communities the business rates generated from onshore wind farms for six years, a pledge for electric car owners to be guaranteed an overnight charging point and the building of ‘Marine Parks’ to stage development for the UK’s world leading marine energy sector.

Industry News- UK 'could face blackouts by 2016'

In an interview with the BBC the government's new energy adviser says the UK could face blackouts by 2016 because green energy is not coming on stream fast enough.
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Political News-DECC appoint David Mackay as Chief Scientific Advisor

David MacKay, Professor in the Department of Physics at Cambridge University and author of the influential book ‘Sustainable Energy -without the hot air' has been appointed Chief Scientific Advisor to the Department of Energy and Climate Change.

The Chief Scientific Advisor’s role is to ensure that the Department’s policies and operations, and its contributions to wider Government issues, are underpinned by the best science and engineering advice available.

Professor MacKay said:

“Climate change and secure energy are two of the most urgent issues facing the UK and the global community. The solutions must be rooted firmly in the science and I look forward to advising the Government on how it can help deliver these important goals.”

Secretary of State Ed Miliband said:

“David MacKay is known for making science accessible and helping to explain clearly the urgency and the challenges of moving to a low carbon economy. I want him to bring all of these qualities to the job of advising DECC on how we can meet Britain’s carbon targets and energy security needs.”

Click Here to read ‘Sustainable Energy -without the hot air' by David Mackay

Political News-UK government proposes faster grid access for renewable energy

UK Secretary of Energy and Climate Change, Ed Miliband, has proposed to address the way power plants are connected to the UK’s power grid in the hope of getting new generation, including renewable energy, connected faster.

The Department of Energy and Climate Change (DECC) says in a statement: “The shake-up will help new projects waiting to get a date to feed electricity into the grid to get out of the queue, and will in particular help renewable energy projects such as wind farms.”

Currently 60 GW of new electricity generation is waiting to be connected to the grid, of which 17 GW is from renewable energy.

Under the current system, new generation, including renewable energy, has been connected on a first come first serve basis regardless of when the projects can actually start generating electricity. According to DECC, this means some windfarms, for example, were given grid connection years after they were due to start producing renewable energy.

Miliband says: “Access to the grid has been one of the key barriers to the generation of renewable energy in this country. … We need these new projects to get hooked up to the grid as soon as they are ready – both to help tackle climate change and secure our future energy supplies.

“The government will do whatever is necessary to bring about the transition to a low carbon economy and to give investors the certainty they need so that new renewable energy generation is built.”

DECC proposes three models:

* Connect and manage (socialised): Cost will be shared between all users of the network;
* Connect and manage (hybrid): A model that targets some, but not all, of the additional constraint costs on new entrant power stations;
* Connect and manage (shared cost and commitment): A model that offers the choice to new and existing power stations to commit to the network (which is helpful to the grid in terms of long term management of the system) in return for greater certainty over charges, or to opt out and be exposed to additional constraint costs.

Ofgem has already approved interim arrangements, which so far have seen 1 GW of renewable energy projects in Scotland being offered earlier connection dates. The UK government says it wants to ensure that these arrangements are put fully in place by June 2010.

Industry News-UK Bosses Tip Cleantech, Technology and Media to be the Three Highest Growth Sectors by 2020

Cleantech and renewables are expected to become two of the most important sectors of the economy according to a survey of UK business leaders, commissioned by the department for Business Innovation and Skills.

The new survey questioned business leaders from across eight sectors and found that nearly half (43 per cent) of those questioned believe that cleantech will grow at the fastest pace by 2020, followed by science and technology (20 per cent) and media and entertainment (15 per cent).

The survey highlights how the current economic climate presents new opportunities for new areas of the economy to thrive.

Combined with a growing awareness to find solutions for some of society’s greatest challenges – from tackling climate change to supporting an ageing population – investing now in innovative, high-growth areas will be essential for bolstering the UK economy once recovery kicks in.

Driving the awareness, investment and skills required to power these high-growth markets is essential for Britain’s future. Britain’s chance to showcase our strength to the rest of the world, including our cleantech innovations in the run up to Copenhagen 15, and how our digital strength will enable the first digital games in 2012, is essential for the UK’s ability to meaningfully contribute to the global economy.

It is therefore essential for both government and business to properly recognise and promote the importance of these sectors.

As part of meeting this need for recognition; Science and Innovation Minister Lord Drayson and entrepreneur James Caan recently launched the iawards - the first ever Government backed-awards to celebrate achievements in science, innovation and technology.

Science and Innovation Minister Lord Drayson said:

“Cleantech and renewables will play a huge part in helping the UK economy to grow sustainably, but we need to do more to encourage innovation in these and other high tech sectors.

“And that means recognising our best innovators, those who are creating the household names of tomorrow. The iawards will do just that, this inaugural year and in years to come. Make sure to get your entries in by 16 September!”

James Caan said:

“The UK is home to some of the most innovative minds in the world and we must continue to recognise and celebrate the work of these talented individuals. The iawards are all about recognising British achievements, the visionaries behind them and showcasing new the latest developments that will make the UK a better place to live and work. In doing so, we will continue to draw investment, energy and skills to the high-growth industries that will drive our economy forward.”

Further findings:

- 73 per cent of those polled believe that business and government must work together to promote the development of skills needed to bring the UK out of recession

- One in five of those surveyed chose web 2.0 as the best technological development of the last ten years

The iawards in association with QinetiQ includes 13 categories which are open to all organisations, but all entrants must specify the British involvement in any innovation - demonstrating that innovative thinking and development came from a British organisation or team.

Siemens sponsor the ‘Next Big Thing' category and Microsoft Bizspark sponsor the best technology start up category.

The awards categories reflect the greatest challenges we face as a country where science and innovation offer the best chance of developing viable solutions. Each entry must demonstrate how its innovative qualities relate to at least one of the following challenges:

Addressing the healthcare needs of an ageing society; Increasing international security from tackling global poverty to minimising the threat of terrorism; Preserving finite natural resources in the face of population growth and climate change; and Delivering public services which make best use of new technologies.

They must also demonstrate that the innovation has an impact on one of the Government’s grand challenges for science.

Winners of the awards will be helped by UK Trade & Investment (UKTI) to meet potential business partners at key industry events such as the giant Medica trade fair in Germany and Technology World in Coventry this autumn. They will also receive public relations support from the iawards team. All shortlisted entries and the winners will also have exclusive access to the iawards logo.

Science and technology has been a driving force behind Britain’s export success. Exports for life sciences, for example, rose 19 per cent in 2008.

Innovation is also important in keeping the UK as the number one destination for inward investment in Europe.
UKTI statistics show that the number of investment projects in creative industries increased by 65 per cent in 2008/9 and in software and computer services by 36 per cent.

Client News-MGT Power Announce 295 biomass power station at the Port of Tyne

MGT POWER ANNOUNCE PLANS FOR 295MW BIOMASS POWER STATION AT THE PORT OF TYNE

Date of Issue: Monday 10th August 2009

MGT Power Ltd today announce plans to develop a second major biomass power generation project at the Port of Tyne in the North Tyneside.

The proposed 295MW Tyne Renewable Energy Plant (Tyne REP) will be located on industrial land in the Port of Tyne, North Shields and is 10 kms east of Newcastle City Centre. The site is on the north bank of the River Tyne. The scheme will generate carbon neutral electricity for around 600,000 homes in the North East of England.

Subject to planning, this major plant, generating power from sustainable sources of biomass, is targeted for commercial operation in 2014.

Chris Moore, Director of MGT Power said: “With the Government committed to more renewable electricity generation over the next decade, our Tyne biomass project along with our consented scheme at Teesport will make a significant contribution to the Government’s targets. Large scale biomass projects can operate at baseload and each scheme will produce in one year as much green electricity as the largest 1,000MW wind farm project. Each biomass project will also save 1.2 million tonnes of CO2 from being emitted every year.”

As a first stage in the Tyne REP planning process, MGT Power has outlined details of the project in a “Scoping Document” which has been circulated to a large number of local and national organisations, including North Tyneside Council, the Environment Agency and the Department of Energy & Climate Change. The Scoping Document outlines the rationale for the project, the energy and planning policy framework and the technical studies and consultations that MGT Power will undertake as part of the project’s Environmental Impact Assessment (EIA).

Chris Moore added: “Just as we did with our Tees Renewable Energy scheme, we are consulting widely from the start, both with key organisations and local people. We see the Tyne project as not only a major green power project for the UK, but one that will contribute positively to the local area and the North East economy, primarily in terms of local investment and employment. We intend to hold a public exhibition of our plans in September.”

North Tyneside Mayor, Linda Arkley, said: “Tyne REP would bring substantial benefits to the borough and the wider region, representing an investment of over £400 million, the creation of hundreds of construction jobs, future permanent on-site jobs, 300–400 indirect jobs and an annual spend of £30 million
in the local economy.

“We are committed to the regeneration of the North Bank of the Tyne and bringing jobs to the area. I welcome the fact that MGT Power Ltd have chosen North Tyneside as their preferred location and look forward to supporting them for the benefit of our residents.”

Andrew Moffat, Chief Executive of the Port of Tyne welcomed MGT Power’s plans: “Our mission is to provide a sustainable, vibrant Port of Tyne and the Tyne Renewable Energy Plant represents a major long term investment that will take full advantage of the excellent facilities, infrastructure and
capabilities offered by the Port.”

The biomass feedstock for the Tyne Renewable Energy Plant will be sourced from certified sustainable forestry projects developed by the MGT Power team and partners in North and South America and the Baltic States, and in the longer-term UK sources. The biomass is clean burning woodchip, which delivers 95% greenhouse gas savings in comparison to coal or natural gas through the life cycle and will not use high quality land suitable for food crops. The plant will use around 2.4m tonnes of woodchips per annum and will operate at baseload – 24 hours a day, all year round.

Notes to Editors:

1.Details of the Tyne Renewable Energy Plant and a copy of the Scoping Document can be obtained via a dedicated website www.mgttyne.com or by contacting MGT Power via email at info@mgttyne.com.

2.MGT Power (www.mgtpower.com) was established in December 2007 to develop biomass generation projects in the UK and Europe. The management team includes Chris Moore, Ben Elsworth, Thiago Azevedo and Noel Forrest who have backgrounds in UK power generation and the supply of renewable energy feedstocks. The company’s main shareholders include Trafalgar Asset Managers and MKM Longboat. The firm’s financial advisors are Ernst & Young and engineering consultants are Pöyry Energy and PB Power.

3.As a storable, concentrated energy form, wood biomass allows electricity generation 24 hours a day, all year round, in contrast to intermittent renewable sources such as wind or solar. MGT Power will use trees sustainably planted specifically for use as fuel, such as Short Rotation Forestry (eg. Eucalyptus, Pines) and Short Rotation Coppicing (eg. Willow, Poplar).


4.The Port of Tyne Authority, created by statute, is a trust port (www.portoftyne.co.uk). It is a deep river port, with round-the-clock access, 2.5 miles from the mouth of the river Tyne. Its main function is the improvement, maintenance and management of the Port. The Port is a commercial enterprise, but it is not funded by Government and has no shareholders. It has five main business areas: conventional and bulk cargoes; logistics;
car terminals; cruise and ferries; and estates. Any surplus is reinvested into a programme of continuous improvement to the benefit of the users, the community and the North East economy. The Port of Tyne Authority is chaired by Sir Ian Wrigglesworth.

5.MGT Power Ltd is the developer of the Tees Renewable Energy Plant, which secured planning consent from the UK Government on July 15th and is scheduled to start operating in 2012.

6.The Mayor and Cabinet have no involvement in the determination of planning matters and any application that is submitted by the developer will be dealt with in accordance with the Council's adopted planning process including if appropriate referral to the Planning Committee.

For further information:

MGT Power Ltd (www.mgtpower.com)

James Court (Taylor Keogh Communications): 020 3170 8467/07921330356

Call Jonny Mulligan (Taylor Keogh Communications): 07875019695

Industry News-EU mulls extending green criteria beyond biofuels

The European Commission has begun consultations on tackling indirect land-use change caused by agro-fuel production, floating the idea that such criteria could be applied more generally to a range of other agricultural commodities.

Background:

In December 2008, EU leaders reached agreement on a new Renewable Energy Directive, which requires each member state to satisfy 10% of their transport fuel needs from renewable sources, including biofuels, hydrogen and green electricity by 2020.

The directive also established sustainability criteria for biofuels. It obliges the bloc to ensure that biofuels offer at least 35% carbon emission savings compared to fossil fuels. The figure rises to 50% as of 2017 and 60% as of 2018.

However, concerns have been raised that increased biofuels production would result in massive deforestation and have severe implications for food security, as energy crops replace other land uses (indirect land-use change).

The Renewable Energy Directive and the Fuel Quality Directive agreed as part of the climate change and energy package in December last year require the Commission to compile a report "reviewing the impact of indirect land-use change on greenhouse gas emissions" and seek ways to minimise its impact.

The report could be accompanied by proposals on developing a concrete methodology for calculating indirect land-use changes, which could be applied to other commodities.

The EU's new Renewable Energy Directive obliges member states to ensure that 10% of their transport fuel comes from renewable sources, including biofuels,by 2020. The goal was aimed at contributing towards the bloc's climate goals, but questions have been raised about the unintended consequences of replacing large forested areas and food production with energy crops.

To address this issue, the directive requires the Commission to present a report by the end of 2010 on how such "indirect land-use changes" impact on greenhouse gases and whether they should be tackled.

But a consultation paper seen by EurActiv reveals that the EU executive is ambitiously planning to come up with a document and potentially a legislative proposal as early as next March. This is to ensure that member states can take them into account when submitting their nationalrenewable energy action plans by the end of June 2010.

The non-paper, drafted by the Commission's transport and energy (TREN) and environment DGs, lists several options to take into account the effects of land-use change. It shows that the Commission is considering addressing the general issue of land-use change instead of limiting its approach to biofuels.

The document suggests that the restrictions on land-use change applied to biofuels could be imposed on other commodities and consuming countries. This could be done by encouraging other administrations to adopt the same restrictions and by encouraging other industries to apply these on a voluntary basis, it states.

Moreover, the EU could require that goods sold on its market are tagged with labels stating compliance with the restrictions, the non-paper reads.

One alternative would be to conclude international agreements to protect "carbon-rich habitats" like rainforests in countries where cultivation patterns are likely to be affected, it states.

However, the Commission believes that such a general approach would require putting in place measures that stretch beyond the scope of the report required by the Renewables Directive, and would take more time to execute.

The rest of the document thus specifically concentrates on biofuels. The minimum required greenhouse gas savings already included in the directive could either be tightened or considered as an adequate "cushion", ensuring that the policy delivers an "acceptably high" greenhouse gas benefit, it says.

Finally, the document floats the idea of promoting differentiated consignments for individual biofuels.

For example, bonuses could be increased for biofuels which do not come from land, or additional sustainability criteria could be set for agro-fuels produced from crops that are likely to cause damaging land-use change. Furthermore, an indirect land-use change factor could be included when calculating greenhouse gas emissions from biofuels, once a methodology has been adopted.

Indeed, the Commission is already consulting researchers about models that could explain the effects of biofuel production on indirect land-use change, according to sources close to the process. These should be presented around September, feeding into a stakeholder consultation in October.

The Commission has already organised separate meetings with member states to chart the field, and has invited comments from stakeholders by the end of this week (31 July).

International trade implications

In addition to comments on the feasibility, uncertainty and administrative burden of the proposed measures, the Commission is seeking feedback on the international trade implications of biofuel sustainability criteria.

During internal negotiations on the directive, Brazil and many developing countries threatened to challenge it before the World Trade Organisation. Major exporting countries fear that the EU will sneak in strict provisions to limit their access to its market, favouring domestic production.

As the directive has now been published, it provides a clearer framework of what both domestic agro-fuel producers and third-country importers can expect from the EU. It sets down clear-cut figures for future greenhouse gas savings which biofuels will have to achieve compared to traditional fossil fuels, and stipulates that biofuels produced from land with "high biodiversity value" cannot be counted towards the target.

"Brazil has raised the issue [of EU sustainability criteria] in some meetings," a WTO spokesperson told EurActiv. But he added that so far no WTO member had requested the organisation to examine the directive's compatibility with its rules.

However, the legislation's potential provisions on land-use change or even the definition of the concept of "land with high biodiversity value" increase the uncertainty. Eventually, these addutions to the directive could expose it to a challenge before the WTO, experts said.

Moreover, it is far from clear whether it is possible to calculate greenhouse gas emissions resulting from land-use changes.

"We question whether it's possible to come up with any macroeconomic model that is able to explain indirect land-use changes because of the production of biofuels. We don't believe this is possible, but we need to wait and see what science is going to deliver," said Rob Vierhout, secretary-general of the European Bioethanol Fuel Association.

He argued that any model would also have to include the positive effects of biofuel production. For example, animal feed is produced as a co-product of biofuels, which reduces the need to expand soy production in third countries in order to export it to Europe, he said, adding that biofuel production is also proven to increase yield per hectare of land.

Hinting that heated debates lie ahead, campaigners against biofuels have described this as "creative accountancy".

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Industry News-ESB acquires two wind farms in Britain

THE ESB has bought its first wind farms in Britain for an undisclosed sum. One is based in Devon and the other is the West Durham.

An ESB spokesman said prices are not being disclosed "for commercial reasons".

The deals mean the Irish semi-state energy group has reached almost half its 2012 target for wind generation in Britain.In its corporate strategy the group said it wanted to have 200MW of electricity under generation in the renewable sector in Britain by 2012.

Fullabrook Wind Farm in Devon has permission to generate up to 66MW of electricity generation with construction expected to start early next year.The 24MW West Durham wind farm, near Tow Law in the north-east of England, started generating power last May.

The group also set out a target of having 3GW of electricity under generation in the conventional manner in Britain also by 2012. It has acquired two conventional plants there including a base in Southampton helping it to move towards its GW target.

ESB’s head of wind development, Joe O’Mahony, said the deals marked the first step in the company’s strategy to achieve 200MW of wind generation in Britain by 2012.

"We are committed to developing a balanced portfolio of generation with less reliance on fossil fuels. Market convergence between the UK and Ireland, and delivery of our low carbon strategic framework, means that ESB sees the UK as a key market. We are delivering on our strategic objectives to become a significant investor in the UK renewables market," he said.

ESBI launched a major investment strategy in Britain last November that has significant plans to develop or acquire wind energy projects.That is in line with the ESB’s strategy to halve its carbon emissions in 12 years and to achieve carbon zero emission by 2035.

Overall, ESB has allocated €4bn specifically for direct investment in renewable generation projects.


This story appeared in the printed version of the Irish Examiner Thursday, July 30, 2009

Politics News-EU launches reflection on future green policies

The European Union needs to reconcile its growth and jobs objectives with long-term environmental goals, says the European Commission in a report taking stock of the bloc’s decade-old sustainable development strategy.

Background:

The European Union first formulated its Sustainable Development Strategy (SDS) during a 2001 European summit in Gothenburg. Although sustainable development is enshrined in the EU treaties, policy implementation remains a problem.

The European Commission's first stocktaking of the strategy confirmed that a number of unsustainable trends were continuing to worsen. It also highlighted the controversial relationship between the SDS and the Lisbon Agenda for growth and jobs.

A June 2006 summit of EU leaders saw the adoption of a renewed SDS strategyPdf external . It addresses seven main challenges: climate change and clean energy; sustainable transport; sustainable consumption and production; conservation and management of natural resources; public health; social inclusion, demography and migration; and global poverty.


Global demand for natural resources is growing fast, European fish stocks are depleting and forests and soils are increasingly challenged by climate change, says the report published on 24 July.

With its recently adopted climate and energy package, the EU has made a positive contribution to sustainable development, but "unsustainable trends persist in several areas," notes the report,which assesses progress made since the Union launched its sustainable development strategy in 2001. The EU executive estimates the annual loss of ecosystem services equivalent to €50 billion and the cumulated welfare losses are estimated equivalent to 7% of GDP by 2050.

Decoupling transport volumes from economic growth also remains a challenge and freight transport has even grown "faster than GDP", notes the report.


Towards renewed priorities

The report launches a reflection on how the EU Sustainable Development Strategy (SDS) should evolve in the future and how it could be better aligned with other cross-cutting EU strategies.The Commission particularly stresses the need to find greater synergy with the Lisbon Strategy for growth and jobs, which will be reviewed in 2010. The report calls for better coordination and linkage between climate change, energy, financial and social sustainability - policy areas covered by both strategies.

According to the EU executive, the SDS could be reviewed to better contribute to "a rapid shift to a low-carbon and low-input economy, based on energy and resource-efficient technologies and sustainable transport, and shifts towards sustainable consumption behaviour".

The progress report will now be handed to EU leaders, who are expected to review priorities and provide orientation for the future strategy later this year. In parallel, the EU is starting to reflect on revising its 2000 Lisbon Strategy, which sought to turn the EU into the "most competitive economy in the world by 2010". 'Green growth' and environmental sustainability are likely to feature high among the strategy's new priorities.

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Industry News-Commission tables EU winter gas storage plan

The European Commission yesterday (16 July) proposed a new regulation on the security of gas supplies, obliging member states to take pre-emptive measures to avoid disruptions in the wake of a January dispute between Russia and Ukraine.

Background:
In November 2008, the European Commission presented a revised version of a 2004 directive on the security of gas supplies as part of the Second Strategic Review, aiming to reduce Europe's reliance on foreign energy imports.

The January gas dispute between Russia and Europe's main transit country Ukraine made the revision of the existing 2004 directive on gas supply security imperative, as it revealed the EU's inability to respond to emergencies. The row led to widespread supply disruptions for a fortnight in Eastern Europe, reducing the EU's gas supply by 20%.


"We have known for some time that the existing arrangements to deal with gas emergencies are insufficient […] All member states recognise that we need common standards for security of gas supply for the whole EU," said the bloc's energy commissioner, Andris Piebalgs.

The proposal authorises the Commission to declare a Community emergency at the request of a single member state, or when the Union loses more than 10% of its daily gas import from third countries. It also entitles the EU executive to coordinate member-state actions between one another and towards third countries.

EU states have a three-year transitional period until the end of March 2014 to ensure that they have either enough gas storage capacity or diversified energy supplies to handle a 60-day supply disruption in extreme winter weather.

But unlike the proposal for a revised directive on oil stocks approved by ministers last month (EurActiv 15/06/09), the gas regulation does not require compulsory strategic stocks as it is replaceable in most uses, the Commission said.

Instead, the document sets common standards for member states to define "serious gas supply disruptions", called 'N-1'. This refers to the preparedness of a country to satisfy its total gas demand during 60 days of exceptionally high gas demand if there is a disruption in the largest gas supply infrastructure.

In order to meet the N-1 standard, member states have to designate a competent authority to assess risks and establish both preventive and emergency plans.

The Commission reserves the right to require that plans be revised if they do not comply with the regulation.

To meet the infrastructure requirements, the regulation obliges transmission system operators to ensure reverse flow capacity on all interconnections within two years after the entry into force of the directive, if it would enhance the security of supply of a member state.

Piebalgs said Baltic nations would face the biggest challenges in meeting the standards, with the largest investments needed in Lithuania and Slovenia,where gas consumption is significant. Denmark, on the other hand, is best placed with its own production, while Germany and Belgium have "decent storage capacity" and are doing fine, he added.

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Industry News-European Industry chiefs call for sectoral approach to climate change

A fair, new international climate regime should include sector-based agreements, leading to binding targets for emissions cuts in developing countries, the European Round Table of Industrialists (ERT), an influential group of CEOs, said in a paper published yesterday (15 July).

Background:

International negotiations are proceeding at full speed in order to agree a replacement for the Kyoto Protocol, which expires in 2012.

The first United Nations Framework Convention on Climate Change (UNFCCC) talks in Bonn (29 March–8 April) launched negotiations for a draft agreement in view of the final conference in Copenhagen later this year.

The draft negotiating text, prepared ahead of June's second round of climate talks, revealed a divide between rich and poor countries.Developing nations are asking their industrialised counterparts to commit to sizeable CO2 reductions and to offer financial aid to help poor nations in their efforts. But developed countries have not made any firm commitments on funding, and only the EU has taken on a firm CO2 reduction target, which nevertheless fails to meet the developing world's demands.

In the meantime, the negotiating text has ballooned to hundreds of pages as all parties have reacted with amendments. No agreement was reached at the June talks on financing for developing countries to mitigate and adapt to global warming.

At the sidelines of a G8 meeting in Italy on 9 July, the Major Economies Forum, comprising 17 countries that are accountable for 75% of global emissions, agreed for the first time to limit global warming to two degrees Celsius.

The EU will be able to upgrade its 2020 objective of slashing emissions of global warming gases from 20% to 30% only if an international agreement is struck to spread obligations evenly among the global community in order to avoid competitive distortions, the group said in the paper.

"Seen from a European perspective, an effective international framework is one that allows the EU to continue competing in the global market by ensuring that the gap is minimised between those leading on the implementation of emission constraints and those following as their economies build capacity to
manage emissions," said Jeroen van der Veer, former CEO of Shell and chair of the ERT's Energy & Climate Change Working Group.

The ERT is a forum of around 45 chief executives and chairmen of major national companies, including E.ON, GDF Suez, Siemens, Nokia, BT and Fiat.

The business leaders see a global greenhouse gas emissions market as the principal tool to deliver emission cuts. Industrialised countries with binding targets should link national cap-and-trade systems together to finance clean technology programmes in developing countries, the group said.

"This will establish a widespread market price for emitting CO2 (and other GHGs) into the atmosphere and deliver the reductions at lowest cost to the global economy," the paper reads.

UN projects to go large-scale

The UN's Clean Development Mechanism (CDM), which allows industrialised countries to earn offset credits by financing mitigation efforts in the developing world, should be redesigned to support large-scale projects - notably in the electricity sector - that are driven by a carbon price, the ERT argues. Lower-cost measures such as energy efficiency would largely be financed by developing countries themselves, it says.

More advanced developing countries, on the other hand, should "stabilise their absolute emissions in the medium term through nationally appropriate actions and thereafter, make a firm commitment to reduce absolute emissions," the report states.

This could be done via sectoral agreements with industrialised countries, the paper argues. The agreements would enable developing countries to adopt emissions reduction programmes in specific sectors like cement or steel to tap into funding and build capacity.

"Each agreement should include the eventual implementation of a long-term binding target for the sector or sectors in question," the ERT says. It adds that the approach could be extended to areas such as deforestation and afforestation. This has been envisaged under the UN's REDD mechanism, which is likely to feature as part of the deal in Copenhagen (EurActiv 20/04/09).

In order to reduce the need for protection for EU sectors that have the price of carbon added to their production costs, each agreement would have to involve at least 80% of world production of products in each particular sector and lead to CO2 reductions comparable to what the EU has set, the paper states.

One of the technologies that the business group would like to see transferred to the developing world through revamped CDM projects is carbon capture and storage (CCS). It calls for an international carbon storage certification, which would deliver a certificate for each tonne of carbon buried underground.

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