martes, 13 de abril de 2010

What (the hell) are “bulk organic chemicals”?

There is one motto, for those who dedicate our working time to advise about industrial regulations, that European Lawmakers should take in account: a paragraph in a law is as interesting for lawyers as a "nightmaring" for technicians. And this contrast is specially intensive when the paragraph regulates the scope of the directive or regulation.

And a law paragraph is interesting when ever it has different interpretations, when two different people could understand it in different ways... a good basis for arguing that possibly ends in a process in courts. And, in my personal point of view, the industrial law maker must understand every process in courts as a fail in his performance.

We assume is not an easy task to find objective and measurable points to establish the scope of a law, to find an easy questions/answer to resolve the puzzle: "Is my company affected in this specific directive?", but we firmly think that the effort is necessary.

European Commission, and the European Court as well, use to reach a formula that industry deeply reject because it is a dangerous source of lack in equality in application of law: "A consideration on a case-by-case basis will therefore be required."

A look trough the competence crystal give us an scene where "case-by-case" analysis supposes that authorities of our competitors, any given border case sector, in Italy, Croatia or France consider that the invisible line keep our sector out of scope... But our government does not.... Our only solution is to demand the help of a judge, require a pre-judicial question to the European Court in Luxemburg and, a couple of year later and after spending a good amount of Euros, we will have a solution...

In other hand, we have objective points that give a non interpretable solution: square metres occupied, tonnes of fuel consumed, therms of gas, kWh... Avoiding any reference to “sectors” and considering any economical activity: If a company burns a tonne of fuel... does it environmentally matter if is burned in an industrial process or to keep warm a mall?

One of the last incident in such of problem is the final decision about the specific facilities included in EU ETS Directive and the scope of the sentence: "Bulk organic chemicals". Decision of regional government, competent in environmental regulation.

The Directive 2009/29/EC of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community, in its annex I “CATEGORIES OF ACTIVITIES TO WHICH THIS DIRECTIVE APPLIES” says:

“Production of bulk organic chemicals by cracking, reforming, partial or full oxidation or by similar processes, with a production capacity exceeding 100 tonnes per day”

In this two lines we can easily find three sources of conflict: What exactly is a “bulk organic chemical”?, What are “similar processes”?.... and the only objective references (100 tonnes per day of production capacity) is inoperative by the question: Production capacity of the specific products catalogued as “bulk organic chemicals” or total production capacity of the facility?....

The Directorate-General Climate Action of the European Commission published last March 18th, a document regarding this problems: “The guidance on Interpretation of Annex I of the EU ETS Directive” but it falls again in same mistake...

Specifically, the reference to “Bulk Organic Chemicals” is this:

Bulk organic chemicals are chemicals which are usually produced at large scale and sold as commodities for the purpose of producing other chemicals. Production processes under this activity are "cracking, reforming, partial or full oxidation" and "similar processes" (i.e. processes where severe thermal and/or oxidising conditions prevail). A production process can be assumed to be a "similar process" falling under this activity, if CO2 emissions are not only result of separate combustion of fuels, but where part of the emitted carbon stems from the feedstock. Other chemical production processes should be assessed regarding inclusion in the EU ETS under the aspect of combustion activities.

There is no exhaustive list of chemicals available that would satisfy the definition of the activity in Annex I of the EU ETS Directive. However, Table 3 can serve as a starting point. The fact that the chemicals produced are not listed in Table 3 does therefore not mean that the installation considered should not be included in the EU ETS. A consideration on a case-by-case basis will therefore be required.

In line with section 4.2, where more than one organic chemical is produced, the aggregation clause requires all production volumes to be added. Also, in line with section 3.2, the production of chemicals which have not been identified as being bulk organic chemicals and which are not individually listed in Annex I (i.e. chemicals such as ammonia, carbon black, etc) must be assessed for inclusion in the EU ETS under the assumption that the activity “combustion of fuels is relevant.

Table 3, entitled as “Non-exhaustive list of bulk organic chemicals” includes 17 chemicals to be used as “starting point”, guide us to new unsolved questions: “Aromatics (Benzene, Toluene, Xylenes, Styrene, Ethylbenzene, Naphthalene and others)”: Which “Others”?... and in organic chemistry, only petrochemicals produce specific aromatics as a substance, but there are many other mixtures produced that include aromatics as part of the mixture.... Must we consider this mixtures as an included product?…

“A consideration on a case-by-case basis” is a heaven on earth for lawyers… industry needs that the European Union thinks almost twice before publish such kind of regulations if the true goals of European Environmental Law are avoid problems, improve Environment and unified competence in the EU and not others.

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