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Environmental requirements go up in smoke

Thanks to the quota law, Statoil does not have to do anything with the emissions from the Mongstad refinery. – Regret, says Environment Minister Helen Bjørnøy.




(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)

[emissions] The Norwegian Pollution Control Authority (SFT) presented it as good news a month ago: Companies subject to quotas emitted four per cent less CO2 in 2005. And this shows – the authorities believe – that the new quota system reduces greenhouse gas emissions.

However, the truth is that the new quota law that came into force on 1 January 2005 so far does not work. Thanks to free government quotas and falling prices on the open quota market in Norway and Europe, companies such as Statoil's Mongstad refinery can buy themselves free of such and nothing. The result is that the major pollutants do not emit less, but pay a little more.

- It is very unfortunate if Statoil and others have not implemented measures to reduce emissions. It cannot be defended that we, as the richest country in the world, buy ourselves free from our moral responsibility, says Minister of the Environment Helen Bjørnøy (SV).

A critical review of SFT's figures for 2005 shows that there were no "minor emissions from compulsory companies" last year, rather the opposite. Two of the alleged reductions in CO2 emissions should never have been recorded in the statistics.

- This is manipulation of figures from SFT's side. We do not know that a single company has reduced actual emissions last year due to the quota system, says Lars Haltbrekken, leader of the Nature Conservation Association.

- The problem with the entire quota law is that the state gives companies free quotas, which in reality is a gigantic subsidy of pollution, he says.

The red-green government is not going to change the current polluters' dream law.

- But we are in favor of Norway being covered by the EU quota directive from 2008, says Bjørnøy.

Also, in the yard, free quotas are an unknown phenomenon.

In the autumn of 2004, the then environmental protection

Minister Knut Arild Hareide (KrF) for the adoption of a new climate quota law in the Storting.

- With this law, Norway is at the forefront of the world, Hareide boasted.

The new law applies to the years 2005-2007, in other words the last three years before Norway is obliged by the Kyoto Protocol to reduce its greenhouse gas emissions. Not all climate emissions in Norway are covered by the law. Instead, 51 companies, which account for around ten percent of the emissions, have been selected.

The idea was that companies should be encouraged and pressured to reduce their climate emissions. Curiously, this was to happen by the authorities giving free CO2 quotas corresponding to 95 percent of the expected emissions to each company. The entire environmental benefit was then to be taken out by the companies themselves having to do something about the last five percent of the emissions – preferably by implementing environmental and treatment measures that actually reduced the pollution.

According to SFT, this went pretty well last year. 32 Norwegian companies subject to quotas (not all 51 companies covered by the Act had relevant emissions last year) had a total of XNUMX per cent lower emissions than the companies allocated by quotas.

The conclusion "Less emissions from companies subject to quota obligations" followed. That was the headline on SFT's website on April 11 this year.

- Emissions will increase

However, the so-called "reduction" in total CO2 emissions is based on the following fact: Two companies, Statoil's processing plant at Kårstø and Norcem's cement plant in Brevik, alone account for a reduction of 288.000 tonnes of CO2 – equivalent to almost four percent.

- But the reason why Kårstø "reduced" its emissions was that the gas supply from the Kristin field in the North Sea and expected emissions did not come in 2005, as planned. Thus, they received a larger number of quotas than they needed last year. But that does not mean that emissions have been reduced. Instead, emissions will increase when the gas from the Kristin field arrives, perhaps next year, says Haltbrekken in the Nature Conservation Association.

Equally artificial is to say that the quota system led to emission reductions at Norcem in Brevik.

- Norcem has switched from using fossil fuels to biofuels. It is a huge initiative in relation to the environment. But they did this voluntarily in 2004, before the quota law came into force. This therefore has nothing to do with the quota system and the accounts for 2005, says Haltbrekken.

Thus, the real picture in SFT's statistics is that a XNUMX percent reduction in total becomes a small increase. Or if it were to be said with a similar heading that SFT used in the launch of the figures: "More emissions from companies subject to quota obligations."

- This is manipulation of numbers and looks like a green bluff, says Haltbrekken.

The Minister for the Environment is also concerned.

- In the worst case, this gives a false image. I think you are probably right that it is impossible to read the truth from these figures, says Bjørnøy.

Audun Rosland, SFT's project manager at

climate quotas, believes that Haltbreken's word usage is reserved for deliberate fraudulent acts.

- We have no basis in any way for believing that companies subject to quotas have manipulated SFT. Parts of what Haltbrekken says are correct. But this is about how the quota law is, says Rosland.

He confirms that the "reduced" emissions from Kårstø cannot be attributed to implemented environmental measures at the plant, and that Norcem started biofuels on its own initiative in 2004.

- But the quota law provides an opportunity to take as a starting point historical emission figures from 1998 to 2001. At that time, Norcem primarily used fossil fuels. In addition, I believe that the quota system can help Norcem maintain the use of biofuels and not return to the use of coal, says Rosland.

No environmental measures

SFT's statistics for 2005 reveal another major cross in the quota law.

Statoil's Mongstad refinery is a good example: Last year, Statoil expected emissions of 1.610.000 tonnes of CO2 from its refinery in Western Norway. As a result, the authorities allocated the Mongstad refinery – as mentioned completely free of charge – a quota of 1.529.000 tonnes of CO2, corresponding to 95 per cent.

In reality, the Mongstad refinery ended up emitting some more CO2 than expected. As a result, by May 1 this year, Statoil had to account for over 100.000 tonnes of CO2 that could not be covered by the government's free quotas.

And how did Statoil do it?

- We bought quotas from other companies on the open market to cover it, says information manager Kåre Næss at Mongstad.

In other words, Statoil has done nothing to reduce emissions from the Mongstad refinery. Instead, they "made up" for their environmental sins through free quotas from the state, as well as quotas they bought from other companies.

- With today's technology, we can not reduce any emissions with us. The most effective in relation to CO2 emissions would be to close the entire factory. But we do not want that, says the information manager at Mongstad very eloquently.

The system not only allows the companies liable to quota to buy and sell the free quotas they receive from the state. The law also allows quotas to be purchased from EU countries.

As if that wasn't enough: In March of this year, the companies that were subject to quota were granted free quotas for 2006. If they want, they can also use these quotas to cover the pollution from last year.

230 million free

- If we take as our starting point a quota price of 20 euros, as it was last autumn, the free quotas for the Mongstad refinery represent NOK 230 million in pure subsidy from the state to Statoil only last year, says Haltbrekken.

Without significantly tightening and ensuring that it costs money to get emission allowances, the quota system will not lead to any real reduction in emissions, he believes.

SFT's project manager points out that it is the politicians who have to decide whether the quotas should be free or cost something.

- It is impossible to find out exactly what effect the Climate Quota Act had in 2005 without a thorough analysis. Future purchases of allowances from abroad will make it even worse. But I believe that the system has already had an effect, says Audun Rosland.

However, his assumptions are based on forecasts. SFT's estimate is that the quota system could lead to a reduction of emissions for the companies subject to quota obligations of between zero and 0,5 million tonnes of CO2 during 2005-2007.

- My assessment now is that I think emissions

the reduction will be more than zero, says Rosland.

The EU's quota price plummets

[sales] The price of CO2 quotas dropped to around eleven euros per tonne at the beginning of the week. By April, the quota price was 30 euros.

The reason for the price collapse is that the EU on Monday presented the figures for the quota accounts for 2005. They show that too many allowances have been allocated in relation to the need.

Thus, CO2 quotas go on cheap sales.

- Norway must learn from what has happened in the EU. We must tighten the allocation of quotas so that this does not just end as a joke, says Lars Haltbrekken, leader of the Nature Conservation Association.

According to Dagens Næringsliv, CO2 quotas were traded for NOK 73 billion last year. So far this year, that sum has already passed, and sales of 150 billion are expected before the year is over.

Critics point out that a surplus of allowances leads to climate emissions continuing as before, while operators can sell allowances with profits.

The point of the system was to provide a deficit of quotas that forces companies and countries to pollute less, in line with the Kyoto Protocol's objective of stopping global warming.

QUOTA LAW:

  • A national quota system was introduced on 1 January 2005. Valid for the years 2005-2007.
  • Includes 51 companies, including oil refineries, iron and steel producers, oil and gas landfilling operations, gas refineries, petrochemicals and gas power plants.
  • The companies account for around ten per cent of Norway's greenhouse gas emissions.
  • Most companies have a quota obligation because of energy plants larger than 20 MW.

RELEASE QUOTA:

  • Corresponds to one ton of CO2 emissions.
  • The companies liable to pay allowance receive free emission allowances equivalent to 95 per cent of expected emissions.
  • Emission allowances can be freely purchased and sold between companies subject to quota.
  • Purchase of allowances is also allowed from EU countries.

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