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178 WASTE HEAT AND EUROPEAN CLEAN ENERGY POLICIES 100% 90% 80% 70% 60% 0.25: 0.91 20% 40% 60% 0% 80% 100% CO-Share (∼ Chemical Energy Content) in Total Off-Gas Recovery of Chemical Energy Recovery of Thermal Energy No Energy Recovery Diagram no. 7: Effect of Increasing Chemical Energy Content 5.1.3 Deduction of Hypothetical Natural Gas Emissions However, the diagram above also illustrates that producers of waste heat electricity cannot receive all allowances they need; allocation only amounts to about 91%. This is the result of a conservative approach to the implementation of the waste-gas-exception from the rule of not allocating allowances to electricity production: Given its initial reluctance to allocate free allowances to certain privileged forms of electricity production, it comes as no surprise that the Commission decided to limit free allocation to that part of the type (c) process emissions that occurs because the electricity is generated from waste gas in lieu of natural gas: ‘Only emissions which are additional to the emissions that would occur if natural gas was used are taken into account.’132 It follows that a hypothetical amount of emissions calculated on the basis of an energy-equivalent amount of combusted natural gas is subtracted from the historical activity level. The amount of natural gas needed to equal the energy content of the off-gas depends, again, on the share of incompletely oxidised carbon, which in case of waste heat recovery is set at 25%. The argument is that, as far as the chemical or thermal energy from the off-stream merely replaces the energy input of conventional electricity production, waste gas/heat electricity and conventional electricity should be treated equally. As electricity production is, in principle, not eligible for free allocation, equal treatment means “no allocation”, which is implemented through the emission deduction. It is not without doubt, though, if this method complies with the exception the Directive made for waste gas electricity: ‘One could argue (...) that the text in Article 10a(1)(3) of the amended Directive (...) implies that for electricity producers using the waste gas, 132 DG-CLIMA, Guidance Document 8 (2011) 5 (emphasis maintained). Preliminary Free Allocation in % of Total Off-GasPDF Image | ELECTRICITY PRODUCTION FROM INDUSTRIAL WASTE HEAT
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