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Roger Bours, of Fike Europe, discusses an approach to the EU Emission Trading Scheme (EU ETS) that was established by Directive 2003/87/EC in October 2003.

The EU ETS is a Cap and Trade mechanism, which requires member states to set an overall cap on carbon dioxide emissions from relevant sectors.

The application enforcement of this directive lead to the need for industries to complete an extensive exercise to map out their emissions.

In the UK, the scheme is divided into periods (phases): Phase I ran for three years from 1 January 2005 to 31 December 2007; Phase ll runs for five years from 1 January 2008 to 31 December 2012; Phase lll will run for five years from 1 January 2013 to 31 December 2016.

Installations covered by the scheme are given an allocation of allowances for emissions.

If they wish to emit more than they have allocations to cover they can buy additional allowances or invest in technology to reduce emissions.

Financial decisions must be made: should an emission-producing company reduce trading emissions, or buy trading emission quotas? Making the correct decision is essential as the adding trading costs for buying clean air allowances may result in the loss of historical cost reduction achievements.

Alternatively, reduction of emissions may turn out to be the best long-term solution.

The introduction of the European Directive 2003/87/EC Greenhouse Gas Emissions Allowance has important effects on the production costs in certain industries.

For example, the legislation will result in the emission of each tonne of CO2 bearing a possible added cost to the industry.

The exact price of such a tonne of CO2 is not fixed; the UK has decided to auction seven per cent of its allowances in Phase ll and prices will be driven by economical demand mechanisms.

The high-level principle behind the use of auctioning as an allocation methodology is that it withdraws a number of ‘free’ allowances, explicitly inviting those who value allowances the most to pay for them and reinforces the incentive to abate through the up-front cost.

UK government advocates increased use of auctioning in Phase III in its aim to further reduce free allocation and truly ‘put a price on carbon’ that businesses must factor into investment decisions.

With greater emphasis placed on the price of carbon, the inducement for businesses to invest in abatement strategies such as emission controls is increased.

As an example of a direct result, all industrial energy consumers will need to take into account an increased cost for used energy, as energy producers will probably pass on emission costs for producing the energy to their customers.

Process emissions related to greenhouse gases (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride) must be considered and reduction programmes evaluated.

Emission improvement can come from better energy management, upgrading the existing equipment, adopting new processing technologies and in the longer term, performing the necessary research and development for emission-friendly processes.

However, for forward planning, a company may prefer an emission-reduction scheme before finding solutions relating to long-term market mechanisms depending on unknown demands and availability levels.

Opportunities exist for lowering emissions; as a first step an inventory needs to be made to identify all possible sources of greenhouse gas emissions.

Such sources may be flange connections, safety valves, end-of-line plates, instrumentation devices, and so on.

Second, quantification needs to be done with regards to volumes escaping over a given period of time.

The combination of emission type and volumes will identify priorities where improvements need to be made in order to achieve long-term goals of emission reduction levels.

In specific cases, where reduction efforts will not lead to achieving required objectives of emission reductions, alternative trading exercises (clean air allowances) may still be required.

Such trading efforts may be minimal as time goes on, as larger amounts of emission reductions have been achieved on a permanent basis.

The EU Directive is currently mandatory and the political will behind making the scheme work is overwhelming.

Any country failing to comply with the published deadlines will be subject to infraction proceedings and penalties.

For the industries involved, the real important date was 30 April 2006, the first compliance date.

On this date, each company exposed to greenhouse gases was required to make available the emission allowances equal to the actual emissions as registered in 2005.

From that moment on the compliance obligation has become continuous on an annual basis until 2016 and likely beyond.

When attempting to answer this question the reality is that the market has de facto already started.

Before looking at the need to buy clean air, a company will first need to ascertain its emission reduction abilities and opportunities.

Based on historic registered emissions, a company will have a good idea of what its actual emissions are likely to be over the forthcoming compliance periods.

The company will also be able to assess the number of emission allowances that it is likely to be issued as a result of the National Allocation Plan (NAP) of the country in which it is operating.

The emission-producing company is then faced with a range of alternative actions.

If the company anticipates being short of allowances, it may consider looking at reducing the measured emissions in order to improve its chances in meeting with the expected emission allocations.

If the company is able to reduce its actual emissions below the level of the granted allowance, it may be able to offer the surplus to the clean air trading market.

Alternatively, the company may be looking at clean air trading markets in order to bridge the gap between actual emissions and allocated allowances.

One obvious source of emission problems, known to the industry as ‘leakers’, are the hundreds of safety relief valves used in today’s industrial process plants.

Safety relief valves are deemed to be working within acceptable limits while demonstrating leakage rates up to 0.043m/day of air equivalents (API 527).

A small to medium-sized plant could contain 100s of such valves all ‘working’ satisfactorily but leaking; a simple sum will confirm that very large emission volumes are thus created.

An easy solution to this situation, with minimal efforts for compliance, is the installation of bursting disc devices upstream of such safety relief valves.

As a result, the expected leakage levels will be reduced by a factor of more then 10,000, with proportional reductions of emissions and related costs.

Bursting discs are pre-weakened metal membranes that will open (burst) at a predetermined overpressure (in this case exactly the pressure needed to activate the valve) along a pre-determined pattern, allowing the overpressure to escape and safeguarding the installation from any damage.

Bursting discs are completely leak tight, which means that emissions are reduced to zero.

Valveguard, from Fike, has been created to allow industries to select rupture discs in combination with pressure relief valves as a viable, affordable option.

Valveguard rupture discs are installed upstream of the pressure relief valve, which renders the assembly leak tight up to the point where accidental overpressure is present.

In such a situation the disc ruptures, offering a free, unobstructed flow to the pressure relief valve.

Emissions are eliminated and pressure relief valve critical parts are protected against fouling and corrosion from the process media and downstream contaminants – thus reducing planned maintenance and replacement of pressure relief valves.

Furthermore, the level of mean time between unscheduled repair and guaranteed safety over an extended period is considerably increased.

The use of such unique combinations of pressure relief valves and rupture discs allows for the industry to respond in a positive manner to the challenges of reducing costs, protection of the environment and reduction of possible business downtime.

Bursting discs are renowned safety solutions within the industry and have proven their reliability for more than 60 years.

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