28 March 2013

Erlet Shaqe Chairman Albania Energy Association

AEA Albania Energy Association PO Box 2424/1, Tirana, Albania, 1001 P: +355 672043806| E-mail: info@aea-al.org www.aea-al.org

Overview
Purpose : Enables every business whether it is a small, medium or large enterprise, to play a role in addressing climate change. Why reduce emissions? The Business Case: Risks and Opportunities. Albania emissions? We propose a six step approach. Where Do Albanian CO2 Emissions Come From ? Data for CO2, NOx, SOx emissions

Every business has a role to play in addressing climate change.

Why Do We Need to Reduce Emissions?

Greenhouse gas emissions (GHG) in the atmosphere are reaching a critical level. If the increase in emissions continues there is a high risk that this will create catastrophic, or so called runaway warming of the planet. The Intergovernmental Panel on Climate Change (IPCC) estimate that we have ten years in which to stabilize emissions to a maximum of 450 parts per million (they are currently at 430ppm) so as to stabilize global temperatures to a safe level at or below 2 degrees of warming.

What is the Difference Between Air Pollutants & Greenhouse Gases?

Albania air pollution is a local and regional problem caused by air pollutants such as considers three direct GHGs (CO2, CH4 and N2O) and indirect GHGs (CO, NOx, SOx and NMVOC). Air pollutants tend to have a short lifetime & impacts occur relatively close to emission source.

What Does this Mean for Albania?

Air pollution Causes poor air quality, which has human health and monetary impacts. The data inventory of greenhouse gas (GHG) for the years 2005-2007, show that total net release of greenhouse gases (CO, CH4 and N2O5) for the reporting period is about 8.5 million / ton / year of CO2 Climate change & Albania Ranks Albania in countries with low pollution compared to other European countries. Mean temperature increase of 4.8 degrees expected by 2100.

CO2 m3 ton per cap

Year

The Business Case. The Risks & Opportunities

Avoids Costs of Reduced Risk & Stranded Assets

Cost Savings

Enhanced Reputation and Leadership

Six Reasons Why Reducing Emissions Makes Good Business Sense

Improved Energy Efficiency

Competitive Advantage

Reduced Risks from Legislation

What Are the Risks for Business?

Companies will need to consider the impact on their business of having to pay for GHG emissions. While this is not an immediate prospect in Albania - other countries are moving rapidly towards introducing charges/ penalties for GHG emissions.

Companies need to consider - Additional expenditure on infrastructure and other adaptation measures - Likelihood of tougher buildings standards - An increase in carbon regulations - Penalties/ charges for greenhouse gas emissions Every business has a role to play in addressing climate change.

The Risks
1. From legislation
- Tightening regulations around energy efficiency, building standards, waste and emissions are occurring worldwide; it is only a matter of time before Albania gets hit with the same regulations.

2. Costs of physical risk & stranded assets

- Costs of damage as a result of extreme weather events, or stranded assets as loans get more expensive because of the higher risk associated with high emission assets.

The Opportunities. Less Energy = Cost Savings

3. Energy efficiency - Energy saving initiatives such as building insulation, heat pumps, water chillers, solar heating and efficient appliances substantially reduce the energy consumption in our buildings.
Opportunities

4. Cost savings - According to the Carbon Trust, a 20% cut in energy costs represents the same bottom line benefit as a 5% increase in sales in many businesses.

The Opportunities
5. Climate Leadership matters
Companies are being ranked on their climate performance and commitment.

6. Competitive advantage
- By responding early to emissions, companies have the opportunity to influence and shape policy development and therefore have more control over the future business environment.

10

How Can Businesses Reduce their Emissions?

11

Step 1. Prepare an Emissions Management Strategy

Three key elements of an emissions management strategy:
Establish an explicit policy direction for emissions reduction Assign responsibility and accountability Set out reduction targets and timelines

12

Step 2. Measure Energy Use and Emissions

The GHG Protocol provides an international standard in accounting for GHG emissions.

13

Step 3. Set Targets and Compare

Set targets that work by ensuring that they are SMART: Specific Measurable Achievable Realistic Time-related
- Benchmark your performance by comparing your

operations over time, different departments or your company with other companies.
14

Step 4. Implement Initiatives

-

Identify easy wins and implement. These can be low cost and simple actions, but will demonstrate your commitment to emissions reduction. Identify energy intensive activities and start reducing immediately Identify medium term and long-term actions and commit to doing the most appropriate for your business. Establish green procurement, including energy efficient equipment, premises and vehicles.

15

Step 5. Offset to Become Carbon Neutral

Carbon neutrality is when an organisation cuts/and or offsets its emissions to zero. Some of the most popular carbon offset projects from a corporate perspective are energy efficiency and wind turbine projects .
The worlds first major bank to achieve carbon neutrality since 2005. The bank offsets its remaining emissions through investing in third-party verified projects that generate credible carbon credits from both the compliance and the voluntary markets.

16

Step 6. Track Progress, Audit and Report

Results on performance should be regularly reported and reporting should include how targets have been met and ways to improve performance in the future.

The trend will be that carbon reporting will become compulsory The UK government recently amended the Climate Change Bill to strongly encourage all UK listed companies to include details of GHG emissions in their annual reports.

17

Where Do Albanian CO2 Emissions Come From?

The GHG inventory, emissions per sector

18

Where Do Albanian N2O Emissions Come From?

The GHG inventory, emissions per sector

19

CO2 Emissions in Albania

The GHG inventory, emissions per type CO2 metrics ton per cap

CO2 metrics ton per cap

Year

20

SO2 Emissions in Albania

The main source of air pollution by SO2 and NO2 is especially transport sector, especially used cars without converters (ug/m3)

The GHG inventory, emissions per type

21

NO2 Emissions in Albania

The main source of air pollution by SO2 and NO2 is especially transport sector, especially used cars without converters (ug/m3)

The GHG inventory, emissions per type

22

The Business Case for Green Buildings

Energy efficiency is one of the quickest, cheapest, cleanest ways to address reducing emissions. Energy saving initiatives such as building insulation, heat pumps, solar heating and efficient appliances can substantially reduce the energy consumption of buildings. Many of these can be installed with little or no cost through building design and good management practices of building operators and occupants.

23

The Business World is Changing

In the global economic crisis, everyone is focusing on their bottom line Legislation and regulation mean sustainability is more than a nice to have Consumers want to know whats behind your company image Consumers expects brands to take action on global issues not just on brand issues

New economic environment

Environmentally focused companies have performed up to 33% better that their peers in the financial markets
(AT Kearney 2009)

New business environment

New EU legislation on carbon emissions, energy efficiency, waste, recycling and water is out in 2009; other countries will follow soon

New consumer culture

85% of Americans would switch to another company's products or services if they found out about a company's poor corporate responsibility
(National Geographic Greendex Survey 2008)

New brand landscape

93% of Chinese people would rather buy from companies that are trying to reduce their contribution to global warming
(Havas 2008)

24

Thank You.

Please contact the AEA if you have any further questions.

www.aea-al.org
25