By Efi Xanthou
On Friday, June 23, the House of Representatives hosted a seminar presenting part of the Fit for 55 EU package, essentially the EU’s target of reducing net greenhouse gas emissions by at least 55 per cent by 2030.
With Fit for 55 we are essentially referring to a set of legislative proposals aimed at revising and updating EU legislation, that will put into place new initiatives, with the aim of ensuring that EU policies are in line with the aforementioned climate goals, agreed upon by the Council and the European Parliament.
Nine of the 13 legislative proposals have already been adopted at EU level, two are still being debated and another two have been probationally agreed upon by both the EU Council and the EU Parliament.
Needless to say, Cyprus has not even adopted the European Climate Regulation 1119/2021, that was adopted on June 30, 2021. The Department of Environment doesn’t even have a draft ready to put to public consultation. (The fact that it is begging for new personnel and not receiving it for years now may have something to do with it. Last time I checked they were asking for another 45 people to deal with all their responsibilities, old and new).
This seminar was very comprehensive and many aspects of the Fit for 55 package were presented, especially imminent legislative changes at national level. I shall need many articles to present the whole package and how it will directly and indirectly impact our daily lives. But for this article I want to focus on data provided by the Department of Environment, pertaining to the EU Emissions Trading Scheme and the money paid by polluters in the Republic of Cyprus, mainly the Electricity Authority of Cyprus (EAC).
The Emissions Trading Scheme has been revised and there are new targets set for overall emissions. Essentially the Republic of Cyprus needs to reduce emissions by 43 per cent per infrastructure by 2030, compared to the emissions emitted in 2005. The overall EU target is 55 per cent reduction. Furthermore, emissions created by sectors that are not included in the Emissions Trading Scheme also need to be reduced by 30 per cent, again compared to 2005 emissions. So, the new, combined emission reduction target of the Republic, compared to 1990 emissions, is a 40 per cent reduction.
Cyprus has three sectors with immovable infrastructure that fall under the EU Emissions Trading System: the EAC’s conventional fuel production units, a cement factory (Vasilikos Cements) and five brick and ceramics production units. Furthermore, Cyprus is responsible for five air transport companies’ emissions.
Since 2013, huge and ever-increasing amounts have been paid out by these companies for their “right” to emit polluting emissions, money that the consumer inevitably pays directly or indirectly. We do not only pay as consumers for the huge amounts of money that the EAC pays out every year to the emissions scheme, but we also partly fund the five air transport companies by subsidising the airfares of tourists arriving on the island. As for the cement and brick factories, I don’t need to remind the readers that our government is constantly building new infrastructure, and that the exorbitant amount of money needed to build or buy a home is directly affecting all of us, driving rent prices up as well.
In 2013 the EAC, the cement factory and the five brick factories paid out €336,000. In 2015 the amount jumped to €2.3 million, in 2016 €9 million and in 2019 it rose to €67 million. In 2021 the amount leapt to €165.2 million and in 2022 €247.9 million. God knows what this amount will be for 2023, 2024 and 2025, which is the earliest we will see production of electricity from imported gas at this rate.
Now, to be fair, the emissions of permanent infrastructure have fallen by 44.83 per cent since 2005, and aviation emissions by 34.83 per cent for the same period. But our demand has grown, so the reduction is mostly due to changes in production methods and the adoption of more climate friendly procedures. So, in the slide that specifically shows electricity production in Cyprus, the CO2 released in the atmosphere basically remains around 3 million tons per year from 2013 onwards. This is taking into account the yearly increase of electricity produced by Renewable Energy Sources, which according to the EAC had reached 17.2 per cent for 2022.
Now remember that this is the same EAC which has been refusing to receive all the renewable energy produced on the island due to its infrastructure deficits. So, according to the Department of Environment, since 2013 Cypriot companies have paid €618 million to the EU Emissions Trading Scheme, with the amounts increasing exponentially in the years since 2020, since our government is not subsidising these companies anymore. Cyprus received approximately €103 million in the period 2013-2020 from the Emissions Trading Scheme.
So, to put this another way, our government has been giving away millions of euros per year to the EAC to subsidise the money each household and company in this country pays for electricity, without ensuring that the necessary infrastructure upgrades are made to be able to include enough renewable energy production to reduce the overall cost.
We have been tossing money into the wind, instead of at least investing it securing future reduced prices for energy consumption! And the money to be paid out to the Emission Trading Scheme by the EAC will just continue to rise, since we are no closer to producing electricity through less polluting energy sources any time soon.
How is this distortion to be fixed? Well, the new Fit for 55 package stipulates that governments can only utilise its income from the Emissions Trading Scheme to reduce carbon emissions and combat climate change. This income is estimated to be more than €1 billion for Cyprus, for the period 2021 -2030.
I suggest that our government gets its act together and at least funds the upgrade of the electricity infrastructure of this country in order to facilitate the constant increase of electricity production from renewable sources.
It is important to remind readers that this infrastructure is not even owned by the EAC anymore, but a separate semigovernmental entity that is supposed to rent out the use of the infrastructure to any electricity producer. The upgrade is essential if we want to reach our overall targets in incorporating electricity production from renewable sources, but also to finally reduce the price of electricity in this country and give all households a break from the ever-increasing cost of living.
Efi Xanthou is a political scientist and the coordinator of the House interior committee of the Cyprus Greens-Citizens Cooperation, xefi81@gmail.com