Household names call on Europe to be bolder on emissions cuts
Post Date: 16 June 2011
Almost 100 prestigious companies from Google to Coca-Cola, with a combined annual turnover of more than €1 trillion, have signed up to a declaration calling on the European Union to extend to 30% its planned emission cuts. Currently the target is 20% below 1990 levels by 2020, but the EU is debating whether or not to increase this to 30%. Britain’s energy secretary, Chris Huhne, has also called for an EU target of 30%.
The 72 firms, which also include M&S, Sony, Nike, Asda, IKEA and Centrica and come from all sectors, say that €45.5 billion could be saved by 2020 by reducing the cost of oil and gas imports.
The new target, which the Welsh government has also lobbied Brussels to adopt, would encourage more efficient product development and investment in green technology. The European Parliament is scheduled to vote on the issue on 23 June.
"The current framework does not properly incentivise renewable energy," said Anders Eldrup, chief executive of DONG Energy. "This calls for a move to 30% emissions reduction by 2020."
Luc Bas, director of european programs at The Climate Group, added: "Signatories to this declaration are part of a growing business community convinced that a 30% target can lead to the market transformation needed to ensure Europe's position as a global leader in a low carbon future. Now, more than ever, businesses realize that a clean industrial revolution is the only way forward for sustainable growth and job creation in Europe and the world".
It is only heavy energy users such as the steel, cement and aluminium industries, who are arguing against stricter emissions targets on the grounds that they would give a competitive advantage to less-regulated rivals overseas.
They have the ear of Europe's energy commissioner, Guenther Oettinger, who is responsible for coordinating the next phase of the EU's Emissions Trading Scheme. However, commissioner Oettinger is on record as opposing the move to a 30% emissions reduction target by 2020, claiming that it would risk the “de-industrialisation” of Europe.
The EU's climate commissioner Connie Hedegaard is meanwhile responsible for developing the energy efficiency agenda and is in the process of producing a new roadmap which will be announced at an informal meeting of environment ministers in Poland on 11 July.
Warning of carbon permits glut
It is reported that her department is angry that there is conflict between the two directorates, which could result in depressed prices in the future for carbon permits.
This is because new energy efficiency regulations, due on 22 June, will apply not just to buildings and vehicles, but also to the 11,000 factories and power plants already covered by the EU's emissions trading scheme (ETS), and such duplication will, without further action, depress carbon prices. This is because efficiency measures could cancel out the need for pollution permits by about 400 million tonnes of carbon in 2013-2020.
Hedegaard's Chief of Staff spoke about the conflict this week at a conference organised by the German Marshall Fund of the US in Brussels, saying "We have got two policy approaches knocking up against each other and that isn't helpful."
On Tuesday, five European energy companies - including Britain's Scottish and Southern Energy and Denmark's Dong - warned that the draft directive risked a "tremendous decline" in carbon market prices, which could be as low as €14 instead of the expected €25.
Hedegaard commented, "We have to create a correlation between the two different initiatives - at some point we have to push this issue further."
However, she is optimistic that the energy efficiency target could be increased. "It seems many countries now understand that we could move beyond 20% by just delivering on our energy efficiency targets," she told Reuters yesterday. "It seems that goes well with a lot of countries that would be normally be sceptical toward the 30% ... which of course is interesting."
"It is possible and doable to deliver on ambitious targets," she said. "But the cost-efficient potential is spread very unevenly across the 27 member states.
"For example, Bulgaria is the most energy-intensive country in Europe. There are relatively many low hanging fruit and relatively many cheap reductions to be made there, but of course you do not find a lot of money to invest in this in Bulgaria... How do we handle that challenge?
"If you're retrofitting buildings, you're creating jobs that cannot be outsourced [outside Europe]," she said.
The new business model
Google, one of the signatories to the petition, also announced yesterday that it will finance a $280 million retrofit of residential solar power systems in the United States through a deal with startup SolarCity. This is the search engine's largest single renewable energy investment to date.
As with Britain's Green Deal and FITs, upfront cash payments will enable householders who can't afford a large upfront investment to have solar modules installed on their roofs by SolarCity in a leasing arrangement. This allows them to pay a monthly fee for the modules that would be offset by savings and electricity bills.
The systems will be owned by Google who would earn a higher return on their investment than if the cash was in a bank.
This business model is now becoming established in the UK. The latest example was announced yesterday by the Foresight Group and Our Generation Limited, who have agreed an initial £10 million programme of residential solar PV installations in the UK over the next three months.
Energy services company Our Generation will make the installations and utility E.ON will be responsible for recruiting and managing the customer service staff through its SolarExchange initiative.
Fifteen thousand of its customers will receive solar power installations costing as little as £99 and save up to £180 on their annual energy bill.
Foresight already manages solar power assets worth over £150 million.
The list of signatories
The full list of businesses who have so far explicitly supported the Declaration calling on the European Union to adopt a 30% emissions reduction target by 2020 is: Acciona, Adolfo Dominguez, Allianz, Alpro, Arjowiggins graphic, Arkadin, ASDA, Atkins, Aviva, Aviva Investors, Barilla, Better Place, BNP Paribas, Boralex, BSH Bosch Siemens Hausgeraete, British Telecom, BSkyB, Capgemini, Carrefour, Centrica, Climate Change Capital, The Coca-Cola Company, Coca-Cola Enterprises, Coca-Cola Hellenic, Credit Agricole, Danfoss, Danone, DHV Group, DONG Energy, Electrolux, Elopak, Eneco, Eurostar, F&C Asset Management, Ferrero, First Solar, Google, H&M, If P&C Insurance Company Ltd, IKEA, InterfaceFLOR, John Lewis Partnership, Johnson Controls Inc, Kingfisher, Lafuma, Mango, Marks and Spencer, National Grid, Nestl Nike, Nokia Siemens Networks, Novo Nordisk, Philips, PUMA, Rockwool, RSA, Scottish and Southern Energy, SKAI Group of Companies, Sony Europe, Standard Life, Sveaskog, Swiss Re, Thames Water, The Co-operative Group, Tryg, Unicredit, Unilever, United Biscuits, Velux, Vestas, Vodafone, WSP Group.