Transcript ENERGYzing the European chemical industry HLG Chemicals Ad-hoc group Energy, Feedstock and Logistics 15 January, 2008 P Claes, Essenscia.

ENERGYzing the European chemical industry
HLG Chemicals
Ad-hoc group Energy, Feedstock and Logistics
15 January, 2008
P Claes, Essenscia
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ENERGYzing the European chemical industry
1. Energy is vital to the chemical industry - as raw material
and fuel
2. Industry’s essential need: Access to competitively-priced
electricity and gas
3. Impact of climate and energy policies on EU
competitiveness
4. Energy efficiency is of prior importance for the industry
5. Chemical products help to save energy
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ENERGYzing the European chemical industry
1. Energy is vital to the chemical industry - as raw material
and fuel
2. Industry’s essential need: Access to competitivelypriced electricity and gas
3. Impact of EU climate and energy policy on
competitiveness
4. Energy efficiency is of prior importance for the industry
5. Chemical products help to save energy
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The chemical industry is a large energy
consumer
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For chemicals, energy is more than a fuel
EU chemical* industry energy consumption by source
Source: Eurostat *including pharmaceuticals
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Energy costs and energy policy matter for important
building blocks of the chemical industry
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Energy is vital to the chemical industry – as
raw material and fuel
Chemical industry is the most important energy
consumer among manufacturing sectors
Energy serves not only as fuel but also as feedstock:
oil and gas are used as raw material for higher value
added products.
The chemical industry is globally active, highly
integrated and depends on very energy intensive
building blocks
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ENERGYzing the European chemical industry
1. Energy is vital to the chemical industry - as raw
material and fuel
2. Industry’s essential need: Access to competitively-priced
electricity and gas
3. Impact of EU climate and energy policy on
competitiveness
4. Energy efficiency is of prior importance for the industry
5. Chemical products help to save energy
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EU electricity prices: A disadvantage in
global competition
General Industrial Power Price (in €/MWh)
EU range *
121
EU average * = 45
Italy
Germ any
Netherlands
Spain
United Kingdom
99
90
70
64
Sw itzerland
63
58
France
USA
(*) Estimates
for the
European
chlor-alkali
industry
47
30
China
Russia
19
15
Saudi Arabia
0
20
40
Sources: Prochemics based on Information from IEA; Eurostat; EIA (2006).
60
80
100
120
140
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Electricity prices traded in the European
exchanges are on the rise
EEX SPOT-Mix Electricity Prices (Dec. 2006)
60
50
€/MWh
40
30
20
10
0
2001
2002
2003
2004
2005
2006
F 2007
F 2008
Source: Prochemics based on Information from EEX (electricity base prices).
Note: These prices do not necessarily reflect prices paid by chlorine producers.
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EU gas prices: A disadvantage in global
competition
Global Natural Gas Costs – 1st Quarter 2007
($US per million BTUs)
Germany: $7.60
UK: $8.65
Belgium: $8.50
Canada: $7.10
USA: $7.20
Libya: $1.00
Mexico: $6.85
Trinidad: $1.65
Russia: $1.50
Belarus: $3.15
Ukraine: $3.60
Iran: $1.25
South Korea: $8.80
China: $6.30
Japan: $8.70
Qatar: $1.80
Oman: $1.00 India: $3.70
Saudi Arabia: $0.75
Brazil : $4.90
Bolivia: $1.85
Argentina: $4.85
Source: ACC
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Industry’s essential need: Access to
competitively-priced electricity and gas
Energy prices are key to competitiveness
While oil has in principle global price levels, electricity
and gas remain national/regional markets (gas has the
potential to become a global market)
EU electricity and gas prices are a competitive
disadvantage for EU industry
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ENERGYzing the European chemical industry
1. Energy is vital to the chemical industry - as raw
material and fuel
2. Industry’s essential need: Access to competitivelypriced electricity and gas
3. Impact of climate and energy policies on EU
competitiveness
4. Energy efficiency is of prior importance for the industry
5. Chemical products help to save energy
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Competitive energy markets are essential
EU energy markets are not competitive
Access to grids, gas storage and cross-border
connections for non-incumbents difficult
Few energy suppliers dominate the markets
Third package is an important step
Cefic supports the EC Third Package and call for its rapid
adoption and implementation.
Cefic calls for improvements to the Third Package in key
areas to ensure its effectiveness.
Cefic calls for transitional measures until energy markets are
competitive.
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Electricity price largely determined by
national policies
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Climate change policies cause energy prices
to rise
Impact of CO2 costs on electricity prices
Source: Prochemics based on Information from DGEMP of the Ministiere de l’Economie, de Finances et de l’Industrie, France (2003).
Note: These prices do not necessarily reflect prices paid by chlorine producers.
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What drives electricity prices… ?
Development of the certificate prices and electricity prices
in Germany – first trading period 2005-2006
Certificates
Electricity
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Use of renewables in the European chemical
industry
Use of renewables in the European chemical industry as
raw material (2003)
Chemical Industry
~6.4 million t
Other industries
~2.6 million t
74.1 million t petrochemical and about 6.4 million t renewable
raw materials are used in the EU-25 chemical industry in 2003,
i.e. roughly 8% of the raw materials are renewable raw materials
EU-15
EU-25
8%
6%
4%
6%
8%
2%
0%
1999
Source: German Agency Renewable Resources
2003
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ENERGYzing the European chemical industry
1. Energy is vital to the chemical industry - as raw
material and fuel
2. Industry’s essential need: Access to competitivelypriced electricity and gas
3. Impact of EU climate and energy policy on
competitiveness
4. Energy efficiency is of prior importance for the industry
5. Chemical products help to save energy
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Energy efficiency is not only driven by high
prices
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EU Chemical industry is leading in CO2
efficiency gains
Chemical industry greenhouse gas emissions per production: EU versus US
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To ensure overall GLOBAL sustainability
….minimise measures that stimulate investment leakage to most CO2
inefficient regions
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18
16
14
12
10
8
6
4
2
Country CO2 / GDP efficiency
indexed to Japan = 1.0
Switzerland
Japan
UK
Germany
Belgium
Spain
Portugal
USA
World
Australia
Africa
India
South Africa
China
Russia
0
Data source: IEA 2006
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Global comparison: EU chemical industry
most energy efficient
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Energy efficiency is of prior importance for
the industry
Energy and resource efficiency is a means for competitiveness
The chemical industry has decoupled production growth and energy
use (e.g. technological breakthroughs, diffusion of CHP)
Timing of energy efficiency measures often depends on life-time of
major assets rather than energy prices
The European chemical industry, overall, is more energy and CO2
efficient than other world regions. The current EU ETS design
encourages growth in carbon-intensive countries. Delocalisation
harms global environmental aims.
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ENERGYzing the European chemical industry
1. Energy is vital to the chemical industry - as raw
material and fuel
2. Industry’s essential need: Access to competitivelypriced electricity and gas
3. Impact of EU climate and energy policy on
competitiveness
4. Energy efficiency is of prior importance for the industry
5. Chemical products help to save energy
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Innovation in chemicals is contributing to
fight climate change
Energy neutral housing
High-performance insulation materials
Solar panelling and photoelectric cells
Heat-absorbing wall-board material can reduce a
building’s energy consumption by 15% to 32%
The “ThreeLiter House”
Source: BASF
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Chemical products support other sectors to
tackle climate change
Cutting back emissions in transport
Energy efficient tyres lower rolling resistance thereby
reducing GHG emissions of cars by 5%
Lightweight, high-strength plastic components replace
metal and save weight for greater fuel efficiency in cars
New jet aircrafts are making increased use of plastic
and carbon fibre composite materials – achieving major
emissions cuts in air transport
Making fuel cells commercially viable
Smart coatings reduce drag through the fouling of a
ship’s hull
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Chemical products help to save energy
Chemical industry saves energy through innovative
solutions for downstream users. Chemical products save
at least twice the CO2 used in their production.
Curtailing growth of the chemical industry through
absolute CO2 reduction targets harms global
environmental aims.
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The way forward to ENERGYze the European
chemical industry
ACTIONS NEEDED
Competitive energy markets are essential: The
Energy Package must be strengthened, not weakened
Beyond what the Energy Package will achieve:
Market dominance: Provide guidance to national regulators
on effective measures to prevent abuse of market power.
Long-term contracts: Workable guidelines on long-term
contracts, enabling consumers to enter into long-term supply
contracts.
Transitional measures to allow access to affordable
energy for energy-intensive industries until energy markets
are competitive.
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The way forward to ENERGYze the European
chemical industry
ACTIONS NEEDED
As long as there is no international agreement on
climate policy, the EU ETS design must not put
unilateral constraints on globally competing
industry.
Special contribution of the chemical industry to
energy and ghg efficiency in economy and
manufacturing must be recognised.
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The way forward to ENERGYze the European
chemical industry
ACTIONS NEEDED
Chemical industry uses renewable raw materials for some of
its processes and is an important actor with regard to the
development of renewable energies.
 EU legislation must not favour the use of renewable
resources for energy generation over their industrial
use
The promotion of renewable energies should adhere to key
principles: cost-efficiency, sustainability, technology-neutrality
EU legislation should provide for national exemption measures
for energy-intensive industries to alleviate the cost burden and
thereby guard international competitiveness
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