[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 08.02.2006

SEC(2006) 138

COMMISSION STAFF WORKING DOCUMENT

Annex to the COMMUNICATION FROM THE COMMISSION FOURTH NATIONAL COMMUNICATION FROM THE EUROPEAN COMMUNITY UNDER THE UN FRAMEWORK CONVENTION ON CLIMATE CHANGE (UNFCCC) (required under Article 12 of the United Nations Framework Convention on Climate Change) {COM(2006) 40 final}

Table of Contents

1. National Circumstances Relevant To Greenhouse Gas Emissions and Removals 6

1.1. Government structure 6

1.2. Population profile 6

1.3. Geographic profile 8

1.4. Climate profile 9

1.5. Economic profile 11

1.5.1. Changes in overall GDP 11

1.5.2. Development of economic sectors 11

1.5.3. Trade patterns 12

1.5.4. Energy profile 14

1.5.5. Energy Supply 15

1.5.6. Energy consumption in different sectors 19

1.5.7. Liberalisation and privatisation of energy markets 20

1.5.8. Energy Prices 20

1.6. Transport profile 21

1.6.1. Freight transport 22

1.6.2. Passenger transport 22

1.6.3. Taxes on and prices of transport fuels 23

1.7. Industry profile 23

1.8. Waste profile 24

1.9. Building stock and urban structure 26

1.10. Agriculture 28

1.11. Forest 29

2. Greenhouse Gas Inventory Information 31

2.1. Introduction 31

2.2. The EC Monitoring Mechanism 31

2.3. EC greenhouse gas emission trends 32

2.3.1. Contribution of MS to Greenhouse reduction trends 39

2.3.2. Information on indirect greenhouse gas emissions for EU-15 41

3. Policies and Measures 42

3.1. The Policy Framework 42

3.1.1. Policy making process 42

3.1.2. The Lisbon Strategy 43

3.1.3. European Climate Change Programme (ECCP) – The main framework for policy action 43

3.1.4. EU Climate Change Strategy post-2012 44

3.1.5. Environmental Technologies Action Plan 45

3.1.6. Monitoring Mechanism 45

3.1.7. Minimisation of adverse impacts 46

3.2. EU Emissions Trading Scheme 47

3.2.1. Linking project based mechanisms to the emissions trading scheme 50

3.3. Member States’ use of Kyoto mechanisms 50

3.4. Sectoral Policies and Measures 55

3.4.1. Introduction 55

3.4.2. Policies in Energy Demand 57

3.4.3. Policies in the Residential and Tertiary Sector 65

3.4.4. Policies in the Transport Sector 69

3.4.5. Policies in the Industry Sector 74

3.4.6. Policies in Agriculture and Forestry 78

3.4.7. Policies in Waste Management 85

3.5. Policies no longer in place 89

3.5.1. CARNOT 89

4. Projections and the Total Effect of Policies and Measures 90

4.1. Introduction 91

4.2. With measures projection 91

4.2.1. EC wide with measures projection 91

4.2.2. Use of Kyoto mechanisms 95

4.3. With measures projections for CO2 95

4.4. With measures projections in the energy sector 97

4.5. With additional measures projection 98

4.6. Key policies and measures projected to deliver reductions 99

4.7. Model methodology 102

5. Vulnerability assessment, climate change impacts and adaptation measures 103

5.1. Vulnerability and Impacts of Climate Change 103

5.2. Adaptation measures 106

6. Financial Resources and Transfer of Technology 109

6.1. Introduction 109

6.2. Climate Change in Context of Development Cooperation 109

6.3. New and Additional Resources 110

6.4. Resources for development and co-operation in the field of climate change 111

6.4.1. Overview 111

6.4.2. Regional initiatives 121

6.4.3. Mainstreaming environment into development projects 123

6.5. Technology Transfer 123

7. Research and Systematic Observation 140

7.1. General Introduction 140

7.1.1. Background 140

7.1.2. 6th Framework programme (2002-2006) 140

7.1.3. The future for research-7th Framework Programme (2007-2013) 141

7.1.4. International co-operation 143

7.2. Research 143

7.2.1. Cross-cutting research 143

7.2.2. Climate systems studies and modelling 144

7.2.3. Impacts of climate change 146

7.2.4. Socio-economic research 146

7.2.5. Mitigation and adaptation technologies 148

7.3. Systematic observation and global climate observation 152

7.3.1. General approach to systematic observation 152

7.3.2. Meteorological and atmospheric observation 152

7.3.3. Oceanic observations 153

7.3.4. Terrestrial observations 154

7.3.5. Space-based observing programmes 155

8. Education, Training and Public Awareness 156

8.1. Introduction 156

8.2. Information centre 157

8.3. Internet site 157

8.4. Publication programme 158

8.5. Co-operation with the press and audio-visual sector 159

8.6. Co-operation with the business sector, NGO and networks 159

8.7. Subsidies to awareness raising projects 159

8.8. Conferences 160

8.9. Education 161

Annex 1:The EC inventory methodology and data 162

Annex 2: UNFCCC Summary Reports 1. A of the Common Reporting Format for the European Community – EU-15 168

Annex 3: UNFCCC CRF Table 10 for the EU-25 197

1. NATIONAL CIRCUMSTANCES RELEVANT TO GREENHOUSE GAS EMISSIONS AND REMOVALS

Developments

1. The European Union’s institutional system is unique, with 25 Member States delegating sovereignty for some matters to independent institutions

2. The Gross Domestic Product (GDP) of the EU-15 has increased by 18 % in real terms from 1995 to 2002 (average annual increase of over 2%), putting an upward pressure on greenhouse gas emissions.

3. Counteracting this trend, the energy intensity has decreased since 1990

4. Renewable energy currently contributes 6% to energy supply and is expected to grow significantly in the next few years

5. Agricultural land use is decreasing but forestry is increasing steadily

1.1. Government structure

The European Union’s institutional system is unique. The Member States (of which there are currently 25) delegate sovereignty for certain matters to independent institutions, which represent the interests of the Union as a whole, its member countries and its citizens[1]. Each national government is represented within a Council of the European Union and its citizens directly elect the European Parliament. The European Commission is the executive body of the Union and is responsible for preparing legislation abd watching over its implementation by Member States. It also represents the Union on the international stage and negotiates international agreements, chiefly in the field of trade and co-operation. The structure is described in detail in the 3rd National Communication.

On 1 May 2004 ten New Member States (NMS) joined the Union:the Czech Republic, Cyprus, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. Where possible this chapter presents historical data for all Member States.

1.2. Population profile

During the 1990s, the population of the 25 EU Member States has grown by 3.2 %, at an average growth rate of 0.27 % per annum. The accession of the New Member States (NMS) added approximately 74M people to the EU’s total.

Table -1 Aggregate EU-25 population from 1990 to 2002 (millions)

Year | Total population in EU-25 (as of January each year) Millions |

1990 | 438. 7 |

1991 | 440. 5 |

1992 | 442. 2 |

1993 | 444. 1 |

1994 | 445. 4 |

1995 | 446. 4 |

1996 | 447. 4 |

1997 | 448. 4 |

1998 | 449. 2 |

1999 | 450. 1 |

2000 | 451. 2 |

2001 | 452. 2 |

2002 | 452. 8 |

2003 | 454. 8 |

2004 | 456. 9 |

Source:EUROSTAT[2]

Individual EU Member States vary considerably in size and population density, as shown in Table -2.

Table -2 Population, and population density

Country | Population in 2002 (millions) | Population density (inhabitants/km2) |

Belgium | 10. 3 | 338. 6 |

Denmark | 5. 4 | 132 |

Germany | 82. 4 | 124. 7 |

Greece | 11. 0 | 231 |

Spain | 40. 9 | 31. 3 |

France | 59. 3 | 83. 5 |

Ireland | 3. 9 | 81. 6 |

Italy | 57. 0 | 109. 7 |

Luxembourg | 0. 4 | 57. 3 |

Netherlands | 16. 1 | 189. 7 |

Austria | 8. 0 | 124. 7 |

Portugal | 10. 3 | 37. 5 |

Finland | 5. 2 | 53. 1 |

Sweden | 8. 9 | 172. 5 |

United Kingdom | 59. 3 | 109. 2 |

Cyprus | 0. 7 | 1254. 7 |

Czech Republic | 10. 2 | 476. 7 |

Estonia | 1. 4 | 96. 4 |

Hungary | 10. 2 | 122. 3 |

Lithuania | 3. 5 | 112. 8 |

Latvia | 2. 3 | 99. 1 |

Malta | 0. 4 | 109. 7 |

Poland | 38. 2 | 17. 1 |

Slovenia | 2. 0 | 21. 8 |

Slovakia | 5. 4 | 243. 3 |

Source:EUROSTAT

Compared to the majority of all Parties to the Convention, most EU Member States have a relatively high population density. This has implications for settlement and building patterns, and a tendency to relatively short transport distances. However, it facilitates economic integration among communities and regions, resulting in a tendency for higher transport intensity.

1.3. Geographic profile

There is considerable difference in land-use within the Member States as illustrated in Table -3 . Agriculture stills accounts for a considerable portion of land-use but is in general decreasing, with a wide variation in the scale of different types of activities undertaken, for example the level of fallow land compared to crops, pasture etc (also see sections 1.10 and 1.11).

Table -3 Land-use patterns within the EU-25, 2000

EU-25 | 3386 |

EU-15 | 3358 |

Austria | 3569 |

Belgium | 2882 |

Cyprus | 787 |

Czech Republic | 3559 |

Denmark | 3479 |

Estonia | 4420 |

Finland | 5823 |

France | 2494 |

Germany | 3244 |

Greece | 1698 |

Hungary | 2917 |

Ireland | 2916 |

Italy | 2085 |

Latvia | 4243 |

Lithuania | 4071 |

Luxembourg | 3216 |

Malta | 564 |

Netherlands | 2905 |

Poland | 3605 |

Portugal | 1302 |

Slovakia | 3440 |

Slovenia | 3044 |

Spain | 1856 |

Sweden | 5423 |

United Kingdom | 3354 |

Source:EUROSTAT

Since the base year for Kyoto reduction commitments for CO2, 1990, was a warm year relative to the average 1960-1999, it looks possible that in the first commitment period 2008-2012 there will be more heating degree days[3] than 1990, which would exert an additional burden on target fulfilment[4].

1.5. Economic profile

1.5.1. Changes in overall GDP

The Gross Domestic Product (GDP) of the EU-15/25 has increased by 18 % in real terms from 1995 to 2002 (average annual increase of 2.3%).

Table -5 EU-15/25 GDP growth in million € (1995 prices)

EU-15 | EU-25 |

Agriculture, hunting, forestry and fishing | 157 | 2.7% | 176 | 2.8% | 186 | 2.5% |

Total industry (excluding construction) | 1425 | 24.6% | 1529 | 24.1% | 1728 | 23.0% |

Construction | 362 | 6.3% | 373 | 5. 9% | 387 | 5.1% |

Other services:wholesale and retail trade; repair of motor vehicles and household goods; hotels and restaurants; transport, storage and communication | 1200 | 20.7% | 1338 | 21.1% | 1684 | 22.4% |

Financial intermediation; real estate, renting and business activities | 1391 | 24.0% | 1555 | 24.5% | 1964 | 26.1% |

Public administration and defence, social security; education; health and social work; other community, social and personal service activities; private households with employed persons | 1252 | 21.6% | 1381 | 21.7% | 1565 | 20.8% |

Source:EUROSTAT

Note: Complete data on New Member States prior to 1995 is not available.

The growth in the services sectors has implications for increases in transportation and energy use[5] as the sector:

- tends to have a higher transport intensity (kilometres per gross value added in the sector) than industry.

- does not involve highly energy consuming production processes but tends to have a high, and increasing, use of electrical and electronic equipment, e.g., for IT and communication purposes, heating of buildings etc. .

See section 1.7 on industry patterns for the development of value added in the various industrial sub-sectors.

1.5.3. Trade patterns

Trade between the Member States of the EU is more than 1. 5 times higher than trade of EU Member States with the rest of the world; however, this latter (extra-EU) trade grew significantly in the 1990’s. From 1990 to 2002 it fluctuated between deficit and surplus but in 2002 it was neutral, i.e., total exports almost equalled total imports. The balance of extra-EU trade is significant as having any net imports of goods, particularly energy- intensive goods, can be seen as ‘exporting’ emissions, and having net exports of goods, particularly energy- intensive goods, as ‘importing’ emissions. Whilst any such situation might be interesting to note, there is no mechanism under the Kyoto Protocol for taking it into account. Figure 1-1 shows extra-EU trade for both the EU-15 and the EU-25 (complete data for NMS is only available from 1995 onwards). Extra-EU-25 trade is lower than Extra-EU-15 trade because the EU-15’s trade with NMS accounted for much of their original extra-EU trade.

Figure 1-1 Development of Extra-EU trade

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Source:Eurostat

Figure 1-2 shows that manufactured goods, including machinery, electronics, vehicles and chemical products make up the largest share of exports, while their share in imports is also significant but not as large. Raw materials play a bigger role in imports, including fossil fuels.

Figure 1-2 Composition of Extra-EU-25 trade, 2002

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Source:EUROSTAT.

1.5.4. Energy profile

The most recent comprehensive energy profile of the EU is reported in the European Commission’s Green Paper of 29 November 2000:“Towards a European Strategy for the security of energy supply”[6]. A final report on the green paper[7] was issued on 26 June 2002 summarising views from various parties (Governments, National Energy Agencies, private sector organisations, academia, NGOs etc) on the questions posed in the document[8].

The total energy consumption in the EU is on a slowly growing trend, both in absolute terms and on a per capita basis as seen from Figure 1-3 and Figure 1-4. There is a decline in energy intensity, even against the backdrop of relatively low energy prices during most of the period.

Figure 1-3 Total energy consumption, primary and final, EU-25

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Source:EUROSTAT

Figure -4 Energy intensity and energy consumption per capita, EU-25

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Source:EUROSTAT

1.5.5. Energy Supply

The energy supply profile of the EU-25 can be summarised by the following observations:

Solid fuels (coal and lignite) are on a declining curve, from previously being the driver of industrialisation in Member States and from a short revival after the oil price shocks in the 1970s. Solid fuel accounted for around 18% of overall energy supply in the EU-25 in 2002, much of it subsidised for social and employment objectives in the regions where it is produced. Domestic coal production is expected to continue its decline in importance within overall EU supply as subsidies are gradually abandoned and atmospheric emission limits tightened. The EU ETS could also exacerbate the decline in use of solid fuels. Development of ‘clean’ coal technology and carbon capture storage factors could slow the speed of this decline:

Figure -5 Solid fuels in the EU-25

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Source:EUROSTAT

Oil is still the major energy source in the EU-25 accounting for around 38% of total energy supply in 2002 and more than 60% in some Member States. The percentage has been relatively stable over the last decade, growing slightly in absolute terms.

The present trend reflects the contrasting effect of continued efforts to replace oil as a fuel in industry, electricity generation and domestic heating, with steady growth in the consumption of oil products in the transport sector. Although this trend appears t have leveled out lately. As options for substitution in non-transport sectors are gradually being more utilised, the transport sector will increasingly determine the quantity of oil required, unless strong policy action is taken.

Figure 1-6 shows that EU-25 production during the early 1990’s increased as a proportion of consumption. However, the degree of self-sufficiency has dropped slightly in recent years due to a plateau in the level of production but continued growth in consumption. In addition, the steadily increasing percentage of transport fuels to be produced from crude oil leads to increasingly deep conversion of heavier oils into gasoline, diesel and jet fuel with sharply increasing CO2 emissions per ton of transport fuel produced.

Figure -6 Oil in the EU-25

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Source:EUROSTAT

Natural gas has become the second largest component, after oil, accounting for around 23% of overall supply, an increase of almost 50% from 1990. Sizeable gas field discoveries in the North Sea and willing sellers on the doorstep of the EU (Russia, Algeria, Norway) have made this development possible and forecasts show a continued, albeit slower, growth in the share of natural gas within overall energy supply.

Aside from cheap, imported coal, natural gas is a very cost-competitive energy source – with additional environmental benefits in the form of lower CO2 emissions and negligible sulphur or particulate emissions.

EU-25 gas production kept pace with rising consumption in the early part of the 1990’s but, as with oil, growth in demand is now rising faster than levels of production. As demand rises and the dependence on imports continues to increase, the gas transport infrastructure and the limited number of physical pipeline connections for imported gas will be important consideration in the overall security of supply.

Figure -7 Gas in the EU-25

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Source:EUROSTAT

Nuclear energy supplies approximately 15% primary energy in the EU-25, slightly less than solid fuels, and approximately one third of electricity generation. After 2010 the share of nuclear energy in the overall supply pattern may decline if present decommissioning plans are continued without replacement. Any significant decline in production of nuclear energy offers a serious challenge to security of energy supply and future reductions in greenhouse gas emissions unless there is significant growth in the uptake of new technologies and renewable energy.

Renewables provide a modest 6% of overall EU-25 primary energy supply, and around 13% of electricity. The primary sources of renewable energy across the EU-25 are hydropower and biomass, although the relative contribution between Member States varies significantly. This reflects both national policies and measures, and also the distribution of biomass and hydropower resources.

Renewable energy was expected to show strong growth over the next decade towards an agreed EU-25 target of 12% of primary energy. However, latest growth figures are not as high as expected, so further actions are being developed to spur renewables growth. Biomass and wind (there has been a strong increase of wind energy) are seen as having a significant potential to cover part of the increase, whilst hydropower has more limited scope for further expansion. Other sources, such as solar energy, are further away in terms of cost-effectiveness so are seen as an option for the medium to long term in most Member States, although as technological development continues their cost effectiveness may improve considerably.

Figure -8 Percentage of nuclear and renewable energy, in primary energy and electricity consumption, EU-25

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Source:EUROSTAT

1.5.6. Energy consumption in different sectors

As stated in section 2. 6, overall energy consumption in the EU has shown modest but steady growth from 1990-2002; however, consumption within individual sectors has varied considerably as shown in Figure 1-9 .

The transport sector has experienced strong growth, largely due to a similar increase in GDP and intra and extra EU trade with a limited efficiency improvement. Without a strong policy response this trend will continue over the next decade, particularly so in air transport, a mode which is growing rapidly. This policy response is discussed in Chapter 4.

The industrial sector is using a decreasing share of overall EU energy consumption, due in part to the relative decline of heavy industry, but also to extensive energy efficiency improvement programmes in this sector.

The domestic and tertiary/service sectors show growing energy consumption, particularly due to strong growth in the latter. Although, energy intensity in the tertiary sector is normally far less than in the industrial sector, the potential for energy efficiency improvement in this sector is considered to be significant and is the subject of a number of initiatives at EU level.

Figure -9 Final energy consumption by sector EU-25

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Source:EUROSTAT

Note :Complete data is not available for the EU-25 for services and other for 2001/2002

1.5.7. Liberalisation and privatisation of energy markets

Markets for electricity and gas are in the process of liberalisation in all EU Member States, as a result of the EU Electricity Directive and Gas Directive[9]. In addition, electricity producers and gas suppliers are increasingly privatised. Since the 3rd National Communication further Directives have been passed on the common rules for the internal markets in gas[10] and electricity[11].

1.5.8. Energy Prices

Electricity prices for industrial and domestic consumers have decreased in real terms in almost all Member States due to increased competition. However, due to a number of factors, including increased fuel prices and the introduction of a price for carbon dioxide, electricity prices have recently substantially increased in absolute terms. The most significant price reductions can be found in the Member States with liberalised energy markets. The picture is less clear for gas; markets were liberalised later and the gas price since liberalisation has been significantly influenced by the increase in the crude oil price in the last couple of years and the development in the euro/dollar exchange rate. However, energy prices have been relatively low in real terms and this has had an adverse effect on energy demand reduction and on the cost-effectiveness of energy efficiency measures and alternative energy sources.

1.6. Transport profile

Throughout the period 1990 to 2002 both freight and passenger transport have continued to grow strongly. Growth in freight transport up till recently has been exceeding both growth in GDP and industrial production, whilst growth in passenger transport, from the late 1990’s onwards, has grown more slowly relative to GDP. This is particularly important as the transport sector is now the largest consumer of energy within the EU-25 (and this consumption has grown steadily from 1990 to 2002 – see Figure 1-9) and any attempt to limit future greenhouse gas emissions will need to address this sector. There appears to be a trend for decoupling of passenger transport growth from GDP (Figure -10) but more data are needed to confirm this trend.

Figure -10 Transport growth in the EU-15 and EU-25

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Source:DG Transport and Energy, EUROSTAT;

N ote: (1) = passenger cars, buses & coaches, tram metro, railways, air. (2) = road, rail, inland waterways, pipelines, sea (intra-EU + domestic)

1.6.1. Freight transport

Total freight transport in 2002 in the EU-15 was approximately 3076 Gtkm (3412 Gtkm in the EU-25, however no data are available on NMS sea freight transport), equivalent to a 32% increase since 1990. Road freight transport is the largest sector, accounting for 45% of the total freight transport in 2002 in the EU-15. Sea freight transport (both domestic and intra-EU) accounted for 41% in the same year. However, whilst the shares of pipeline, sea and inland waterway transport have remained fairly constant from 1990 to 2002 in the EU-15, the share of rail freight transport has declined relative to road freight transport (the situation is the same throughout the EU-25). This has implications for freight energy consumption, as rail transport is in general more energy efficient than road transport.

Figure -11 Relative share in goods transport by mode (%)

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Source:DG Transport and Energy, EUROSTAT

Note :Sea transport is domestic plus intra-EU-15, no data is available for NMS sea freight transport

There are considerable differences between Member States, with the percentage of rail freight in the NMS higher than in the EU-15, although even in the NMS the trend is moving towards road freight transport.

1.6.2. Passenger transport

Passenger transport has also increased substantially (24% growth from 1990-2002 in the EU-15) amounting to 4927 billion passenger kilometres in 2002 in the EU-15 with tourism and leisure traffic an important driving force behind this development, particularly for air transport.

Passenger cars remain the dominant mode of transport accounting for 79% of all transport miles in the EU-15 in 2002. The most rapid growth has been seen in air transport (a 78% increase from 1990 to 2002 in pkm with the modal share increasing from 4% to 5.7%). This poses particular difficulties for emissions reduction in the transport sector due to the high carbon intensity of air travel relative to other modes.

Figure -12 Relative share in passenger transport by mode (%)

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Source:DG Transport and Energy, EUROSTAT

Note: Air transport is domestic plus intra-EU-15 travel, no data is available for air transport in NMS

Car ownership varies throughout the Member States, from 247 per 1000 inhabitants in Slovakia in 2002 to 542 in Denmark in the same year. All Member States have seen a substantial rise in vehicle ownership from 1990 to 2002, with the highest rate increases in the NMS[12].

The NMS have a higher share of public transport compared to the EU-15. The highest level in 2002 was 38.8% (of all pkm travelled) in Hungary and the lowest 12.9%, in the UK[13].

1.6.3. Taxes on and prices of transport fuels

Both fuel prices and fuel taxes differ from Member State to Member State. However, as an average it can be stated that they are broadly equivalent to Japan but far higher than in the US, Canada and Australia, due to significantly higher taxes on these fuels

1.7. Industry profile

Table -7 highlights the changes within industrial sub-sectors. This is particularly important as sectors with high energy intensity and/or high process emissions of greenhouse gases (such as the chemical industry, pulp and paper, basic metals and ‘other’ non-metallic mineral products) have increased substantially over time. The chemicals, pulp and paper and building materials industries are all expected to expand further.

Table -7 composition of industry based on gross value added €bn (1995 prices)

Sub-sector | EU-15 | EU-25 |

Other mining | 10.8 | 12.3 | 13.0 | 20.2% | 12.7 | 13.6 | 6.6% |

Food products, beverages and tobacco | 144.4 | 155.0 | 167.8 | 16.2% | 162.0 | 176.4 | 8.9% |

Textiles and textile products | 70.2 | 65.6 | 60.5 | -13.8% | 68.5 | 63.8 | -6.8% |

Leather and leather products | 13.8 | 13.0 | 11.4 | -17.7% | 13.6 | 12.0 | -12.0% |

Wood and wood products | 25.1 | 29.2 | 32.6 | 29.7% | 30.5 | 34.5 | 12.9% |

Paper, paper products, publishing and printing | 110.8 | 118.2 | 126.3 | 14.0% | 122.0 | 131.6 | 7.8% |

Coke, refined petroleum products and nuclear fuel | 20.9 | 21.2 | 27.7 | 32.8% | 22.9 | 29.5 | 28.7% |

Chemicals, chemical products and man-made fibres | 118.2 | 132.3 | 153.8 | 30.1% | 137.2 | 160.0 | 16.7% |

Rubber and plastic products | 51.7 | 56.2 | 66.6 | 28.8% | 58.1 | 69.6 | 19.9% |

Other non-metallic mineral products | 54.1 | 61.2 | 64.5 | 19.1% | 63.8 | 68.0 | 6.6% |

Basic metals and fabricated metal products | 162.7 | 167.5 | 186.2 | 14.5% | 174.6 | 194.9 | 11.7% |

Machinery and equipment n. e. c | 141.1 | 135.2 | 146.3 | 3.7% | 140.1 | 152.6 | 8.9% |

Electrical and optical equipment | 148.6 | 145.1 | 188.6 | 26.9% | 150.0 | 197.3 | 31.6% |

Transport equipment | 126.4 | 123.1 | 152.0 | 20.3% | 126.9 | 159.2 | 25.5% |

Other manufacturing | 50.1 | 50.1 | 52.9 | 5.6% | 51.9 | 55.4 | 6.7% |

Source:EUROSTAT;

Note :Complete data is not available for the NMS prior to 1995.

1.8. Waste profile

Trends in waste generation, recovery and recycling are a proxy for resource use, and have both a direct and indirect affect on greenhouse gas emissions. Basic data on the generation and treatment of waste are based on the Joint Eurostat/OECD questionnaire. The data are published on the Eurostat website and in the publication “Waste generated and treated in Europe 1995-2003”[14]. Data collection is done on a voluntary basis and there are considerable gaps and inconsistencies in the data availability. Waste data collected by Eurostat is used by the European Topic Centre on Resource and Waste management (which replaced the previous ETC on Waste in January 2005)[15] for further assessments.

Figure 1-13 gives an overview of total waste generation per capita selected countries. In Western European (WE) countries (EU-15 and others) the average was approximately 4. 4 tonnes per capita in 2000 and 6.3 tonnes in Central and Eastern European (CEE) countries (NMS and others). Total waste quantities are continuing to increase in most WE countries for which data are available. In CEE, the picture is more mixed:quantities are increasing in some countries (Czech Republic, Hungary, and Poland) and decreasing in others (Estonia and the Slovak Republic). In general, limited data sets preclude an accurate assessment[16].

Figure -13 Total waste generation per capita in selected countries

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Source: Europe’s Environment:The Third Assessment (2003)

Figure 1-14 gives an overview of waste generation per unit GDP per capita and expresses the link between waste generation and economic activity. The limited data appears to show a decoupling of waste from GDP in countries such as the Netherlands and the majority of the CEE countries. However, in the latter case this reduction may be associated with significant structural changes and industrial decline and more disaggregated data would be needed to explore this further.

Figure -14 Total waste generation per GDP per capita for selected countries

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Source:Europe’s Environment:The Third Assessment (2003)

The treatment of biodegradable waste differs markedly between Members States, but is subject to a Landfill Directive[17], which will lead to lower emissions as it promotes increased recycling, recovery and reuse and requires reductions in landfilling and collection of landfill gas.

1.9. Building stock and urban structure

Energy consumption within buildings forms a significant component of all EU energy consumption. Total energy consumption within both these sectors has been rising since 1990 (as previously shown in Figure 1-9). This is due primarily to increasing economic activity in the service sector, increasing population pressures and a shift towards fewer members per dwelling in the household sector.

The majority of energy consumption is due to space and water heating within households as illustrated within, although the share of consumption of lighting and appliances is rising over time (this situation is similar within the service sector although the share of lighting and appliance consumption is higher than in households due to greater utilisation of ICT equipment).

Figure -15 Total household energy consumption by end-use, EU-15

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Source:EU Odyssee project on energy efficiency indicators[18]

The level of energy consumption within buildings is primarily affected by: the thermal properties of the building (in terms of insulation, building type – e.g.,flat/house); the efficiency of the heating system and the stock/efficiency of the appliances used. In general, newer dwellings are likely to be more energy efficient than older buildings and flats more efficient than houses. There is a considerable difference in housing stock between Member States.

Figure -16 Household energy consumption per dwelling (climate corrected)

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Source:EU Odyssee project on energy efficiency indicators[19]

From 1990 to 2002, the level of energy consumption per dwelling has fallen in some EU-15 countries but has increased in others (illustrated in Figure -). In general older buildings have gradually been improved in terms of heating and thermal efficiency (e.g. double glazing and loft and wall insulation) and new dwellings now have to be constructed to higher energy standards under the terms of the Directive on the energy performance of buildings[20].

However, counteracting factors that have contributed to a rise in energy consumption per dwelling include:increasing energy consumption of appliances (for example, the use of air conditioners within Southern European countries); rising service demand (higher average internal temperature), increasing dwelling area per capita and the size/type of new dwellings (which is not accounted for in Figure -16).

For appliance consumption, higher levels of ownership act to increase the overall level of energy consumption but a focus on improving efficiency of individual appliances has counteracted this to a certain extent.

1.10. Agriculture

Agricultural land use area is continuously decreasing within the EU-25, as illustrated by Table -8, due to an increasing use of land for settlement and/or leisure areas. The use of agriculture land is important for greenhouse gas emissions thanks to its ability to act as a carbon sink. It is also important though due to the emissions associated with it due to energy consumption (e.g., machinery use and energy input to fertilizers) and methane emissions from livestock.

There are considerable differences in the composition of agricultural areas between the Member States. In Finland, Denmark and Sweden, the majority of agricultural land is used for arable crop farming/tillage. In Ireland, by contrast, nearly 65% is used for pasture or as meadows. Permanent cultures (e.g. vineyards) cover considerable areas especially in the Mediterranean countries Greece, Spain, Italy, Portugal, and France[21]. Data also indicates that the composition of livestock is changing, with a decrease of approximately 9% in head of cattle from 1995 to 2002 within the EU-15, and a rise in the number of pigs and poultry by 5% and 3% respectively. The use of fertilisers is also declining trend with a reduction in total consumption of approximately 11% from 1997 to 2001 (from Eurostat data), although this is in absolute terms and coupled with the decline in agriculture land does indicate a decline in the intensity of fertilizer consumption. As a result of the reform of the Common Agricultural Policy in 2003 payments to farmers are linked to obligations regarding the environment and provide greater opportunity for funding environmentally sound farming methods which could lead to this trend continuing.

Table -8 Total agriculture land and usage in EU-25

1990 | 2000 |

Austria | Yes | Priority on JI and CDM | No | 7. 0b |

Belgium | Yes | Priority on JI and CDM | No | 8. 4 |

Denmark | Yes | CDM, JI | No | 4. 5 |

Estonia | N | - | Not applicable (Yes for national Kyoto target) | - |

Finland | Yes (Pilot programme to gain experiences implemented) | Not yet decided | Not yet decided | 0. 4 contracted, total quantity not yet decided |

Germany | Use of Kyoto mechanisms allowed at company level, no acquisition by government planned | ET, JI, CDM | Yes | No projected estimate as the amount will depend on private action |

Greece | Not yet decided | Not yet decided | Not yet decided | Not yet decided |

Ireland | Yes | ET | No | 3. 7c |

Italy | Yes | ET, CDM, JI | No | 39. 6 |

Luxembourg | Yes | ET, CDM, JI | No | 3. 0 |

Netherlands | Yes | CDM, JI | No | 20. 0d (CDM and JI) |

Portugal | Yes | ET, CDM, JI | No | No estimate providede |

Slovenia | Yes | ET, CDM, possibly JI | Not applicable (not yet decided for national Kyoto target) | Not yet decided |

Spain | Yes | Priority on ET and CDM | No | 20. 0 |

Sweden | Not yet decided, under consideration | ET, CDM, JI | Yes | Investments made are estimated to amount to 1 Mtonnes/year in emission credits |

United Kingdom | Use of Kyoto mechanisms allowed at company level, no acquisition by government planned | ET, CDM, JI | Yes | No projected estimate as the amount will depend on private action |

Notes:

a The projected emission reduction through the use of Kyoto mechanisms for Austria, Ireland and Luxembourg stems from the Commission decisions on the national allocation plans of those countries (COM(2004) 500 final, COM(2004) 681 final). The Commission has based its decision on information provided in the NAPs and/or in further correspondence during the assessment of the NAPs. The figures for Belgium, Denmark, Italy, the Netherlands, Portugal and Spain are derived from the questionnaire, the 3rd national communication or the national allocation plan (for details see below).

b Austria assumes in the questionnaire a maximum of 50 % of the efforts required for compliance with its burden sharing target to be accomplished by means of JI and CDM.

c Ireland states in the questionnaire that it intends to purchase 3. 7 million tonnes CO2-equiv. per year from international emissions trading.

d The Netherlands expect in the questionnaire a contribution of 100 million tonnes CO2-equiv. from project based activities in 2008-12 (20. 0 million tonnes CO2-equiv. per year). By the end of 2004 99. 0 million tonnes CO2-equiv. have already been contracted, two thirds of which from CDM projects and the remaining third from JI.

e. Portugal assumes in the questionnaire a maximum of 50% of the additional efforts required (described as the difference, for each of the years of the commitment period, between emissions levels considering the effects of policies and measures, and the burden sharing target) will be accomplished by means of JI and CDM.

Table -17 Preparations for the use of project based mechanisms by EU Member States

Member State | Preparation of JI/CDM programmes | Bilateral / multilateral agreements, memorandum of understanding or contracts arranged with countries | Allocated budget |

JI | CDM |

Austria | Legal framework and programmes under preparation | Czech Republic, Slovakia, Bulgaria, Romania | No arrangements yet | Up to € 288 million for 2003-2012a |

Belgium | Federal Government:first JI/CDM tender 2005 Flemish region:preparation of legal framework and start of pilot projects in 2003 Walloon region:CDM project currently launched | No arrangements yet | Capital Region:DR Congo Walloon region:agreements with French-speaking African countries | Federal Government: € 25 million per year Capital Region: € 9 million Flemish region: € 25 million proposed Walloon region: € 2 million per year |

Denmark | 5 JI project contracted, several JI projects in progress Several CDM projects are being negotiated | Slovakia, Romania, Ukraine, Latvia, Estonia, Bulgaria, Hungary, Lithuania, Poland | Moldova, Armenia, Kyrgyzstan, Georgia, Armenia, Azerbaijan, Malaysia, China, Thailand, South Africa, Nicaragua, Chile, Argentina | € 152 million for public procurement programme of JI and CDM credits 2003-2008 |

Finland | Pilot programme 9 CDM project ideas and 4 JI projects on-going | Estonia, Latvia, Lithuania, Poland, Hungary, Ukraine | China, Costa Rica, El Salvador, Nicaragua | Pilot Programme:€ 9 million PCFc:USD 10 million BASRECb:€ 1. 75 million |

Germany | Participation in BASREC and initiation of climate fund | Norway, Finland, Sweden, Denmark, Estonia, Lithuania, Latvia, Poland and Russia through BASREC | No arrangements yet | € 18 million for climate fund € 5 million for BASREC |

Greece | Studies on use of JI/CDM initiated | -- | -- | No arrangements yet |

Ireland | No preparation of JI/CDM programmes | Not applicable | Not applicable | Not applicable |

Italy | Multilateral and Regional Financial Institutions:participations in CDCF, ICF5, BCF6, MEDREP7, MEDREC8, Trust Fund for the Environment in Asia and China (GEF), bilateral agreements | Bulgaria, Croatia, Moldavia, Poland, Kazakistan, Slovenia, Romania | Agreed MOUs: Algeria,China, Cyprus Cuba, Egypt, Israel, Morocco, El Salvador, Slovenia, Argentina, Brasil, Mexico, Uruguay,Panama, Congo, Nigeria, Laos, Serbia and Montenegro | € 169. 5 million are already allocated: € 58. 7 million for World Bank funds € 8. 5 million for GEF Trust Fund €10. 3 million for MEDREP[49] € 8. 5 million for MEDREC[50] € 79 million for China-Italian Facility € 4. 5 million for various funds € 1,150 million for the years 2006-2011 [51] |

Netherlands | ERUPT CERUPT Multilateral and Regional Financial Institutions, Participation in PCFc, Community Development Carbon Fund, Private Financial Institutions, bilateral contracts | Memoranda of Understanding Romania, Bulgaria, Estonia, Hungary, Slovakia, Croatia, New Zealand, participation in PCF | Memoranda of Understanding Argentina, Bolivia, Brazil, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Indonesia, Mexico Nicaragua, Panama, Uruguay, participation in PCF | € 606 million |

Portugal | Studies on use of JI/CDM initiated | No arrangements yet | No arrangements yet | No arrangements yet |

Spain | 2002:Pilot programme for JI/CDM 2004:Iberoamerican Climate Change Units Network | No arrangements yet | No arrangements yet | €200 million to be managed by the IBRD |

Sweden | 4 CDM projects in advanced stages of development, several JI proposals are under consideration Participation in PCFh and BASRECi | Bilateral agreements concluded with Romania; negotiations with Estonia, Russia Lithuania in progress. Multilateral agreement in Baltic Sea Region for high quality JI projects with ICE, NOR, SWE, DEN, GER, FIN, EST, LAT, LIT. | No arrangements yet | € 10 million (SEK 94 million) in CDM-SCILIPj € 6. 5 million (SEK 61 million) in JI-SCILIP € 3. 5 million in BASREC USD 10 million in PCFc |

United Kingdom | - | No arrangements yet | No arrangements yet | None |

Notes:

a) Amount indicated in PointCarbon 25 March 2004 (“The budget managed by Kommunalkredit Public Consulting GmbH, is worth €1 million in 2003, rising to € 11 million in 2004, € 24 million in 2005 and € 36 million in 2006, although this includes administrative fees. The government expects that it will earmark € 36 million each year from then on until 2012. ”) whereas response to questionnaire and Austrian national strategy foresee annually up to € 36 million starting in 2003.

b) Baltic Sea Region Energy Co-operation Testing Ground Facility

c)&h) Prototype Carbon Fund of the World Bank

d) International Finance Cooperation

e) International Bank for Reconstruction and Development

f) Corporación Andina de Fomento

g) Community Development Carbon Fund

i) Baltic Sea Region Energy Co-operation on JI and Emissions Trading

j) Swedish International Climate Investment Programme

3.4. Sectoral Policies and Measures

3.4.1. Introduction

The following sections describe developments in policy since the 3rd National Communication. The full range of climate related measures therefore includes the measures described in the 3rd National Communication as well as those described in these sections. The quantification of the effect of the measures reported in this Communication is mainly through the ECCP programme and relates generally to the technical potential for a measure. Unless otherwise stated the quantification is for the EU-15. Effort is being directed by the Commission to obtain updated estimates of the realisable reductions for the measures, both at the individual level and for aggregate effects of packages of measures but the results are not yet available. The updated revised reduction potentials will be published in a separate report at a later stage.

3.4.1.1. Developing the internal market

The EU continues to liberalise its energy markets and the Commission has introduced and amended a number of directives[52],[53],[54],[55],[56] to continue to help complete the internal market. The Commission intends to review the way the EU’s energy markets operate and will begin an investigation in 2005 to look at the competitiveness of energy markets. The review will consider whether the Commission needs to take enforcement action to increase competitiveness. It is envisaged that the restructuring of the energy markets might help boost the use of environmentally friendlier forms of energy.

3.4.1.2. Taxation of energy products

A Community framework on the taxation of energy products was agreed in October 2003[57]. The Directive sets out minimum levels of taxation to be applied to energy products and electricity, but allows for exemptions or reductions to promote renewable sources of energy.

3.4.1.3. Promotion of electricity from renewable energy sources (RES-E)

The development of renewable energy sources is a central aim of European Union energy policy, reflecting the clear benefits that clean, sustainable and secure energy supplies will bring. The RES-E directive[58] promotes renewable energy sources for electricity generation.Between 1990 and 2003, wind power production increased by almost 57 times and electricity production from solar photovoltaic cells by 87 times.

A comprehensive EU regulatory framework is now in place and Member States have adopted national targets for green electricity consumption and are working towards them. By creating national targets, the directive gives a quantitative framework within which each Member State can plan and implement the most appropriate measure for their own situation. National indicative targets are included in the Accession Treaty for new Member States. With their accession the 22.1% target set initially for EU-15 for 2010 becomes 21% for the EU-25.

In 2004, as required by the directive, the European Commission produced an assessment of Member States’ progress[59] based on reports submitted by Member States[60]. Four Member States (Denmark, Germany, Spain and Finland) are in line to meet their renewable electricity targets. For the rest of the Member States, further measures will be needed to increase the currently expected achievement of 18-19% in 2010 to the 21% target.

The report emphasises that more must be done for the production of electricity, heat, as well as biofuels for transport (see section 3.4.4.1 for more details), from bio-energy. The Commission will therefore propose a Community action plan for energy from biomass by the end of 2005. As an aid to the development of this the Commission held a public consultation from February to March 2005, the results of which are already available[61].

In addition, the Commission has proposed several concrete actions to take renewable energies forward and to emphasise the deployment of renewable energy in its main financial instruments, the Common Agricultural Policy (direct payments and rural development) and the Structural and Cohesion funds. The development of renewable energy is also supported by other programmes such as ALTENER within Intelligent Energy – Europe and the Campaign for Sustainable Energy (see 3.4.2.3) as well as ongoing community wide standardisation of technologies and products. This includes, amongst others, the development of standards for biodiesel and solar PV through the involvement of the European Standardisation Committee (CEN) and will also be reinforced by the proposed directive on eco-design of energy using products.

Structural Funds and Rural Development support specific investments and local actions to raise the capacities for biofuels and other renewable energy supply and demand. The ongoing process of CAP reform has reduced price support and helped to increase the competitiveness of EU agricultural production in all possible outlets, including biofuels.

The decoupling of price and income support which has been introduced by the CAP reform 2003 is a key instrument to further facilitate supply of energy crops. A specific aid for energy crops has been introduced with CAP reform 2003. For a maximum guaranteed area of 1.5 million hectares a premium of € 45 per ha will be available. This new scheme is subject to a Commission report by 31 December 2006 and appropriate proposals taking into account the implementation of the bio-fuels initiative.

3.4.1.4. Cogeneration directive

Promotion of cogeneration was one of the short-term priority areas identified in the Commission’s Action Plan on energy efficiency. The purpose of the Directive[62] is to create a framework for promotion and development of high efficiency cogeneration based on useful heat demand and primary energy savings.

The Directive defines high-efficiency cogeneration as achieving more than 10% energy savings compared to the separate productions of heat and electricity. In this context the efficiency requirements for a cogeneration plant using renewable sources are less stringent to be qualified as ‘high efficiency’ than for fossil fuel fired plants, thus providing an incentive for the promotion of biomass CHP.

Member States are required to report annually on cogeneration statistics, prepared using a methodology outlined in the Directive. Other provisions include analysis of national potentials and the requirement for Member States to take steps to facilitate access to the electricity grid for CHP.

3.4.2. Policies in Energy Demand

The foundations of policy in the energy sector were set out in the 2000 green paper on security of energy supply[63] discussed in the 3rd National Communication, which was finalised in 2002[64].

Since this point a new green paper on energy efficiency[65] has also been adopted, on 22 June 2005. The Green Paper aims to act as a catalyst, leading to a renewed energy efficiency initiative at all levels of European society – EU, National, regional and local. In addition, the Green Paper seeks to make a significant contribution, by way of example and leadership, to kick-start an international effort to contribute to addressing climate change through energy efficiency. It focuses on three key reasons for a renewed focus on energy efficiency:

- Competitiveness and the Lisbon Strategy. It is estimated that the EU could save up to 20% of its present energy consumption in a cost-effective manner, leading to net savings of up to €60bn per year and increased job creation.

- Environmental protections and the EU’s Kyoto commitments. Energy savings is likely to be the quickest and most cost-effective manner for reducing greenhouse gas emissions as well improving air quality, in particular in heavily populated areas.

- Security of supply. By 2030 it is predicted that the EU will be 90% dependent upon imports for oil and 80% for gas. Rising energy prices and regional instability leading to shortages of supply, could lead to severe impacts on the economy and energy efficiency is one of the key mechanisms to help minimise this risk.

The green paper seeks to identify a number of bottlenecks, such as lack of information or finance that are preventing these cost-effective measures from being taken up. It also suggests a number of key actions that might be taken to overcome these including:

- Establishing annual energy efficiency action plans at a national level.

- Giving citizens better information, through improved labelling and targeted publicity campaigns.

- Better targeting of state aid where public support is appropriate.

- Using public procurement to “kick-start” new energy efficient technologies.

- Using new or improved financing instruments to induce cost-effective improvements.

- Further effort on buildings, including extending existing requirements to smaller premises.

- Speeding the development of a new generation of more fuel-efficient vehicles.

3.4.2.1. Action Plan to Improve Energy Efficiency in the European Community – enhancing demand side reduction measures

As described in the 3rd National Communication, The Energy Efficiency Action Plan[66] was prepared in 2000 to realise the available economic potential for energy efficiency in line with the proposed target for reduced energy intensity of 1% per year above and beyond business-as-usual trends. A set if core policy instruments for implementing the action plan[67] have been agreed.

3.4.2.2. Proposal for a Directive on energy end-use efficiency and energy services

The proposed Directive[68], still under discussion in the EU institutions, has the objective of increasing end-use energy efficiency using a number of operational measures. Member States are called on to:

- Remove barriers and provide credible information for companies to offer energy services and energy-efficiency programmes.

- Adopt general national targets of annual 1% cumulative savings.

- Ensure that retail suppliers or distributors of electricity, natural gas, fuel oil and district heating offer and actively promote energy services and/or energy audits.

- Ensure that the public sector in each Member State sets a good example with indicative national targets of annual 1.5% cumulative savings.

- Establish energy efficiency programmes.

3.4.2.3. Programmes

Intelligent Energy - Europe

Intelligent Energy – Europe[69] (IEE) supports sustainable development in the energy context. Its objectives are:

- to provide the elements needed for the promotion of energy efficiency, the increased use or renewable energy sources and energy diversification;

- to develop means and instruments to monitor and evaluate the impact of measures adopted by the Community and Member States in these fields; and

- to promote efficient and intelligent patterns of energy production and consumption.

There are four specific fields in the programme:

- SAVE, which concerns the improvement of energy efficiency and rational use of energy.

- ALTENER, which promotes new and renewable energy sources.

- STEER, which concerns support relating to all energy aspects of transport.

- COOPENER, which concerns support for initiatives relating to the promotion of renewable energy sources and energy efficiency in developing countries.

The financial framework for the implementation of the programme for the period 2003 to 2006 is approximately €200 million[70].

A decision was also taken[71] on the On 6 April, to adopt a proposal for the continuation of the Intelligent Energy - Europe programme during the period 2007-2013, as part of the Competitiveness and Innovation framework Programme (CIP). The continued IEE programme will provide support in the same fields as the current IEE programme. However, it will also introduce ‘Replication Projects’ throughout the SAVE and ALTENER parts of the programme which aim to help speed commercialisation of particularly innovative process or products that are close to but not yet cost-competitive. The proposed EIE budget from 2007-2013 is €1. 639 billion, with approximately €896 million allocated to replication projects.

Action Plan - Campaign for Sustainable Energy

The new ‘Campaign for Sustainable Energy’ started in mid-2004 and will run until 2007. It is the successor to the previous ‘Renewable Energy Campaign for Take-Off’ (described in the previous 3rd National Communication) that ran from 1999-2003, but now includes both energy efficiency and renewable energy.

The new campaign will continue the efforts of the previous one as well as providing indicative sectoral targets, an extended series of promotional tools and will allow partners to join the common effort of implementing programmes and initiatives in the Union and beyond. Renewable Energy Partnerships were one of the most important parts of the original campaign for take-off. From 2000-2003, 130 renewable energy programmes and projects involving more than 700 partner organisations in the EU joined the Campaign as Renewable Energy Partners and they will continue to operate and expand via the successor Campaign for Sustainable Energy.

3.4.2.4. Non-greenhouse gases

The two measures reported here are aimed at improving air quality but their provisions will affect emissions of non-greenhouse gases through control of combustion. The measures are the National Emissions Ceiling and Large Combustion Plant Directives

National Emissions Ceiling Directive

The National Emissions Ceiling Directive[72] sets upper limits for each Member State for the total emissions in 2010 of the four pollutants responsible for acidification, eutrophication and ground-level ozone pollution (SO2, NOx, VOCs and ammonia), but leaves it largely to the Member States to decide which measures to take in order to comply.

Large Combustion Plant Directive

The 2001 revised Large Combustion Plants Directive[73] (LCPD) applies to combustion plants with a thermal output of greater than 50 MW and replaces the existing LCPD[74]. The LCPD aims to reduce acidification, ground level ozone and particles throughout Member States by controlling emissions of SO2, NOx and PM from large combustion plants(LCPs).

Table 4. 3. 1 Summary of the policies and measures in the energy sector

Developing the internal market for energy | Liberalising energy supply within gas and electricity markets | CO2 | Regulatory | Number of directives adopted implementation ongoing | EU/Member States | ~80-12075 |

Emissions Trading Scheme | EU-wide trading scheme covering combustion plants >20MW | CO2 | Economic | Implemented. First phase 2005-2007. Second Phase 2008-2011 | EU/Member States |

Directive on taxation of Energy Products | Minimum levels of taxation to encourage shift to less carbon intensive energy products | Mainly CO2 | Fiscal | Implemented | EU/Member States |

Directive on energy end-use efficiency and energy services | Remove barriers to and promotion of energy efficiency | Mainly CO2 | Regulatory | Adopted in 2003 | EU/Member States | ~40-5575 |

Directive on promotion of renewable energies in electricity generation | Increase the contribution of renewables to primary energy supply by 2010 | Mainly CO2 | Framework Regulatory | Implemented | EU/Member States | ~100-125[75] | . |

Directive on the promotion of Biofuels | Increase environmentally benign use of liquid and gaseous bio-fuels | Mainly CO2 | Framework Regulatory | Adopted | EU/Member States | ~35-4075 |

Directive on promotion of cogeneration | Promote ‘high efficiency’ cogeneration | Mainly CO2 | Framework Regulatory | Adopted | EU/Member States | ~24-42[76] |

Further RES-H measures | Measure to promote the generation of heat from renewables (linked to action below) | Mainly CO2 | - | Planned | - | 36-48 |

Action plan for energy from biomass | Increase biomass use for production of electricity, heat and transport fuels | Mainly CO2 | - | Plan expected by end of 2005 |

Campaign for sustainable energy | Support activities for promotion of energy efficiency and renewables | Mainly CO2 | Primarily information and capacity building | Ongoing | EU/Member States |

Intelligent Energy Europe (SAVE and ALTNER programmes | Non-technical measures to promote energy efficiency and RES, respectively | Mainly CO2 | RTD | Ongoing - EIE from 2003-2006 and EIE2 from 2007-2013 | EU |

National Emission Ceiling Directive | National annual limits on emissions of NOx, SOx, VOCs, NH3 | Some indirect impact on – N2O and CH4 | Framework Regulatory | Adopted ongoing implementation | EU/Member States |

Large Combustion Plant Directive | Emission limits on combustion plant >50MW on NOx SOx and PM | Some indirect impact on – N2O and CH4 | Framework Regulatory | Adopted | EU/Member States |

Research Fund for Coal and Steel | Funding for cleaner coal technology and low CO2 steel production processes | CO2 | RTD | Ongoing | EU/Member States |

3.4.3. Policies in the Residential and Tertiary Sector

The guidelines for European policy on the residential and tertiary sector were set out in the in the Action Plan to improve Energy Efficiency as discussed in the 3rd National Communication.

3.4.3.1. Energy performance of buildings

The residential and tertiary sector, the major part of which is buildings, accounts for more than 40% of final energy consumption in the Community. The Directive on energy performance of buildings adopted in December 2002[77] seeks to promote improvement in energy efficiency in buildings. It lays down requirements for:

- The general framework for a methodology of calculation of the integrated performance of buildings;

- The application of minimum requirements on the energy performance of new buildings;

- The application of minimum requirements on the energy performance of large existing buildings that are subject to major renovation;

- Energy certification of buildings; and

- Regular inspection of boilers and of air-conditioning systems in buildings and an assessment of the heating installation in which boilers are more than 15 years old.

3.4.3.2. Framework Directive for establishing Eco-design requirements for energy-using products

The Framework Directive for establishing Eco-design requirements for energy-using products.Directive 2005/32/EC creates a comprehensive and coherent legislative framework for addressing eco-design requirements with the aim of:

- ensuring the free movement of energy-using products in the EU;

- improving the overall environmental performance of these products;

- contributing to the security of energy supply and enhancing the competitiveness of the EU economy; and

- preserving the interests of both industry and the consumer.

The framework directive will be followed by implementing measures establishing eco-design requirements for specific types of products adopted by the Commission assisted by a regulatory committee. The Directive includes annexes setting out, inter alia, the methods for setting generic and specific eco-design requirements. In terms of implementing measures, the Directive includes a list of products that should be examined with priority that were identified by the ECCP as offering a high potential for cost-effective reduction of greenhouse gas emissions.

The Directive lays down eligibility criteria for adopting implementing measures. For example, a product will be selected only if it represents an important volume of sales in the EU market and an important environmental impact at European level. Another criterion is the potential for improvement, without entailing excessive costs and taking into account both existing legislation and pro-active initiatives from industry.

The level of eco-design requirements should normally be established on the basis of technical, economic and environmental analysis. Flexibility in the method of establishing the level of requirements can make swift improvement of environmental performance easier. Priority should be given to alternative courses of actions such as self-regulation by the industry, where such actions are likely to deliver the policy objectives faster or with less cost than mandatory requirements.

3.4.3.3. Labelling and minimum energy efficiency requirements for household appliances, electrical and electronic end-use equipment

Other developments in the buildings sector include the extension of the "Labelling Directive" (92/75/EEC) via Directives 2002/31/EC, 2002/40/EC and 2003/66/EC with regard to energy labelling of household air-conditioners, household electric ovens, household electric refrigerators, freezers and their combination

3.4.3.4. Non CO2 gases

Both CH4 and N2O emissions from the buildings sector are relatively small and emissions are mainly linked to boiler operation and improve in parallel with the improvement of boiler efficiency and lowering of the demand. In addition, there is a small but increasing contribution of fluorinated gases, mainly due to air conditioning, although this will be in part be affected by the regular audits required under the Energy Performance of Buildings Directive as well as the Commission proposal on fluorinated gases discussed in section 3.4.5.1. Fluorinated gases.

Table 4. 3. 2:Summary of the policies and measures in the tertiary sector

Directive on energy end-use efficiency and energy services | Remove barriers to and promotion of energy efficiency | Mainly CO2 | Regulatory | Adopted in 2003 | EU/Member States | ~40-55[80] |

Directive on Energy performance of buildings | Improve energy performance of new (and partially existing) buildings and | Mainly CO2 | Regulatory | Adopted | EU/Member States | ~20[81] |

Proposed Directive of eco-design requirements for energy using products | Create overall framework for improving energy and environmental aspects of products | Mainly CO2 | Framework Regulatory | Proposed | EU/Member States | MTP 180[82] |

EU Boiler Directive 92/42/EEC | Improve minimum boiler efficiency | CO2 | Regulatory | Implemented | Member States | ~22[83] |

Labelling and minimum energy efficiency requirements for household appliances | Improve share of energy efficient electric appliances | CO2 | Regulatory | Implemented | Member States | ~3180 |

Revision of the Energy Labelling Directive 92/75/EC | To provide additional and effective information to consumers | CO2 | Regulatory | Implemented | EU/Member States | ~2382 | 10 |

EMAS energy audit and management scheme | Efficient energy use within business/public sector organisations | Mainly CO2 | Voluntary | Ongoing | EU/Business/ Public sector organisations |

Energy Star Programme and Code of Conduct for Digital TV Services and standby losses | To reduce energy consumption of information and communication technology, particularly from stand by losses | CO2 | Voluntary & negotiated agreements | Adopted | Manufacturers | ~30-3580 | 13 |

Intelligent Energy Europe - SAVE programme | Non-technical measures to promote energy efficiency | Mainly CO2 | RTD | Ongoing - IEE 2003-2006 and EIE2 2007-2013 | EU |

WEEE Directive | To minimise the environmental impact of waste from electrical and electronic equipment | CO2 | Directive | Adopted | EU/Member States/Manufacturers |

Greenlight programme | To promote use of CFLs within non-residential (i.e. public/private) consumers | CO2 | Voluntary | Ongoing | Manufacturers |

Motor challenge programme | to achieve system optimisation in motor driven processes | CO2 | Voluntary | Ongoing | EU | ~30 MTP |

3.4.4. Policies in the Transport Sector

The guidelines for European policy on transport were set out in the transport white paper as discussed in the 3rd National Communication. Clear progress has made on the objectives set out in the white paper but demand in the road transport sector continues to grow, giving higher greenhouse gas emissions. Emissions of air pollutants have however decreased (The European Environment Agency’s 2004 Transport and Environment Report Mechanism (TERM))[84]. The alternative fuels policy is starting to take effect with the use of biofuels increasing, however, still modestly.

DG Environment also undertook a study[85] in 2003 to examine the affect of other EU policies on transport activity, particularly those where the generation of increased transport activity is an avoidable side-effect. Whilst only an initial overview it did provide some general conclusions and recommendations regarding the affects on transport of the following areas: agriculture, competition, environment, internal market, regional policies and taxation (see study for more details).

The strategy for reducing CO2 emissions of passenger cars[86]described in the 3rd National Communication will improve the fuel efficiency of passenger cars through voluntary commitments with car manufacturing associations (ACEA, JAMA, KAMA), labelling and fiscal measures. The voluntary agreements with European, Japanese and Korean car manufacturers signed in 1999, on increased fuel efficiency of new passenger cars aim to achieve total new passenger car fleet average CO2 emissions of 140 g CO2/km by 2012. By 2003, CO2 emissions from new cars in the EU-15 were 12% lower than in 1995[87]. As regards future actions beyond the current commitments in view of the Community’s objective of 120 g CO2/km, the Commission will review, in 2006, the options available to further reduce CO2 emissions from passenger cars, subject to an impact assessment and taking into account the work of the CARS21 high-level group.

3.4.4.1. Biofuels

The biofuels directive[88] is one component of an active European energy policy that seeks to safeguard energy supplies and promote sustainability. It requires the substitution of conventional transport fuels by biofuels derived from agricultural crops, notably biodiesel and bioethanol. To achieve this, the directive, accompanied by the energy taxation directive, sets indicative targets for biofuel substitution and then gives a legal framework for fiscal and other national measures to promote biofuels. The indicative targets for the biofuel share in the Union are set at 2% by 2005, and 5.75% by 2010, with Member States setting their own national targets.

Under the directive Member States may choose how to implement its objectives and to promote biofuels. However, it requires them to ensure that such measures are selected and designed with the whole life cycle of the particular biofuel in mind, taking account of the overall carbon balance and other impacts, and giving priority to promoting those fuels that are environmentally cost-effective.

To monitor progress towards the biofuel targets, the directive requires that Member States report yearly on their biofuel promotional measures and the share of biofuels in their national market. Every two years, the European Commission will produce an evaluation report on progress towards the biofuel target. On the basis of the findings of the report, the Commission can propose changes to the system of targets, including mandatory targets if it seems that national targets will be missed.

3.4.4.2. Infrastructure charging for heavy goods vehicles

A directive is proposed to modernise the existing charging system for heavy goods vehicles[89]. The philosophy of the approach recommended by the Commission is that road charges, usually in the form of tolls, should enable Member States to recover the total costs of infrastructure. The charges must also be able to reflect the level of congestion of the road network and the level of pollution of the zone crossed by a major road, to convey a signal to users. Revenues from the charges should also be allocated by Member States to fund improvements in the transport sector. Proposals will also be developed for a common framework for infrastructure user charges, including port and airport charges.

To aid in the development of road charging an additional Directive[90] was created 2004 looking in particular at the interoperability of electronic road toll systems and the standardisation of microwave technology used.

3.4.4.3. Third railway package

Introduction of the new European regulatory framework for rail transport is progressing in line with the reform objectives set out in the White Paper on the common transport policy. The objectives place the revitalisation of the rail sector at the heart of the sustainable mobility strategy and, seek to improve the attractiveness and competitiveness of more environmentally friendly modes of transport[91].

3.4.4.4. Programmes

Marco Polo Programme

In its White Paper, the Commission proposed to take measures which should make the market shares of the modes of transport return, by 2010, to their 1998 levels. This will prepare the ground for a shift of balance from 2010 onwards.

One measure to achieve this objective is the establishment of the Marco Polo Programme with its adoption on 22 July 2003[92]. The Programme's objective is to reduce road congestion and to improve the environmental performance of the freight transport system within the Community and to enhance intermodality, thereby contributing to an efficient and sustainable transport system.

To achieve this objective, the Programme supports actions in the freight transport, logistics and other relevant markets. The Programme runs from 2003 to 2006 with a budget of €100 million for the EU-25.

In 2004 the Commission presented a proposal[93] to establish a second, significantly expanded "Marco Polo" programme from 2007 onwards. Marco Polo II includes new actions such as motorways of the sea and traffic avoidance measures. The programme, which has a budget of €740 million for 2007-2013, has been extended to countries bordering the EU. The Commission estimates that every €1 in grants to Marco Polo will generate at least €6 in social and environmental benefits. The final form of Marco Polo II will depend on the outcome of the negotiations with the European Parliament and the Council.

STEER

As mentioned in section 3.4.2.3, STEER is one of the sub-programmes within Intelligent Energy – Europe, which focuses specifically on transport energy issues. It provides funding in the areas of:

- Alternative fuels and vehicle propulsion.

- Policy measures for efficient use of energy in transport.

- Strengthening the knowledge of local energy agencies in the transport field.

Table 4. 3. 3:Summary of the policies and measures in the transport sector

Directive on the promotion of Biofuels | Increase environmentally benign use of liquid and gaseous bio-fuels | Mainly CO2 | Framework Directive | Adopted | EU/Member States | ~35-40[95] |

Proposed directive on Infrastructure charging | Structure and levels of charging for all modes of transport | Primarily CO2 | Framework directive | Under preparation | EU/Member States | ~40-60 |

Voluntary agreements with European, Japanese and Korean car manufacturers | Reduce average CO2 emissions of newly sold cars to 140 g/km until 2008/2009 (25 % reduction compared to levels in the mid-90s) | CO2 | Voluntary agreement | Implemented | EU/ manufacturers' associations | ~75-8095 |

Various Air quality legislation, e.g. Auto-Oil I and II | Regulations and Research on pollution, i.e. ozone precursors, indirect effect on fuel consumption, limits on sulphur content etc | Indirectly CO2 | Regulation, Research | Implemented | EU/Member States |

Air quality legislation, Directive 98/70/EC + additions | Vehicle (and non-mobile) emissions (Euro) standards | Indirectly CO2 and N2O | Regulatory | Implemented but ongoing tightening of standards | EU/Member States |

Car Labelling Directive 1999/94/EC | Indication of CO2 emissions for car purchasers | CO2 | Labelling | Adopted | EU/Member States + institutes |

Infrastructure charging | Road charging to recover costs of infrastructure | CO2 | Fiscal | Heavy duty road vehicles in implementation | EU/Member States | 40-60[96] |

Marco Polo Programme | Promote modal shift in freight transport away from road | Primarily CO2 | Economic | Ongoing 2003-2006. Proposed second phase from 2007-2013 | EU |

Fiscal measures | Promote modal shift, lower congestion. | CO2 | RTD on Taxes, Road-Pricing etc | Ongoing research[97] | EU/Member States | ~32-3595 |

3.4.5. Policies in the Industry Sector

The guidelines and background for European policy on industrial greenhouse gas emissions were discussed in the 3rd National Communication based upon the Action Plan to improve Energy Efficiency and the Green Paper on Integrated Product Policy[98].

3.4.5.1. Fluorinated gases

There are two elements to the Commission proposal in the Common Position[99] adopted by Council on 20 June 2005[100], which have subsequently been split into two separate legal texts:

- A regulation on containment, recovery, training and certification, prohibitions, use bans and reporting of F-gases;

- A common position on mobile air conditioning in passenger vehicles.

The proposal is to put into place a legislative framework to reduce emissions of fluorinated gases. The primary focus is on new requirements for the containment, recovery, training and certification of personnel involved in maintaining equipment containing fluorinated gases. A secondary aspect is concerned with a limited number of marketing bans for specific fluorinated gases in specified applications. These harmonised restrictions have been agreed on the basis of extensive stakeholder consultation and following cost-benefit analyses. Examples of the restrictions include the use of SF6 in magnesium die casting, vehicle tires and in footwear.

The Common Position on mobile air conditioning systems would prohibit the placing on the market of passenger cars with HFC 134a (a fluorinated gas) mobile air conditioners in new passenger cars from 2011 and in all passenger cars from 2017.

3.4.5.2. Integrated Pollution Prevention and Control

Compliance with the 2001 Integrated Pollution Prevention and Control Directive as outlined in the 3rd National Communication is one of the key prerequisites for European industry to achieve good environmental performance. Successful implementation, including full application of best available techniques by October 2007, is essential to achieve more sustainable production patterns in the European Union.

A communication[101] in 2003 indicated that whilst some good progress had been made on implementation of the directive, this was unevenly spread and a number of Member States needed to accelerate their efforts. A stakeholder consultation on the communication was also undertaken with a summary of the feedback available on the Commission website[102].

To help support the implementation of the directive a number of support structures have been developed and enhanced:

- IMPEL an informal network of authorities responsible for implementation and enforcement of EU environmental law, has devoted a great deal of its activities to the IPPC Directive. A number of relevant projects[103] have been carried out, such the use of energy efficiency in environmental permits[104].

- The IPPC Experts Group is an informal group that was originally created to further discussions between Member States and the Commission on various ambiguities that needed to be dealt with when the Directive was transposed into national law. More recently the group has focused on reporting and on strategic issues.

- The Information Exchange Forum (IEF) has been set up as part of the information exchange on Best Available Techniques established pursuant Article 16(2) of the IPPC Directive. The IEF is composed of representatives of Member States, industry and NGOs. The draft final BAT Reference Documents are presented to the IEF before their adoption by the Commission.

- EPER - The European Pollutant Emission Register[105], which has been running since 2004. This provides access to information on the annual emissions of approximately 10000 industrial facilities in the 15 Member States.

- The PHARE project[106], which is aimed at capacity building for implementation of the IPPC directive as well as the Environmental Impact Assessment Directive[107] in the New Member States

Interaction of IPPC and Emissions Trading

The EU-ETS and Integrated Pollution Prevention and Control Directive have synergies in a number of areas such as permitting, coverage, emission limits etc and the ETS Directive has been formed in such a way as to complement this. Due to the lower threshold rating of the installations covered under the ETS (20MW, rather than 50MW under IPPC), the ETS scheme will cover some of the installations that also fall under the IPPC requirements. In these cases CO2 emissions effectively form part of the ETS scheme whilst the installations must still conform to the general requirements of their IPPC permits, for example emission limits for other pollutants such as VOCs (see non-paper by DG Environment[108] for more information).

Review of the IPPC Directive

The Commission has launched a process to review the IPPC Directive. The cornerstones of the review will be the streamlining of IPPC Directive and other pieces of legislation on industrial emissions (in particular the LCP, Waste Incineration and Solvents Directives), the development of incentives for a more dynamic system aimed at improving the environmental performance of installations and the introduction of “technical” amendments (e.g., rectifying inconsistencies, clarifying definitions/concepts, possible extension of the scope, streamlining of reporting). It is expected to complete the review in 2007.

Table 4. 3. 4:Summary of the policies and measures in the industry sector

IPPC Directive | Integration of pollution issues into permits for plant operation based on BAT | All gases | Regulation1 | Adopted, implementation ongoing | EU/Member States |

Directive on Fluorinated Gases | Improve monitoring and verification, improve containment and apply marketing and use restrictions | HFC, PFC and SF6 | Regulation and agreements | Adopted | EU/Member States | ~23[110] |

Directive on Mobile Air Conditioning | Prohibit the use of HFCs in mobile air conditioning systems in new vehicles | HFC | Regulation | Adopted | EU/Vehicle manufacturers |

E2MAS* | Environmental auditing Energy efficiency in non-core areas of industry and SMEs | Primarily CO2 | Voluntary | Implemented | EU/Member States |

Framework guidelines for good practice | Promote VAs as part of an appropriate mix of policy instruments and promote best practice | All | Voluntary | Ongoing | EU, industry, Member States |

Promotion of use of Renewable Raw Materials | Through working group promote the greater use of RRM in the EU. E.g. via standards | Mainly CO2 | Research, consumer information, Support for industry | Ongoing | EU |

3.4.6. Policies in Agriculture and Forestry

The foundations of policy in the agricultural and forestry sectors were set out in the 3rd National Communication, primarily in relation to Agenda 2000[111] and reforms of the Common Agricultural Policy (CAP) in 1999 (Agenda 2000) and in 2003-2004 and the Forestry strategy for the European Union[112].

Effort on quantification emissions reduction potential and future measures has continued via the Working Group on Agriculture and two sub-groups, which delivered reports in 2003 under ECCP activity on carbon Sinks Related to Agricultural Soils[113] and Forest Sinks[114]. The working group on Agriculture identified mitigation potentials linked to extensification (coupled to reduced fertiliser use) and bio-energy production:

- N2O emissions from agricultural soils of 10 MtCO2-eq

- CH4 emissions from enteric fermentation of 0.3 MtCO2-eq

- CH4 and N2O emissions from manure management of 1.7 MtCO2-eq

- Bio-energy production and the replacement of fossil fuels of 200-600 MtCO2eq

The working group identified a mitigation potential for carbon sinks in agricultural soils through conservation and enhancement of carbon stocks by extensification (e.g., organic farming, conservation agriculture) of 60-70 MtCO2-eq.

The working group on Forest Sinks estimated that for the first Kyoto commitment period 2008-2012, the combined potentially accountable carbon credits for the EU from ARD (Afforestation, Reforestation, Deforestation) measures, assuming a continuation of the rate of AR from 1990-2000 would lead to a mitigation potential of around 14Mt CO2 eq/yr. When this is added to the estimated mitigation potential from Forest management (capped under the Protocol at 19Mt CO2eq/yr) it would be equal to approximately 33Mt CO2eq /yr.

3.4.6.1. Policy Actions in Agriculture

As part of the continuing process of CAP reform the Commission adopted a new proposal[115] in 2004 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD).

This is aimed at reinforcing the EU’s rural development policy and simplifying its implementation. The proposal, if approved, could increase EU funding, amounting to a total of € 13.7 billion per year for 2007-2013.

CAP reform measures which impact on climate change, and their predicted effect are listed in the following table.

Measure | Expected effect |

Decoupling of single farm payment from production, replacing most of the current direct payments. | Eliminates incentives for intensified production (e.g., reduced soil erosion, fertiliser use, irrigation etc). |

Cuts in direct payments of up to €5bn. Modulation amounts will be used for rural development measures and will be available from 2006 onwards. | Larger budget for Rural Development provides MS with increased margin to support Agri-Environmental Measures, which go beyond Good Farming Practice. |

Partial or entire reduction of direct payments in case of non-respect of: Statutory management requirements in areas such as environment, plant health, animal welfare etc. Maintenance of land in good agricultural and environmental condition (defined by MS on basis of common framework laid down in Annex IV of CAP regulation). Cross-compliance | Provides additional incentive to comply with mandatory requirements on environmental protection. E.g,. Nitrate Directive leading to reduced fertiliser use. |

Carbon credits:45 €/ha for energy crops (contract with processor required) for a maximum guaranteed area of 1. 5 Mio ha. | Incentives for cultivation of energy crops |

Set aside scheme. | Increased carbon sequestration, in particular in non-rotational set aside. |

Non-food crops can be grown on set-aside land – but in these cases would need receive 45 €/ha support. | Incentives for non-food crops including energy crops. |

Rural development support is also being widened by introducing new measures targeted towards the following:

Measure | Expected effect |

Support for participation in food quality schemes using local and traditional resources. | This type of food production is often associated with less intensive production. |

Support to help farmers adapt to new more demanding standards within Community legislation. | Better compliance with environmental standards. |

Farm advisory systems – involving structured and regular stock taking and accounting of material flows and processes relevant for a particular target issue (e.g. animal welfare, environment etc). | Raises awareness of potentially superfluous and negative input in agricultural production. |

Investment in state owned forests for ecological and social reasons. | Enhanced carbon sequestration. |

Market measures – intervention price cuts for rice reducing incentives for intensified production. Abolition of intervention for rye. | Less incentive for intensive production. |

Support for dried fodder to growers will be integrated into single farm payment, and thus be decoupled from drying techniques used. | Reduces incentives for energy consuming drying techniques. |

Support for Organic Farming Action Plan | Less intensive production, lower fertiliser use, higher content of organic matter in soil. |

Increased community support for agri-environmental measures. | Incentives for uptake of measures such as soil conservation, organic farming, etc. |

3.4.6.2. Policy Actions in Forestry

EU Forestry Strategy

In 2005 the Commission reported[116] on progress in implementing the EU’s Forestry Strategy from 1999-2004. A detailed description of the actions and activities implemented over the period 1999–2004 is contained within Commission staff working document attached to the communication[117]. The EU’s Forestry Strategy recognises the importance to climate change mitigation of multi-purpose sustainable forestry. In addition, to their contribution to the protection of biodiversity and the social and economic development of communities, forests function as carbon sinks and reservoirs, and as a sustainable source of biomass for renewable energy and material.

At the EU level, the adoption of the 6th Community Environment Action Programme in 2002 and the reform of the CAP in 2003, which has strengthened rural development policy, are important developments with implications for the forest policies of the Member States. At the Pan-European level, the MCPFE (Ministerial Conferences on the Protection of Forests in Europe) has become a well-established process, through which European countries and the European Community have developed a framework for sustainable forestry, and strengthened co-ordination and co-operation.

Substantial progress has been achieved in the preparation and implementation of national forest programmes (NFPs) in the EU. A common approach to NFPs has been developed in the context of the MCPFE, with the aim of establishing a social and political framework for forest management, based on participatory and transparent governance, and in line with international forest-related commitments. The NFPs address issues such as the productive function of forests and the economic viability of sustainable forest management, the contribution of forestry to rural development, the protection and enhancement of biodiversity in forests, climate change mitigation, the protective functions of forests, and social, recreational and cultural aspects.

The rural development policy[118] has been the main instrument for the implementation of the EU Forestry Strategy at Community level. The regulation contains forestry measures including:

- Afforestation.

- Investment in forests aimed at significantly improving their economic, ecological or social value.

- Maintaining and improving the ecological stability of forests.

Financial support from the Community for forestry measures in the context of rural development amounts to €4.8 billion for the period 2000–2006 (approximately 10% of the rural development budget).

The rural development regulation requires "cross-compliance", i.e. EU funding is conditional on meeting all relevant EU legislation, including environment (e.g., those related to biodiversity or water). The rural development programmes are implemented by MS on the basis of their National Rural Development Plans (NRDPs), which must be approved by the Commission. These NRDPs must identify priorities and document the mechanism to achieve cross-compliance. Payments are regularly audited by EU institutions, which further enhances compliance with these rules.

The new Rural Development Regulation[119] to reinforce the EU’s rural development policy for the period 2007–2013, as mentioned in section 3.4.6.1, provides a basis for a fuller integration of forestry into rural development.

Protection Against Forest Fires

The Community measures to support the protection of forests against fires[120] and atmospheric pollution[121] have yielded a considerable amount of information and operational developments. Forest fires continue to be a major concern in many European countries. The Commission has recently set up an expert group to analyse forest fire prevention at Community level and to make recommendations for future actions. The Forest Focus Regulation[122] adopted in 2003 provides an opportunity for the EU to develop a comprehensive and integrated system for monitoring a range of effects that signal damage, or potential damage to forest ecosystems. Monitoring may include new parameters on soils, biodiversity and climate change.

Although the role of the forest sector in climate mitigation was confirmed by the rules of the Kyoto Protocol agreed since the adoption of the Strategy, development of measures to encourage carbon sequestration as an objective of afforestation, reforestation and forest management, has been slower than expected. The use of biomass for energy purposes has increased considerably, especially in some member states, but has not yet been developed to its full potential in the EU. In the future, wood for products may also play an important role as carbon reservoir and may be included within a forest carbon accounting.

There is also an emerging need to evaluate the impacts of climate change on forest ecosystems and to develop measures to adapt to these impacts. In the future, not only mitigation measures (reduction of greenhouse gases) but also adaptation measures (adaptation of forests to a changed climate) will need to be considered.

The Commission is currently elaborating a future EU Forest Action Plan, to be presented in 2006. Its aims will be to:

- Develop an EU Forest Action Plan, which should provide a coherent framework for the implementation of forest-related actions and serve as an instrument of co-ordination between Community actions and the forest policies of the Member States.

- Review the existing Community means and practices to facilitate co-ordination, communication and co-operation between different policy sectors, which have an influence on forestry, in the light of the increasing complexity of forest policy and of the decision-making processes. This review will also include Council Decision 89/367/EEC of 29 May 1989 setting up the Standing Forestry Committee, and the role this body should play in the implementation of the Action Plan.

Tropical Deforestation

Tropical deforestation, sometimes associated with illegal logging, is a major source of anthropogenic greenhouse gas emissions. To build on a commitment taken at the World Summit on Sustainable Development, in May 2003 the Commission, with support from the timber trade in its development and implementation, published an Action Plan for Forest Law Enforcement, Governance and Trade (FLEGT)[123] aimed at the reduction and eventual elimination of the imports into the EU of illegally harvested timber. Among the many other adverse effects of illegal logging, the action plan recognises that it "can be a contributory factor to the process of deforestation, and it can increase the vulnerability of forests to fires - both of which have climate change implications".

Council Conclusions were adopted in October 2003, and the European Parliament motion on the FLEGT action plan was adopted in February 2004. A proposal for a FLEGT regulation[124] is being debated. When fully implemented, the legislative package will exclude the import of illegally harvested wood to the Community.

Table 4.3.5 Summary of the policies and measures in the agriculture sector

CAP (market policies) | Sustainable agriculture | CO2, CH4, N2O | Regulation | Implementation ongoing | EU | ~12[125] | (potential of 200-600 from bioenergy crops) |

CAP (rural development policy) | Sustainable agriculture | CO2, CH4, N2O | Regulation | Implementation ongoing | EU/Member States | Potential of up to 60-70 from agricultural sinks125 |

Forestry strategy | Sustainable forestry | CO2 | Resolution | Implementation ongoing | EU | ~33 from forest sinks through AR and management [126] | Long term ~124 |

Other forestry measures | Prevention of damage to forests | CO2 | Regulation | Implementation ongoing | EU |

3.4.7. Policies in Waste Management

The background to the various waste policies and their relation to climate change and the ECCP were discussed in the 3rd National Communication.

In 2003, the Commission adopted a Communication[127] towards a thematic strategy on the prevention and recycling of waste. It included an assessment of Community waste policy in relation to prevention and recycling, with a view to identifying means to further develop waste management policy in line with the hierarchy of objectives set out in the Community’s waste strategy. It also focused on the means to promote more sustainable waste management, by minimising the environmental impacts of waste while also taking into account economic and social considerations.

This section outlines developments since the 3rd National Communication. More detail is available in a 2003 communication[128] on Member States’ implementation of Waste Legislation from 1998-2000.

3.4.7.1. Landfill of Waste

The Landfill Directive[129] required implementation at the Member State level by 2001 and a communication in 2005[130] examined national strategies for achieving the Directives requirement to cut down the landfill of biodegradable municipal waste by 65% by 2016. In addition, landfills must collect, treat and where possible produce energy from landfill gases. Where energy production is not possible the gases must be flared.

3.4.7.2. Directive on Waste Packaging

Member States have broadly complied with the recycling and recovery targets set in the Directive on Waste Packaging[131] to be achieved by 2001. Increased recycling and recovery targets have been adopted in 2004[132] to be achieved by 2008, including:

- 60 % as a minimum by weight of packaging waste to be recovered or incinerated at waste incineration plants with energy recovery;

- Between 55 % as a minimum and 80 % as a maximum by weight of packaging waste to be recycled;

The European Parliament and the Council must then decide, by 31 December 2007, on targets for the third five-year phase, 2009 until 2014, based on the practical experience gained in the Member States.

Greece, Ireland and Portugal are, because of their specific situations (such as a large number of small islands, the presence of rural and mountain areas and the current low level of packaging consumption) allowed a period derogation from these and the original targets. The New Member States are also allowed a period of derogation, dependent upon each country, until between 2012 and 2015.

It has been estimated by the EC’s Environment DG (Directorate General) that recycling of waste packaging at 2001 levels reduces emissions by around 25 MtCO2 compared to zero recycling. The impact of the waste packaging directive itself, due to business as usual recycling and legislation predating the directive, is estimated to be 3 MtCO2.

3.4.7.3. Directive on End-of-Life Vehicles

Following the 2000 Directive[133] on End-of-Life Vehicles a number of pieces of secondary legislation[134] have been made, amending sections on items such as material and coding standards, recycling of spare parts etc.

The majority of Member States are on track to meet the 2006 requirements of the directive. The Directive also mandates the separation and treatment of air conditioning fluids.

3.4.7.4. Directives on Waste Electrical and Electronic Equipment

The Directive on Waste Electrical and Electronic Equipment (WEEE) came into force in 2002. It includes the target that by 31 December 2006 Member States should be achieving separate collection rates of at least 4kg per capita per year of WEEE from private households - to be taken for reuse, recycling etc. The various categories of WEEE are subject to sets of recycling and recovery targets. The directive also mandates the separation and treatment of CFC, HCFC, HFC and HC and refers to the regulation on ozone depleting substances.

3.4.7.5. Incineration of Waste

The Directive on the incineration of waste came into force in 2000[135]. As requested by Parliament in its first reading, the Commission's proposal was merged into a single text. It now covers the incineration of hazardous (formerly Directive 94/67/EC) and non-hazardous (89/369/EEC and 89/429/EEC) waste.

The aim of the Directive is to prevent or - where that is not practicable - to reduce as far as possible negative effects on the environment caused by the incineration and co-incineration of waste. This is to be achieved through stringent operational conditions and technical requirements and by setting up emission limit values for waste incineration and co-incineration plants within the Community.

The Directive aims to cover all waste including pollutants such as SO2 and HCl but the main effect on greenhouse gas emissions will be from the level of energy generation from waste within the energy mix.

The Directive entered into force on 29 December 2000. Transposition into national legislation was necessary by 28 December 2002. From this date on new incinerators will have to comply with the provisions of the Directive; the deadline for existing plants will be 28 December 2005. Then all old Directives (89/369/EEC, 89/429/EEC und 94/67/EC) will be repealed.

Table 4.3.6:Summary of the policies and measures in the waste sector

Landfill Directive | Amount of waste to landfills; recovery of landfill gas | CH4 | Regulatory | Adopted | EU/Member States | ~41[136] |

Directive on Waste Packaging | Recovery rates for waste packaging | CH4 CO2 | Regulatory | 1st phase implemented, but 2nd phase targets for 2008 | EU/Member States | ~3[137] |

Directive on End-of-Life Vehicles | Acceptance of used vehicles and recovery by their producers | CH4 CO2 Fluorinated gases | Regulatory | Implemented, but 2nd phase targets for 2015 | EU/Member States |

Directive on Waste Electrical and Electronic Equipment (WEEE) | Recovery of WEEE | CH