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Risk and Chances for the Lime Industry through the European Emissions Trading System

Risk and Chances for the Lime Industry through the European Emissions Trading System. Dipl.-Ing. Andreas von Saldern, ESolutions GmbH, Germany. Since 2005. European Emissions Trading System. EUAs. CO 2. CO 2. CO 2. CO 2. CO 2. CO 2. 10.000 Installations.

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Risk and Chances for the Lime Industry through the European Emissions Trading System

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  1. Risk and Chances for the Lime Industry through the European Emissions Trading System Dipl.-Ing. Andreas von Saldern, ESolutions GmbH, Germany

  2. Since 2005 European Emissions Trading System EUAs CO2 CO2 CO2 CO2 CO2 CO2 10.000 Installations

  3. The Europe-wide CO2–Emissions Trading System (ETS) exists since autumn 2004 It includes installations of energy intensive industries like power stations, steelworks, cement, lime, bricks, ceramic… Verified reports of CO2-emissions have to be generated, annually An equivalent number of CO2-Emission Allowances have to be submitted to the authorities Companies receive less CO2-Emisson Allowances than they need Lacking CO2-Emission Allowances have to be bought, surpluses can be sold Sales can be conducted between plant operators (OTC) or via Stock Exchange (e.g. Leipzig, London, Paris…)

  4. Direct CO2–dependency in Germany CO2–Emissions of different industries in relation to sales

  5. Trading Periods the first trading period lasted 3 years, from 2005-2007 the second trading period lasts 5 years, from 2008-2012 and the third period will last 8 years, from 2013-2020. The basic rules have been fixed for the third period, some important details will be determinied in 2009 and 2010 Reduction Target by the end of 2020: Setting I: -21% compared to the emissions of 2005 Setting II: -30% if an ambitious Kioto II agreement will passed

  6. Allocated Emission Allowances in the European Emissions Trading System

  7. CO2-prices for 1st and 2nd trading period differed significantly in 2007

  8. Forwarding production from 2008 in 2007 add 24 € profit / ton

  9. What does a 21% reduction requirement mean? 21 % per product at 0% annual growth 42 % per product at 2% annual growth 62% per product at 5% annual growth since 2005

  10. Current number of installation covered through the European Emission Trading System

  11. Industries which have to comply with the European Emissions Trading System

  12. The prices for CO2-Emission Allowances are highly volatile

  13. Different price predictions of CO2-Emission Allowances

  14. “Process”-emissions can hardly be influenced Lime production emits 1.0 to 1.9 t CO2/t lime

  15. The duties of enterprises which have to comply with the European Emissions Trading System include: Monitor their CO2-emissions Compose an annual CO2-emissions report Let the report be verified through an external accredited verifier Submit an according number of CO2-Emission Allowances

  16. Euro/ Product 30 Contribution to profit 20 10 CO2-price Euro/tCO2 30 10 60 20 40 50 0 -10 loss EF=1.0 EF= 1.2 EF=0.8 EF= emissions factor in t CO2/product example: Contribution to profit = 25 € The cost for CO2-Emission Allowances can lead to losses

  17. € 40 Contribution to profit per product 30 Contribution to profit Break even Profit by selling equivalent amount of CO2-Allowances 20 10 €/tCO2 30 10 60 50 20 CO2 - price 40 Reducing production can become profitable

  18. What impact does a 10% CO2 reduction have ? 10% reduction of CO2 would lead to 40% increase of profit At a price of 22 € / t CO2 (average 2008) 1 t CO2 / t lime at10% profitability (profit / revenue)

  19. A holistic CO2-Management offers the best chances distribution / production / planning permission allocation of free EUAs energy consumption purchase of fuels and commodities CO2 monitoring & reporting purchase & sell of CO2 allowances consideration of CO2 allowances in balances & tax CO2-controlling & risk management

  20. The CO2-Emissions Trading System offer new opportunities - Harvest them!

  21. Dr. oec. Susanne Achilles-Kuhnhardt Director Sales and Marketing Reinhardtstraße 23 · D-10117 Berlin Phone: +49 (30) 88 66 37 80 Mobile: +49 (171) 33 55 377 E-Mail: susanne.kuhnhardt@esolutions.eu Internet: www.esolutions.eu Contacts: Dipl.-Ing. Andreas von Saldern CEO / Accredited Environmental Verifier Schoppastraße 2 D-65719 Hofheim a. Ts., Germany Close to Frankfurt Airport Phone: +49 (6192) 921 99 – 10 Mobile: +49 (170) 911 84 23 E-Mail: saldern@esolutions.eu Internet: www.esolutions.eu

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