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ECCT's LCI issues report on industrial energy efficiency

Taipei, 5 March – The European Chamber of Commerce Taiwan's (ECCT) Low Carbon Initiative (LCI) released a report today titled "The Path to Industrial Energy Efficiency in Taiwan - Partnering with the EU". The report, initiated jointly by the ECCT LCI and KPMG Sustainability Consulting, provides an overview of global energy and climate facts and trends, a summary of policies and practices in Taiwan and the EU and offers some of the best solutions to improve energy efficiency in industry from ten ECCT LCI members: ABB, Atlas Copco, BASF, Bosch, Evonik, Grundfos, Schneider, Siemens, STMicroelectronics and TUV Rheinland.

The report concludes that there is great potential to realise significant energy savings in Taiwan's manufacturing sector, which would translate into less primary energy use and therefore a reduction in energy imports and CO2 emissions. The report shows how integrating energy management into a company's business strategy can reduce costs and thereby enable companies to increase margins and competiveness. Moreover, energy saved by industry helps to enhance economic independence while boosting energy efficiency is the least costly of all measures to reduce pollution and combat climate change since it does not require a change in living standards, way of life or industrial structure. It simply consists of applying better technologies onto existing patterns of production, transportation, housing or electricity generation.

According to the report, there are, however, stumbling blocks to overcome before realizing greater energy efficiency in industry. Taiwan's relatively low energy prices, lack of comprehensive energy and climate policies and the lack of attractive incentives are the major reasons that industries have not taken action to enhance their energy efficiency. Low energy prices in Taiwan make the return on investment cycle rather long and thus act as a disincentive for investments in advanced energy efficiency technologies as investments are usually only decided based upon their immediate benefits and disregard life cycle costs over the medium and long term. In addition, there is a lack of awareness among small and medium-sized companies of the benefits of energy efficiency.

While Taiwan relies heavily on imported energy, there has to date been little focus on energy efficiency. For years, total energy consumption in Taiwan has had a persistently positive correlation with GDP. This is in contrast to countries such as the United Kingdom, Japan and Germany, which have achieved low growth or even declines in energy consumption while achieving positive economic growth.

EU authorities and companies remain global leaders in tackling climate change. EU authorities and member states have introduced policies to spur low carbon development while EU corporations are at the forefront of developing cutting-edge technologies. In 2014, the EU adopted new targets for 2030, including a cut of 40% in greenhouse gases emissions compared to 1990, increasing renewable energy to 27% of the total energy mix, and improving energy efficiency by 27% compared to 1990. Based on experience to date, these targets are credible, economically and technically realistic. Between 1990 and 2014, the EU reduced its GHG emissions by 20% while its GDP grew by more than 40%. EU industry is 19% less energy intensive now than in 2001. New buildings in Europe use half the energy they needed in the 1980s. In terms of policy, the EU implemented the Energy Efficiency Directive (2012/27/EU) in December 2012, which provided a framework for the goal of cutting primary energy use by 20% in EU countries by 2020. Under this policy, every EU member must set an energy efficiency goal at the national level, and achieve the energy-saving goal projected in the directive between 2014 and 2020. In Germany for example, large companies will be required to do an energy audit from 2015 onwards and this has to be repeated every four years. For SMEs, the network of energy consultants and associations should be strengthened. In an evaluation undertaken by the Commission Services in 2012 (Non-Paper Energy Efficiency Directive Informal Energy Council, April 2012), it was estimated that the Energy Efficiency Directive will add €24 billion to the EU GDP and create a net employment of 400,000 jobs, while the cost of implementing all measures would be €24 billion each year. For the years 2011-2020, the reduction in the cost of energy generation and distribution would be an average of €6 billion per year, and the reduction in fuel expenditure would be an average of about €38 billion per annum.

The third chapter of the report notes the emergence of energy management systems in recent years, which highlights the growing importance of energy efficiency for industry. ISO 50001, published in 2011, is the most globally-recognized energy management system standard. As of May, 2014, 7,346 manufacturers in 68 countries worldwide have implemented the ISO 50001 system in their plants. Taiwan ranked No. 11 with 118 companies certified for ISO50001. Among them, the manufacturing sector takes up the highest portion at 65%.

Another significant trend in recent years is the increase in the use of Combined Heat and Power (CHP) systems. CHP systems recycle the heat lost in the conventional power generation process, making them far more energy efficient than traditional power generation facilities. European countries, including Denmark, Finland, Norway, Germany and Italy, have actively developed large-scale Combined Cooling, Heating and Power (CCHP) Systems and promoted regional energy integration through legislation, tax discounts and subsidies for CCHP energy and natural gas.

Chapter 4 of the report sets out to show that Taiwanese businesses can actually save money by reducing energy and the use of resources while the final section of the report (chapter 5) provides a range of solutions offered by ECCT LCI members to improve energy efficiency in manufacturing.

About the ECCT Low Carbon Initiative
The ECCT spearheaded the Low Carbon Initiative (LCI) in 2011 to showcase the best European low carbon solutions and practices through its three strong platforms: 1) Advocacy, 2) Best Practices, and 3) CSR & Education, across a broad range of industries, to raise awareness about sustainable development and promote the adoption of low carbon solutions. To promote EU-Taiwan cooperation, LCI aims to demonstrate what EU countries and leading firms are doing to address sustainability challenges. The LCI expects to engage local business, policy-makers and the public to work together to meet the targets set by the Taiwan government to lower carbon emissions and prepare companies to deal with rising energy costs.