1. Greenhouse Gas reporting and reduction mechanism
COM (2007) 18 – Article 7a
Stakeholder meeting
29 May 2007
European Commission

2. Climate Change - Background
‘Urgent action’ required to limit mean global temperature rise to +2°C
EU Target to reduce GHG emissions 30% by 2020 (if other developed countries do the same). At least 20%. 60% by 2050
50% EU emissions already covered by EU ETS – (cement, paper, wood, combustion, refineries…)

3. EU Transport GHG emissions
21% of EU emissions – rising at 1.7% p.a.
98% dependent on fossil fuels
Aviation, cars, fuels……….
Lifecycle Transport Fuel emissions are currently approximately 1000 Mt CO2e

4. European Transport GHG Emissions

5. Transport GHG emissions
1.7%
Kyoto
Agreed
2.0%
1.0%

6. GHG reduction mechanism - rationale
Transport fuel contribution by reducing carbon intensity - net increase in GHG emissions
Recognises reductions from transport will be more modest and later than other sectors
To ensure changes in fuels (e.g. tar sands, biofuels, coal to liquid etc.) don’t lead to increases in carbon intensity
Holistic approach – Well to Tank
Maximum flexibility

7. Scope
Extraction (includes flaring)
Transport
Processing
Fuel composition (e.g. additives)
Distribution

8. Quantification Monitoring and reporting
Obligation is on ‘suppliers’ (MS) level
Single, simple methodology defined at EU level
Already an obligation for refineries under EU ETS
Methodologies under development (e.g. UK/NL)
Default values where appropriate (suppliers could provide actual data if preferred)
From 1/1/2009
Verification obligation on MS

9. Reductions Reductions from 1/1/2011 10% by 2020
1% of 2010 emissions p.a.
Flexibility over years
Joint reporting

10. How reductions can be achieved?
Flexibility - suppliers are free to reduce GHG in any way e.g.
Biofuels – e.g. 10% by 2020
Improvement in efficiency (e.g. refineries)
Carbon Capture and Storage – significant potential
Reduced flaring

11. Other reduction options
Use of low carbon H2
Increasing use of co-generation
Use of process waste heat
Fuel composition
“Total also intends to provide customers with a range of “energy-saving” products…these motor fuels reduce vehicle fuel consumption…..they reduce CO2 emissions by as much as 5%...”
Innovation…..

12. 1% reduction in CO2 intensity
1% reduction is 10 Mt per year
10 years BAU improvement in EU refineries (upper end of range)
Reducing global flaring by 3%
CCS of 7% of EU refinery emissions (8 projects like BP Peterhead)
1.1% high GHG saving biofuel
3% low GHG saving biofuel
NG replacing ≈ 10% refinery fuel

13. Relation with EU ETS FQD 7a does not effect ETS operation
The scheme will stimulate higher cost reduction options within refineries
Allowances from required FQD emission reductions in refineries could be cancelled

14. Parallel developments in USA
Potential for synergy with (evolving) CA/USA scheme
Same level of ambition
Same timescale
Possibility of CA scheme becoming US wide
EU/CA cooperation on methodologies

15. Thank you for your attention