Shell, ChevTex to benefit from UK emissions proposal
Author: Neil Chatterjee
The UK's Petroleum Industry Association Limited (PIAL) said most UK refineries had been given unrealistically large emissions cuts to make, but Shell 's Stanlow refinery and ChevronTexaco 's Pembroke plant had been allowed to increase their emissions.
"These are curious increases, and quite substantially above their historic levels," Ian Mcpherson of PIAL, which represents all main oil refining and marketing companies in the UK, told Reuters.
Britain said on Monday it would cut its carbon dioxide (CO2) emissions in excess of its obligations under the United Nations Kyoto Protocol on climate change, prompting protests from industrial consumers which fear this would lead to higher electricity costs. Greenhouse gases are blamed for contributing to global warming.
Shell's 262,000 barrels per day (bpd) Stanlow plant in central England and ChevronTexaco's 210,000 bpd Pembroke plant in Wales are two out of 11 UK refineries and around 1,500 installations for which the government has set CO2 emissions limits.
No explanation has been provided for why the two plants have been given more emission allowances than others. The government says it will not comment on individual cases.
Under an EU-wide trading scheme from 2005, companies that do not meet their targets will be allowed to buy carbon allowances from those which emit less than they are allowed.
ALLOWANCES TO BE REVISED
PIAL said earlier this week it was looking for a meeting with the Department of Environment, Farming and Rural Affairs (DEFRA) to discuss inconsistencies in how allowances had been calculated.
"They have opened a consultation and this is a first draft based on data from operators such as refiners," said a spokeswoman from DEFRA. "They're going to have to resubmit - the figures will be revised before the final version."
A spokeswoman for ChevronTexaco said there were inaccuracies in the UK proposals which needed to be addressed to ensure consistency, while a Shell spokesman said the company backed the overall direction the UK government was taking in regard to Kyoto.
PIAL said ChevronTexaco 's plant had been allocated 2.364 million tonnes of carbon dioxide emissions a year between 2005-2007, while Stanlow had been given 3.968 million tonnes per year.
If the companies have excess allowances they can sell them on the open market, with EU allowances changing hands at around 13 euros ($16.43) a tonne.
PIA said overall the emissions proposal could damage the UK refining sector. It said the government had also not taken account of tougher EU environmental legislation set to come into force, which compel refineries to produce cleaner fuels.
"One problem with refining is that we're looking at a rising trend of having to make sulphur-free fuels, as you need more energy to take the sulphur out and so this requires more CO2 emissions," Mcpherson said.
EU rules call for 50 parts per million (ppm) sulphur content in motor fuels by 2005 and 10ppm by 2011, although most of northwest Europe has already moved to 50ppm. Sulphur is blamed for acid rain and lung disease.