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					Abating CO2 in Energy
 Intensive Industries

        Katharina Grave


  Institute of Energy Economics
       Cologne, Germany
      Agenda

1. Aim
2. Theoretical Approach
3. Quantifying Abatement Potentials
4. Implementation
5. First Results


               0
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne     2
Saturday, 9 October, 2010
      Aim

      Analyse the structure of the “other half“
      of the emissions covered by the
      European Emission Trading System and
      quantify CO2-abatement potentials
      outside the energy sector



                                         1
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne     3
Saturday, 9 October, 2010
       Theoretical Approach:
       Analysing CITL
 Combustion [1]

 Refineries [2]                                                     The main category:
 Iron & Steel [3;4;5]                                               Combustion
 Cement [6]

 Glass [7]

 Ceramics [8]

 Pulp & Paper [9]

 Other [99]




Verified Emissions 2009



                                                                2
 9th Conference on Applied Infrastructure Research (INFRADAY)
 Katharina Grave
 Institute of Energy Economics at the University of Cologne                              4
 Saturday, 9 October, 2010
       Theoretical Approach:
       Analysing CITL
 Combustion [1]

 Refineries [2]
                                                                    main industrial emitters:
 Iron & Steel [3;4;5]                                               iron and steel,
 Cement [6]

 Glass [7]
                                                                    cement,
 Ceramics [8]                                                       and refining
 Pulp & Paper [9]

 Other [99]




Verified Emissions 2009



                                                                2
 9th Conference on Applied Infrastructure Research (INFRADAY)
 Katharina Grave
 Institute of Energy Economics at the University of Cologne                                     5
 Saturday, 9 October, 2010
       Theoretical Approach:
       Analysing CITL
 Combustion [1]

 Refineries [2]
                                                                    main industrial emitters:
 Iron & Steel [3;4;5]                                               iron and steel,
 Cement [6]

 Glass [7]
                                                                    cement,
 Ceramics [8]                                                       and refining
 Pulp & Paper [9]

 Other [99]


                                                                    Problem:
                                                                    Combustion is also a
Verified Emissions 2009                                             main process in the
                                                                    industrial sector

                                                                2
 9th Conference on Applied Infrastructure Research (INFRADAY)
 Katharina Grave
 Institute of Energy Economics at the University of Cologne                                     6
 Saturday, 9 October, 2010
       Theoretical Approach:
       Analysing CITL
 Combustion [1]

 Refineries [2]

 Iron & Steel [3;4;5]

 Cement [6]

 Glass [7]

 Ceramics [8]

 Pulp & Paper [9]

 Other [99]




                                                                    What part of it
Verified Emissions 2009
                                                                    belongs to the
                                                                    industrial sector?
                                                                2
 9th Conference on Applied Infrastructure Research (INFRADAY)
 Katharina Grave
 Institute of Energy Economics at the University of Cologne                          7
 Saturday, 9 October, 2010
       Theoretical Approach:
       Analysing CITL
                                                                    Trotignon/Delsbosc:
Combustion
Cogeneration/Heat
Industrial Combustion                                               15% is emitted in
Refineries [2]
                                                                    cogeneration plants
Iron & Steel [3;4;5]
Cement [6]
Glass [7]                                                           10% are industrial
Ceramics [8]
Pulp & Paper [9]
                                                                    emissions
Other [99]




                                                                2
 9th Conference on Applied Infrastructure Research (INFRADAY)
 Katharina Grave
 Institute of Energy Economics at the University of Cologne                               8
 Saturday, 9 October, 2010
Quantifying Abatement Potentials:
Collecting Data
      • Industrial studies
        (specific and general)

      • Institutes

      • Stakeholder-Interviews


                                                               3
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne         9
Saturday, 9 October, 2010
Quantifying Abatement Potentials:
Classification

      1) Specific abatement
                     - Electric arc furnaces instead of integrated steel mills
                     - Clinker substitution
      2) Fuel-switching
      3) Carbon capture and storage (CCS)
      4) Carbon leakage


                                                               3
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne                       10
Saturday, 9 October, 2010
Quantifying Abatement Potentials:
Variables
        • Production (covered by ETS)
        • Average emissions per tonne
                          - Process emissions
                          - emissions from combustion
        • Electricity demand
        • Costs of abatement per tonne
        • Exogenous limits of applicability


                                                               3
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne         11
Saturday, 9 October, 2010
Quantifying Abatement Potentials:
Variables
        • Production (covered by ETS)
        • Average emissions per tonne
                                                                   For each
                          - Process emissions
                                                                     state
                          - Emissions from combustion
                                                                       +
        • Electricity demand                                       For each
        • Costs of abatement per tonne                             industry
        • Exogenous limits of applicability


                                                               3
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne                12
Saturday, 9 October, 2010
                 Example: Cement
                                                                       Clinker Production Costs

              45
              40
              35
                                                                                                                                   Depreciation
              30
Cost (€/t)




              25                                                                                                                   Maintenance
              20                                                                                                                   G&A
                                Electricity: 60 kWh/t
              15                                                                                                                   Elektricity
              10                                                                                    Heat: 3.4 – 4 GJ/t
               5                                                                                                                   Combustibles
               0                                                                                                                   Labour
                     AT       BG        CZ      DK-         FI      DE      HU    IT     LT   MLT    PL    RO    SI      SE   NO   Raw material
                                                 W
                                                                                 State



                                                                                              3
             9th Conference on Applied Infrastructure Research (INFRADAY)
             Katharina Grave
             Institute of Energy Economics at the University of Cologne                                                                          13
             Saturday, 9 October, 2010
    Example: Cement




            Process-Emissions:                                 0.525 tCO2/t clinker
            Combustion Emissions:                              0.33 tCO2/t clinker




                                                                3
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne                            14
Saturday, 9 October, 2010
                           Merit Order of Abatement
              60




              50




              40
Cost (in €)




              30




              20




              10




               0

                   1   7   13   19   25   31   37   43   49   55   61   67   73 79   85   91   97 103 109 115 121 127 133 139 145 151 157 163 169 175 181 187 193 199 205 211 217 223 229 235 241 247 253 259 265 271 277 283 289 295 301 307 313 319


                                                                                                                     Abatement Potential
               9th Conference on Applied Infrastructure Research (INFRADAY)
               Katharina Grave
               Institute of Energy Economics at the University of Cologne                                                                                                                                                                     15
               Saturday, 9 October, 2010
                           Merit Order of Abatement
              60




              50




              40
Cost (in €)




              30




              20




              10




               0

                   1   7   13   19   25   31   37   43   49   55   61   67   73 79   85   91   97 103 109 115 121 127 133 139 145 151 157 163 169 175 181 187 193 199 205 211 217 223 229 235 241 247 253 259 265 271 277 283 289 295 301 307 313 319


                                                                                                                     Abatement Potential
               9th Conference on Applied Infrastructure Research (INFRADAY)
               Katharina Grave
               Institute of Energy Economics at the University of Cologne                                                                                                                                                                     16
               Saturday, 9 October, 2010
                            Merit Order of Abatement
               60




               50




               40
Costs (in €)




               30




               20

                                                                         Carbon Leakage Spain                                                                                        Carbon leakage Germany


               10




                0

                    1   7   13   19   25   31   37   43   49   55   61   67   73 79   85   91   97 103 109 115 121 127 133 139 145 151 157 163 169 175 181 187 193 199 205 211 217 223 229 235 241 247 253 259 265 271 277 283 289 295 301 307 313 319



                                                                                                                      Abatement Potential (in t)
                9th Conference on Applied Infrastructure Research (INFRADAY)
                Katharina Grave
                Institute of Energy Economics at the University of Cologne                                                                                                                                                                     17
                Saturday, 9 October, 2010
      Implementation
      DIME
             - Linear optimisation model
             - Calculation to 2050
             - Aim: Minimisation of the total costs of
                      electricity generation
             - constraint:
                   Limited emission of CO2

                                                               4
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne         18
Saturday, 9 October, 2010
    Implementation


      Objective function:
      C[…] min

      New constraint:
      Σ Ee(y) = B(y) + Ag(y)
                                                               4
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne         19
Saturday, 9 October, 2010
    Implementation

      Abatement:
      Ag(y) = Σ Ai (r,m,y)

      Limited potential:
      Ai max * (1+gi (r,m)^j)> Ai


                                                               4
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne         20
Saturday, 9 October, 2010
      Implementation

      Industrial abatement costs:
      ACg = Σ (Ai * Ci (r,m,y))

      Additional demand for electricity:
      Lg (r,y,s,d,h) = l (r,y,s,d,h) + Ai * f (r,m)


                                                               4
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne         21
Saturday, 9 October, 2010
First Results
                                       30


                                       25


                                       20
                 Price of EUA (in €)




                                       15                                           Scenario I
                                                                                    Scenario II

                                       10


                                       5


                                       0
                                            2010   2015        2020   2025   2030




                                                                                                  5
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne                                            22
Saturday, 9 October, 2010
First Results
                 Required EUAs from industrial sector   120000000


                                                        100000000


                                                        80000000


                                                        60000000                                       Scenario I
                                                                                                       Scenario II

                                                        40000000


                                                        20000000


                                                                0
                                                                    2010   2015   2020   2025   2030




                                                                                                              5
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne                                                           23
Saturday, 9 October, 2010
Further Research

      • Similar costs of production
      • Missing data
                         - Production covered by ETS in glass and ceramics sector
                         - Production costs outside carbon constraint
      • Limited application of abatement potentials
      • Estimations for carbon leakage
      • Assumptions about technical progress


                                                                        5
9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne                          24
Saturday, 9 October, 2010
   Thank you for your attention!
Katharina Grave

Energiewirtschaftliches Institut
an der Universität zu Köln
Vogelsanger Str. 321
50827 Köln
Tel.: 0221-27729-306
katharina.grave@uni-koeln.de
      Backup: Main Studies

      • McKinsey für BDI (2007): Kosten und
        Potentiale der Vermeidung von
        Treibhausgasemissionen in Deutschland
      • IEA (2005): Industrial Competitiveness
        under the European Union Emissions
        Trading Scheme
      • BREF Reports
      • Sektorenspezifische Studien


9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne     26
Saturday, 9 October, 2010
      Backup: Experts
      CEPI:                       Marco Mensink (Energy&Environment Director)
      FEVE:                       Adeline Farrelly
      Cembureau:                  Nina Sparacio (Assistent of Claude Lorea, Technical Director)
      VdZ:                        Dr. Volker Hoenig; Dr. Stefan Schäfer, Stefan Woywadt
                                  (Energy and Production Engineering)
      HVG DGG:                    Karlheinz Gitzhofer (Environmental Protection)
      FEHS:                       Dr. Dirk Mudersbach, Anja Garbach (Building Materials)
      IMA/EuLA:                   Bert d‘Hooge (Scientific Advisor)
      BMU:                        Franzjosef Schafhausen (Director Environment and Energy)
      McKinsey:                   Dr. Phillip Beckmann (research for BDI)
      IEHK Aachen:                 Dr. Stephan Geimer (CO2-topics)
      Wirtschaftsvereinigung Stahl:                            Roderick Hömann (Energy Economics and Techical Design);
                                                               Achim Beerheide (supply and logistics)
      VDEh:                       Dr. Bodo Lüngen (production)
      BdF:                        Jörg Schulze (environment and security)


9th Conference on Applied Infrastructure Research (INFRADAY)
Katharina Grave
Institute of Energy Economics at the University of Cologne                                                               27
Saturday, 9 October, 2010

				
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