As environmental concerns take on increasing importance, the European Commission is introducing initiatives that will make sweeping changes in energy culture.
Change, particularly when it involves cost, is rarely welcomed by business, but with environmental concerns dominating the corporate social responsibility agenda, a radical change in energy culture is underway.
Driving the transformation is a concerted effort to cut carbon dioxide (CO2) emissions - a major contributor to climate change - produced by manufacturing, transport and power generating industries.
Dudley Curtis, communications officer with the European Federation of Transport and Environment, based in Brussels, says: 'Tackling the carbon issue in Europe will take some bold political decisions. If attitudes to energy culture are to change, it will cost money, and business and consumers alike need a clear demonstration of the benefits.'
Under the Kyoto Protocol, ratified in 2002, the EU committed itself to reducing its greenhouse gases emissions by 8% during the first commitment period from 2008 to 2012, a target shared between the member states under a legally binding burden-sharing agreement that sets individual targets for each member state.
CLEANING UP THE TRANSPORT INDUSTRY
The transport industry, whose carbon emissions are still rising, has been the target of several new initiatives announced by the European Commission. In January it proposed a revision of the fuel quality directive that, among other things, requires a 10% reduction in greenhouse gas emissions from transport fuels by 2020.
The following month the EC proposed a new strategy to reduce CO2 emissions from new cars and vans sold in the EU by 25%, limiting average CO2 emissions to 120 grams per km by 2012.
Road transport currently generates around a fifth of the EU's CO2 emissions, with passenger cars responsible for around 12%. Vehicle technology has improved in recent years, but not by enough to counteract the overall effect of increases in traffic and car size. The current EU strategy is based on voluntary commitments by the car industry, and measures to encourage consumers to buy more fuel-efficient cars. But it has fallen short of the 2012 target; between 1995 and 2004 average emissions from new cars sold in the EU fell from 186g CO2/km to just 163g CO2/km.
The new proposals, due in 2008, will, according to the EC, provide the car industry with sufficient lead time and regulatory clarity to hit the target.
COORDINATION IS NECESSARY
Key industry bodies such as the European Automobile Manufacturers Association (ACEA), its suppliers and European drivers associations are less optimistic, insisting that a more integrated approach is needed. ACEA secretary general Ivan Hodac said: 'We need a concerted effort to achieve sufficient results for the environment and to safeguard employment and innovation power in the EU.
'A focus on vehicle technology alone is not cost-effective and a target of 130 grammes of carbon emissions per kilometre from new cars by 2012 is not feasible. Industry needs proper lead-time ahead of any new legislation.'
He also highlighted the fact that emissions of new cars had decreased by more than 13% in the last decade and that the majority of carbon emissions now come from the ageing car fleet, congestion and an increase in mileage.
Consumers, too, need to be factored in to the strategy. Wil Botman, of the international drivers associations' federation FIA, suggests that CO2 emission reduction results have been unsatisfactory because cars have become heavier, limiting the technological gains in fuel economy.
He said: 'This trend has a lot to do with consumers asking for safer and therefore heavier cars. We now have to shift attention from safety to CO2 reduction.'
Other measures, such as congestion charges and road pricing schemes have been felt more noticeably on smaller businesses and consumers, prompting some cynics to question the real motives - carbon reduction or revenue raising?
But the European Federation of Transport and Environment's Dudley Curtis suggests that schemes need to be in place before people see the benefits.
'In cities where congestion charges have been introduced, some businesses, such as courier firms, have benefited by being able to make more deliveries,' he said.
Public awareness of the need to shrink their carbon footprint is growing, and it is the environmentally responsible organisations with green policies that include better waste management, bio diesel company cars, and paperless offices, that are attracting that increasingly elusive commodity, talent.
CUTTING EMISSIONS
Another key initiative aimed at tackling the size of Europe's industrial carbon footprint is the EU Emissions Trading Scheme (EU ETS). Phase I of the Scheme, which began in January 2005, concludes on 31 December this year, while Phase II runs from 2008 to 2012, coinciding with the first Kyoto Protocol commitment period.
Since the ETS began, around 12,000 energy-intensive plants within the EU's power generation, iron and steel, glass and cement industries have been able to buy and sell allowances that permit them to emit CO2 into the atmosphere.
Companies that exceed their individual limit can buy unused allowances from firms that have taken steps to cut their emissions. Those that can't are fined €40 (£27) for every excess tonne of CO2.
Results for the first year of the scheme showed that allowances exceeded CO2 emissions by around 80 million tonnes across the EU, resulting in carbon prices falling as low as €8 (£5) per tonne, and a scenario where it costs companies less to buy spare allowances than pay a fine or invest further in emission reduction.
While experts agree that the first phase has created incentives that give financial value to cutting carbon emissions, issues such as allowance allocation, and competitive carbon pricing must be addressed before the next phase.
The Carbon Trust's chief economist Professor Michael Grubb said: 'Phase I has been positive but it has indicated problems in the way allocations are awarded. For the next phases, we need to introduce stronger allocations and some auctioning with a shift to a new auctioning-centric approach in the longer term.'
BEYOND CARBON OFFSETTING
It is also likely that the aviation industry will be brought into the scheme during Phase II under a new directive proposed last year. CO2 emissions from aviation have grown almost 90% since 1990, faster than any other transport sector, with air travel responsible for between 3% and 5% of global CO2 emissions.
Currently governments and institutions that exceed their carbon allowance through air travel can voluntarily engage in a form of 'carbon offsetting'.
However, carbon offsetting, or taxing airlines will not be enough to prevent further damage to the environment, and the EC wants airline manufacturers to aim for 40% cuts in CO2 emissions through the use of new technology that will be available by 2015.
A number of European operators have committed to renewing their fleets with 'greener' aircraft. Low cost airline easyJet recently unveiled its design for the next generation of short-haul super-clean aircraft for operation by 2015.
Dubbed the 'easyJet ecoJet, the aircraft spec proposes a 25% reduction in noise and a 50% reduction in CO2 emissions compared with today's newest aircraft.
Chief executive Andy Harrison said: 'Our fleet of 131 aircraft has an average age of only 2.3 years, the youngest of any major airline in Europe. We have recently called for over 700 of the dirtiest aircraft to be banned from Europe's skies and are active supporters of the EU ETS and Single European Skies programme.'
The question is, will the ETS, greener aircraft and possible aviation fuel taxes counteract the impact of an inevitable increase in flights as more people choose to travel by air?
REALITY CHECK
With the EU's key stage CO2 emission targets several years away, it is important that measures are also in place to monitor progress and respond if it is found to be wide of the mark.
A report published in July by independent think tank energy analysts Cambridge Econometrics predicts that under its current policies the UK Government will miss its own 2010 goal for a 20% cut in carbon emissions.
Following a 3% decline in 2002, emissions had risen again by 3% by 2006, as high gas prices led to a shift from gas to coal in power generation.
Professor Paul Ekins of the Policy Studies Institute, and a senior consultant to Cambridge Econometrics, said: 'We consistently forecast that the government's 20% carbon reduction goal by 2010 would be missed, but the necessary policy measures were not put in place and the government itself now accepts that it will miss the goal. These forecasts provide a reality check to the rhetoric on climate change that is now standard government fare.'
The threat to the environment can no longer be ignored, and political and industrial decision makers around the world must cooperate, and stand by tough decisions to secure long term sustainability and economic prosperity.
