13
efficiency or to increase the return on such investments e.g. by taxing energy consumption. Our audit found that financial incentives indeed
were important for saving energy. Companies frequently expected energy savings to increase their market share. The presence of sufficient capital
is also an important factor to invest in energy savings. But there are also other reasons and factors that are not directly related
to the direct investment cost. A company may decide not to take energy saving measures if it thinks they will disrupt its relationship with suppliers
and maintenance contractors a computer-controlled energy efficient production line, for example, might be too advanced for the tried and
trusted maintenance contractor. Companies are also more willing to invest in energy saving measures at a natural moment for example when
a production line is expanded or machinery is replaced. There are also non-cost factors for investing in energy savings and
energy efficient products. One is the presence of knowledge, not only about the energy saving potential but also about the companys own
energy management. Our audit found that policy instruments that agreed with the reasons and
factors given above were a greater incentive to manufacturing companies than policy instruments that did not. Aligning the current policy
instruments would therefore increase policy effectiveness. We return to this in the recommendations given in section 5 of part II of this report.
Our audit findings regarding the manufacturing sectors reasons for and against taking energy saving measures are considered in chapter 5 of
part II of this report.
2.2.4 The European CO
2
emissions trading system
Part of the energy saving is negated by the interaction between national energy saving policy and the European CO
2
emissions trading system. Since 2005, the EU has used the trading system to reduce the emission of
greenhouse gases see box. In the system, major emitters of CO
2
factories, power stations must have emission allowances. They can buy and sell allowances. Those that successfully reduce their CO
2
emissions can sell their excess allowances to others.
14 The European CO
2
emissions trading system
In 2005, the European Commission set a ceiling on total CO
2
emissions by industrial plants in the EU. The plants include power stations, oil refineries, steel companies and glass, cement
and paper producers. The companies in question are allocated emission allowances, which, in aggregate, make up the ceiling. If a participating company emits less CO
2
it can sell its unused allowances to other companies. If it emits more CO
2
it must buy additional allowances. This creates a price for CO
2
emission allowances. The participating companies are responsible for 40 of all CO
2
emissions in Europe. To date, the emission allowances have been allocated free of charge. The ceiling that will
apply in 2020 was set in 2005. There has been some discussion of whether it should be lower i.e. stricter The ceiling for 2020 and subsequent years will be set in a series of steps,
one being taken on 1 January 2013. The CO
2
emissions trading system will be an important factor in achieving the European target of reducing CO
2
emissions by 20 relative to 1990. Since it relates to only 40 of total CO
2
emissions, however, this is inadequate. To achieve the ultimate target, CO
2
emissions must also be reduced in other sectors.
Our audit found that the CO
2
emissions trading system probably did not produce any energy savings in the Netherlands in 2005-2007. The
allowances allocated to the Netherlands were higher than the actual emissions. Companies did not have to buy additional allowances until
2008, after which the system probably had an appreciable effect. Since then, however, there has also been a negative interaction with the
national energy saving policy. This interaction occurs in two instances: 1.
when the national energy saving policy is directed at companies subject to the CO
2
emissions trading system; 2.
when the national energy saving policy is directed at reducing electricity consumption by companies or individuals that are not
participating in the emissions trading system but do influence the electricity production of power stations. Power stations participate in
the CO
2
emissions trading system. In both instances, energy savings lead to companies or power stations
holding unused emission allowances. Sooner or later, these allowances will be used, after having been sold or otherwise, in the Netherlands or
elsewhere in the EU. The CO
2
emission initially avoided thanks to the measures taken in the Netherlands will then occur at another date and
probably in another EU member state. In consequence, all other instruments and measures taken to reduce CO
2
emissions in the sectors participating in the emissions trading system will
