BPMR BPMR Mission Korea BPMR BPMR Mission Korea Mission Korea - PowerPoint PPT Presentation

BPMR BPMR Mission Korea BPMR BPMR Mission Korea Mission Korea Mission Korea Industry Industry Industry Industry to Industry Dialogue on Emissions to Industry Dialogue on Emissions to Industry Dialogue on Emissions to Industry Dialogue on Emissions Trading and Market Readiness Trading and Market Readiness Trading and Market Readiness Trading and Market Readiness Experience Experience Experience Experience sharing on broader issues dealing sharing on broader issues dealing sharing on broader issues dealing sharing on broader issues dealing with EU ETS and overlapping with EU ETS and overlapping policies with EU ETS and overlapping with EU ETS and overlapping policies policies policies Giles Dickson, Giles Dickson, Giles Dickson, Giles Dickson, Vice Giles Dickson, Vice Giles Dickson, Giles Dickson, Giles Dickson, Vice President Vice President President Environment President Environment Environment Policies Environment Policies Policies & Global Policies & Global & Global & Global Vice Vice Vice Vice President President President President Environment Environment Environment Environment Policies Policies Policies Policies & Global & Global & Global & Global Advcocacy Advcocacy, Alstom Advcocacy Advcocacy , Alstom , Alstom , Alstom 27 September 2013, Seoul 27 September 2013, Seoul 27 September 2013, Seoul 27 September 2013, Seoul

Alstom = Alstom = low Alstom = Alstom = low- low low - carbon - - carbon infrastructure carbon carbon infrastructure infrastructure infrastructure Equipment & services for power generation Equipment & services for power transmission Alstom Thermal Power Alstom Thermal Power Alstom Thermal Power Alstom Thermal Power Alstom Grid Alstom Alstom Alstom Grid Grid Grid Equipment & services for rail transport Alstom Renewable Power Alstom Renewable Power Alstom Renewable Power Alstom Renewable Power Alstom Transport Alstom Transport Alstom Transport Alstom Transport

EU ETS + EU ETS + Renewables Renewables + + Energy Energy Efficiency Efficiency EU ETS + EU ETS + Renewables Renewables + + Energy Energy Efficiency Efficiency Measure Measure Measure Measure Covers Covers Covers Covers which which sectors which which sectors sectors sectors Target Target Target Target • EU ETS: 45% of EU emissions: reduce 21% 2005- 20 • Renewables: EU ETS EU ETS EU ETS EU ETS Power and industry: 45% Reduce emissions by 21% of EU emissions by 2020 compared to 2005 long list …. BINDING BINDING Renewables Renewables Renewables Renewables Power and transport Renewables to be 20% of energy consumption by 2020 BINDING Energy Energy Energy Energy Whole economy Improve by 20% by 2020 Efficiency Efficiency Efficiency Efficiency vs. business as usual NON- BINDING Presentation title - 01/01/2007 - P 3

…. …. a and there are other policies nd there are other policies …. …. a a nd there are other policies nd there are other policies • Greenhouse Greenhouse Greenhouse Greenhouse Gas Gas Gas « Gas « « Effort « Effort- Effort Effort - - - Sharing Sharing Sharing Sharing » » » » • 10% target to reducing for the other 55% of emissions by 2020 on 2005 levels • broken down by 27 binding national targets • Fuel Fuel Fuel Fuel Quality Quality Quality Quality • 6% target for reducing GHG emissions from fuels by 2020 on • 6% target for reducing GHG emissions from fuels by 2020 on 2010 levels • Vehicle CO2 Standards Vehicle CO2 Standards Vehicle CO2 Standards Vehicle CO2 Standards • cars: 130g/km by 2015 and 95g/km by 2020 • vans: 175g/km by 2017 and 147g/km by 2020. • Eco Eco- Eco Eco - - - Labelling Labelling Labelling Labelling rules rules rules : promotes products with low carbon footprint rules • Eco- Eco Eco Eco - - - Design Design Design Design standards standards standards : on environmental performance of energy standards related products • Energy Energy Taxes Taxes : minimum rates for energy taxes in heating electricty Energy Energy Taxes Taxes and motor fuel Presentation title - 01/01/2007 - P 4

Overall progress “good”: meeting CO2 target …. Overall progress “good”: meeting CO2 target …. Overall progress “good”: meeting CO2 target …. Overall progress “good”: meeting CO2 target …. CO2 x,000 tonnes 6,000,000 � 1990- 2011: EU GDP 5,500,000 up 48%, emissions 5,000,000 down 18.5% � Close to 20% target 4,500,000 Actual GHG emissions for 2020 4,000,000 20% target path 3,500,000 30% target path 3,000,000 1990 1995 2000 2005 2010 2015 2020

Progress on EU ETS ? Progress on EU ETS ? Progress on EU ETS ? Progress on EU ETS ? Good Good Good Good State of play: ETS • will deliver 21% emissions reductions in sectors covered 35 Dec-12 EUAs Not Not so Not Not so so good so good good good 30 Dec-12 CERs 25 Price in Euro 20 15 • price not driving investments 10 5 • low auction revenues 0 févr 2007 juil 2007 déc 2007 mai 2008 oct 2008 mars 2009 août 2009 janv 2010 juin 2010 nov 2010 avr 2011 sept 2011 févr 2012

Progress on Progress on Renewables Progress on Progress on Renewables ? Renewables Renewables ? ? ? Good Good Good Good State of play: Renewable energy • good progress towards targets (see next slide) • important contribution to emission reductions • technology costs down, especially in PV and onshore wind Not Not so Not Not so so so good good good good • high cost of support schemes not politically sustainable � € 23bn pa in Germany; € 10bn pa in Italy • successful industrial policy ? • market/grid integration challenges remain

Progress on Progress on Progress on Progress on Renewables Renewables Renewables Renewables …. …. …. ….

Progress on Progress on Progress on Progress on Energy Energy Energy Efficiency Energy Efficiency Efficiency ? Efficiency ? ? ? State of play: Energy Efficiency Good Good Good Good • vehicle CO2 standards will be met • new energy efficiency standards and labelling adopted for lighting and appliances • recent adoption of Energy Efficiency Directive Energy Efficiency Directive (October 2012) Energy Efficiency Directive Energy Efficiency Directive Not so good Not so good Not so good Not so good • EU unlikely to meet 20% energy efficiency target for 2020 • more finance needed, especially for the renovation of buildings • more progress needed in overall transport energy efficiency

Interaction of ETS Interaction of ETS Interaction of ETS with Interaction of ETS with with with Renewables Renewables and Renewables Renewables and and and Energy Energy Energy Energy Efficiency Efficiency Efficiency Efficiency • CO2 CO2 price price not not high high enough enough to drive investments in CO2 CO2 price price not not high high enough enough either • Renewables Renewables have relied more on national support Renewables Renewables schemes: feed feed feed feed- - - in - in in tariffs in tariffs tariffs tariffs and green/white certificates • Energy Energy efficiency Energy Energy efficiency efficiency efficiency improvements have relied on regulation regulation regulation regulation , e.g. on cars and appliances • ETS cap ETS cap ETS cap ETS cap failed to take full account of progress in renewables deployment and energy efficiency: − this has contributed to current surplus of allowances Presentation title - 01/01/2007 - P 10

What’s actually happening out there ….. What’s actually happening out there ….. What’s actually happening out there ….. What’s actually happening out there ….. Phase 1 Phase 1 Phase 1 Phase 1 Phase 2 Phase 2 Phase 2 Phase 2 35 ECX EUA Dec Ahead 30 ECX CER Dec Ahead 25 20 15 10 5 0 janv.-05 janv.-06 janv.-07 janv.-08 janv.-09 janv.-10 janv.-11 janv.-12 janv.-13 Increased interest in Increased interest in Increased interest in Increased interest in Increased interest in Increased interest in Increased interest in Increased interest in Fuel switching from Fuel switching from Fuel switching from Fuel switching from 1 1 1 1 2 2 2 2 3 3 3 3 renewables and gas renewables and gas renewables and gas renewables and gas CCS CCS CCS CCS gas to coal gas to coal gas to coal gas to coal

EU CO2 EU CO2 price price now now well well below below international international norm norm EU CO2 EU CO2 price price now now well well below below international international norm norm British Colombia Australia (pre-EU linkage) EU (Phase 2 prices) Alberta Quebec California South Africa Shenzhen EU Australia (with linkage) RGGI 0 5 10 15 20 25 30 $/tonne

… and investments insufficient … and investments insufficient … and investments insufficient … and investments insufficient $140 $140 $140 $140 billion billion billion billion 64.4 58.6 Clean energy Clean energy Clean energy Clean energy investments investments investments investments 45.1 $ $bn bn $ $ bn bn 2013 2013 2013 2013- - - - 2010 2011 2012 2020 2020 2020 2020 Source: Bloomberg New Energy Finance, UNEP, SEFI