The first step towards the development of an optimal strategy for your business is to produce an inventory of emissions taking place within the organization. An emission scan is carried out to quantify emissions from the different – and sometimes geographically dispersed – production plants within your business. Working from the data yielded by the scan, KEMA uses specialized software tools and other techniques to develop a number of scenarios involving forecast NOx and CO2 price developments. We then help you to formulate an emission strategy – "make, buy or sell" – geared to the scenarios. Essentially, what this entails is determining whether you will have surplus credits that you can sell, or whether your present emissions exceed your allocation, making it necessary to either reduce emissions or buy extra credits. We will help you identify the most cost-effective solution. Where NOx emissions are concerned, that may be the installation an SCR system, while for CO2 emissions the best solution may be further energy conservation in the production process, in line with the energy efficiency benchmark.

At a preliminary meeting, we can use a specially developed checklist to quickly establish where your business stands and what more needs to be done.

An emission scan enables us to work with you to quantify emissions from the different – and sometimes geographically dispersed – production plants within your business. At the same time, we draw up a picture of the business’s inward energy flows. An inventory of the measurement provisions is also made: where and how measurements are performed and how the data is recorded. In this way, a complete baseline profile is produced for use in subsequent stages of the process.

Once the emission inventory is complete and the baseline profile is ready, any difference between your emission ceiling and the current level of emission production within your business will become clear. Depending on the findings, the next step will normally be to develop a number of scenarios for price development, and thus for the financial implications of various courses of action. A strategic market study is conducted as a basis for estimating future NOx and CO2 prices.

Appropriate calculations are made, depending on whether your current emissions are above or below your assigned emission ceiling. These calculations involve comparison of the cost of emission-reduction measures against the cost of buying additional credits or the income attainable from selling credits. KEMA has developed a suite of technical and financial models to facilitate these calculations: EcoNOxTM  for NOx and EcoTwo for CO2.

Make, buy or sell?

Armed with the scenarios developed in the previous step, you will be in a position to assess the relative merits of buying credits or investing in emission control. The point being that the scenarios provide strategic insight into the development of supply and demand on the Netherlands’ NOx and CO2 emission markets – and into the implications for NOx and CO2 prices over the shorter and longer terms. Having made a risk assessment, it is then possible to define a financially reasoned emission strategy: to buy credits, to sell credits, or to act on emissions.

Under the Regulations on Environmental Quality in Electricity Production (MEP Regulations), a subsidy scheme for the producers of renewable electricity and electricity from co-generation plants (combined heat and power plants) has been in force since 1 July 2003. The MEP subsidy scheme replaced the old subsidy system based on the Regulatory Energy Tax (REB); its creation also coincided with withdrawal of the transitional tax arrangements for green energy producers. The availability or non-availability of an MEP subsidy may also influence your choice of strategy.

EcoNOxTM is a mathematical program designed to help you minimize the cost of meeting your NOx reduction obligations. The model takes account of the anticipated trade in NOx emission credits. It provides insight into the financial implications of acquiring NOx credits, acting to reduce emissions and selling credits. So, against a background of fluctuating emission credit prices and possible uncertainties regarding the deployment of plant, you are able to develop the most rational approach to NOx reduction for your business. EcoNOxTM is a particularly valuable planning tool in complex cases, where various courses of action appear viable.

The program offers numerous output options:

• automatic optimization: what action should be taken, when and where   
• calculation of NOx reduction costs for the business as a whole and for each installation: cost per year and total cost over the lifetime of the measure   
• sensitivity analysis 
• multiple concurrent measures for each installation 
• effect of measures per operating point 
• ‘what-if’ module: how a shift in a given parameter will influence the cost profile and potentially the strategy selection     

The program is designed for maximum flexibility. Changes in parameters, such as the NOx Performance Standard Rate, time span, the relationship between primary and secondary credits, installation types, installation deployment, measures already in place, economic climate and so on may be incorporated into the model and modified as the user prefers. So the cost implications of possible courses of action are immediately visible.

EcoTwo is a mathematical program designed to help you minimize the cost of meeting your CO2 reduction obligations. The model takes account of the anticipated trade in CO2 emission credits. It provides insight into the financial implications of acquiring CO2 credits, acting to reduce emissions and selling credits. So, against a background of fluctuating emission credit prices and possible uncertainties regarding the deployment of plant, you are able to develop the most rational approach to CO2 reduction for your business. EcoTwo is a particularly valuable planning tool in complex cases, where various courses of action appear viable.

The program offers numerous output options:

• automatic optimization: what action should be taken, when and where  
• calculation of CO2 reduction costs for the business as a whole and for each installation: cost per year and total cost over the lifetime of the measure        
• sensitivity analysis 
• multiple concurrent measures for each installation 
• effect of measures per operating point 
• ‘what-if’ module: how a shift in a given parameter will influence the cost profile and potentially the strategy selection         

The program is designed for maximum flexibility. Changes in parameters, such as the CO2 Performance Standard Rate, time span, installation types, installation deployment, measures already in place, economic climate and so on may be incorporated into the model and modified as the user prefers. So the cost implications of possible courses of action are immediately visible.For more information please contact us.