Allowance Allocation and CO2 intensity of the EU15 and Norwegian refineries

On 1 January 2005 the European Union Emission Trading Scheme was launched. The launch was preceded by an allocation process in each of the Member States. The main objective of this study was to analyse the allocation in relation to CO2 efficiency for the mineral oil refining sector. A CO2 intensity index for mineral oil refineries was defined and calculated for the refineries within the EU15 and Norway. The IVL CO2 intensity index is based both on the Solomon Energy Intensity Index (EII), an assumed fuel mix and process-specific emissions. Due to uncertainties in input data, the determined values for the individual refineries are fairly uncertain, but the regional values can be used to identify trends. It was concluded that there are substantial differences in the CO2 intensity between refineries within different regions/countries in the EU and these differences have not been considered in the allocation process. However, there seems to be a correlation between allocation and CO2 efficiency for refineries in different regions. With some exceptions countries where the mineral oil refining industry has a low CO2 intensity index have allocated relatively more than countries with industries of high CO2 intensities. Only a few countries have mentioned energy efficiency or reduction potential due to CO2 intensity of fuels used. Only one country (Denmark) has explicitly given a benchmark that will be used for allocation to new mineral oil refineries.