1. What it means for your business? The recent climate and greenhouse gas emissions legislation – what it means for your business? Sinead Whyte, Associate, Arup

2. What it means for your business? 2 1.Greenhouse gas effect 2.Climate change effects 3.Climate legislation / obligations 4.Impact on business 5.Emissions trading scheme 6.Conclusions Contents

3. What it means for your business? Greenhouse gas effect 1

4. What it means for your business? 4 The greenhouse gas effect (Source IPCC 2007)

5. What it means for your business? Climate change effects 2

6. What it means for your business? 6 Carbon dioxide emissions through burning fossil fuels; Methane and nitrous oxide emissions from agriculture; Emissions through land use changes. Sources of climate change

7. What it means for your business? 7 Mean temperature increase of 0.7o C between 1890 and 2008; The increase was 0.4o C during the period 1980- 2008; Six of the ten warmest years in Ireland have occurred since 1990; A reduction in the number of frost days and shortening of frost season length; An increase in annual rainfall in northern and western areas with decreases or small increases in the south and east. Climate change - Ireland

8. What it means for your business? 8 Sea level rise Global sea level rose about 17cm in the last century. Global temperature rise the 20 warmest years having occurred since 1981 Warming oceans The oceans have absorbed much of this increased heat Climate change - Globally Shrinking ice sheets The Greenland and Antarctic ice sheets have decreased in mass. Declining Arctic sea ice Extreme events Decreased snow cover

9. What it means for your business? 9 Global temperature v CO2

10. What it means for your business? Climate legislation / obligations 3

11. What it means for your business? 11 Kyoto Protocol; EU Effort Sharing Decision (Decision No 406/2009/EU) for the years 2013-2020; EU Climate and Energy Framework; COP21; EU Energy Roadmap 2050; Climate Action and Low Carbon Development Act 2015; Emissions Trading Scheme (ETS). Legislation / obligations

12. What it means for your business? 12 First international agreement in which concluded a verifiable agreement to reduce GHG emissions; Sets binding targets to cut the greenhouse gas emissions by 5% on 1990 levels by 2008-2012; Ireland is required to limit total national greenhouse gas emissions to 13% above Ireland’s 1990 baseline value; A legal agreement; Introduces ETS. The Kyoto Protocol

13. What it means for your business? 13 Kyoto Protocol compliance

14. What it means for your business? 14 COP18 in Doha, Qatar in December 2012 included new commitments for the second period (2013-2020); Parties committed to reduce GHG emissions by at least 18 percent below 1990 levels from 2013 to 2020; EU Effort Sharing Decision (Decision No 406/2009/EU) binding targets to reduce non-ETS emissions by 10% relative to 2005 levels in the period to 2020; Annual limits set; Penalty added to following year if annual allocation exceeded. EU Effort Sharing Decision

15. What it means for your business? 15

16. What it means for your business? 16 EU Effort Sharing Decision Compliance Source: EPA, Greenhouse Gas Emission Projections to 2020 – An update

17. What it means for your business? 17 Sectoral breakdown Projected sectoral share of non-ETS greenhouse gas emissions in 2020 for the With Additional Measures scenario Source: EPA, Greenhouse Gas Emission Projections to 2020 – An update

18. What it means for your business? 18 EU leaders agreed a 2030 policy framework in October 2014; Greenhouse gas reduction target of at least 40% compared to 1990; No agreement has yet been reached on the contribution of individual EU Member States; the new EU targets will not be translated into national binding targets through EU legislation; Would equate to a 29MtCO2eq limit for Ireland. EU Climate and Energy Framework 2030

19. What it means for your business? 19 EPA projections to 2035 EPA - Ireland’s Greenhouse Gas Emission Projections 2014-2035, May 2015

20. What it means for your business? 20 The low-carbon economy roadmap suggests that: By 2050, the EU should cut emissions to 80-95% below 1990 levels; Milestones to achieve this are 40% emissions cuts by 2030 and 60% by 2040; All sectors need to contribute; The low-carbon transition is feasible & affordable. EU Energy Roadmap 2050

21. What it means for your business? 21 COP21

22. What it means for your business? 22 Governments agreed a long-term goal of keeping the increase in global average temperature to well below 2°C above pre-industrial levels; to aim to limit the increase to 1.5°C, since this would significantly reduce risks and the impacts of climate change; on the need for global emissions to peak as soon as possible, recognising that this will take longer for developing countries; to undertake rapid reductions thereafter in accordance with the best available science. COP21

23. What it means for your business? 23 Provides the tools and structures to transition towards a low carbon economy through: a national mitigation plan (to lower Ireland’s level greenhouse emissions); a national adaptation framework (to provide for responses to changes caused by climate change); and tailored sectoral plans (to specify the adaptation measures to be taken by each Government ministry) Establishment of Advisory Council Climate Action and Low Carbon Development Act 2015

24. What it means for your business? 24 Relevant bodies to have regard to: the most recent approved national mitigation plan; the most recent approved national adaptation framework and approved sectoral adaptation plans; the objective of mitigating greenhouse gas emissions and adapting to the effect of climate change in the State. Climate Action and Low Carbon Development Act 2015

25. What it means for your business? 25 New legislation is to be welcomed; Provides a framework in which public policy is required to address the issues of climate change and greenhouse gas emissions; Act composed of tools, not targets; Key role for policy makers and stakeholders; Will assist in Ireland’s ability to meet COP21 obligations and EU targets; Can lead to measures to generate investment in renewable energy, clean technology and sustainable transport and agriculture. Climate Action and Low Carbon Development Act 2015

26. What it means for your business? Impact on business 4

27. What it means for your business? 27 Non-ETS emissions need to be reduced! Carbon emissions previously considered outside scope of planning applications; Impact assessment on carbon emissions should now be prepared; Mitigation measures to offset emissions proposed or minimise emissions; Future investment – low carbon; Requirements will be clearer once plan/framework completed. Impact on business - non-ETS

28. What it means for your business? 28 28 28

29. What it means for your business? Emissions trading scheme 5

30. What it means for your business? 30 Launched in 2005; Puts a price on carbon – promotes investment in clean, low- carbon technology; Operates in the 28 EU countries plus Iceland, Liechtenstein and Norway; Limits greenhouse gas emissions from: o More than 11,000 heavy energy-using installations in power generation and manufacturing industry; o Operators of flights to and from the EU, Iceland, Liechtenstein and Norway; Covers around 45% of the EU’s greenhouse gas emissions; Managed in Ireland by EPA. Emissions trading scheme (ETS)

31. What it means for your business? 31 Schedule 1 of S.I. No. 490/2012 - European Communities (Greenhouse Gas Emissions Trading) Regulations 2012 Combustion of fuels in installations with a total rated thermal input exceeding 20 MW (except in installations for the incineration of hazardous or municipal waste) ETS – Industries included

32. What it means for your business? 32 2005-2007: 1st trading period Establishment of the world’s biggest carbon market; the number of allowances, turns out to be excessive; the price of first-period allowances falls to zero in 2007. 2008-2012: 2nd trading period. The number of allowances is reduced by 6.5%; Economic downturn cuts emissions and demand; Surplus of unused allowances and credits which effects carbon price; Aviation brought into the system. EU ETS: Development in phases

33. What it means for your business? 33 2013-2020: 3rd trading period Major reform takes effect; introduction of an EU-wide cap on emissions (reduced by 1.74% each year); progressive shift towards auctioning of allowances in place of cost-free allocation. EU ETS: Development in phases

34. What it means for your business? 34 2021-2028: 4 th trading period Reduction of emissions by 43% compared to 2005; Overall number of emission allowances will decline at an annual rate of 2.2%; Equates to 556 million tonnes over the decade; Revises the system of free allocation to focus on sectors at highest risk of relocating their production outside the EU; A considerable number of free allowances set aside for new and growing installations; Phase out free allocation by 2027. EU ETS: Development in phases

35. What it means for your business? 35 Businesses must monitor and report their ETS emissions annually; Emissions report must be checked by accredited verifier; Enough allowances to cover emissions must be surrendered; Penalty if business does not surrender enough allowances to cover emissions; €100 per tonne of CO2; If allowances have to be bought, name of business published Compliance with ETS

36. What it means for your business? 36 UK non-compliance CompanyPenalty (£) JCB Ltd.157,600 Bahrain Royal Family60,700 Midroc Aviation56,640 Embraer SA52,137 AIG24,076 Jet Airways14,716 DJT Operations1,611

37. What it means for your business? 37 Tighter limits, less allowances proposed; Lower threshold likely; ETS emissions need to be reduced! Future investments – low carbon Impact on business - ETS

38. What it means for your business? Conclusions

39. What it means for your business? 39 More consideration required of climate change; Emissions need to be mitigated; Forward thinking on low-carbon investment; Lower ETS allowances on the horizon; More facilities will be included in ETS; Business planning and decision making need a carbon focus; Non-compliance will hit us all business-wise and personally. Conclusions

40. What it means for your business? 40

41. What it means for your business? Any questions?