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China’s new energy ministry demonstrates the country’s continued commitment to environmental protection and renewable energy.

By Paul A. Davies and Andrew Westgate

Recent comments from senior communist party leaders indicate that the Chinese government intends to establish a new Ministry of Energy to streamline and consolidate authority for energy-related issues. The responsibility for these issues is currently dispersed among a variety of other ministries. The new ministry will be responsible for managing sectors including electric power generation, oil and natural gas in a bid to improve the workings of government and policymaking in relation to energy. However, the full extent of the new ministry’s authority remains unclear, including whether it will have oversight of China’s state-owned oil companies.

Transparency regarding mitigation and financing rules likely to be key hurdles to overcome in achieving climate goals.

By Rosa Espin, Paul Davies, and Michael Green

The European Commissioner for Climate Action and Energy, Miguel Arias Cañete, recently commented on momentum in the European Union (EU) regarding climate change and the action that countries across the globe need to take to implement the Paris Agreement goals. The Commissioner addressed three main issues:

  • The Paris Agreement and its goals
  • How the EU has maintained the momentum at the recent COP23 UN Climate Change Conference (including establishing what COP24 participants intend to discuss at COP24 this year)
  • What the EU has done to implement the Paris Agreement targets (including the current status of the relevant legislation)

A coalition government would likely focus on energy, transportation, and the automotive industry to meet Paris Agreement targets.

By Joern Kassow and Patrick Braasch

Background

After the 2017 German parliamentary elections, the conservative Christian Democrats (CDU/CSU) and the Social Democrats (SPD) faced difficulties in forming a new government. However, the parties have now agreed on preliminary key terms for the government’s 2018-2021 policy in a 28-page memorandum. The key terms will serve as the basis of formal coalition negotiations, which the parties likely will conclude in February or March 2018. Whether the parties will form a new government at the end of these negotiations still remains to be decided, however, based on the current election results, a so-called “grand coalition” between the two largest parliamentary groups is the most probable outcome. Therefore, the key terms will likely form the cornerstones of the next government’s political agenda.

The memorandum provides insight into German environmental policy, which will have significant impact, particularly on the energy and automotive industries. This blog highlights two key terms of the memorandum, and considers the potential outcome for German energy and automotive industries.

By Paul Davies, Bridget Rose Reineking and Andrew Westgate

At the 19th National Congress of the Chinese Communist Party, President Xi Jinping asserted his country’s emerging leadership in environmental stewardship and pledged to build a “beautiful China”. In his speech to the 2,300 delegates and guests assembled for the Congress’s opening session, President Xi lauded China’s burgeoning role as a global marshal of environmental reform.

Xi’s speech follows major efforts to reduce energy consumption and conserve resources across China — such as green finance initiatives facilitating lending to firms in environmentally friendly sectors; programmes for the development of alternative energy sources; and efforts to strengthen and enforce environmental laws and regulations. President Xi pointed to these efforts and proclaimed that China’s pursuit of sustainable development is both paying off domestically, and setting an example globally. 

By Paul Davies and Michael Green

The UK government has announced that it is bringing together a new taskforce led by senior financiers in order to encourage the growth of “green finance”. The taskforce, which will be chaired by Sir Roger Gifford, former lord mayor of London, has six months to develop proposals aimed at accelerating investment in low-carbon projects.

The UK’s climate change minister, Claire Perry, announced the initiative in New York at the opening of Climate Week. According to Perry, “The transition to a low-carbon economy is a multi-billion pound investment opportunity and a key part of this government’s industrial strategy”.

By Paul Davies and Michael Green

On 8 July 2017, the G20 summit in Hamburg issued a Climate and Energy Action Plan for Growth (the Plan). The Plan reaffirms the commitment of the countries (excluding the United States (US) — which announced its intended withdrawal from the Paris Agreement) to work together to implement the UN Framework Convention on Climate Change (UNFCCC), the Paris Agreement, and the 2030 Agenda for Sustainable Development.

In summary, the Plan promotes the following measures:

  • The main commitments under the Paris Agreement, including the target to limit the temperature increase to 1.5 degrees Celsius and commitments to implement nationally determined contributions (NDCs)
  • Drafting long-term greenhouse gas (GHG) emission development strategies by 2020, for the period to 2050
  • Working towards affordable, reliable, sustainable, and low GHG emission energy systems as soon as is feasible
  • Promoting energy efficiency and improving international collaboration on energy efficiency
  • Scaling up renewable energy and other sustainable energy sources
  • Promoting access to modern and sustainable energy use for all
  • Enhancing climate resilience and climate adaption efforts
  • Aligning finance flows with the goals of the Paris Agreement
  • Mobilising climate finance by multilateral development banks (for example, the European Bank of Reconstruction and Development)
  • Phasing out inefficient fossil fuel subsidies

By Paul Davies and Andrew Westgate

On June 1, 2017, President Trump announced during a speech at the White House that the United States will withdraw from the Paris Agreement, fulfilling a campaign pledge to end the agreement that the President argued would harm the U.S. economy. Supporters of the Paris Agreement had lobbied for the U.S. to remain in the agreement, including members of the Trump Administration and 360 companies that signed an open letter to the President. In the end, President Trump was swayed by the agreement’s opponents who argued it threatened America’s energy sector. Though under its terms the U.S. cannot withdraw from the Paris Agreement until 2020, the effect of the announcement was immediate as leaders around the world condemned the decision and pledged support for the agreement.

In relation to China, the decision to withdraw is significant in two respects. First, cooperation between the U.S. and China was a key driver of the negotiations leading to the Paris Agreement and crossing the agreement’s threshold of 55% of the world’s carbon emissions to become effective. Second, President Trump has framed the decision as part of a larger pivot away from international trade and cooperation, which has left China in the unfamiliar position of a leading champion of international trade. China’s President Xi Jinping called on the world to “remain committed to developing free trade and investment” in Davos earlier this year, a position expressed by the U.S. in the past. Alex Wang, a professor of environmental law at the UCLA School of Law noted that “[w]hile the US is breaking these ties, China — which has traditionally been more reserved in international affairs — is building them at breakneck pace.”

By Jörn Kassow and Patrick Braasch

Emissions from approximately 2,900 large combustion plants in the EU, including coal-fired power stations as well as peat, oil and gas power plants, are now likely to be subject to stricter environmental performance standards. These updated standards (“Best Available Techniques Conclusions for Large Combustion Plants” – BREF LCP), based on a decision adopted by the Industrial Emissions Directive (IED) Article 75 Committee on 28 April 2017, are expected to be formally adopted by the European Commission as a Commission Implementing Decision. The negotiations leading up to the Committee‘s decision have been covered by a previous blog post on 25 April 2017.

By Paul Davies, Michael Green and Kristof Ferenczi

The Industrial Emissions Directive (IED) is the main EU instrument that regulates emissions from industrial installations (including power stations) and came into force on 6 January 2011.

Its objective is to achieve a high level of protection for the environment and human health by reducing harmful industrial emissions. It creates an obligation for all plants to operate using Best Available Techniques (BAT) and to be issued with a permit setting emission limits in line with BAT. Regular sector-based discussions then take place to update BAT to reflect new technology.

As such, by the end of April 2017, the reference document on Best Available Techniques for large combustion plants (BREF) will be subject to approval by a special commission set up by member states under the provisions of Article 75 of the Directive on Integrated Pollution Prevention and Control (IPPC Directive).

By Paul Davies, Fiona Maclean and Stuart Davis

Blockchain is more widely recognised as the underlying software technology usedVirtual Currency B - Single for the cryptocurrency Bitcoin. This technology is also being increasingly applied to alternative opportunities, including in the energy sector. In its simplest form, a blockchain is a shared, and continually reconciled, database. No central repository of the database exists and, instead it is hosted simultaneously across a network of computers or nodes. This means that each participant in the network has real-time access to a “golden source” of the data stored on the database without the need for trusted intermediaries and costly data reconciliation. Automated code-based processes called “smart contracts” can run off, interact with and update the database in a way that would not be possible without a golden source of data and real-time reconciliation. In the energy sector, this technology can be used to provide an automated transaction model with no or limited third-party intermediaries (as compared to the traditional transaction model which is multi-tiered, involving a provider, a central authority such as the National Grid and the consumer). Blockchain’s ability to track the flow of electrons on a distributed grid, for example, enables their secure and transparent trade between consumers directly. The advent of blockchain could fundamentally change the way consumers use and generate electricity.

An early adoption of blockchain in this context is TransActive Grid, a peer-to-peer distributed energy offering based in Brooklyn. TransActive Grid, amongst other things, enables consumers to buy and sell renewable energy directly to each other by utilising blockchain technology. Homes producing their own energy through solar power, can sell excess energy to neighbours. Smart meters are used to record the level of energy produced, with transactions being effected and recorded through smart contracts. There are also plans to develop an application for consumers so that any excess electricity can be traded efficiently, with consumers specifying the price they are willing to pay. This has opened up a peer-to-peer market which facilitates direct interaction between consumers and it is hoped that this will develop into a local community market for renewable energy. Grid Singularity, based in Austria, is planning to bring a similar, decentralised electricity market to developing countries, to distribute solar power.