Climate & the environment

“With new EU regulatory priorities, our sector faces challenges. We monitor these via Euro Chlor’s climate change and energy-related groups, which will help us contribute to Europe’s climate neutrality goals”

Kristof May

Regulatory Affairs Manager

Energy and climate change highlighted as most relevant Green Deal topics for Euro Chlor

The European Commission (EC)’s Green Deal was launched at the end of 2019. It includes the EU’s climate ambitions for 2030 and 2050, expectations on clean, affordable and secure energy and on sustainable and smart mobility, an industrial strategy and a zero-pollution ambition for a toxic-free environment. The Green Deal will induce a far-reaching package of elements, of which some will have a particular impact on our chlor-alkali sector. That is why Euro Chlor is working closer than ever with Cefic on many relevant topics.

Meanwhile, Euro Chlor’s Regulatory Affairs Committee (RAC) has been determining how to promote the key elements of Euro Chlor’s new Mid-Century Strategy (MCS) via positive advocacy whilst considering the above Green Deal concepts, which are now evolving into the Green Recovery. In one key RAC meeting, the different elements were examined for their impact on our sector and other key stakeholders that may need to be collaborated with. There were no surprises. Energy and climate change and the initiatives taken regarding a zero-pollution ambition for a toxic-free environment came out as very important, followed by smart mobility and circularity.

Euro Chlor has of course been focusing on energy since our very first Sustainability Programme in 2001, with energy consumption and hydrogen use being two of the key measures tracked.

Energy Consumption

Energy consumption increased slightly in 2019 to 90.8% versus the 2011 reference from the 2018 level of 90.5%.

Slight increase in energy consumption

The decline seen over the last years mainly resulted from the phase-out of mercury technology. In the years to come, energy consumption levels are set to stabilise as there may be limited room to further improve the energy efficiency levels. This is especially true as improvements in modern membrane technology are fast approaching the thermodynamic limits of the process.

Euro Chlor launches the Hydrogen Task Force

Hydrogen is high on the political agenda as part of the Green Deal/Green Recovery plans. This was confirmed by several recent high-level EU initiatives, including the European Industrial Strategy and the formation of a new European Clean Hydrogen Alliance. Following the success of several other industrial alliances (such as those involving plastics and batteries), this new Alliance brings investors together with governmental, institutional and industrial partners. It builds on existing work to identify technology needs, investment opportunities and regulatory barriers and enablers.

The EC has also launched an EU Hydrogen Strategy, which sets out the EU’s clear ambition to become climate neutral by 2050 by redesigning the current energy system with hydrogen playing a major role. Hydrogen currently accounts for less than 2% of the energy supply but, by 2050, this could rise to 12-14% according to this strategy, showing scope for innovation, job creation and growth.

As the European chemical industry is a major consumer and producer of hydrogen, it is of vital importance that Cefic is part of the hydrogen discussion. In order to become a valued partner, our industry must investigate the possibilities and barriers to hydrogen. Only then can Cefic become a respected knowledge hub within the hydrogen debate.

To be part of the hydrogen discussion, the Euro Chlor secretariat agreed to manage a new Hydrogen Task Force, open for all Cefic members, to serve as a platform for discussion and data collection. More specifically, this Task Force will map the potential of hydrogen and perform a gap analysis on preconditions to exploit this potential within the chemical sector. It will also identify and involve other stakeholders. Given Euro Chlor’s technical experience with the electrolysis process and our production/use of hydrogen, we are leading this Task Force on behalf of Cefic under our Climate Change & Energy Committee.

The kick-off meeting was held in June 2020 and was well-attended with representatives of a wide variety of sectors, reflecting the great interest in the subject. The participants agreed on the need for a comprehensive overview of current hydrogen production (either intentional or as by-product) and consumption, an analysis of the pros and cons of the different production routes and the potential applications of hydrogen. There was also agreement that any activities must take place with close attention to, and interaction with, other stakeholders across different sectors.

Euro Chlor is also participating in a Hydrogen for Europe study to assess the contribution of clean hydrogen to the secure and affordable decarbonisation of the EU energy sector. Deloitte, SINTEF and IFPEN form the Research Consortium responsible for carrying out this study.

Hydrogen Use

Meanwhile, Euro Chlor member companies have increased their use of hydrogen from 86.6% in 2018 to 89.2% in 2019.

increase in hydrogen use versus last year

Considering that hydrogen is an important chemical for the climate neutral economy, the 89.2% utilisation rate of hydrogen from chlor-alkali production remains relatively low. This may change over time as demand for hydrogen increases, and more application solutions become available. Euro Chlor continues to strive to move towards full utilisation, and this will also be a key feature of our MCS activities.

Euro Chlor responded to ETS State Aid Guidelines consultation

Euro Chlor continued to help members remain competitive on energy by responding to the EC’s public consultation on draft ETS State Aid Guidelines in March 2020 via our Energy Task Force and through Cefic.

The EC is currently revising the conditions under which Member States are allowed to grant state aid to compensate for the cost of indirect CO2 emissions, for the fourth period of the EU Emission Trading System (2021-2030). In line with the EC’s Green Deal communication, the draft EU ETS State Aid Guidelines aim to incentivise the modernisation of production processes, while reducing the carbon leakage risk related to indirect ETS costs. The current guidelines will expire on 31 December 2020, but it is still not entirely clear what indirect compensation will look like for the next trading period which starts on 01 January 2021. A public consultation was launched to allow stakeholders to provide input. As the chlor-alkali sector is so highly electro-intensive, we decided to introduce specific comments as Euro Chlor.

First of all, we welcomed the fact that our sector was still considered at high risk, as the proposal so far includes a considerable reduction in the number of sectors eligible for compensation and we are still on the list. We also welcomed the equal treatment of electricity sources, the definition of activity levels and the foreseen mid-term update of the benchmark. On the other hand, we emphasised that some proposals may negate the purpose of the guideline in protecting European companies against carbon leakage. For example, the capping of the compensation to 75% of the benchmark (to be determined at a later stage) is predicted to systematically disadvantage domestic electro-intensive European chlor-alkali manufacture.

We also asked some questions about the CO2 factor for electricity production, which in the draft is currently proposed to change from a regional to a country approach.

Euro Chlor input in IED Focus Groups

This year, Euro Chlor has participated in the EC’s Industrial Emissions Directive (IED) Evaluation Focus Groups, namely their assessment of IED 2010/75/EU. This also included attending the final event on the IED evaluation in December 2019.

Euro Chlor members ahead of the curve on mercury conversion

In our annual monitoring of environmental commitments regarding mercury, we continue to see progress when it comes to mercury conversion.

Following the phase-out of mercury technology by the end of 2017, Euro Chlor member companies have focussed on the demolition of the cells and the conversion of the liquid mercury to mercury sulfide. This process must complete, and the mercury sulfide be stored in a salt-mine, by the end of 2022. Due to their commitment to safety and sustainability, members are making real progress and we anticipate that all liquid mercury will be converted and safely stored before the deadline. In 2019, 495 tonnes of mercury were converted with approximately 731* tonnes of mercury still being present at those sites which operated chlor-alkali mercury technology.

In the rest of the world, under the United Nation’s Minamata Convention on Mercury, the conversion of the mercury process for chlor-alkali must be finalised by the end of 2025. Within the membership of the World Chlorine Council, there remain 12 mercury units operational, with new conversions being announced regularly.

*Mercury for alcoholate production is not included in these figures.