Energy & Climate
As an industrial consumer of energy, SABIC in Europe has always emphasized the effective and efficient use of energy. Moreover, many of our products enable energy savings in their applications. A more efficient use of energy goes hand in hand with reductions in the emission of the Green House Gas CO2.
The efficient use of energy in our production processes helps to limit the emissions of CO2, and strengthens our competitiveness. In 2007, our energy efficiency in Europe was determined and verified by independent consultants to be, on average, significantly better than that of similar plants in Europe. A large number of our plants belong to the top quartile and studies are underway to improve our position even further.
Many of our products eventually find their application in consumer goods where they add to a more efficient use of energy. Examples include the application of our polymer products in cars where they reduce weight which in turn leads to a lower fuel usage and the use in milk bottles with improved recyclability. These examples support the outcome of a recent study of the International Council of Chemical Associations (ICCA) demonstrating that during their lifetime Chemical products save up to three times the amount of CO2 emitted during their production when compared to traditional materials.
In March 2007, EU leaders agreed to cut CO2 emissions by at least 20% by 2020, (30% if global targets can be agreed on), and to set a binding 20% target for the use of renewable energy sources. Further they reiterated their ambition to reduce energy consumption by 20%.
SABIC in Europe supports the EU's aim to be a leader in worldwide efforts to address climate change and its ambition to arrive at a wider international agreement on meeting this global challenge. Furthermore, we support the principle of a fully harmonised European Emissions Trading System ('ETS') that provides incentive for emission improvement and preserves a level playing field through an approach of Community-wide industry sectors.
SABIC in Europe supports the EU's objective that an international agreement on climate change should enforce comparable emissions constraints globally and the recognition that, until such an agreement is in place, measures will be necessary to protect exposed EU industry sectors from the risk of displacement by manufacturing in other less regulated areas of the world ('carbon leakage'). We call on the EU to recognise that basic petrochemicals and polyolefins is an 'exposed' energy intensive industry, by virtue of the high impact carbon allowance auctioning would have on production costs, its susceptibility to import displacement and a resultant inability to pass through those costs. We are of the opinion that such exposed industries should receive free allocation based on actual production benchmarked against an overall (direct + indirect) emissions cap. This approach rewards the leading performers, promotes early action and preserves the full emission reduction incentive. Unlike auctioning, it avoids destroying competitiveness and the attendant likelihood of carbon leakage.
Towards a simple, robust and predictable EU Emissions Trading Scheme
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Illustration of a market distortion under a cap & trade regime
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Options and consequences for the allocation of allowances to electricity producers
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Climate change challenges and the search for a sustainable policy
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EU Emissions Trading Scheme: effectiveness, competitiveness and the level playing field must be improved
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