Greenhouse Gases [EU]
Reducing greenhouse gases by 2020
This Decision contributes to meeting the commitment made by the European Union to reduce its greenhouse gas emissions by 20% by 2020 in relation to 1990 levels. It sets objectives for reducing emissions for each of the Member States and defines the means for checking whether they have been met. These objectives could be increased in line with international agreements.
Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020.
This Decision sets out minimum contributions for Member States in terms of greenhouse gas emissions *, following commitments made by the Community for the period from 2013 to 2020.
Emission levels for the period from 2013 to 2020 and flexibility
Each Member State has annual emissions quotas forming a linear trajectory from 2013 to 2020. Each year between 2013 and 2020, Member States’ emissions must be lower than the corresponding annual emissions quota. The annual emissions quota for 2020 corresponds to the percentage fixed in Annex II to the Decision for each Member State.
During the period from 2013 to 2019, a Member State may carry forward from the following year a quantity of up to 5 % of its annual emission allocation *. The unused part of the quota may be carried over to subsequent years. It is also possible, under certain conditions, to transfer a part of this allocation to other Member States.
Energy efficiency
In 2012, the European Commission will assess the progress achieved by the Community and Member States with regard to the implementation of the Action Plan for Energy Efficiency. Following this assessment, the Commission shall propose strengthened or new measures, if necessary.
Use of credits from project activities
In order to fulfil their obligations, Member States may use the following greenhouse gas emission reduction credits:
- Directive 2003/87/EC during the period 2008-2012 and corresponding to projects registered before 31 December 2012;
- CERs issued for emission reductions from projects implemented in LDCs;
Each year, Member States may transfer up to 3% of their unused annual allocation to another Member State. They may also carry over the unused part to subsequent years.
Reporting, evaluation of progress, amendments and review
Pursuant to Decision 280/2004/EC, Member States must declare the following in their reports:
- their annual greenhouse gas emissions;
- use, geographical distribution and types of credit used;
- forecasted progress and national projections;
- information on policies and national measures.
Every two years, the Community will evaluate progress achieved and compliance with commitments.
Corrective action
If the emission allocations which have been set are exceeded, the Member State concerned must take the following steps:
- a deduction from the Member State’s emission allocation of the following year;
- the development of a corrective action plan;
- the temporary suspension of the eligibility to transfer to another Member State part of their emission allocation and rights to use credits from project activities.
Adjustments applicable upon the approval by the Community of an international agreement on climate change
Following the signing of an international agreement on climate change by the Community providing for a reduction of 20 % in greenhouse gas emissions compared with 1990, the Commission has to present, in the three next months, a report on the following points:
- the nature of measures decided at international level;
- options required at Community level in order to move to the 30 % reduction target endorsed by the European Council of March 2007;
- the impact on the competitiveness of industry and agriculture, including carbon leakage risks;
- the impact of the international agreement on other economic sectors;
- accounting methods for emissions to land use and forestry;
- modalities relating to afforestation, reforestation, deforestation and forest degradation in third countries;
- the need for additional policies and measures.
In the event that no international agreement is approved by 31 December 2010, the Commission will have to prepare a proposal for including land use, land use change and forestry in the Community’s reduction commitment.
Context
The objective of the United Nations Framework Convention on Climate Change (UNFCCC), approved by Decision 94/69/EC, is to stabilise greenhouse gas concentrations. It is essential that the global annual temperature does not exceed 2° C above pre-industrial levels. In this regard, emissions of these gases should be reduced by 50 % by 2050.
| Key terms of the Act |
| · Greenhouse gas emissions: emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).
· Annual emission allocation: the annual maximum allowed greenhouse gas emissions in the years 2013 to 2020. |
References
| Act | Entry into force | Deadline for transposition in the Member States | Official Journal |
| Decision 406/2009/EC | 25.6.2009 | – | OJ L140 of 5.6.2009 |
RELATED ACT
Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Analysis of options to move beyond 20% greenhouse gas emission reductions and assessing the risk of carbon leakage [COM(2010) 265 final – Not published in the Official Journal].
This Communication analyses the effects of a policy which could reduce greenhouse gas emissions by 30%.
The 2008 economic crisis caused a sharp decrease in CO2 emissions. In fact, greenhouse gas emissions recorded in the European Union (EU) in 2009 fell by 14% in relation to 1990 levels, even though the decrease recorded in 2008 was only 11.6%.
As a result the possibility of moving beyond the 2020 objective seems realistic if the following options are implemented:
- adapt the emissions trading system by “setting aside” a share of the allowances planned for auction;
- reward fast movers that invest in top performing technology in terms of reducing emissions by allocating them extra free allowances;
- establish carbon taxes;
- use EU policies to encourage emission reductions;
- use the instruments of international credits to encourage the adoption of top performing technologies in emissions reduction.
However, the Communication highlights that the total cost of reducing emissions by 30%, taking into account the costs associated with achieving the objective of 20% reduction, could be EUR 81 billion. This amount considerably exceeds the initial cost of the “climate-energy” package, estimated at EUR 70 billion.
It is also important that the objective of reducing CO2 emissions by 30% is also implemented by third countries so as to avoid the risk of “carbon leakage”. International coordination at this level is, therefore, vital.
Greenhouse gas emission allowance trading scheme
The European Union (EU) is establishing a scheme for greenhouse gas emission allowamce trading for the cost-effective reduction of such emissions in the Community. This scheme should enable the Community and the Member States to meet the commitments to reduce greenhouse gas emissions made in the context of the Kyoto Protocol. Installations operating in the energy sector, iron and steel production and processing, the mineral industry and the paper and board industry will automatically be subject to the emission trading scheme.
Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC [See amending acts].
This Directive aims to introduce significant reductions in greenhouse gas emissions with a view to reducing the influence of such emissions on the climate.
Greenhouse gas emission permits
Since 1 January 2005, all installations carrying out any of the activities listed in Annex I to this Directive (activities in the energy sector, iron and steel production and processing, the mineral industry and the wood pulp, paper and board industry) and emitting the specific greenhouse gases associated with that activity must be in possession of an appropriate permit issued by the competent authorities.
Applications for greenhouse gas emission permits must describe:
- the installation, its activities and the technology used;
- the materials used which could emit the greenhouse gases listed in Annex II;
- the sources of gas emissions;
- the measures planned to monitor and report emissions.
The authorities will issue a permit provided that they are satisfied that the operator of the installation is capable of monitoring and reporting the emissions. A permit may cover one or more installations on the same site operated by the same operator. The permit will contain details of:
- the name and address of the operator;
- the installation’s activities and emissions;
- a monitoring programme;
- the reporting requirements in respect of emissions;
- the obligation to surrender, during the first four months of each year, a quantity of allowances commensurate with the total emissions over the previous year.
The competent authority will reexamine the greenhouses gas emissions permit at least every five years and make the necessary modifications.
Management of allowances
The Community-wide quantity of allowances issued each year shall decrease in a linear manner as from 2013. For 2013, the absolute Community-wide quantity of allowances shall be calculated on the basis of the national plans accepted by the Commission and introduced between 2008 and 2012.
Member States shall auction all allowances which are not allocated free of charge. The distribution of allowances by auction shall take place according to the following procedures:
- 88% shall be distributed amongst Member States on the basis of their emissions;
- 10% shall be distributed for the purpose of solidarity and growth;
- 2% shall be distributed amongst Member States the greenhouse gas emissions of which were, in 2005, at least 20% below their emissions in the base year applicable to them under the Kyoto Protocol.
At least 50% of the revenues generated from the auctioning of allowances should be used for the following purposes:
- to reduce greenhouse gases;
- to develop renewable energies, and other technologies contributing to the transition to a low-carbon economy;
- measures to avoid deforestation and increase afforestation and reforestation;
- forestry sequestration;
- capture and geological storage;
- a shift to low-emission and public forms of transport;
- research in energy efficiency and clean technologies;
- improvements in energy efficiency and insulation;
- to cover administrative expenses of the management of the Community scheme.
By 31 December 2010, the European Commission shall adopt Community-wide harmonised measures for the allocation of allowances.
By 30 June 2010, the Commission shall submit to the European Parliament and to the Council an analytical report assessing the situation with regard to energy-intensive sectors or subsectors that have been determined to be to a significant risks of carbon leakage.
Monitoring and reporting of emissions
By 31 December 2011, the Commission shall adopt a regulation for the monitoring and reporting of emissions. That regulation shall take into account the most accurate and up-to-date scientific evidence available.
Member States and the Commission shall ensure that all decisions and reports relating to the quantity and allocation of allowances and to the monitoring, reporting and verification of emissions are immediately disclosed in an orderly manner ensuring non-discriminatory access.
Verification and accreditation
By 31 December 2011, the Commission shall propose a regulation for the verification of emission reports and for the accreditation and supervision of verifiers. It shall specify conditions for the accreditation and withdrawal of accreditation, for mutual recognition and peer evaluation of accreditation bodies, as appropriate.
Kyoto Protocol project mechanisms
Directive 2004/101/EC reinforces the link between the EU’s emission allowance trading scheme and the Kyoto Protocol by making the latter’s ‘project-based’ mechanisms (Joint Implementation and the Clean Development Mechanism) compatible with the scheme. This will enable operators to use these two mechanisms in the allowance trading scheme to fulfil their obligations. The result will be lower compliance costs for installations in the scheme. It is estimated that annual compliance costs in the period 2008-12 for all installations covered in the enlarged EU will be reduced by more than 20%.
This Directive thus recognises joint implementation (JI) and clean development mechanism (CDM) credits as equivalent to EU emission allowances, except for those generated by nuclear installations and those from land use, land use change and forestry activities. Credits from JI projects are called ‘emission reduction units’ (ERU), while credits from CDM projects are called ‘certified emission reductions’ (CER). The Directive also takes steps to prevent ERUs and CERs being counted twice where they result from activities which also lead to a reduction in, or limitation of, emissions from installations covered by Directive 2003/87/EC.
Registries, reports and agreements
The Commission has adopted a regulation on the establishment of a system of registries in the form of an electronic database for monitoring the issue, holding, transfer and cancellation of allowances. These registries will also guarantee public access to information, confidentiality and conformity with the provisions of the Kyoto Protocol.
The Commission will nominate a Central Administrator to maintain an independent transaction log recording the issue, transfer and cancellation of allowances at Community level. The Central Administrator will conduct an automated check on each transaction relating to allowances. If irregularities are identified, the transactions in question will be suspended until the irregularities have been corrected.
Each year, the Member States will submit to the Commission a report on the application of this Directive and the Directive amending it. The Commission will publish an annual report based on these reports.
Agreements may be made to provide for the recognition of allowances between the Community scheme and compatible mandatory greenhouse gas emissions trading systems with absolute emissions caps established in any other country or in sub-federal or regional entities. Non-binding arrangements may be made with third countries or with sub-federal or regional entities to provide for administrative and technical coordination in relation to allowances in the Community scheme or other mandatory greenhouse gas emissions trading systems with absolute emissions caps.
Adjustments applicable upon the approval by the Community of an international agreement on climate change
The signing of such an agreement requires Member States to reduce greenhouse gases by over 20% compared to 1990 levels, as reflected in the 30% reduction commitment as endorsed by the European Council of March 2007. In that regard, the Commission undertakes to submit a report assessing the following elements:
- the measures taken at international level;
- the action to be taken to reach a target of a 30% reduction in greenhouse gas emissions;
- the risk of carbon leakage in the context of business competitiveness;
- the implications of the agreement on other economic sectors;
- the impact on the agriculture sector;
- afforestation, reforestation, avoided deforestation and forest degradation.
Operators are permitted to use the credits provided for in this Directive, CERs (certified emission reductions), ERUs (emission reduction units) or other approved credits from third countries which have ratified the international agreement.
Background
The adoption of the Kyoto Protocol by the Community and its Member States in 2002 commits them to reducing their greenhouse gas emissions by 8% in relation to 1990 levels between 2008 and 2012. This Directive, by establishing a market in greenhouse gas emission allowances, will help the EU and its Member States to effectively meet the commitments made in the framework of the Kyoto Protocol while safeguarding economic development and employment.
In March 2007, the European Council approved the target of reducing greenhouse gas emissions by 30% by 2020 compared to 1990 levels, as a contribution with a view to an agreement after 2012, on condition that other developed countries undertake to set comparable reduction targets, depending on their respective responsibilities and capacities.
The EU is strongly committed to reducing its greenhouse gas emissions by at least 20% by 2020 compared to 1990 levels. In October 2009, the European Council supported the objective of reducing emissions by 80 to 95% by 2050 compared to 1990 levels, within the context of the IPPC Directive. The Copenhagen Conference from 7 to 18 December 2009 is also in line with those objectives.
References
| Act | Entry into force – Date of expiry | Deadline for transposition in the Member States | Official Journal |
| Directive 2003/87/EC | 25.10.2003 | 31.12.2003 | OJ L 275 of 25.10.2003 |
| Amending act(s) | Entry into force | Deadline for transposition in the Member States | Official Journal |
| Directive 2004/101/EC | 13.11.2004 | 13.11.2005 | OJ L 338 of 13.11.2004 |
| Directive 2008/101/EC | 2.2.2009 | 2.2.2010 | OJ L 8 of 13.1.2009 |
| Directive 2009/29/EC | 25.6.2009 | 31.12.2012 | OJ L 140 of 5.6.2009 |
Quota allocation
Commission Decision 2006/944/EC of 14 December 2006 determining the respective emission levels allocated to the Community and each of its Member States under the Kyoto Protocol pursuant to Council Decision 2002/358/EC [Official Journal L 358 of 16.12.2006]
Corrigendum [Official Journal L 367 of 22.12.2006]
Commission Decisions of 15 September 2005 pursuant to Article 9 of Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC [Official Journal C 226 of 15.9.2005]
These decisions apply to national plans for trading in the period 2005-07. Additional information about the content of these allocation plans can be found at the European Commission’s website on climate change.
Communication of 20 October 2004 from the Commission to the Council and to the European Parliament on Commission Decisions of 20 October 2004 concerning national allocation plans for the allocation of greenhouse gas emission allowances of Belgium, Estonia, Finland, France, Latvia, Luxembourg, Portugal, and the Slovak Republic in accordance with Directive 2003/87/EC [COM(2004) 681 final – Not published in the Official Journal]
Communication from the Commission to the Council and to the European Parliament on Commission Decisions of 7 July 2004 concerning national allocation plans for the allocation of greenhouse gas emission allowances of Austria, Denmark, Germany, Ireland, the Netherlands, Slovenia, Sweden and the United Kingdom in accordance with Directive 2003/87/EC [COM(2004) 500 final – Not published in the Official Journal]
Mechanism for monitoring greenhouse gas emissions
The European Union has established a new mechanism for monitoring and reporting greenhouse gas emissions so as to be able to evaluate more accurately and more regularly the progress made in reducing emissions with a view to complying with the Community’s commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol.
Decision 280/2004/EC of the European Parliament and of the Council of 11 February 2004 concerning a mechanism for monitoring Community greenhouse gas emissions and for implementing the Kyoto Protocol [Official Journal L 49 of 19 February 2004].
The Decision establishes a mechanism designed to:
- monitor, in the Member States, all anthropogenic greenhouse gas emissions (including their removal by sinks) not controlled by the Montreal Protocol on substances that deplete the ozone layer;
- evaluate progress made in this field to ensure compliance with the Community’s commitments concerning emissions and their removal;
- implement the UNFCCC and the Kyoto Protocol;
- ensure that information reported by the Community to the UNFCCC Secretariat is complete, accurate, consistent, transparent and comparable.
National and Community programmes
The Member States and the Community respectively must devise, publish and implement national programmes and a Community programme to limit or reduce anthropogenic emissions by sources and enhance the removal, by sinks, of all greenhouse gases not controlled by the Montreal Protocol in order to contribute to:
- stabilising CO2 emissions at 1990 levels by 2000 (this UNFCCC objective has been met by the Community and its Member States);
- meeting the Community’s commitments under the UNFCCC and the Kyoto Protocol to reduce all greenhouse gas emissions not controlled by the Montreal Protocol;
- transparent and accurate monitoring of the actual and projected progress of Member States towards reducing these emissions, including the effect of Community measures.
The national programmes must include information on:
- the effect of national policies and measures on emissions and removals, broken down by gas and by sector;
- national projections for emissions and removal of CO2 and other greenhouse gases for 2005, 2010, 2015 and 2020;
- measures being taken or planned to implement relevant Community policies and to comply with commitments under the Kyoto Protocol.
In addition to the information in national reports, Member States must communicate other information to the Commission (by 15 January each year at the latest) for the assessment of actual progress and the preparation of annual reports as required under the UNFCCC and the Kyoto Protocol. This information should include:
- provisional data on emissions of carbon monoxide (CO), sulphur dioxide (SO2), nitrogen oxides (NOx) and volatile organic compounds for the twelve-month period preceding the previous year (i.e. year X-2), as well as finalised data for the year before that (year X-3);
- emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC) and sulphur hexafluoride (SF6) in year X-2;
- greenhouse gas emissions resulting from land-use and forestry during year X-2;
- the accounting of emissions and removals resulting from land-use and forestry for the years between 1990 and year X-2;
- information from national registries established pursuant to Directive 2003/87/EC;
- information on indicators used during year X-2.
National and Community inventory systems
By 31 December 2005 at the latest, Member States must establish national inventory systems for the estimation of greenhouse gas emissions and removals on their territory.
Each year, the Commission will compile a Community greenhouse gas inventory and report. It will circulate the report to the Member States by 28 February, and to the UNFCCC Secretariat by 15 April each year.
By 30 June 2006 at the latest, the Commission must adopt a Community inventory system to ensure the comparability, consistency, completeness, accuracy, and timeliness of national inventories with regard to the Community inventory.
National and Community registries
The Community and its Member States must establish registries accounting for the issue, holding, transfer, cancellation and withdrawal of units and incorporating the registries established under the Community scheme for greenhouse gas emission allowance trading.
Assessment of progress made
Each year, the Commission evaluates whether the progress made throughout the Community is sufficient to meet the commitments made at international level under the UNFCCC and the Kyoto Protocol.
The Commission must submit an annual progress evaluation report to the European Parliament and the Council. This report must include information on projected emissions and removals, and on policies and measures taken to reduce emissions.
By 1 January 2006 at the latest, the Commission and the Member States must submit a report to the UNFCCC Secretariat on the progress achieved by 2005.
Assigned amounts
By 31 December 2006 at the latest, the Community and each Member State must inform the UNFCCC Secretariat of the emission levels assigned to them pursuant to the Kyoto Protocol and Decision 2002/358/EC concerning the approval of the Kyoto Protocol and the joint fulfilment of commitments thereunder.
Background: the Kyoto Protocol
This Decision repeals Decision 93/389/EEC establishing the previous monitoring mechanism for Community CO2 and other greenhouse gas emissions. That mechanism focused solely on requirements under the UNFCCC of 1992. The mechanism introduced by this Decision also respects commitments under the Kyoto Protocol.
The approval of the Kyoto Protocol by the Community and its Member States in 2002 commits them to cutting their greenhouse gas emissions to 8% below 1990 levels between 2008 and 2012.
The entry into force of this Decision on 10 March 2004 marked the transposition of all the provisions of the Kyoto Protocol into Community law, in advance of the Protocol entering into force at international level. The Kyoto Protocol itself entered into force on 16 February 2005.
References
| Act | Entry into force – expiry date | Deadline for transposition in the Member States | Official Journal |
| Decision 280/2004/EC | 10.3.2004 | – | OJ L 49 of 19.2.2004 |