Portuguese industry and the EU trade emissions directive: development and analysis of CO2 emission scenarios

Abstract

In December 1997, the Kyoto Protocol was adopted, setting limits on the greenhouse gas (GHG) emissions of industrialized countries. The European Union agreed to reduce its emissions of GHG by 8% during the period 2008–2012 in comparison to their 1990 levels. Subsequently, in a scheme known as “burden-sharing”, Portugal was allowed to increase its emissions by 27% in the same period. Large industrial facilities are responsible for a significant share of carbon dioxide (CO2) emissions and are object of a European Directive (2003/87/EC) establishing the scheme for GHG emission allowance trading within the European Union, launched with the purpose of allowing the reduction of GHG emissions cost-effectively. According to the Directive, Member States shall develop a National Allocation Plan (NAP) stating the total quantity of allowances that each one intends to allocate and how it proposes to allocate them among the activities included in the trading scheme. In this work, an analysis of the Portuguese industry is performed, focused on the energy consumption and CO2 emissions levels in the period 1990–2001 and on the estimation of the two parameters for the period 2002–2012, considering different economic growth scenarios and investments on energy reduction technologies. Results show that all the analysed sectors present a significant growth in CO2 emissions, exceeding the limit established in the frame of the Kyoto Protocol, and that measures other than cost-effective energy technologies will have to be implemented.