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Spain: Las Marismas faces the cost of CO2 emissions
The 2021 harvest is jeopardized by the cost of carbon dioxide emissions
The progressive requirements of the European emissions trading system is giving rise to situations that can sometimes be worrying. In this context, the Las Marismas de Lebrija cooperative recently asked the ministry for a moratorium on the payment of the EUR 400,000 needed to offset its 2020 emissions.
The company, which is a major player of the tomato paste industry in Andalusia, has invested more than EUR 1.2 million over the past five years in reducing its carbon footprint. It has brought its total emissions down by 9%.
However, according to Las Marismas, the seasonality of this industry and the increase in the price per tonne of CO2 (which has increased by 420% over the last two years), make the cooperative unable to bear the cost of purchasing emission rights required by the Ministry of Ecological Transition, which amount to more than EUR 400,000.
The possibility of trading greenhouse gas emission rights is regulated by Law 1/2005 of 9 March. The scheme was launched on 1 January 2005, framed by the Kyoto Protocol, as a fundamental measure to promote the reduction of CO2 emissions in the sectors of industry and electricity production. Currently, this scheme affects nearly 1,100 installations, including the Las Marismas cooperative, which annually emits between 11,000 and 12,000 tonnes of carbon dioxide.
The ministry grants industries a free annual allocation of rights that can be "traded" for pollutant emissions. Each right “allows the buyer to pollute” by rejecting a tonne of CO2. However, this allocation of rights is gradually being reduced each year, in order to promote the implementation by factories of solutions to reduce their emissions.
The problem is that “the rate of reduction of rights has not kept pace with the rate at which industries have been reducing their emissions, which poses serious problems,” denounced Francisco Javier Villegas, industrial technical director for Las Marismas. According to the scheme, the rights granted in 2020 are to be used by operators to offset their polluting emissions of 2019. But if these emissions are greater than the amount of the rights allocated free of charge, the companies are obliged to buy further rights on the open market, for the full compensation of all their polluting emissions.
In addition, the difficulties are compounded by the phase change of the European regulation and the entry into Phase IV, which covers the period running 2021-2025. As such, “companies are not authorized to use the rights that will be allocated in 2021 to pay for 2020 emissions, which correspond to an earlier phase. This is why Las Marismas must acquire on the market all the rights to pay for last year's emissions,” explained the company executive, “which is a purchase amounting to almost 400,000 euros.”
On this point, Francisco Javier Villegas has criticized the deregulation and permanently speculative nature from which emission rights schemes suffer, like many other markets: “the cost of emissions rights has exceeded all foreseeable reasonable limits, with a value that currently reaches EUR 40.21, whereas in 2017 the rights were still under EUR 6.” It is therefore “a disproportionate burden that weighs heavily on the company's accounts,” and which should translate into “a drop [in the price paid for fresh tomatoes] of 2 euros per tonne of raw material for hundreds of farmers in the region of Bajo Guadalquivir,” said the President of the cooperative, Juan Sánchez.
The President regrets that the company is being pushed “to the edge of the precipice” by the problems related to “the Covid pandemic, rising costs, successive droughts, unfair competition from countries outside the EU that are not subject to environmental requirements and further asphyxiation caused by regulations and the emissions market.” For Juan Sánchez, Las Marismas is in a desperate situation, because if it does not buy back its rights before the end of April, the company is further exposed “to a penalty from the Ministry of Ecological Transition of EUR 1 million” (100 euros for each unitary right).
This situation has led the cooperative to request a moratorium from the central government, but this has been rejected.
In recent years, Las Marismas has implemented a series of solutions that have reduced its carbon footprint. Heat-saving devices have been installed at the entrance to the boilers; a regasification plant for liquid natural gas with pre-evaporation condensers has been set up and work is underway to improve the performance of the steam channels and install a turbine that will save electricity.
In total, the investments in environmental protection launched by the cooperative have amounted to EUR 1,200,000 over the past five years.
Sources:
Las Marismas, sevilla.abc.esFurther details in the attached press release (in Spanish) and in the video available here
