DSM calls for major overhaul of emissions trading scheme
product produced, rather than by manufacturing plant,
Netherlands-based DSM said yesterday.
DSM also called for the set up of an overarching EU regulatory agency to enforce the CO2 emissions limits established for each member country by the European Commission. The proposals were outlined yesterday by Jan Zuidam, deputy chairman of DSM's managing board, who also unveiled a report detailing the company's efforts at cutting down its manufacturing impact on the environment. The report outlines the tactics one of the largest food ingredients and chemicals companies in the world is taking to meet consumers' demands for more sustainable production. DSM's policy is to improve its energy efficiency worldwide by five per cent by 2010 relative to 2005. DSM based the target on the principle that all of its sites worldwide should meet the environmental standards that apply in the EU or the US. The EU's Emissions Trading Scheme (ETS) is part of the bloc's plan to reduce greenhouse gas emissions to meet international commitments under the Kyoto Protocol. The "cap-and-trade" scheme, which took effect from January 2005, sets limits on each manufacturer's CO2 outputs. Companies can then to buy and sell CO2 emissions rights according to need on specially constructed Internet sites. Plants that emit more CO2 than their allocation need to buy allowances to cover the extra emissions. Companies that emit less than their allocation are able to sell the allowances to companies that need them. Under the system the Commission firs set country limits. Then each country allocates emission rights to particular plants and companies. But DSM finds that the ETS system is an impediment rather than a useful tool in reducing CO2. "Efficient plants that reduce their emissions do not benefit from this because it means they will be granted fewer rights in the next allocation round," Zuidam said. "At the same time, inefficient plants with higher emissions will be granted higher emissions allowances" DSM claimed to have developed a method to make sure that the overall emissions ceiling in Europe will not be exceeded. "However, in order for this to work, the allocation of emission rights should be managed at the European level," Zuidam said. "We would therefore welcome the establishment of a European Emissions Agency." DSM estimates its energy use worldwide generates about five million tonnes of CO2 emissions per year. The company said that over the past 25 years the company has increased its energy efficiency by about one per cent per year on average. This means that today, 25 per cent less energy is needed than in 1980 to make the same product, the company said. "Benchmark studies have shown that DSM's Dutch-based plants rank among the most energy-efficient in the world," the company claimed. The company's plants emitted an estimated 10.25 million tonnes of greenhouse gases last year, compared to 10.5 million tonnes in 2005, the company said. In 2006, the company began projects at three sites to analyse its energy and raw-materials use. The programme was expanded this year to a number of other sites, the company said. Elsewhere the company claimed it made major emissions reductions in China. "We are well on track to achieving the targets for emissions of respirable dust, nitrogen dioxide and sulfur dioxide to the atmosphere, COD (chemical oxygen demand) emissions to water, energy use and non-hazardous solid waste volumes," the report stated. The company has started projects to reduce the emission of volatile organic compounds and found it had made insufficient progress in reducing nitrogen dioxide emissions to the atmosphere and in the landfilling of hazardous solid waste. Additional measures will be made to improve the record on nitrogen dioxide, the company said. DSM had 22,156 employees worldwide in 2006. The food processing industry is energy consumer and discharger of greenhouse gas through its reliance on cooking, refrigeration, freezing and air compressor systems. ETS is mandatory for food and drink companies operating combustion installations with a rated thermal input exceeding 20 MW. The importance of the scheme for the food and drink sector is reflected in the fact that, for instance, in France 13.6 per cent of all ETS installations are food and drink sites.
