On 23 April 2009, the European Parliament and the Council approved Decision No 406/2009/EC on the Member States’ efforts to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020 (GHG-001). The discussions on this issue started in January 2008 following a proposal from the European Commission. This Decision is essentially applicable to the industrial sector (including power plants, oil refineries and steel mills – accounting for almost half the Union's CO² emissions).
Although the Decision is not directly applicable to maritime transport, it clearly states that if no agreement is reached tackling greenhouse gas (GHG) emissions from shipping at international level, the Commission should take regional measures within 2012 to fulfil its international commitments in abating climate change. Such a proposal should minimise the negative impact on the Community’s competitiveness while taking into account the potential environmental benefits. The Commission started an online consultation in spring 2012, as part of an impact assessment on potential measures that can be implemented at EU level. The results of the impact assessment are expected before the end of 2012, while a political decision on an EU approach is expected to follow in the first quarter of 2013.
However, in a joint statement issued in October 2012, Transport Commissioner Siim Kallas and Climate Action Commissioner Connie Hedegaard implicitly said that the Commission will for the time being not be looking to introduce a specific European market-based instrument to reduce greenhouse gas emissions from ships. They consider that the necessary starting point is to set a system for monitoring, reporting and verification of emissions based on fuel consumption and they expressed their intention to pursue such a system in early 2013. It is not clear yet how the Commission’s proposal for a monitoring, reporting and verification scheme would work, while officially the possibility of a follow up to EU market-based instrument is not completely swept off the table.
The decision on greenhouse gas emissions
The decision needs to implement the commitments made by Council to combat climate change and promote renewable energy. A thorough reform of the emissions trading system (ETS) will impose an EU-wide cap on emissions and should be an incentive for all major CO2-emitting players to develop clean production technologies. The package enables the European Union to reduce greenhouse gas emissions by at least 20% by 2020 and to increase the consumption of renewable energy to 20%. The reduction in emission will reach 30% by 2020 when a new international agreement on climate change will be concluded.
Building on EU Emission Trading System (ETS) (GHG-002), it was decided to strengthen the single, EU-wide carbon market which will include greenhouse gases (currently only CO2 is included) and involve all major industrial emitters. The emission allowances put on the market will be reduced annually to allow emissions covered by the ETS to be reduced to 21% below the 2005 level in 2020.
The power sector, forming the majority of EU emissions, will face full auctioning from the start of the new regime in 2013. Other industrial sectors, as well as the aviation sector, will step up to full auctioning gradually, although an exception may be made for sectors particularly vulnerable to competition from producers in countries without comparable carbon constraints. In addition, auctions will be open: any EU operator will be able to buy allowances in any Member State.
The EU Emissions Trading Scheme has, according to the European Commission, proved to be an effective instrument to find a market-based solution to provide incentives for cuts in greenhouse gas emissions. At present, the system covers some 10,000 industrial companies across the EU, including power plants, oil refineries, and steel mills, accounting for almost half of the EU's CO2 emissions. Under the new system, over 40% of total emissions will be covered by the ETS.
In sectors not covered by the ETS such as buildings, transport, agriculture and waste, the EU will reduce emissions to 10% by 2020 compared with 2005 levels.
The decision also refers to specific targets that are set for each EU Member State to reduce the use of biofuel by a minimum of 10% in the transport sector by 2020.
The Revision Climate and Energy Package
In December 2008, the European Council of Ministers and the European Parliament agreed on a Climate and Energy Package. This package includes a revision and strengthening of the Emissions Trading System (ETS), the EU's key tool for cutting emissions cost-effectively. This package also integrated new Regulations on the quality of transport fuel and a Regulation on the reduction of CO2 emissions from passenger cars.
White Paper - Roadmap to a Single European Transport Area
The "White Paper - Roadmap to a Single European Transport Area?? (see chapter 7, WHP) explicitly addresses greenhouse gas emissions of the transport sector. We need to bring an end to the dependency of the transport sector on oil without sacrificing the system's efficiency or compromising the mobility of people and businesses. The aim of the Transport White Paper is to reduce emissions in aviation up to 50% by 2050, emissions of ships by 40 to 50% and reduce emissions from road transport by 80%. At the same time, a growth in passenger traffic by 50% and freight transport by 80% is expected for the same period.
Some relevant documents:
GHG-002: Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a sheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (European Parliament and the Council)
GHG-001: 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 (European Parliament and the Council)