Carbon Market –Sahateollisuusmiesten kokous
11.04.2019Mika Anttonen, St1
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The Global Energy Challenge
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Energy Demand (Mtoe)
New Policies Scenario
Fuel 2017e 2025 2030 2040
Coal 3 750 3 768 3 783 3 809
Oil 4 435 4 754 4 830 4 894
Gas 3 107 3 539 3 820 4 436
Nuclear 688 805 848 971
Hydro 353 415 458 531
Bioenergy 1 384 1 590 1 691 1 851
Other renewables 254 516 736 1 223
Total 13 972 15 388 16 167 17 715
IEA World Energy Outlook 2018
Source BP Energy Outlook – 2016 edition
Growth in Renewable Energy needs to be >10 times higherthan today
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©BP p.l.c. 2019
To stay within the Carbon Budget of 580 Gt the use
fossil energy needs to halved every decade
The annual growth of RE in primary energy consumption would have to be
~760 Mtoe between 2020 and 2030. In 2017 it was only 69 Mtoe.
?
1) IEA WEO 20182) Calculation: The growing energy need and halving the use of fossil energy use every decade would be covered by
incremental renewable energy
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Global Energy investments (USD billion)
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IEA World Energy Investment 2018 https://webstore.iea.org/download/direct/1242?fileName=WEI2018.pdfIEA World Energy Investment 2017 https://webstore.iea.org/download/direct/225?fileName=WEI2017.pdfIEA World Energy Investment 2016 https://webstore.iea.org/download/direct/235?fileName=WEI2016.pdf
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200
400
600
800
1000
1200
Fossil Nuclear Renewables Electricity networks Energy efficiency
Energy investment 2015 - 2017 (USD billion)
2015 2016 2017 ©IEA
Fossil CO2 emission reach all time high in 2018
Balancing Global Carbon Cycle
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Image St1 Oy
White numbers are annual carbon fluxes in gigatons.
Yellow numbers indicate stored carbon in gigatons.
1 Gt = 1 billion tonsBtC = Billion tons of carbon
Note!• Probably the biggest source of
confusion and errors in climate discussions concerns “carbon” versus “carbon dioxide
• One ton of carbon equals 3.67 tons of CO2
• The central climate number is the atmospheric concentration of carbon dioxide (~ 400 parts per million, ppm)
Sources: Earth System Science Data - Global Carbon Budget 2017; Pan et al. 2011; Clais et al. 2013 *calculated from the sources1) Since ppm measuring has started in 1959, the increase of carbon in atmosphere is 185 BtC
Yearly carbon increase 4,81) (2017),
(~17,6 Gt CO2)
Atmosphere 850*
Carbon debt, reduction need 1851)
(~680 Gt CO2)
The challenge – oil refining products
Crude oil refining produces always the same oil products:
• light distillates, middle distillates, heavy distillates and residuum
• i.e. if you produce Jet fuel, the process produces the other products as well
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Liquefied petroleum gas
Jet fuel
Heavy fuel oil
Lubricants
Diesel oil and light fuel oil
Petrol
PreheatingBitumen
Crude oil
What should be done? Cut down carbon dioxide emissions at maximal speed• Completely dependend on the renewable energy investment capabilities, the progress limited by
• Engineering & Financial resources• Bottlenecks in technology• Compatibility with the old energy system• Regulation
Carbon Sequestrating from atmosphere• Increasing the amount of biological carbon sinks through photosynthesis• Afforestation and new cultivation methods• New technologies capturing CO2 from atmosphere and using solar power to produce hydrogen from water. The combination results methane or synthetic liquid fuels
and oxygen
R&D to remove the bottlenecks of energy system• Electricity and heat storage systems in industrial scale• Separation from the problematic crude distillation curve – bio crude oil and replacing solutions for the refined oil products
Scale down current Western consumer behaviour towards more sustainable way of life • Raising awareness• Regulation
To create Market-based market place for sequestered and emitted CO2
• Carbon Market, where the emitting companies will pay and carbon sequestering companies will get income to finance renewable energy investments
Measuring• All emissions and carbon sequestration activities must be under common measurement standard, which is prerequisite for a working Carbon Market
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Renewable energy developments
by controlled exploitation of CO2 cycles
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CO2
H2
N
Methane
Methanol
Dimethyl ether
Sustainable
new materials
Ammonium
Sustainable
fertilizer supplies
Synthesis
SynthesisEnergy
production
Electricity
Heat
Cool
Balancing
Water
Electrolysis
CO2
capture
O2
Air
Seawater
Industry
Electricity - Solar & Wind, Batteries, Storage
Strategic modelling of global transition of technologies, by country on an hourly level
Nitrogen
capture
System Efficiency and Grid Management
Energy
storage Fuels
Storage
Transpor-
tation
Car
Heavy trafic
Marine
Air trafic
Market place for carbon removed from the atmosphere
Third party verification
Market-basedpricing
Scientific verification of carbon removal claims
Market placefor carbon
CRC (Carbon Removal Credit) traceability ensures the authenticity and traceability of carbon credits
DEMAND(emissions)
SUPPLY(carbon sequestration)
Scientific verification
of produced emissions
Third party verification
Afforestation
Agriculture and agroforestry
Carbon capturetechnologies
Other carbonbinding projects
(e.g wetlandrestoration)
Project A
Project B
Company
A
Company
B
Company C
Producer
A
Producer
B
Producer
C
Consumers
Companies in mandatedsectors (e.g)
Other companies
Fuel
distributors
and
transportation
Electricity
producer
EUREUR
EUR
EUR
CRC
CR
C
CRC
CRC
Finland, Nordic countries and EU have a Billion euro opportunity to create and commercialise Carbon
Market and Carbon Sink concepts - includingstandardized measurement system.
That would be the responsible way for Europe to demonstrate leadership and to show example.
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Link to video: Carbon Farming
Let's make Sahara green again
Image http://clubofmozambique.com/news/southern-africa-join-great-green-wall-august-30-2016/
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The Global Energy Challenge
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1) UN News World Population Prospects: The 2017 Revision2,3) BP Energy Outlook – 2019 edition https://www.bp.com/en/global/corporate/energy-economics/energy-outlook.html ©BP p.l.c. 2019
©UN
©BP p.l.c. 2019
”Showing example” inside the EU is just not enough
Allowing CO2 abatement actions outside the EU is needed
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1)
3.9 Gt CO2-eq2)
1) Global Carbon Project, Global Carbon Budget 2017: http://www.globalcarbonproject.org/carbonbudget/17/files/GCP_CarbonBudget_2017.pdf2) European Environment Agency: https://www.eea.europa.eu/data-and-maps/indicators/greenhouse-gas-emission-trends-6/assessment-13) IEA, World Energy Outlook 2018, Current Policies Scenario
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EU Emissions 2017e Growth of global emissions w/o EU 2030vs. 2017
Gt CO2Growth of global emissions vs. EU 2017e
3)
2)
3,9 Gt CO2-eq
Growth 2025 vs. 2017
Growth 2030 vs. 2025
Carbon sinks are both imperative and cost effective
Electric Vehicles
Biofuels
~400 -6004) €/tCO2
Measure Cost per abated tCO2
EU Emission Trading (ETS)
225- 4003)
€/tCO2
~201) €/tCO2
14.11.2018 Eduskunta turvallisuuden tekijänä -keskustelu15
1) eex: https://www.eex.com/en/market-data/environmental-markets/spot-market/european-emission-allowances#!/2018/11/292) St1 own analysis for Carbon Farming project. Several sources.3) Current market price for HVO in the Nordic market, Actual offer for 225 €/tCO2 and by market intelligence estimated price span for 20304) Integrated Fuels and Vehicles Roadmap 2030+ (Roland Berger, April 27, 2016): The societal cost for long-range BEVs across different personnel vehicle segments5) European Environment Agency: https://www.eea.europa.eu/data-and-maps/indicators/greenhouse-gas-emission-trends-6/assessment-16) Natural climate solutions, PNAS: http://www.pnas.org/content/114/44/116457) Global Energy Transformation: A Roadmap to 2050, IRENA: file:///C:/Users/MIAHO/Downloads/IRENA_Report_GET_2018.pdf8) Electric Vehicle Outlook 2018, BloombergNEF: https://about.bnef.com/electric-vehicle-outlook/#toc-download
CO2 abatement potential
LULUCF 50-2002) €/tCO2CO2 abatement potential globally23,8 Gton/a CO2-eq by 20306)
CO2 reduction 2016 actual vs. 2030 cap in the EU 0,374 Gton/a CO2-eq by 20305)
CO2 abatement potential globally 2,3 Gton/a CO2-eq (720 Mtoe/a by 20507))
CO2 abatement potential globally 1.2Gton/a CO2-eq (365Mtoe/a by 20408))
Carbon Market is needed to achieve Carbon neutral EU by 2050
SetCO2 emission
reduction obligations to
companies
Allow CO2
reduction activities across
the sectorsand in the 3rd
countries (incl. carbon sinks)
Carbon Market: Create a market
place for emitted and sequestrated
CO2
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Inside the EU a minimum CO2 reduction level to be set, with the emphasis on globally scalable measures and technologies
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