OPINION OF THE COMMISSION pursuant to Article 251 (2) (c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL relating on the limitation of emissions of certain pollutants into the air from large combustion plants AMENDING THE PROPOSAL OF THE COMMISSION pursuant to Article 250 (2) of the EC Treaty

EXPLANATORY MEMORANDUM

Article 251, paragraph 2, letter c) of the Treaty establishing the European Community establishes that the Commission gives an opinion on the amendments proposed by the European Parliament in the second reading.

The Commission hereafter gives its opinion on the eighteen amendments adopted by the European Parliament.

1. Background

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The second reading of the European Parliament aims to strengthens the Common Position in a number of areas. It introduces a cut-off date, 2012, for the use of the 20 000 hours derogation for existing plants (Am. 4). The provision of a less stringent emission limit value for SO2 for plants operating for less than 2 200 hours per annum, averaged over a five year period, has been curtailed to plants operating for less than 700 hours (Am.33). It deletes the exemptions and rewording of the less demanding provision for indigenous fuel (Ams. 7, 9, 21 and the nota bene paragraphs of Ams. 35 and 36) and it tightens the emission limit values (Ams.35-37, 16 and 38-40). The remaining amendments extend the review clause (Am. 5), propose changes to calculation of gas turbine efficiency (Am. 20), reduce confidence levels (Am. 22), and are of a technical/drafting nature (Ams. 2, 3 and 12).

2. Objective of the Commission Proposal

The purpose of the Commission's Proposal was to update the emission limit values applicable to plants licensed after the proposal comes into force and to extend the scope of Directive 88/609 to include gas turbines from the same date. The Common Position also includes more stringent requirements than currently prevail for plants for which a license was issued prior to 1 July 1987; so-called "existing plants.

3. Commission opinion on the amendments adopted by the Parliament

On 14 March 2001, the European Parliament adopted 18 amendments. 10 amendments have been accepted by the Commission in full (Amendments 3, 4, 7, 9, 12, 16, 21, 36, 39, 40), 4 in part or in principle (Amendments 2, 5, 35 (2nd part), 38). The remaining amendments (20, 22, 33, 35 (1st part), 37 ) cannot be accepted.

The Commission's position with regard to the amendments adopted by the European Parliament is as follows:

3.1. Amendments accepted by the Commission

"Existing" plants as defined in Directive 88/609 may be exempt from the basic obligations concerning new emission standards if there is a commitment to the competent authority before 30 June 2004 to close the plant within 20000 operational hours from 1 January 2008.

Amendment 4 proposes to specify that this exemption window must end by 31 December 2012. From both an enlargement and liberalised market perspective it is desirable to have harmonised environmental standards as soon as practicable. Thus the Commission can accept this amendment.

Since 1988, Directive 88/609 has contained different environmental standards for indigenous solid fuels versus imported solid fuels. Amendment 7 and 21 aim to delete Article 5.2 and Annex VIII of the Common Position respectively. These amendments remove the alternative desulphurisation requirements that only apply to indigenous solid fuels when the emission limit values in Annex III cannot be met due to the nature of the fuel. Amendment 9 seeks to remove special provisions for indigenous lignite. Amendments 35 (Nota Bene ) and 36 (Note Bene) propose to include alternative measures for solid fuels where the emission limit values in Annex III.A and III.B respectively of the Common Position cannot be met due to the nature of the fuel. However, the desulphurisation requirements in the Nota Bene are more stringent as they will apply whether the solid fuel is indigenous or imported. The Nota Bene in Amendments 35 and 36 are equivalent to the Nota Bene in amendments 13 and 14 respectively which were accepted by the Commission. However amendments 13 and 14 were not adopted by the Parliament.

It has become apparent that the diverging treatment of indigenous solid fuel compared to other solid fuel could be incompatible with the increasing commercial mandate of the large combustion plant sector and in particular against a background of multinational ownership and electricity market liberalisation. Given the time period for repeal of the existing provisions for indigenous solid fuels and the absence of any notification to the Commission that the existing provisions for indigenous solid fuels were ever used , the Commission can accept amendments 7, 9, 21 and the Nota Bene in amendments 35 and 36.

Amendment 38 seeks to tighten the emission limit values for nitrogen oxides for existing plants and in particular for plants with a capacity greater than 300 MWth. In the case of nitrogen oxides the Common Position will only have a very marginal effect on emissions due to the less stringent emission limit values contained therein. In view of the ongoing need to further reduce emissions of nitrogen oxides given their contribution to acidification and the formation of tropospheric ozone, more stringent emission limit values than those in the Common Position are desirable. At the same time it is important to ensure that the standards imposed are not excessively costly for small plants in particular. This part of amendment 38 is equivalent to amendment 17 for plants in the same size category which was accepted by the Commission. However, amendment 17 was not adopted by the Parliament. Therefore, the Commission can partly accept amendment 38 for plants with a capacity greater than 300 MWth.

In the case of sulphur dioxide, Amendments 16 and 36 (1st part), and in the case of nitrogen dioxide, Amendments 39 and 40, propose to tighten emission limit values for plant that will be licensed after the Directive comes into force. The Commission can also accept some increased stringency in this case as the environmental requirements can be integrated into investment decisions and cost effective solutions can be developed. Amendment 36 (1st part) is equivalent to amendment 14 (1st part) which was accepted by the Commission but was not adopted by the Parliament. As amendments 16, 36(1st part), 39 and 40 only result in increased stringency for plants in the 100 to 300 MWth size category, they are acceptable to the Commission.

Amendments 3 and 12 deal with the gradual repeal of Directive 88/609 and the entry into force of the new directive. Amendment 12 establishes a date of 31 Dec 2007 for the application of more stringent emission limit values to new plants licensed since 1 July 1987 and covered by Article 4.1 of the Common Position. It is necessary to have a transition period to comply with new emission limit values for plants licensed under Article 4.1. The Commission can accept these amendments as, in their absence, the transition period for compliance for this category of plants would not apply. The final drafting of amendment 12 may need further revision to ensure consistency with the outcome of considerations on other amendments proposed by Parliament.

3.2. Amendments accepted in principle by the Commission

Amendment 2 seeks to align the list of wastes used as a fuel in the Common Position with the list of wastes which are exempt from the recently adopted directive on waste incineration (2000/76/EC) thus ensuring continuous coverage between the two legislative instruments. The Commission can accept this amendment in principle subject to ensuring that the final text ensures continuity of legal coverage between the two directives.

Amendment 5 seeks to include emissions of heavy metals from the large combustion plant sector in the review foreseen in Article 4.7. It also seeks to include consideration of emissions from sea and air transport as well as proposals for curbing emissions from these sectors. The Commission can accept this part of the amendment in so far as it relates to heavy metal emissions and can accept in principle that part of the amendment concerning emissions from large combustion plants in the marine sector. However, the Commission cannot accept including consideration of emissions from aircraft within the scope of stationary source legislation given the different application characteristics in the aviation sector.

3.3. Amendments not accepted by the Commission

Amendment 33 seeks to reduce the operating time averaged over a five-year period from 2200 hours per year to 700 hours per year during which a higher emission limit value of 800 mg/Nm3 than would otherwise apply may prevail. An analysis conducted by the Commission shows that the Common Position will substantially reduce emissions of sulphur dioxide in the Community and especially upon enlargement. Thus there is little justification for this amendment and therefore the Commission cannot accept amendment 33.

Amendment 35 (1st part) and amendment 37 propose to tighten the emission limit values for sulphur dioxide applicable to "existing" and "new" plants as covered by Article 4 (1) respectively. Given the substantial reduction in sulphur dioxide emissions from the large combustion plant sector resulting from the Common Position, the geographic distribution of the emission reductions and the provision of a review in Article 4.7 to assess the potential for further emission reductions from the large combustion plant sector, the Commission cannot accept these amendments.

Amendment 20 deals with gas turbines. It seeks to reduce the stringency of the Common Position by reducing the cycle efficiency threshold to 70% from 75% for gas turbines in combined heat and power applications under which a higher emission limit value of 75 mg/Nm3 is allowed. In the case of combined cycle applications for gas turbines with a capacity of less than 250 MWth, it reduces the efficiency threshold from 55% to 50% above which the higher emission limit value of 75 mg/Nm3 may apply. It also seeks further definition of the conditions under which efficiency is calculated. In addition it seeks to exempt gas turbines with multi-fuel combustion operated with light fuel oil as an emergency fuel for less than 500 hours annually. The Commission cannot accept this amendment as it weakens the Common Position, adds detail that is not necessary and seeks exemptions for emergency use that are not necessary.

Amendment 22 seeks to make the compliance criteria for plants covered by Article 4 (2) i.e. licensed after entry into force of the new directive more stringent, by reducing the confidence intervals used in calculating validated daily averages. The confidence intervals for the pollutants in question are the same as those recently adopted in the Directive on Waste Incineration (2000/76/EC). They reflect measurement uncertainty, the benefit of which is granted to the operator when assessing compliance. As the Commission has no evidence to support a reduction of the confidence intervals the Commission cannot accept this amendment.

3.4. Amended Proposal

Having regard to Article 250, paragraph 2 of the EC Treaty, the Commission modifies its proposal as indicated above.