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Energy Efficiency and Climate Change News: 4 - 10 Feb 2011

1. General policy
2. Industry, business and utilities
3. Buildings
4. Appliances, equipment and lighting
5. Transport
6. Emissions trading/Carbon market
7. Climate change negotiations
General Policy
EU leaders rule out binding efficiency target

Friday’s EU Accord acknowledged that countries are not on track to meet the energy efficiency
target of 20% improvement by 2020 (more likely 9%) but did not make the commitment binding nor
introduce any new measures to secure its achievement. The Accord encourages Members to
consider energy efficiency in procurement and did note that more detailed measures are needed to
address existent policy failures, providing that these would be announced in a later energy efficiency
action plan. They agreed progress towards meeting the 20% goal will not be reviewed until 2013.

EU Leaders Take Steps to Curb Fossil Fuel Habit

The accord resulting from last Friday’s EU Summit highlights improving the EU’s energy
infrastructure as the crucial step in reducing the EU’s reliance on foreign energy imports. While the
economic crisis has meant that the EU is already close to its 2020 emissions reductions target,
investment needs to increase ten-fold, with emphasis on creating a high-tech power grid to support
renewables, smart grids and electric vehicle charging needed if the EU is to remaining competitive
against other advancing countries such as the US, China and Brazil. While stating these ambitious
goals and strong support for renewables in order to meet the 2050 emissions reduction target of 80-
95 percent, the Accord also validates nuclear and shale gas exploration and failed to address energy
efficiency commitments.

EPA official says cap and trade won't be part of forthcoming CO2 rules

The EPA has assured concerned US utilities that the upcoming climate regulations will not include
cap and trade but will rather set a carbon floor for the best available technology to control emissions
from power plants. The New Source Performance Standards (NSPS) will apply only to oil refineries
and power plants and only for new builds or where renovations are being carried out. Utilities are
still calling for better incentives and for flexibility for the varying circumstances of each plant.
Parliament backs ambitious e-waste policy

The new EU directive on Waste from Electrical and Electronic Equipment (WEEE) received strong
support last week, with parliament resolving to broaden the equipment categories, set a collection
target of 85% of all electronic waste produced as from 2016, a 50-75% recycling target (depending
on the category) and a new 5% re-use goal. Discussions covered making countries responsible for
reaching targets, sharing the financial burden currently carried by local councils, national registration
and reporting obligations for producers and measures to prevent illegal export of ‘e-waste’ to
developing countries. Environment ministers will discuss further details of collection modalities,
targets and funding over the next month before the second reading of the recast directive.

House Republicans Push Energy and Science Cuts

A congressional Republican spending plan released on Wednesday proposes imposition of

immediate cuts averaging 15 percent to the domestic budget in a bid to reduce the deficit deepened
by the economic crisis. Major cuts would seriously impact Obama’s clean energy plans, cutting 30%
from the EPA, 30% from scientific research, scrapping an array of clean energy projects and wiping
Obama’s high-speed rail proposal entirely. The budget proposal will face strong democratic
opposition and is likely to engage a difficult debate in Congress before funding expires on 4 March.

Australian Disasters Spark Call For Climate Action

Following the dramatic effects of Cyclone Yasi on Australia’s East coast over recent weeks, the
architect of its stalled climate change policy is calling for renewed action to mitigate Australia’s
emissions which are among the highest in the world per capita, largely due to its strong reliance on
coal. Options such as carbon tax and a carbon trading scheme have been explored in Australia, and
while firm commitments have hitherto not been forthcoming, Prime Minister Julia Gillard now says
that carbon pricing will receive particular attention from the Australian government.

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Industry, business and utilities

UK Government launches review of feed-in tariffs

One year into the UK feed-in tariffs scheme (FITs) designed to support small scale domestic feed-in
of solar energy, the government is launching a review to check whether larger scale (over 50 kW)
solar installations are absorbing too much funding. The scheme, which now includes 21,000
renewables installations contributing over 76 MW in capacity, is facing a 10% reduction in the costs
which has prompted the review set to also cover tariff levels and technology eligibility. Tariffs will
remain unchanged until April 2012 but the review threatens to cause market uncertainty,
particularly for medium-sized non-domestic installations, such as hospitals and schools.

UK carbon tax would not cut wider emissions, report warns

A recent report issued by the London School of Economics and Political Science (LSE) warns that,
while the UK government’s current plans to introduce a carbon floor through a tax payable by power
generators on their carbon emissions will certainly help the UK meet its national GHG reduction
targets, these emissions will simply go elsewhere. Unless the UK works with the EU to reduce the
EU-wide emissions cap, reduced emissions saved in the UK will simply lower the EU carbon price
allowing other EU countries to purchase the unused credits more cheaply for their own emissions.

Carbon Trust Standard dishes out 500th green label

500 British companies are now included in the UK scheme which awards a stamp of approval for
carbon cutting efforts for businesses who have pledged to reduce their collective footprints by more
than 43m and commit to reporting and reducing their carbon emissions. Motorola, Mothercare and
British Land are the latest to join, British land having installed smart meters in all of its properties
and the other two setting themselves emissions reductions targets.

'Green bonds' seen among Europe's options for paying hefty, $3.93 trillion bill for clean energy –

The major investment needed to meet EU carbon emissions targets is likely to put significant added
pressure on already struggling private-sector financing and public financial markets. A recent study,
which assesses the relative financial investments needed to support different clean technology
development, also proposes creating a special financial product to turn debt into a security contract
which would be backed by the clean energy infrastructure it financed. This ‘green bond’ concept
could offer an opportunity to turn environmental debt into a tradable commodity.’

Grave concerns as cremation heating plan is approved

An innovative concept has been approved in Redditch England to capture waste heat from a local
crematorium and channel to heat the swimming pool at a neighbouring public leisure centre. The
plan should save the local authority than £14,000 a year. Despite some concerns about insensitivity
of the project, the council is going ahead with this energy-efficiency initiative, using technology
pioneered in Sweden.

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Hungary pushes for revision of TEN-T policy

One of Hungary’s goals for its presidency of the EC is to reach a council agreement making “radical
and comprehensive changes” to the Trans-European transport network (TEN-T). The proposed
changes to the delivery network will struggle against the limited funding allocated for infrastructural
improvements and the green group T&E is taking the opportunity to insist that any new policy must
encourage sustainable transport projects by offering co-financing rates for proposals with better
environmental and carbon performance.

Ethanol blend goes to the races

NASCAR, the organiser of the Daytona 500, is going green, increasing recycling at its events,
introducing a solar powered track and, most recently, announcing that cars this year will run on a 15
percent ethanol fuel blend. Motivated by positive results of NASCAR research, the US Association of
Corn Growers supports this publicity boost for ethanol biofuels, which should go a long way to
challenge the opinion stated in the automotive industry that they damage engines and cannot
support high performance driving.

Bill aims to recoup gas tax revenue from EV drivers

US Senators are set to make a second attempt to introduce a Bill this week proposing a gas tax on
drivers of electric vehicles, designed to recoup lost fuel taxes which are applied to maintain roads
and highways on the basis that EV drivers will also damage these roads. The tax would be about USD
100 per annum, about half what regular car drivers pay. Critiques say that the proposal is not fair
and equitable and argue any tax should be based on mileage rather than a flat fee.

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Emissions trading/Carbon market

Five CO2 registries reopened on Friday morning

Spot trading on the EU carbon market resumed as registries in UK, France, Germany, the
Netherlands and Slovakia were the first to receive permission to reopen last Friday. 14 registries,
notably in Eastern Europe remain vulnerable to similar attack and have still more work to do before
they can be reopened. Criminal investigations into the thefts are now underway in Member
countries although some concern exists over the lack of a harmonized approach to dealing with
perpetrators, the innocent buyers of stolen credits and the return of or compensation for stolen
credits. Several calls for an independent regulatory body to take over management of the trading
system have been made reflecting doubt as to the EC’s ability to do so.

Austria refuses to identify stolen carbon credits

Market traders are unsatisfied with Austrian government assurances that the some 500,000 EUAs
stolen from their registry have been frozen where they were located in accounts in Liechtenstein
and Sweden and will be safely integrated back into trading. Austria is resisting a call from traders on
the spot market, who are currently reluctant to resume trading, for a list of the serial numbers of all
stolen EUAs to be published. While many stolen credits remain lost or unprotected, more registries
are likely to reopen this week which may help boost very slow current trading.

Bulgaria allowed to trade Kyoto credits again

The UNFCCC compliance committee has lifted the seven-month ban against international carbon
trading placed on Bulgaria last year for breaching Kyoto protocol's rules on greenhouse gas reporting
after Bulgaria evidenced significant reforms made to its GHG inventory system.

Korea’s carbon trading plan losing momentum

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Climate change negotiations

Korea’s carbon trading plan losing momentum

President Lee Myung-bak’s green growth plan is facing strong opposition from business afraid of
limits to economic growth and competitiveness, especially in light of the retreat from such plans
demonstrated by rival markets in Japan and US. As a result the cap and trade system which was to
commence in 2013 and was key to the new Bill, will now be revised prior to tabling at the National
Assembly. A greater number of free carbon allowances are expected to be added as well as delayed
start date.
World Bank post-2012 fund reaches target

The World Bank carbon fund which is intended to buy certified emission reductions (CERs) from
climate change mitigation projects in developing countries post-2012 has reached its goal of €105
million after a rush of funding was received from Deutsche Bank, Enel Trade, GDF Suez and the
Swedish Energy Agency. In the face of uncertainty for the carbon market following the expiry of first
commitment period under the Kyoto Protocol, this funding will support the liquidity of the market.

Sweden's green investments in developing countries to be improved

The Swedish Energy Agency is investigating the effectiveness of Swedish investments in climate
change mitigation projects in developing countries made via the Clean Development Mechanism
(CDM) under the Kyoto Protocol. They have been tasked, in particular, to ensure that the measures
are ones which would not otherwise have taken place and develop better reporting and monitoring
systems of GHG reductions and costs as Sweden considers the potential to increase the number of
countries in which it is making climate change mitigation investments via the CDM.

Engineers warn climate adaptation is vital to UK's economic health

A new study carried out the an alliance of engineering firms tasked by the government to investigate
the UK’s ability to cope with climate change, states that major opportunities exist for the UK to offer
innovative adaptation technologies and services in countries more vulnerable to climate change
effects, but making the most of this opportunity depends on reinforcing the resilience of local UK
infrastructure to avoid overburdening the economy under the weight of dramatic weather patterns.
This is one of the first of over 90 reports sought by the government in preparing its upcoming
climate adaptation strategy.

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