Our climate in EU - EU Climate Policy

Introduction	©Flickr
The 'Energy and Climate Package'
The Kyoto Protocol
European Climate Change Programme (ECCP)
Emissions Trading Scheme
Climate Change and Aviation
Energy Efficiency and Renewable Energy
Carbon Capture and Storage (CCS)
In the News

Update on the Climate and Energy Package See Update below

Introduction

Climate change is one of the biggest challenges facing mankind in the coming years. Rising temperatures, melting glaciers and increasingly frequent droughts and flooding are all evidence that climate change is really happening. The risks for the whole planet and for future generations are colossal and we need to take urgent action. For several years now the European Union has been committed to tackling climate change both internally and internationally and has placed it high on the EU agenda: taking action to curb greenhouse gas emissions in all its areas of activity in a bid to achieve the following objectives: consuming less-polluting energy more efficiently, creating cleaner and more balanced transport options, making companies more environmentally responsible without compromising their competitiveness, ensuring environmentally friendly land-use planning and agriculture and creating conditions conducive to research and innovation. The European Union is committed to limiting the global temperature increase to 2 degrees Celsius by the year 2100 relative to pre-industrial levels. See the European Commission Communication 'Limiting Global Climate Change to 2 degrees Celsius: the way ahead for 2020 and beyond' (in all languages).

The 'Energy and Climate Package'

The Integrated Energy and Climate Change Package of January 2007 endorsed by the European Council in March 2007, underlined the objective of limiting the rise in global average temperature to no more than 2° Celsius above pre-industrial levels. This 2° Celsius objective is indeed considered an upper limit for preventing dangerous anthropogenic interferences with the climate system as requested by Article 2 of the United Nations Framework Convention on Climate Change. To achieve this goal, Member States agreed to reduce the EU's greenhouse gas (GHG) emissions by 20% in 2020 compared to 1990 levels and by 30% provided other developed countries commit themselves to comparable reduction targets. The EU intends to increase energy efficiency by 20% and increase the share of renewable energy to at least 20% and biofuels to 10% by 2020. With this independent commitment, the EU shows leadership in the fight against climate change, while at the same time demonstrating a willingness to go even further in the context of an ambitious international agreement.

On 23 January 2008, the Commission released the Climate Action and Renewable Energy Package (so-called 'Climate Package') in line with previous commitments and proposes a review of the current EU ETS Directive. Reas the Communication on '20 20 by 2020: Europe's Climate Change Opportunity' (in all languages). An integrated energy and climate policy signals the launch of a new industrial era to transform the way we produce and use energy. The goal is to move to a climate-friendly economy based on a combination of low-carbon technologies and energy sources. Several major pieces of legislation are already tackling the issue of climate change and important legislative proposals on EU Climate Change policy will be debated in the years 2008 and 2009, including the Review of the European Emissions Trading Scheme and the proposal on the Reduction of CO2 emissions from cars. The package comprises a set of key policy proposals that are closely interlinked and account for a great percentage of the EU's GHG emissions. It includes:

Proposal to amend the EU Emissions Trading Directive (so-called 'EU ETS Directive') - ENVI text

Proposal relating to the Sharing of Efforts to meet the Community's independent greenhouse gas reduction commitment in sectors not covered in the EU ETS (so-called 'Effort Sharing Decision') - ENVI text

Proposal for a Directive promoting Renewable Energies - ENVI text

Proposal for a Directive on Carbon Capture and Storage - ENVI text

Proposal for a Directive on a CO2 cap on the aviation sector - ENVI text

The other policy area that is included in the Climate and Energy Package is the legislation on Carbon and Capture Storage.

The Kyoto Protocol

Under the Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) concluded in 1997, the European Community committed itself to achieving an overall reduction in CO2 emissions of 8% in the period 2008-12 compared with 1990 levels. This target is shared between the Member States under a legally binding burden-sharing agreement, which sets individual emissions targets for each Member State. All contracting parties committed themselves to reducing the six greenhouse gases responsible for climate change: carbon dioxide (CO2), methane, nitrous oxide, hydrofluorcarbons, perfluorcarbons and sulphur hexafluoride. On 31 May 2002, the EU and all its Member States ratified the Kyoto Protocol. The ten accession countries scheduled to join the EU in May 2004 all have ratified the Kyoto Protocol and have their own Kyoto targets of between 6% and 8% except for Cyprus and Malta which have no targets. Internationally, the protocol entered into force in February 2005, after being ratified by 55 contracting parties, accounting for 55% of total CO2 emissions in 1990. Read the protocol. More on international climate negotiations and EU's positions here.

European Climate Change Programme (ECCP)

The European Climate Change Programme (ECCP) was established in June 2000 on the basis of two Communications by the Commission to help identify the most environmentally-friendly and cost-effective EU measures enabling the EU to meet its targets under the Kyoto Protocol. Under this umbrella, the Commission works with industry, environmental organisations and other stakeholders to identify cost-effective measures to reduce emissions. More than 30 measures have been put in place to this date. Within the context of the First European Climate Change Programme (ECCP I), working groups have investigated the possibilities of and the issues related to: market-based mechanisms such as an Emission Trading Scheme (ETS), Joint Implementation (JI) a nd Clean Development Mechanism (CDM); energy supply and consumption (including the use of renewable energy and the improvement of the energy performance of buildings); transport; industry; agriculture and forestry (including their use as carbon sinks); and research. Under the Kyoto Protocol, Joint Implementation (JI) and the Clean Development Mechanism (CDM) will allow industrialised countries to achieve part of their emission reduction commitments by conducting emission-reducing projects abroad and counting the reductions achieved toward their own commitments. JI will allow for projects in other industrialised countries with Kyoto targets, while CDM will take place in countries without targets, i.e. developing countries. A condition for the issue of credits in respect of the reductions achieved is that the projects result in real, measurable and long-term climate change benefits. The second phase (ECCP II) was launched in October 2005 and consists of several working groups. The focus is on developing proposals to strengthen in particular the EU ETS, reducing emissions from transports, developing carbon capture and storage technology and identifying a set of measures to adapt to climate change. The inclusion of emissions from planes in the system of carbon trading and the proposal to limit the pollution from cars falls into that context.

As part of the climate change programme, the 6th Environmental Action Plan (EAP) sets out the framework for environmental policy-making in the European Union for the period 2002-2012 and outlines actions that need to be taken to achieve them. The 6th EAP promotes full integration of environmental protection requirements into all Community policies and actions and provides the environmental component of the Community's strategy for sustainable development. It therefore links the environment and European objectives for growth, competitiveness and employment and identifies four priority areas in particular: 1) climate change; 2) nature and biodiversity; 3) environment and health; 4) natural resources and waste. The 6th EAP calls for the development of seven Thematic Strategies - i.e. air, waste prevention and recycling, marine environment, soil, pesticides, natural resources, urban environment -, which include, amongst others, the promotion of sustainable production and consumption patterns, an improved collaboration with enterprises and informing individual consumers and between enterprises and public purchasers about the environmental impact of processes and products. The progress made in the implementation of the 6th EAP are published in the mid-term Review of the 6th EAP available here.

Emissions Trading Scheme

In respect of the Kyoto flexible mechanisms, the EU has moved ahead with its own internal emissions trading system. The Directive was approved by the European Parliament on 2 July 2003,and the Council on 22 July. Emissions trading started in 2005 and cover the Member States of the enlarged European Union. The EU ETS is now the world’s largest company- level ‘cap-and-trade’ system for trading in emissions of carbon dioxide (CO2). The so-called ‘Linking Directive’ (2004/101/EC) links the EU emissions trading system with the other Kyoto Flexible Mechanisms: Joint Implementation and the Clean Development Mechanisms. This directive allows European companies to carry out emissions-curbing projects around the world and convert the credits earned into emissions allowances under the European Union emissions trading scheme. This ‘linking’ increases the diversity of compliance options within the Community scheme, thereby leading to a reduction in compliance costs for installations in the scheme. Since 2005, some 10,000 large industrial plants in the EU are required to buy and sell permits to release carbon dioxide into the atmosphere. The scheme is based on Directive 2003/87/EC, which entered into force on 25 October 2003. The so-called Emissions Trading Scheme (ETS) enables companies exceeding individual CO2 emissions targets to buy allowances from 'greener' ones and help reach the EU targets under the Kyoto Protocol. Member states are requires to draw up national allocation plans covering each trading period. These plans allocate to each installation in the system allowances to emit a certain level of CO2 per year. Responding to Article 30 of the ETS Directive, the Commission submitted a report to the European Parliament and the Council considering the functioning of the EU Emissions Trading Scheme (ETS) in November 2006: COM(2006)676 final. According to that report, the ETS has proved successful so far, with the latest official data showing that the 15 EU members who originally signed up to Kyoto had achieved a 2% CO2 cut in 2005 compared to 1990 levels. Furthermore, projections imply that, based on existing policies alone, this figure should rise to 7.4% by 2012 – just short of the Kyoto target. However, in March 2007, EU leaders agreed that, by 2020, they would cut overall greenhouse gas emissions by 20% compared to 1990 levels. The Commission says this will require a "much steeper reduction path" for industrial emissions, which is the aim of its ETS reform proposal for the post-2012 period, presented on 23 January 2008. The so-called 'Directive of the European Parliament and of the Council amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading system of the Community' is available here. More information on the EU ETS here.

Climate Change and Aviation

In September 2005 the Commission adopted a Communication (COM(2005)459) outlining plans to reduce the impact of aviation on climate change which recommends that aviation emissions should be included in the EU emissions trading scheme as part of a comprehensive approach which includes research into cleaner air transport, better air traffic management and the removal of legal barriers to taxing aircraft fuel. In July 2006, Parliament adopted an own-initiative report advocating an aviation scheme as well as its inclusion in the ETS. In 20th December 2006, the Commission adopted a proposal for legislation to include aviation in the EU Emissions Trading Scheme (ETS). The proposal provides for aviation to be brought into the EU ETS in two steps. From the start of 2011, emissions from all domestic and international flights between EU airports will be covered. One year later, at the start of 2012, the scope will be expanded to cover emissions from all international flights - from or to anywhere in the world - that arrive at or depart from an EU airport. The intention is for the EU ETS to serve as a model for other countries considering similar national or regional schemes, and to link these to the EU scheme over time. Therefore, the EU ETS can form the basis for wider, global action.

In May 27, 2008, the Environment Committee of the European Parliament voted to reaffirmed its commitment towards the inclusion of airline traffic in the EU ETS by voting on amendments that had been rejected by the Council. Members of ENVI are in favour of this inclusion to begin as soon as 2011, to increase the share of emission permits to be auctioned and to lower the ceiling on emissions. The decision concerns planes leaving or landing in EU territory, to the exception of e.g. light airplanes, humanitarian and emergency flights and police and military planes. The Committee also agreed on a reduction of 10% reduction in emissions as compared with 2004-2006 levels, thus showing greater ambitious than Council and European Commission, and to further reduce that share as from 2013. The Committee also challenged Member States position on the share of free carbon emission allowances. Whereas Member States want only 10% of the carbon emissions allowances to be traded freely, the Committee says that a suitable starting figure would be 25%, with the rest being distributed free of charge. The text presented by Rapporteur Peter Liese (EPP-ED, DE) has been approved in ENVI Committee with 54 votes in favour, 4 against and 1 abstention. The plenary vote was then held in July 2008. Follow the decision-making process on the amendment to Directive 2003/87/EC here. This percentage of traded allowances shall be increased according to the maximum level of auctioning in other ETS sectors as from 2013. Earmarked revenues, the Committee says, should be channelled to, inter alia, research to improve efficiency in the aviation sector, climate-friendly transport such as trains and buses, and assistance to developing countries to help them adapt to climate change and reduce their emissions. More about climate change and aviation here.

Energy Efficiency and Renewable Energy

In order to increase the share of renewable energy in Europe and to reduce the oil-dependency, the European Commission urges through the EU Biomass action plan (COM(2005)628) and the Communication on the EU Strategy for bio fuels (COM(2006)34), to improve the production and use of bio-energy in Europe and in third countries. The Climate and Energy Package proposed by the Commission in January 2007 further sets the targets to be met by 2020: energy efficiency would be improved by 20%, the market share of renewable energy sources increased to 20% and the share of biofuels in transport fuels raised to 10%. More

Carbon Capture and Storage (CCS)

As part of the energy-climate package of January 2007, the European Commission is currently preparing a legislative proposal which aims at establishing the regulatory framework for the capture of carbon dioxide and its storage (CCS). CCS technology separates CO2 from atmospheric emissions (resulting from industrial processes), compresses the CO2 and transports it to a location where it can be stored in geological or mineral formations and/or oceans. According to the UN Intergovernmental Panel on Climate Change, CCS could remove 80-90% of CO2 emissions from power plants if successful, and could reduce the costs of stabilising the CO2 concentrations in the atmosphere by up to 30%. More

Europe's soils are important carbon reservoirs. In a report released in March 2009, the European Commission underlines the crucial role that soil can play in mitigating climate change. The report also shows the importance of protecting soils that are high in carbon, such as peat bogs in Sweden, Finland, the UK and Ireland.

In the News

French Presidency
While the vote in the ENVI Committee of the European Parliament has been consistent with the Commission's proposal to significantly reduce the amount of reductions and engage into ambitious commitments in the perspective of the post 2012 climate negotiations in Copenhagen, in December 2009. French President Sarkozy was willing to reach an agreement on the Package by the end of its Presidency, in December 2008, and before the next Conference of the Parties meeting in Poznan (1-12 December).
See the French presidency's Draft Guideline on the Energy and Climate Package and Draft Conclusions to the Council.

Member States oppositions
A compromise on the Package needed to foster consensus among Member States. A group of eight Eastern European member states – Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia – wanted to receive greater recognition for efforts made to reduce CO2 emissions. Italian Prime Minister Sylvio Berlusconi also repeatedly spoke out in opposition to the EU's climate plans on the grounds that they could further strangle his country's economy, whose traditional domestic manufacturing base has been hard hit by third-country competition.

'Trialogue' started
The Council, Parliament and Commission have negotiated in a so-called trialogue in order to reach a deal on the package. After an extensive exchange of views between the coordinators of the ENVI and ITRE Committees, the coordinators of the these committees reached agreements on the fact that the European Parliament will speak with one voice by the rapporteurs on energy and climate issues with the Counci, during the so-called 'Trialogue' meetings. Trialogues is starting on October 17 and will be chaired by the chair of the respective lead committee, who is accompanied by the chair of the committee associated. The timetable of trialogue meetings will be set jointly by the rapporteur and the Council Presidency, taking account of the availability of the chair of the lead committee.

On the occasion of the last day of the meeting of the Council of the European Union on Thursday 16 October, European Union leaders agreed to stick to a December deadline for agreeing ambitious measures to fight climate change.