European utilities give priority to reducing power plant pollution

Douglas J. Smith

Managing Editor

In 1993, Finland`s Ministry of Trade and Industry allocated 82 percent of its research funds to research on environmental technology, renewable energy and energy conservation. Finland currently exports around (US)$60 million of equipment annually to other countries to reduce pollution. In addition, Finland itself has spent millions of dollars on installing flue gas desulfurization systems to its coal-fired power plants. Investments in environmental technology make up 20 to 25 percent of the price of new coal-fired power plants in Finland.

Because of concerns about polluting the environment, Finland has set up a technology research program to fund research into environmental problems connected with the use of energy. Under this program researchers are working on developing solutions for reducing emissions from the production of electricity and the environmental impacts from the production and use of wood and peat. They are also looking at reducing pollution from the transportation sector. A major objective of the program is to develop cost-effective technology solutions for reducing emissions.

Sweden is controlling its emissions of SO2, CO2 and NOx through a combination of economic measures and the setting of strict emission standards. On the economic side Sweden has imposed a carbon tax on the use of fossil fuels, a tax on sulfur emissions and a so-called environmental charge on NOx emissions from power plants. They also have very stringent emission standards.

Local emissions of NOx and SO2 in the Netherlands, Belgium, Norway, Sweden, Denmark and Finland are very small. However, emissions of these pollutants are increased tenfold when cross-border pollution is included. To reduce cross-border pollution non-members of the European Union (EU) have agreed to adhere to EU minimum requirements for emissions of sulfur, lead and nitrogen oxides into the atmosphere, including those from electric power plants. Although the goals are not legally binding they do serve as a guide for countries who have a need to set up their own emission standards.

For a number of years European governments have been actively debating an energy/carbon tax on fossil fuels. Under the proposal half of the tax would be based on the carbon content of the fuel while the other half would be on its energy content. The aim is to reduce the emissions of CO2 and to improve energy efficiency

Obviously controlling NOx, SOx and other pollutants from electric power plants is necessary. But from an economic point of view, how low should we mandate the limits? If tax laws are written as a way of raising general revenue funds, they will fail. It is my opinion that energy tax laws should be written so that companies have an incentive to reduce pollution, not as a punishment.

In the new competitive electric power market only the most efficient companies will survive, and the more efficient a plant operates the less it pollutes. However, legislators must be careful that they do not burden electric utilities and their customers with excess legislation and/or taxes. Without an expanding electric power industry no country can expect to grow economically.