The Climate & Energy Package -an introductionec.europa.eu/environment/archives/greenweek2009/... ·...
Transcript of The Climate & Energy Package -an introductionec.europa.eu/environment/archives/greenweek2009/... ·...
The Climate & Energy Package
-an introduction
Green Week
24 June 2009Mr. Stefaan Vergote
Ms. Yvon Slingenberg
Directorate C
Climate Change & Air
DG Environment
European Commission
Political context
Overall objective: limit temperature increase to 2°C above pre-industrial level
European Council March 2007: 20/20/20 by 2020
Climate & Energy Package: agreed Dec 2008
Environment Council March 2009:Global GHG emissions: peak by 2020 - halved by 2050 (from
1990)
Reductions by 25 – 40% by 2020 and 80 – 95% by 2050 for developed countries, compared to 1990 levels
The Package at a glance
Carbon capture and
storage Directive
CO2 & cars
Renewable
Energy Directive
Fuel Quality Directive
-20% / 30%
technology specific &
product policies
cross-sectoral
targets & instrumentslarge industrial
installations &
aviation
“small
emitters”
EU ETS
Effort
Sharing
Decision
GHG Target:
-20% compared to 1990
-14% compared to 2005
EU ETS
-21% compared
to 2005
Non ETS sectors
-10% compared to 2005
27 Member State targets, stretching from -20% to +20%
A shared effort between sectors and MS
Effort Sharing Decision
Introduction
ESD covers about 60% of the EU’s GHG emissions
Very diverse sectors: transport, heating in buildings, services, agriculture, waste and possibly forestry
Mostly “small emitters” as a result of our daily activities
Major differences in cost-effective emission reduction potential (high for some non-CO2 emissions and buildings, low in transport)
National measures, regional and local action important
Complementary support to MS through community-wide measures (energy efficiency standards, CO2 & cars, energy labelling of equipment and appliances…)
Key points
Binding annual targets in 2013-2020
Strict reporting obligations for Member States
Annual compliance check for period 2013-2020
Member States subject to corrective action if non-compliance
Commission reporting requirements
Further Commission action requirements
Effort Sharing targets for 2020 compared to 2005 emissions
-20
-15
-10
-5
0
5
10
15
20
LU DK IE SE AT FI NL UK BE DE FR IT ES CY EL PT SI MT CZ HU EE SK PL LT LV RO BU EU
2020 emissions compared to 2005
Flexibility
Member States are allowed certain flexibility for
meeting their targets:
Within a Member State – flexibility between years
Between Member States – flexibility through trading
No KP AAU’s in the system
JI/CDM
for the first time, absolute constraint on use of JI/CDM credits in non-
trading sectors
stronger requirements for reporting on quality
International agreement:
Next steps
Land Use, Land use Change and Forestry
International maritime shipping
If 30% or more than 20% for the EU:
Split between trading and non-trading sectors
Use of CDM credits
Sharing of deeper target among Member States
Carbon Capture and Storage
CCS Directive:
Main structure
Enabling approach
Draft directive on geological storage sets environmental rules and liability requirements
Member States determine whether and where CCS will happen on their territory
Emissions captured and stored are recognised as not emitted under the Emissions Trading Scheme
Companies decide whether to use CCS on the basis of conditions in the carbon market
Capture-ready assessment required to avoid lock-in of high-emissions technology
No mandatory CCS at this stage
Implementation
CCS Directive implementationExchange of information with Member States
Guidance on key issues (some requested by Council and EP)
Checking transposition
Commission review of draft permit and transfer decisions Establishment of Scientific Panel by Commission Decision
CCS under the ETSFinalisation of Monitoring and Reporting Guidelines
Ratification of changes to international conventions (OSPAR) COM proposed ratifying Decision beginning June.
Demonstration of CCS and
innovative renewables
300m allowances in New Entrant’s Reserve of ETS for co-funding demonstration of CCS and innovative renewables
Detailed modalities to be established by Commission working with the Member States, and with EP and Council scrutiny of proposals
Aim for adoption of the modalities through comitology by end 2009
The Renewable Energy Directive
Key points
1. Sets 20% EU target and mandatory national targets for renewable energy shares in 2020, including 10% of renewable energy in transport
2. Requires national action plans
3. Creates flexibility by facilitating “joint projects” with Member States or third countries and “statistical transfers” between Member States to help reach targets cost effectively
4. Requires reduction of administrative and regulatory barriers, improvements in provision of information and training and improves renewables’ access to the electricity grid
5. Creates a sustainability criteria for biofuels
49%
13%
16%
13%
30%
18%
25%
16%
18%
20%
23%
17%
13%
40%
23%
11%
13%
14%
34%
15%
31%
24%
25%
14%
38%
15%
10%
RES share in 2020
BE
BG
CZ
DK
DE
EE
IE
EL
ES
FR
IT
CY
LV
LT
LU
HU
MT
NL
AT
PL
PT
RO
SI
SK
FI
SE
UK
Member States’ targets
2.2%
9.4%
6.1%
17.0%
5.8%
18.0%
3.1%
6.9%
8.7%
10.3%
5.2%
2.9%
32.6%
15%
0.9%
4.3%
2.4%
23.3%
7.2%
20.5%
17.8%
16%
6.7%
28.5%
1.3%
39.8%
0%
RES share in 2005
Based on 2005 starting point, recent progress and a balanced sharing of the effort, weighted by GDP/capita
The revised EU ETS –
improved and extended
Some ETS basics
Started in 2005
World‟s largest „cap-and-trade system‟
Large industrial emitters and power plants
Cap = environmental outcome – trade -> lowest cost
Reduce on site or buy allowances?
Trading periods: 2005-7, 2008-12, 2013-20, …
Annual compliance cycle with monitoring, reporting, verification, surrender of allowances
Penalties for non-compliance
Extended scope
Scope 2005-2012:
Sectors: Power generation and industrial sectors (steel and iron,
cement, lime, ceramics, paper, glass)
Gases: CO2, opt-in of N2O
Extended scope as from 2013:
New sectors: Aluminium, basic chemicals production and aviation
(from 2012)
New gases: PFC from aluminium production, N2O from certain
chemicals production
Possible inclusion of maritime transport if no agreement in the
International Maritime Organisation
-20%
2083 Mt/yr
Gradient: -1.74%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Primary feature of the new ETS: A robust EU-wide cap
Starting point:
1974 Mt in 2013
1720 Mt
Linear factor to be reviewed by 2025
Aviation to be included; will change figures correspondingly, but cap not reduced
Disclaimer: all figures are provisional and do not account for new sectors in third period
Harmonised Allocation Rules
Auctioning is default allocation methodFor the power sector as from 2013
Ltd derogation available for 10 new MS
Transitional free allocationBenchmarks (average of 10% most efficient installations)
Benchmark = X allowances per unit of production output
Phasing out free allocation for sectors not exposed to risk of carbon leakage 80% in 2013 – 30% in 2020 – 0% in 2027
Addressing “carbon leakage”
Carbon leakage: When production is moved out of
the EU to places with less ambitious climate
policies
List of exposed (sub-)sectors to be determined by
December 2009
“100%” free allocation
Review every five years, but first …
… a review after Copenhagen – may adjust percentage of
free allocation and/or introduce other measures
Use of auction revenues
Member States decide on use of all auction
revenues
50% of revenues “should” be used for climate
related purposes including among others
Global Energy Efficiency and Renewable Energy
Fund, Adaptation Fund
Developing renewable energies
Avoided deforestation
Carbon Capture and Storage (CCS)
Low emission and public forms of transport
Market oversight provisions
Ensure the good functioning of the market and thereby emission reductions at least cost
Monitor carbon market, report annually on auctions, liquidity and volumes, propose measures if needed
If needed, propose measures to protect from insider dealing and market manipulation
Measures to deal with excessive price fluctuations
International offsets from CDM/JI:
a stepping stone towards wider use of cap-and-trade
Role of offset credits Build capacity for cap-and-trade in less developed countries –
but at least 50 % of reduction effort needs to be within the EU
Provide additional means to comply with targets within the EU
Quality Projects should bring real emission reductions and benefits to
sustainable development
The Commission and the Member States can decide that credits from certain types of projects are not to be accepted for compliance purposes in the EU ETS
Take account of international agreement and reform of CDM
Linking
EU ETS can be linked to any mandatory and compatible GHG emission trading system with absolute emission caps, in any country or in sub-federal or regional entities
A link to the future US federal trading system would create a transatlantic market
Further emission trading systems under development/ consideration in Australia, New Zealand, Japan, Canada could lead to an OECD-wide market by 2015
What happens after Copenhagen agreement?
Three months following Community signature,
Commission will submit a report
If appropriate, proposal will be made covering
among others
A tightening of the phase 3 cap -> contr. to 30%
reduction target
Increased access to credits, but: restricted to
ratifying countries, supplementarity maintained
Review of rules on free allocation
Summary
The climate and energy package
Covers all sectors of the economy
Gives EU industry first mover advantages
Makes the EU ETS ready to go global
Gives an important impetus to the
international negotiations
For more information
Listen to our prominent panelists!
Attend further GW sessions
Visit
http://ec.europa.eu/environment/clima
t/climate_action.htm