Exxon: EU energy efficiency plan too expensive

The EU energy efficiency action plan sets Europe on the right track to reduce energy use but risks becoming too expensive, according to international oil company ExxonMobil.

The action plan was published last month and aims to help Europe cut 20% off its energy consumption by 2020.

Presenting Exxon’s ‘long-term energy outlook’ in Brussels on Tuesday (21 November), Exxon Vice-president Sherri Stuewer told European Voice that political pressure for more energy efficiency was in line with industry thinking.

"Energy efficiency is in everyone’s best interest", said Stuewer. "Energy is a bill we pay too. There is a built-in incentive to improve efficiency."

But she warned it was important "to consider cost effectiveness when selecting the options".

"If you have a series of mandates and regulations, you end up with some steps that are more costly than others," she added.

Energy efficiency is not the only area where Exxon fears over-regulation from the EU. The European emissions trading system (ETS) sets a cap on carbon dioxide emissions from large industrial sectors and allows companies to buy and sell emission permits.

Carbon prices this year alone have fluctuated between €8.45 and just over €30. This volatility makes long-term investment planning difficult, according to Exxon.

"Current policies that aim to impose emission caps give us the challenge of trying to understand in advance what supply and demand will be," said Stuewer. "That’s very difficult…no one expects perfect predictability. Not 30- or 50-year predictability. But month-to-month predictability would be very helpful."

Asked if ETS was a mistake, Stuewer said: "I think we need to debate other options."

She said Exxon was analysing alternative emission reduction ideas using guidelines set by the EU integrated pollution prevention and control (IPPC) directive.

This 1996 legislation sets rules for permitting and controlling pollution from industrial installations in the EU, with an emphasis on best available techniques and technologies.

The ETS allocates emission trading permits for five-year periods: a short timeframe which has been criticised by many industry groups. "We are trying to look at IPPC policies to find ways to bring a stable framework for planning prices," said Stuewer.

The Exxon long-term energy outlook runs to 2030. The oil company predicts a 60% growth in energy demand by that date, 80% of which is expected to come from poor countries.

Technology is the best way to face this challenge, according to Exxon. One of the sectors offering the greatest room for improvement, said Stuewer, is light duty transport, especially cars.

Growth in the developing world is expected to spur a huge increase in the demand for cars, leading to a surge in energy demand unless more efficient vehicles can be developed.

Europe currently has 400 cars for every 1,000 inhabitants. In China the figure is 12 per 1,000.

The EU energy efficiency action plan sets Europe on the right track to reduce energy use but risks becoming too expensive, according to international oil company ExxonMobil.