Proposal for a Council Decision on the conclusion by the European Community of the Protocol to the 1979 Convention on long-range transboundary air pollution on further reductions of sulphur emissions
Date: 1997-03-12
Institutions: European Commission
Subjects: EU action, EU law, air quality, sulphur, transfrontier pollution

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  12.03.1997 
COM(97)  88  final 

97/0105  (SYN) 
97/0107  (CNS) 

COMMUNICATION  TO  THE  COUNCIL  AND  THE  EUROPEAN  PARLIAMENT 
on  a  Community  strategy  to  combat  acidification 

Proposal  for  a 
COUNCIL  DIRECTIVE 
relating  to  a reduction  of  the  sulphur  content  of  certain  liquid  fuels 
and  amending Directive  93/12/EEC 

Proposal  for  a 
COUNCIL  DECISION 
on the  conclusion  by  the European  Community  of the Protocol  to the  1979  Convention 
on  long-range  transboundary  air  pollution  on  further  reductions  of  sulphur  emissions 

(presented  by  the  Commission) 

Communication  to  the  Council  and  the  European  Parliament  on  a 
Community  strategy  to  combat  acidification 

LIST  OF  CONTENTS 

1. 

INTRODUCTION 

2. 
2.1 
2.2 
2.3 
2.4 

3. 
3.1 
3.2 
3.3 

3.4 
3.5 

. 

BACKGROUND 
The problem  of  acidification 
Other effects  of acidifying  pollutants 
Existing  EC legislation  on  acidifying  air  pollutants 
The  UN  ECE/CLRTAP 

DEVELOPING  THE  STRATEGY 
The  scientific  basis  for  the  strategy 
ITie ultimate  target  of no exceedance  of critical  loads  and  need  for  interim  targets 
Preliminaiy  assessment  of  the  emission  reductions  necessary  to  achieve  the  50%  gap 
closure  target 
Assumptions  concerning  energy  use  and  C02  emissions 
Collaboration  with  the  UN  ECE/CLRTAP 

THE  STRATEGY 
Proposal  for national  emission  ceilings 
Ratification  of the  1994  Sulphur  Protocol 
Proposal  for  revision  of the  Directive  on the  sulphur content  of certain  liquid  fuels 
Action  related to the LCP and IPPC Directives: controlling emissions from stationary  sources 
Action  related  to  emissions  from  shipping 
Action  related  to  countries  in  Central  and  East  Europe 
Action  related  to the  Convention  on  long-range  transboundary  air  pollution 
Possible  action  to  reduce  emissions  of  ammonia 
Economic  instruments 

4. 
4.1 
4.2 
4.3 
4.4 
4.5 
4.6 
4.7 
4.8 
4.9 
4.9.1  Energy 
4.9.2 
4.9.3  Agriculture 
4.9.4 
4.10 
4.11  Actions to  promote  energy  efficiency  and  energy  conservation 
4.12  Review  process 

Joint  implementation  of national  ceilings 
Possible  further  action  related  to  emissions  from  transport 

Shipping 

5. 

6. 
6.1 
6.2 
6.3 
6.4 
6.5 

PRELIMINARY  ASSESSMENT  OF  THE  ENVIRONMENTAL  BENEFITS  AND  THE 
COSTS OF THE  COMMISSION'S  STRATEGY 

POSITIVE  SIDE-EFFECTS/DOUBLE  BENEFITS 
Eutrophication 
Ozone 
Air  quality 
Improvements  outside the  EC 
Economic  evaluation  of certain  benefits 

1. 

INTRODUCTION 

In December 1995, the Environment Council requested the Commission to develop a coherent 
acidification  strategy, to be presented to the Council  in the beginning of  1997. This decision 
followed  the  publication  in  November  1995  of  a  Commission  staff  working  paper  on 
acidification  (SEC(95) 2057). The working paper  showed that, while considerable progress 
has been  made,  current  and  planned  legislation  was  not  sufficient 
to  achieve  the 
long-term  goal of "no exceeding ever of critical loads and levels" of the Fifth  Environmental 
Action Programme. 

This  Communication  is  a response to the  request  from  the  Council.  It  briefly  reviews the 
problem  of acidification  and the methodology which the Commission has used to develop a 
cost-effective  strategy to combat acidification.lt then goes on to describe the major elements 
in that strategy. 

2. 

BACKGROUND 

2.1 

The problem  of  acidification 

For the purpose of this strategy, acidification  means effects  of the introduction of  acidifying 
substances  into  the  environment  by  means  of  atmospheric  deposition.  The  primary  air 
pollutants contributing to acidification  are: 

sulphur dioxide (S02),  emitted mainly from  the combustion  of coal and oil; 
nitrogen oxides (NOx), chiefly from motor vehicles and other combustion processes; and 
ammonia (NH3), principally  from  agricultural  activities. 

The  emissions  divided  by  sector  for  the  EC15  are  shown  in  Table  1,  and  the  emissions 
country-by-country  in  1990 are given in Table 2. 

Table  1: Emissions  of acidifying  pollutants, by sector, 1990* European  Community 

Sector 

%  of  S 02 

%  of  NOs 

%  of  NH3 

Large  combustion  plants  (LCP)  >  300  MW 

LCP  50-300  MW 

Other  combustion  plant 

Industrial  processes 

Road  transport 

Other  transport 

Waste 

Agriculture 

Natural 

Source:  CORINAIR  1990 

56 

7 

24 

4 

3 

2 

0 

0 

3 

19 

2 

13 

2 

51 

12 

1 

0 

0 

0 

0 

0 

3 

0 

0 

1 

94 

2 

100% 

100% 

100% 

These  acidifying  substances  can  be  carried  by  winds  for  hundreds  and  even  thousands  of 
kilometres  before  being  deposited  in  the  environment.  While  still  in  the  atmosphere,  the 
sulphur dioxide can be transformed  into sulphuric acid, and the nitrogen oxides to nitric acid. 
When deposited on vegetation,  soil, and water, they cause acidification,  which has extensive 
biological  effects  on  both  aquatic  and  terrestrial  ecosystems,  greatly  changing  and 
impoverishing them by reducing the diversity  of plant  and animal  species. 

Acidification  of  the  soil  leads  to  the  leaching  out  of  plant  nutrients,  such  as  potassium, 
calcium,  and  magnesium,  which  in  the  long  term  may  cause  nutrient  deficiencies,  thus 
threatening  the  productivity  of  forest  soils.  The  process  of  acidification  also  results  in 
increased concentrations of aluminium and other toxic metals in the soils, ground water, and 
surface  waters.  The  biodiversity  of  lakes  and  rivers  is  drastically  impoverished  in  areas 
affected  by  surface  water  acidification.  Acidified  ground  water  can  cause  problems,  for 
instance  by  corroding  pipe-work,  but  also  by  creating  health  risks  as  the  acidification 
increases the mobility  of various harmful  metals, such as aluminium, mercury, copper, zinc, 
cadmium, and lead. Acid deposition accelerates the rate of deterioration of building materials 
as well as objects  of art and cultural  heritage, particularly  in urban areas. 

Table 2: Emissions of S02,  NOx and NH3 1990 (thousand  tonnes) 

Country 

Austria 

Belgium 

Denmark 

Finland 

France 

Germany 

Greece 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Spain 

Sweden 

UK 

EC15 

so2 

NOx 

NH3 

90 

317 

180 

260 

1  298 

5  331 

510 

178 

222 

352 

269 

300 

1  585 

3  071 

306 

115 

1  678 

2  047 

14 

205 

283 

2  266 

136 

3  752 

16 498 

23 

575 

215 

1  178 

411 

2  702 

13 371 

3  516 

91 

95 

140 

41 

700 

759 

78 

126 

416 

7 

236 

93 

353 

61 

320 

The effects  of acid  deposition  vary  geographically,  depending  primarily  on the  sensitivity  of 
the  receptor  (e.g.  an  ecosystem)  in  question,  and  the  amount  of  acid  deposition.  The  critical 
load  indicates  the  sensitivity  of  a  particular  environment  by  defining  how  much  exposure  to 
pollution  it can tolerate before  long-lasting  or other significant  damage occurs. Critical  loads 
are  set  for  natural  and  semi-natural  ecosystems,  such  as forest  soils,  heathlands,  and  surface 
waters, i.e. excluding e.g. managed  farmland  and built-up areas. The concept of critical  loads 
is science-based.  Consequently,  the  data used  reflects  current  best  knowledge  and  includes a 
certain  level  of  uncertainty.  Critical  loads  have  a  significance  for  sustainable  development, 
since  depositions  above the  critical  loads  are  not  sustainable  in  the  long  term. 

The sensitivity to acid  deposition  varies greatly  between  different  areas and  ecosystems.  The 
areas in  the  European  Community  where  critical  loads for  acidity  are the  lowest  -  i.e.  those 
containing  the  most  sensitive  ecosystems  -  tend  to  be  in  the  northern  part  of  the  region, 
including  Sweden,  Finland,  the United  Kingdom,  the Netherlands  and  Germany. 

Acidification  is  determined  by  the  total  deposition  of  acidifying  pollutants  relative  to  the 
critical  load for a particular environment.  Any reduction in acidifying  depositions will  reduce 
acidification,  but acidification  will  not stop, and thus sustainable recovery will not take place, 
until  depositions  are brought  down  to  levels where the  critical  loads no longer  are  exceeded. 
In fact,  as a result  of the historically  accumulated  acidification  effects  in  soils, recovery  may 
for  some  areas take  decades  or  even  hundreds  of  years.  The  speed  of  recovery  is  dependent 
primarily  on  ecosystem  characteristics  and  on how  quickly  the  depositions  are reduced  - the 
sooner  depositions  are brought  down  to below  critical  loads,  the  quicker  the  recovery. 

In  1990,  the  critical  loads  for  acidification  were  exceeded  over  an  area  of  more  than 
32  million  hectares  in the Member  States.  In  terms  of  absolute  area  exceeded,  the  countries 
worst affected  were Sweden  (10 million hectares), Germany  (7 million hectares), and Finland 
(5  million  hectares)  (see  Table  5).  As  indicated  above,  the  damage  caused  by  acidification 
involves  reduced  biodiversity  in  terrestrial  and  freshwater  ecosystems,  which  in turn  affects 
e.g.  amenity  and  recreational  values.  The  impoverishment  of  the  soil  nutrient  status  may  in 
the  longer  term  result  in  reduced  forest  productivity.  While  it  is  possible  to  identify  and 
quantify  the areas affected  or at risk with a relative  high level  of certainty,  there is still  large 
uncertainty  as regards the quantification  in economic terms  of the damage  and the  long-term 
risks  caused  by  acidification. 

2.2 

Other  effects  of  acidifying  pollutants 

Although  the focus  of this  strategy  is on  acidification  (as  acid  deposition),  it  is important  to 
note  that  airborne  emissions  of  the  mentioned  acidifying  pollutants  have  other  detrimental 
effects  on  the  environment.  In  particular,  ambient  concentrations  of  sulphur  dioxide  and 
nitrogen  dioxide have been  shown to have deleterious effects  on human health,  especially  for 
people susceptible to respiratory  problems,  such  as asthma,  bronchitis  and emphysema.  They 
also contribute to corrosion of buildings and materials. There is increasing evidence that small 
acid  particles,  which  are  secondary  products  of  emissions  of  sulphur  and  nitrogen  oxides, 
affect  lung  function.  Nitrogen  oxides  are also a major  precursor  of ground-level  ozone  (03), 
an  aggressive  pollutant  which  can  damage  human  health,  vegetation,  and  organic  materials, 
and  reduce  visibility.  Deposition  of  nitrogen  compounds,  emanating  from  emissions  of 
nitrogen  oxides  and  ammonia,  can  act  as  fertilizer,  thus  contributing  to  eutrophication  of 
terrestrial, freshwater,  and marine ecosystems, affecting  among others the biological  diversity 
of  these  ecosystems. 

Consequently, the benefits of reducing emissions of acidifying  air pollutants relate not solely 
to reduced  acidification  damage, but  are  substantially  wider,  i.e.  includes improved  health, 
reduced  mortality  and/or  morbidity,  lessened  corrosion  of  buildings  and  material,  better 
protection of the cultural heritage, less eutrophication, improved visibility, etc. Some of these 
benefits  (e.g.  impacts  on  health  and  corrosion)  can  with  some  degree  of  certainty  be 
quantified  in monetary  terms (see section  6), while others (e.g. the ecological  impacts) can 
not that easily be monetized. In order to show the ecological benefits  of emission reductions, 
the  change  in  the  area  of  sensitive  ecosystems  where  critical  loads  are  no  longer  being 
exceeded can be estimated. 

2.3 

Existing EC legislation  on acidifying  air pollutants 

There is  a large  range of  instruments  by  which  emissions  of  sulphur  dioxide  and  nitrogen 
oxides are controlled at Community level, but so far none dealing specifically  with emissions 
of  ammonia.  Some  of  the  existing  instruments  were  largely  designed  to  help  combat 
acidification,  while  others  have  been  developed  primarily  for  other  reasons.  The  key 
instruments,  either in force  or proposed,  are shown in figure 1 on the next page. 

In addition to the measures adopted at the level of the Community, many Member States have 
introduced national measures to bring about even further  reductions in acidifying  emissions. 

2.4 

The UN ECE/CLRTAP 

The Convention on Long-Range Transboundary Air Pollution (CLRTAP) was signed in 1979. 
The  secretariat  of  the  Convention  is  run  by  and  located  at  the  United  Nations  Economic 
Commission  for  Europe  (UN  ECE),  in  Geneva.  Of  the  present  55  member  states  of  the 
UN ECE,  40  are  parties to the  convention,  including  all  the member  states  as well  as the 
European  Community.  Since coming into force  in  1983, the convention  has been  extended 
by five specific  protocols,  four  of which  prescribe  objectives  and  measures to  control  and 
reduce  emissions  of  transboundary  air  pollution.  Three  of  these  relate  to  acidifying  air 
pollutants: The two sulphur protocols, from  1985 and  1994, and the 1988 NOx Protocol. The 
fourth  aims at reducing  emissions of volatile  organic  compounds  (VOCs), with  the  aim of 
lowering concentrations of ground-level  ozone. 

In  1993, the Community  acceeded to the  1988 NOx Protocol1. Twelve Member  States have 
ratified, two have signed but not ratified,  and one has not signed this protocol. As regards the 
1994 Sulphur Protocol, fourteen  member states, as well as the Community has signed it. As 
yet only four  member states have ratified  it (see section 4.2). 

In the late  1980s, the convention  started  to develop the so-called  critical  loads approach  as 
a tool  for developing effects-based  and cost-effective  abatement strategies. This approach was 
used  when  negotiating  the  1994  sulphur  protocol,  and  is  also  being  used  for  the  ongoing 
negotiations  on  a  new  multi-effects  and  multi-pollutants  protocol  -  an  agreement  that 
addresses  the  effects  of  ground-level  ozone,  acidification,  and  eutrophication,  and  the 
pollutants nitrogen  oxides, volatile organic compounds, and ammonia. This new protocol  is 

OJNoL  149, 21.6.1993, p. 14. 

expected to be finalized during  1998, and once it enters into force will  supersede the existing 
VOC and NOx Protocols. In practice, however, the basic obligations of existing protocols are 
being  maintained.  Moreover,  the  CLRTAP  process  plays  an  important  role  in  generating 
information,  exchanging  of  data,  and  in  raising  knowledge  and  awareness. 

Figure  1: 

Existing  Community 
acidifying  emissions 

legislation 

relevant 

to 

the 

reduction  of 

The Council Directive 88/609/EEC on the limitation  of emission of certain pollutants into the 
air from  large  combustion  plants:  This  was  adopted  by the  Council  in November  1988, and 
applies to combustion plants with a thermal input of 50 megawatts (MW) or more. It includes 
emission  limit values for new (post-1987) plants, and coiintry-by-country ceilings for national 
total emissions from existing (pre-1987) plants. These emission ceilings are gradually  reduced 
in several  steps over time. Presently, the Commission  is preparing  a revision  of the Directive, 
as requested  by provisions in the original Directive. The proposal for revision is expected to be 
finalized  by the Commission by autumn  1997. 

The  Council Directive  93/12/EEC relating  to the  sulphur content  of certain  liquid fuels:  This 
sets limits of the maximum sulphur content, to 0.2% for gas oils used in stationary combustion 
sources,  and to  0.05% for  diesel  fuels  used  in  mobile  sources.  A provision  for  the  revision, 
prescribing  a  lower  limit  for  gas  oils  used  for  stationary  combustion,  is  contained  in  the 
original Directive. 

Legislation  relating  to  control  of  emissions  from  mobile  sources:  There  exists  an  extensive 
body of Community  legislation  for the control of atmospheric emissions from passenger cars 
and  light  commercial  vehicles  (Directive  70/220/EEC  as  amended)  and  heavy  duty  vehicles 
(Directive  88/77/EEC as amended). In June  1996 the  Commission  adopted  a strategy  for the 
further  control  of  road  transport  emissions  (COM(96)248 final). This  strategy  foresees  that 
NOx  emissions from road  transport  will  be  reduced  by  65% in  2010  as  compared  to  1995. 
With  regard  to  other  mobile  sources  of  acidifying  emissions,  in  1995  the  Commission 
put forward  a  proposal  for  the  control  of  emissions  from  non-road  mobile  machinery 
(COM(95) 350  final). 

The framework Directive 96/61/EC on integrated pollution prevention and control (IPPC): This 
was  adopted  by  the  Council  in  September  1996,  and  will  require  the  application  of  best 
available techniques  (BATs), as defined  in this  Directive, adapted to local  circumstances and 
taking  into  account  contribution  to transboundary  air pollution,  at  every  existing  installation 
covered by the Directive by the year 2007, and at new installations as from 1999. 

Air  quality  Directives  for  among  others  SQ2.  NQ2.  particulates,  and  ozone:  Under  the 
framework  of  Directive  96/62/EC  on  ambient  air  quality  assessment  and  management,  the 
Commission  is currently preparing new air quality limit values for S02, N02, and particulates, 
and  a proposal  for  a new Directive for these is expected  in the first half of  1997. A proposal 
for  revision  of  Council  Directive  92/72/EEC  on  air  pollution  by  ozone,  as  well  as  a 
Community strategy to reduce ozone precursors, is due early 1998. 

3. 

DEVELOPING  THE STRATEGY 

3.1 

The scientific  basis for the strategy 

Responding to the mandate given by the Council, the Commission working together with its 
contractor (the International Institute for Applied Systems Analysis (IIASA)), has carried out 
a detailed scientific  assessment to provide a sound technical foundation  upon which to build 
a strategy for combatting acidification in the European Community. The data used in carrying 
out the analysis as well as the models for  integrated  assessment  are the same as those used 
to  support  the  development  of  protocols under  the  UN ECE/CLRTAP.  In  this way  it was 
assured  that  the  Commission's  strategy  would  be  consistent  with* ongoing  work  in  the 
UN ECE. The assessment  carried  out by the Commission  has taken into account inter alia: 

(1) the predicted evolution in the emissions of acidifying  substances, taking into account the 
impact  of existing and forthcoming  legislation at the level  of the Community  as well as 
legislative actions and plans announced  by the individual  Member States; 

(2) the transboundary nature of the acidification  problem, by using internationally agreed data 
on emissions, transboundary  fluxes,  and depositions of the acidifying  air pollutants; 

(3) the identification  of cost-effective  strategies to combat  acidification  taking into account 
changing patterns in emissions, the differences  in critical loads across the Community and 
the cost of different  abatement measures; 

(4) the potential  impact of abatement measures taken outside the territory  of the EC; 

(5) the impact on related environmental  phenomena such as eutrophication  and tropospheric 

ozone  formation. 

A description of the scientific  analysis which was carried out to support the development of 
the acidification  strategy is presented in the Annex to this Communication. However,  before 
going  on to  describe the elements in the Commission's  proposed  strategy  it is necessary  to 
draw attention to a number of important considerations. 

3.2 

The  ultimate  target  of  no  exceedance  of  critical  loads  and  need  for 
interim  targets 

The Council conclusions of December  1995 recognized the difficulty  of meeting the ultimate 
objective of no exceedance of critical  loads in the immediate future.  It therefore  invited the 
Commission to identify  interim targets on the path to reaching that goal. The analysis verified 
the need for setting interim targets. A given policy constraint for the strategy is that measures 
to reduce emissions must primarily  take place within the EC, since the EC  can not impose 
legally binding commitments/measures outside of its territory. The analysis showed that even 
when assuming the application of current best available technologies to all emission sources 
in the whole of Europe, it would not be possible to. reach the long-term environmental quality 
target for the whole of the EC by 2010. 

Using  a  so-called  gap-closure  approach,  various  possible  interim  targets  were  analysed.  A 
similar  approach  was  used  in  the  negotiations  for  the  1994  Sulphur  Protocol  under  the 
Convention  on Long-Range Transboundary  Air Pollution.  Due to the more complex critical 
loads  now  used  -  involving  both  sulphur  and  nitrogen  compounds,  as  compared  to 
sulphur only  in  the  sulphur  protocol  -  the gap  closure  now applied  is  based  on  ecosystem 
protection  data. 

Consequently, the concept applied aims at a stepwise closing of the gap, that is the difference, 
between the level of ecosystem protection in  1990 and the ultimate target of  100% ecosystem 
protection, by  a certain percentage. 

After  thorough  analysis  of  several  options,  it  was  found  appropriate  to  aim  at  a  50% gap 
closure. This should, with present knowledge, in the most cost-effective  manner for  the EC 
as a whole, reduce the area of sensitive ecosystems in which critical loads were exceeded in 
1990, by  at  least  50% in the  different  regions  of  the member  states.  The main  motive  for 
selecting this interim environmental  quality target is that it represents a good balance between 
ecosystem  protection  and  costs: at levels  of  gap closure  above  50% the  additional  costs of 
emission  reduction  increase  very  rapidly.  The  Commission  considers  that  the  interim 
environmental target of 50% gap closure should be achieved by 2010. The interim target will 
be reviewed  in 2004, as part of the review process (see section 4.12). 

A more detailed explanation  of the concept of gap closure and the rationale for  selecting an 
interim target  of 50% gap closure are presented  in the Annex. 

3.3 

Preliminary assessment of the emission reductions necessary to achieve the 50% 
gap closure target 

The Commission, working with IIASA, has carried out an analysis of the most  cost-effective 
approach for achieving the interim target of 50% gap closure by 2010. This analysis takes into 
account  the transboundary  fluxes  in  atmospheric  pollutants  across the  Community  and the 
costs  for  each  country  associated  with  reducing  the  emissions  of  the three  pollutants  S02, 
NOx, and NH3. The output from  the analysis is the global, least-cost  solution  for  the whole 
Community  in order to achieve the 50%» gap closure target.  A summary  of the preliminary 
results from  the analysis are shown in Table 3, and more detailed results are presented in the 
Annex. 

Table 3:  Summary  of the emission levels for the Community  which will  be necessary 
to achieve the 50% gap closure target as compared to 1990 and the predicted 
situation  in 2010 on the basis of current plans (million tonnes) 

1990 

2010 
(current  plans) 

2010 
(in  order  to  achieve  the 
interim  target) 

16.5 

13.4 

3.5 

5.6 

6.9 

3.0 

2.7 

6.0 

2.5 

so2 

NOx 

NH3 

3.4 

Assumptions  concerning  energy  use  and  C02  emissions 

In  carrying  out  the  scientific  analysis  underlying  the  strategy,  certain  assumptions  had  to  be 
made with regard to energy use. Given that energy  production  and the associated  combustion 
of  coal  and  liquid  petroleum  products  is  one  of  the  most  important  sources  of  acidifying 
emissions,  these  assumptions  had  a  significant  impact  upon  the  acidification  strategy, 
particularly  in  relation  to  the  identification  of  least-cost  solutions.  It  was  also  clear  that 
assumptions  concerning  energy  consumption  should 
take  into  account  the  need  to  reduce 
C02  emissions  in  the  light  of  concerns  relating  to  global  warming. 

The  analysis  upon  which  the  acidification  strategy  was  developed,  is based  on  the  so-called 
conventional  wisdom  scenario,  which  envisages  a 20% increase  in  energy  consumption  and 
a  10% increase  in  C02  emissions  between  1990  and  2010.  However,  an  additional  analysis 
was also carried out using an alternative scenario based on the assumption  that C02  emissions 
would  be  reduced  by  10% in  2010,  as  compared  to  1990.  The  results  show  that  under  such 
assumptions  the  expenditures  on  abatement  measures  for  attaining  the 
interim  target  of  a 
50%o gap  closure  could  be  substantially  reduced  (see  Annex). 

3.5 

Collaboration  with  the  UN  ECE/CLRTAP 

The  Council  recognized  that  international  cooperation  and  coordination  were  necessary  to 
reach  the  goal  of  no  exceedance  of  critical  loads,  and  considered  it  essential  that  future 
Community  strategies  were  developed 
the 
UN ECE/CLRTAP. The Council also stated that when preparing the acidification  strategy, the 
Commission  should  have  regular  contact  with  among  others the  UN  ECE/CLRTAP. 

full  account  of 

the  work  of 

taking 

Following  bilateral  consultations  between  the  Commission  and  the  UN  ECE/CLRTAP  in 
April  1996,  a  steering  group  of  key  people  from  the  two  institutions  was  formed,  with  the 
main  task  to facilitate  coordination.  Formal  meetings  of the  steering  group  have taken  place 
in  July  and  November,  and  informal  consultations  are  carried  out  on  a continuous  basis. 

4. 

THE  STRATEGY 

On  the  basis  of  the  results  from  the  scientific  analysis  described  above,  taking  into  account 
the  observations  made  by  member  states,  and  noting  those  made  by  the  industry  and  the 
NGOs,  during  the  course  of  three  meetings  held  on  29  May  1996,  31  October  1996,  and 
16 January  1997, the Commission has developed a strategy for  combatting acidification  in the 
European  Community. 

If  the  measures  which  are  proposed  as  part  of  the  strategy  are  implemented,  this  will  allow 
the attainment  by  2010  of the interim  target  of  50%» gap  closure,  as described  in  section  3.2. 
The proposed measures will lead to further  emission reductions as compared to those expected 
to 
to 
reduce  Community-wide  emissions  of  S02,  NOx,  and NH3 by  66, 48, and  15% respectively, 
between  1990 and 2010. However, the long-term environmental  objective is no exceeding ever 

and  commitments,  which  are  estimated 

legislation 

current 

result 

from 

10 

of  critical  loads.  With  this  in  mind,  the  Commission's  proposed  strategy  also  foresees  an 
ongoing review process to both monitor the impact of the measures to be introduced  and to 
assess the need for and the nature of additional measures to reduce acidifying  emissions. The 
key elements in the strategy are as follows: 

4.1 

Proposal  for national  emission  ceilings 

The Commission considers that the Community's future policy with regard to acidification and 
related transboundary  phenomena, such as tropospheric ozone, should be based on  national 
emission ceilings for a number of key pollutants. These national  emission ceilings should be 
compatible  with  the  achievement  of  agreed  environmental  objectives.  The  elaboration  of 
national emission ceilings is consistent with the approach which has been taken in the context 
of  the  UN  ECE  Convention  on  Long-Range  Transboundary  Air  Pollution.  One  of  the 
advantages of  a policy  which  is based  upon emission  ceilings is that  it allows a  significant 
degree of flexibility  for  member  states to determine how the ceilings are to be achieved in 
the most  cost-effective  way.  It is understood  that  measures  taken by  member  states would 
need to be compatible with Community rules governing the functioning  of the internal market 
and competition. Member states could for example implement economic instruments or other 
non-technical  measures  as  additional  tools  as  part  of  their  national  strategies  to  meet  the 
emission ceilings. 

As stated above, the quantification  of national emission ceilings is dependent upon the prior 
definition  of  the  environmental  objective.  With  regard  to  acidification,  the  Commission 
considers  that  an  appropriate  medium-term  objective  is  the  achievement  by  2010  of  the 
50% gap closure interim target (see section 3.2). 

The scientific  analysis carried out by the Commission has provided  preliminary  information 
concerning the emission  reductions which would be necessary to achieve the interim target 
of  50%> gap  closure  (see  section  3.3  and  the  Annexj.  The  Commission  would  stress  the 
preliminary nature of these figures which will be reviewed in the light of the ozone strategy 
(see below)  and further  refinements  to the  scientific  analysis. However,  it  is clear that the 
achievement of the 50% gap closure target will present a significant challenge over and above 
the efforts  that the member states are already making to reduce their acidifying  emissions. 

Tropospheric  ozone is another type of transboundary  pollution which requires an integrated 
response  at  the  level  of the  Community.  It  is  foreseen  that  by  the  beginning  of  1998 the 
Commission will come forward with a proposal for a Community strategy to combat this type 
of pollution.  The Commission, working with its contractor IIASA, is currently carrying out 
the  scientific  analyses  necessary  to  develop  its  proposed  strategy.  These  analyses  will  be 
based  on  the  same  methodology  which  has  been  used  to  develop  the  present  strategy  to 
combat  acidification.  It  is  foreseen  that  the  scientific  analysis  will  allow  the  definition  of 
national emission ceilings for NOx and Volatile Organic Compounds, which are the pollutants 
primarily  responsible for the formation  of tropospheric ozone. 

During the course of  1998, and on the basis: 

(1) 

(2) 

of the refinements  to the analysis relating to  acidification; 

the completion of the analysis relating to tropospheric ozone; 

11 

(3) 

(4) 

further  discussions with experts from  the Member  States, industry  and NGOs; 

the  progress  of  discussions  related  to  the finalization of  a  new  protocol  in  the 
context of the UN ECE Convention on Long-Range Transboundary Air Pollution, as 
well  as  the  planned  revision  of  the  International  Maritime  Organization's  (IMO) 
Convention  on Maritime Pollution  (MARPOL), 

the  Commission  will  come  forward  with  a  proposal  for  a  Directive  establishing  national 
emission  ceilings  for  SO^ NOx,  NH3,  and  VOCs,  consistent  with  the  attainment  of  the 
50%) gap closure target for acidification  and the achievement of agreed air quality  objectives 
for  tropospheric  ozone.  In  drawing  up  these  emission  ceilings,  the  Commission  will  have 
regard to the consequences of the proposed ceilings for the economic and social development 
of specific  regions in the Community. 

Even though the introduction of binding national emissions ceilings is a major new initiative, 
it is only  one part  of the acidification  strategy.  It is proposed that the emission  ceilings are 
complemented by a number of other actions (see below), that will help ensure both that the 
emission  ceilings will  be attained  in  practice,  and  that  cost-effective  technical  measures to 
reduce emissions are taken within  and outside the European  Community. 

4.2 

Ratification  of the  1994 Sulphur Protocol 

With the exception of Portugal, all member states, as well as the European Community, have 
signed  the  1994  Sulphur  Protocol  to  the  Convention  on  Long-Range  Transboundary 
Air Pollution.  Moreover,  the  following  non-EC  countries  have  so  far  signed  it:  Bulgaria, 
Canada, Croatia, Czech Republic, Hungary, Liechtenstein, Norway, Poland, Russia, Slovakia, 
Slovenia,  Switzerland, and Ukraine. By December  1996, however, only four Member States 
(Sweden, Netherlands, Luxembourg,  and the UK), and one non-EC  country  (Norway) had 
ratified  it. For the protocol to enter into force  it must be ratified  by  16 of the signatories. 

If  the  Community  is  intent  upon  the  development  of  an  ambitious  policy  to  combat 
acidification,  then  one  of  the  first  steps  which  should  be  taken  is  the  ratification  of  the 
1994 Sulphur  Protocol:  before  deciding  upon  additional  measures  to  reduce  acidifying 
emissions  the  Community  should  demonstrate  its  commitment  with  regard  to  existing 
international  undertakings.  Moreover,  the  protocol  contains  provisions  for  future  reviews, 
which  provide  the  opportunity  for  more  far-reaching  commitments  that  could  further 
contribute to meet the environmental  quality targets of the Community. 

In  addition  to  the  political  significance  of  the  Community  ratifying  the  1994  Sulphur 
Protocol, there is a clear benefit  to be gained for  the Community  in that the Convention on 
Long-Range  Transboundary  Air  Pollution  is  currently  the  most  effective  mechanism  for 
bringing about emission reductions in those non-EC countries which contribute  significantly 
to acid deposition within the EC. 

It is therefore  proposed that the Council  should decide that the European  Community  ratify 
the Protocol to the 1979 Convention on Long-Range Transboundary  Air Pollution on Further 
Reduction of Sulphur Emissions. A proposal for a Council decision on the conclusion by the 
European Community  of the  1994 Sulphur Protocol  is attached. 

12 

4.3 

Proposal  for  revision  of  the  Directive  on  the  sulphur  content  of  certain 
liquid  fuels 

In  March  1993, the  Council  adopted  Directive  93/12/EEC  relating  to the  sulphur  content  of 
certain  liquid  fuels.  Here,  the  maximum  sulphur  content  of  diesel  fuels  was  set  at  0.2% 
by  weight  as  from  1  October  1994,  and  reduced  to  a  maximum  of  0.05%  as  from 
1 October  1996. The maximum  sulphur  content  of gas oils other than  diesel  fuels  was  set at 
0.2% by weight as from  1 October  1994. In Article 2 of that Directive, the Commission  was 
requested  to report  on progress made in controlling  sulphur  dioxide emissions,  and to  submit 
a proposal  prescribing a lower limit for the sulphur content of gas oils, other than diesel  fuels. 
This  proposal  was  postponed  pending  the  outcome  of  the  acidification  strategy. 

In  the  analysis  carried  out  for  the  purpose  of developing  the  acidification  strategy,  it  was 
found  that a further  reduction  in the sulphur content  of gas oils used in stationary  combustion 
sources  was  a  cost-effective  measure  - or was  in  fact  already  being  applied  in  practice  -  for 
eight  Member  States:  Austria,  Belgium,  Denmark,  Finland,  Germany,  Netherlands,  Sweden, 
and  the  UK.  (In  Austria  and  Finland,  the  maximum  sulphur  content  allowed  at  present  is 
0.1%.  These two countries have a derogation  allowing for  this in their Accession  Treaty  with 
the EC, lasting over the transition  period  of four  years, ending by  31 December  1998.) In all 
other  Member  States a further  reduction  of the  sulphur  content  in  gas  oils below  the  current 
limit  value  of  0.2%  sulphur  is  not  cost-effective  for  the  purpose  solely  to  meet  the  interim 
acidification  goals. 

The  combustion  of  heavy  fuel  oils  is the  dominating  source  of  S02  emissions  from  the  use 
of  liquid  fuels,  their  relative  share  of  total  EC  emissions  in  1990  being  about  20%.  In  the 
absence of targeted  measures, by  2010 it is estimated  that this share would  increase to nearly 
40%.  The  emissions  of  S02  from  heavy  fuel  oils  come  from  a  number  of  varying  sources 
(see  Table 4). 

Table  4:  Emissions  of  S02  from  heavy  fuel  oils  (HFO)  in  2010  according  to  the 
reference  scenario, and  after  limiting  the sulphur  content  to  1%  (kilotonnes) 

Refineries 
and  other 
conversion 

Industry 

Domestic 

Transport 

Power 
plants 

SUM 

Reference 
scenario 

If  1% S in 
HFO 

Difference 

404 

207 

574 

329 

158 

75 

81 

27 

901 

2  119 

350 

988 

1  131 

The analysis for  the acidification  strategy  showed  that for  12 Member  States (the  exceptions 
being Spain, Portugal  and Greece) the use of low-sulphur heavy  fuel  oil in certain sectors e.g. 
transport  and  domestic use, was a cost-effective  abatement  option  to  meet the interim  target. 
However,  in  other  sectors  such  as  power  plants  and  industry  the  application  of  flue  gas 
desulphurization  was  generally  more  cost  effective  and  also  more  effective 
in 
removing  emissions. 

13 

the  Commission 

Given that the combustion  of heavy  fuel  oils contributes  significantly  to emissions of  S02, 
the  Commission  considers  it  appropriate  as  part  of  its  strategy  to  combat  acidification  to 
reduce emissions  of  S02  from  this  source by placing limits on the  sulphur  content allowed 
in  heavy fuel  oil. In  order to reflect  the conclusions  from  the  integrated  assessment  and to 
avoid  non-cost-effective  expenditure, 
in  some 
countries/regions where environmental conditions allow, and in some industries which already 
apply  abatement  technologies  (such  as flue  gas  desulphurization)  which  give  equivalent  or 
superior  results  in  terms  of  reduced  S02  emissions,  it  will  be  necessary  to  provide  for 
derogations to  any general  limit  on the  sulphur  content.  In  particular,  any  rules relating to 
heavy  fuel  oils  should  take  account  of  and  be  consistent  with  the  provisions  of 
Directive  88/609/EEC  on  emissions  from  large  combustion  plants  and  the  proposed 
amendment  to  that  Directive  (see  section  4.4  below).  With  regard  to  the  revision  of 
Directive 88/609/EEC,  it  is  currently  foreseen  that  this  will  include  provisions  such  as 
emission  ceilings  (similar  to  the  concept  included  in  this  Directive)  which  afford  large 
combustion plants a degree of flexibility  with regard to the sulphur content of the heavy fuel 
oils they are using. 

recognizes 

that 

A proposal for a Council Directive relating to the sulphur content of gas oils and heavy fuel 
oils,  and  incorporating  the  principles  set  out  in  the  paragraphs  above,  is  attached  to  this 
Communication. 

As  regards  the  control  of  the  sulphur  content  of  marine  bunker  oils  this  is  dealt  with  in 
section 4.5 below. 

4.4 

Action  related  to  the  LCP  and  EPPC Directives:  controlling  emissions  from 
stationary  sources 

New emission limit values for S02 and NOx for all new large combustion plants are currently 
being prepared by the Commission in the process of revision of Directive 88/609/EEC on the 
limitation  of  emissions  of  certain  pollutants  into  the  air  from  large  combustion  plants 
(the LCP  Directive).  The  new  emission  limit  values  will  be  based  on  so-called  BATs 
(Best Available Techniques) for air pollution control. As part of the preparatory work for the 
revision  of  Directive  88/609/EEC,  the  Commission  services  are  examining  inter alia the 
potential  value of  establishing  national  emission  ceilings for  both  new and  existing plants. 
Such  emission  ceilings  are  motivated  by  the  need  to  ensure  both  cost-effectiveness  and 
attainment of environment quality targets. A study carried out for the purpose of the revision 
of the LCP Directive,  as well  as practical  experience in  several  Member  States, has shown 
that emissions from  large combustion plants can be more cost-effectively  dealt with through 
emission  ceilings  (possibly  in  combination  with  limit  values),  as  compared  to  the  use  of 
emission  standards only. 

The conclusions from  the analysis for the acidification  strategy indicated that: 

-  For emissions of  S02, the  application  of flue  gas desulphurization,  or emission  limit 
values to the same effect,  or emission  ceilings leading to the same overall  reductions, 
would be necessary for existing large combustion plants in all Member States, with the 
exception  of Greece, Portugal, and partly  also of Spain. 

14 

For emissions of NOx, the application of flue gas dentrification,  or emission limit values 
to the same effect,  or emission  ceilings leading to the same overall  reductions, would 
be  necessary  for  existing  large  combustion  plants  in  all  member  states,  with  the 
exception  of Greece, Portugal,  Spain, Italy, Finland,  and Luxembourg. 

The Commission's proposal for the revision of the LCP Directive will be consistent with the 
attainment by 2010 of the 50% gap closure interim target for  acidification. 

By the year 1999 for new installations, and the year 2007 for existing ones, the emission limit 
values  as required  by the IPPC-Directive (96/61/EEC),  shall be based  on integrated BATs, 
as defined  in this Directive, taking into account: 

local  environmental  circumstances; 

-  geographical  location; 
- 
-  provisions on the minimization  of long-distance or transboundary  air pollution; and, 
- 

the primary  objective  of the IPPC Directive, which is to prevent or, where that is not 
practicable,  to reduce  emissions in  order to achieve  a high  level  of protection  for the 
environment taken as a whole. 

The IPPC Directive is also the main tool for bringing reductions in emissions from  industrial 
processes. According to the results from the analysis carried out in support of the acidification 
strategy, for the purpose of achieving the 50% gap closure target, it would be  cost-effective 
to apply strict controls on S02 emissions from industrial processes in all member states of the 
Community  with the exception of Greece and Portugal.  Similarly, ten member states would 
need  to  control  also  NOx-emissions  from  these  sources,  the  exceptions  being  Greece, 
Portugal,  Spain,  Italy,  and Finland.  Again,  emission  ceilings,  or economic instruments,  are 
conceivable that could lead to the same overall  reductions in a more cost-effective  way. 

The conclusion  from  the analysis for the acidification  strategy  therefore  is that,  in order to 
meet the interim  target,  complementary  measures of Community-wide  or regional  character 
are needed to reduce emissions from  combustion  plants and industrial  processes.  The legal 
instruments  to  use  are  the  revision  of  the  88/609/EEC  Directive  on  emissions  from  large 
combustion plants, and the IPPC Directive. 

4.5 

Action  related to emissions from  shipping 

When  including  emissions  from  international  shipping  in  the  optimization  for  the  interim 
target  of  50%  gap  closure,  it  was  demonstrated  to  be  cost-effective  to  reduce  the  S02 
emissions from  ships in the Baltic Sea and the North Sea, and to reduce emissions of nitrogen 
oxides in the Baltic Sea, the North  Sea and parts of the Atlantic Ocean. Due to lack of data, 
the emissions from  ships in the Mediterranean were not included in the analysis. Reduction 
in S02 emissions can be achieved by lowering the sulphur content in the bunker fuel oils, and 
measures to reduce emissions of nitrogen  oxides include the use of catalytic converters. 

15 

The  sulphur  content  of  marine bunker  fuels  is not  subject  to any  international  regulation. 
There  are  however  proposals  to  control  it under  the  International  Maritime  Organization's 
(LMO)  Convention  on  Maritime  Pollution  (MARPOL  Convention).  This  Convention  is 
currently under revision, with the negotiations due for  completion towards the end of 1997. 
In the preparatory discussions for the revision of the Convention, the countries bordering the 
Baltic  Sea  have  proposed  that  this  sea  area  be  designated  a  sensitive  zone  with  regard  to 
emissions of S02. The countries bordering the North Sea are also working towards a similar 
designation  for  all, or part,  of the North  Sea/English Channel. In  such  sensitive  zones it is 
proposed  that  ships  should  only  be allowed  to burn  bunker  fuels  with  a maximum  sulphur 
content of  1.5%. 

The designation of the Baltic Sea and all/parts of the North  Sea/English Channel as sensitive 
zones  for  S02  emissions,  and  the  associated  restrictions  on  the  sulphur  content  of  marine 
bunker fuels used in these zones would, according to the Commission's analyses, be a highly 
cost-effective  measure as part of an integrated strategy for combatting acidification in the  EC. 
The  Commission  therefore  considers  that,  in  the  context  of  the  current  revision  of  the 
MARPOL  Convention,  all  member  states should  support the designation  of the Baltic Sea 
and  all/parts  of  the  North  Sea/English  Channel  as  sensitive  zones  for  S02  emissions. 
Following  the  revision  of  the  MARPOL  Convention,  the  Member  States  should  move 
towards  the  implementation  of  the  provisions  regarding  the  sensitive  zones  as  soon  as 
practicable.  The  Commission  will,  if  appropriate,  make  proposals  to  ensure  a  speedy 
implementation  of those provisions by the Member States. 

4.6 

Action related  to countries in Central  and East Europe 

Through  its  external  relations,  the  EC  and  its  member  states  could  play  an  active  role in 
promoting cost-effective  measures outside its jurisdiction. For example, additional reductions 
in  sulphur  emissions,  above  those  agreed  under  the  1994  Sulphur  Protocol,  appear  to  be 
cost-effective  in some countries outside the EC in order to further  reduce acidification  inside 
the  EC.  Moreover,  further  control  of  emissions  of  NOx  and  NH3,  as  planned  for  the 
forthcoming  multi-pollutant  protocol  under  the  CLRTAP,  would  also  help  reduce  the 
exceedance  of  critical  loads  for  acidification.  It  is  cost-effective,  and  in  all  likelihood 
necessary for meeting the critical loads for  acidification,  that additional  emission reductions 
are achieved not only in the member states but also in countries in Central  and East Europe 
(CEE), especially  in those neighbouring EC countries. 

The emission reductions identified  in section 3.3 are based on the assumptions that emission 
reductions in countries outside the EC will be reduced in accordance with their present current 
legislation  and  as required  under the various  protocols  of the UN ECE/CLRTAP.  Such an 
assumption  concerning  the  development  of  emissions  in non-EC  countries is prudent  in as 
much  as the  EC  has only  limited  influence  over  the  acidification  policy  to be  pursued by 
these countries. However,  sensitivity  analyses carried  out by the Commission  indicate very 
clearly that reductions in the acidifying  emissions from  certain  countries,  particularly  some 
allow  the  EC  to  pursue  more  ambitious  goals  in  relation  to 
CEE  countries,  could 
acid deposition. 

16 

The scientific  assessment  carried  out to  support the Commission's  strategy  on  acidification, 
has  demonstrated  that  emissions  from  certain  CEE  countries  such  as  Poland,  the 
Czech Republic, Hungary, and Slovenia contribute significantly  to the exceedance of critical 
loads for  acidification  in the EC (see Annex). However, the EC would tend to export more 
acidifying  emissions to these countries than it receives. Nevertheless, it is in general true that 
emission reduction  per unit investment  is greater  in the CEE countries than  in the EC. For 
this reason and  as long as decisions are made on a case by  case basis, it would be possible 
to  identify  situations  where  the  promotion  of  emission  reductions  in  Central  and 
East European  countries  would  be  mutually  beneficial  and  cost-effective  for  all  parties 
involved.  The Community  should  seek to identify  and exploit these  "win" situations. There 
are several  avenues which  should be explored  in order to realize this objective. 

The  EC  has  been  developing  contacts  with  ten  countries  from  Central  and  East  Europe 
(Bulgaria,  the  Czech  Republic,  Estonia,  Hungary,  Latvia,  Lithuania,  Poland,  Romania, 
Slovakia  and  Slovenia)  in  order  to  encourage  the  approximation  of  their  legislation  to 
Community legislation and so to facilitate the adaptations that would be necessary when and 
if  accession  will  occur.  Environmental  considerations  and  in particular  the  adoption  of the 
aquis communautaire in the field of environmental  regulation,  constitute one of the priority 
areas for  consideration  in  such a pre-accession  strategy. Within the context of the ongoing 
dialogue with these countries, the Commission intends to identify  acidification  as one of the 
priority  areas  for  discussion  in  the  field  of  environmental  protection.  To  this  end  the 
Commission will make use of the existing programme Phare and of facilities  such as TAIEX 
(Technical  Assistance  and  Information  Exchange  Office)  and  DISAE  (Development  of 
Implementation  Strategies  for  Approximation  in  Environment)  with  a view  to  identifying 
opportunities for intensive collaboration on initiatives aimed at reducing acidifying emissions. 

One of  the  most  powerful  mechanisms  for  bringing  about  a reduction  in  emissions  in  the 
economies of CEE countries is by influencing  the pattern  of investment, both governmental 
and  private,  especially  in  the  energy  supply  sector.  The  Commission  therefore  intends  to 
pursue discussions with governments, major industrial concerns, and financial institutions with 
a view to identifying investment strategies which will be optimal with regard to the reduction 
of emissions which contribute to  acidification. 

4.7 

Action related to the Convention  on long-range transboundary  air pollution 

The  UN  ECE/CLRTAP  is  the  main  forum  by  which  the  European  Community  and  the 
member  states can influence  and promote  emission  reductions in  countries not members of 
the  EC. Further  action  in  some  of  those  countries  has  proven  to  be  cost-effective  for  the 
attainment  of  the  interim  environmental  quality  target  in  the  EC  of  a  50%  gap  closure. 
Moreover, it is necessary in order to achieve the ultimate target, that critical loads are not to 
be  exceeded.  The  Commission  and  the  member  states  should  therefore  play  an  active and 
promoting role in CLRTAP negotiations for a new multi-pollutant protocol, and for the urgent 
ratification  and  revision  of  the  1994  Sulphur  Protocol  (see  section  4.2),  to  make  these 
contribute  to  meet  the  environmental  quality  targets  of  the  EC  on  acidification  and 
related problems. 

17 

4.8 

Possible  action  to  reduce  emissions  of  ammonia 

Some  environmental  EC  legislation,  already  existing  or  being  developed,  is  expected  to 
lead  to  reductions  in  ammonia  emissions.  Firstly,  the  establishment  and  application  of 
Codes  of  Good  Agricultural  Practice  through  the  implementation  of  the  Nitrate  Directive 
(91/676/EEC)  is  expected  to  not  only  reduce  nitrate  losses  to  surface  and  ground  water  but 
also has the potential to reduce ammonia emissions.  Secondly, the IPPC Directive (96/61/EC) 
applies  also  to  large  installations  for  the  rearing  of  poultry  or  pigs  as  well  as  to  industrial 
installations  that  emit  ammonia.  Finally,  the  covering  of  manure  storage  is  part  of  the 
Communication  on  a  Strategy  for  Reducing  Methane  Emissions  (COM(96)  557/2)  and  can 
achieve  reductions  of  ammonia  emissions. 

The  analysis  carried  out  for  this  acidification  strategy  suggest  that  it is indeed  cost-effective 
to further  reduce  ammonia  emissions.  The  analysis  suggests  that  in  particular  the  following 
measures  appear  cost-effective: 

techniques  that  reduce  ammonia  emission  during  application  of  manure  (dairy  cows, 
cattle,  pigs,  laying  hens,  poultry,  sheep),  with  the  exception  of  a number  of  countries 
(i.e.  Finland,  Greece,  Portugal,  Spain); 
stable  adaptations  that  reduce  emissions  from  poultry,  except  in  Finland,  Greece, 
Portugal  and  Spain; 
reducing  industrial  ammonia  emissions,  except  in  Finland,  Greece,  Luxembourg, 
Portugal  and  Spain. 

Uncertainties  surrounding  abatement  efficiencies,  actual  and  future  emission  levels and  costs 
of reductions techniques for the livestock  sector appear to be more pronounced  than for  other 
pollutants.  Since  abatement  techniques  for  ammonia  are  not  as well  established  as for  other 
pollutants,  a higher  level  of  discretion  for  the  member  states  seems  appropriate  in  deciding 
upon the choice of measures to meet the proposed  indicative national  emission ceilings. When 
setting the national  emission  ceilings, the results of new research  shall  be taken  into  account. 

4.9 

Economic  instruments 

Broadening the range of instruments and where appropriate complement normative legislation 
with  market  based  instruments  is  one  of  the  five  key  priorities  of  the  Fifth  Environmental 
Action Programme.  The use of national  emission  ceilings will  create room for  member  states 
to implement economic instruments as additional  tools in their national  strategies. In addition, 
the  proposals  for  source-based  measures  in  the  previous  sections,  are  in  as  far  as  possible, 
designed so that they create flexibility for using economic instruments. The use of the national 
ceilings, however,  constitutes the main operational  objective and forms an anchoring point  for 
member  states  for  designing  national  economic  instruments  (or  regulations)  that  go  beyond 
common  minimum  environmental  requirements.  One  can  distinguish  four  main  types  of 
tradeable  emission  permits,  and 
subsidies;  3) 
instruments:  1)  charges/taxes;  2) 
4)  environmental  agreements.  Regarding the use of environmental  levies the Commission has 
recently  adopted  a  Communication  (COM(97)  9  final)  which  spells  out  under  which 
conditions member states can use environmental  levies. The Communication  explains the legal 
introduce 
relating  to  the  single  market  that  member  states  wishing  to 
framework 
environmental  taxes  and  charges  must  respect.  The  Commission  has  also  adopted  a 
Communication  on  environmental  agreements  (COM(96)  561  final),  which  clarifies  the 

18 

criteria  for  the  use  of  this  instrument.  The  national  ceilings  and  the  communications  will 
constitute  the  main  incentive  and  framework  for  member  states  to  expand  the  successful 
experiences  with  using  economic  instruments,  where  appropriate. 

On  top  of  the  national  use  of  economic  instruments,  several  areas  can  be  conceived  where 
EC  action  in  the  form  of  economic  instruments  has  value  added  for  meeting  the  national 
ceilings or to induce further  emission reductions through  structural  changes in energy use and 
agriculture,  towards  meeting  the  critical  loads.  These  areas  are:  energy  taxation,  shipping 
dues,  agriculture,  and joint  implementation  of  national  ceilings. 

4.9.1 

Energy 

In  the  energy  sector,  the  use  of  economic  instruments  could  result  in  fuel  switching  and 
improvements  in  energy  efficiency.  This  would  lower  the  costs  of  meeting  the  proposed 
national  ceilings  for  both  NOx  and  S02,  while  at  the  same  time  reducing  C02  emissions. 
Differentiated  fiscal  measures  for  various  energy  products  can be used  for  this purpose.  The 
Commission  does not find it appropriate to differentiate  fiscal  measures in separate Directives 
for  each  single  environmental  problem  or  product.  Instead  the  integration  of  environmental 
concerns  should  be  part  of  a  more  consistent  Community  excise  duty  system  for  energy 
products,  following  the  request  of the  Council  and  the European  Parliament. 

For  this  reason,  the  Commission  will  take  into  account  the  need  to  steer  markets  towards  a 
more  efficient  and  cleaner  use  of  fuels  in  its  proposal  for  a  Directive  on  the  taxation  of 
energy  products,  as  requested  by  the  ECOFIN  council  of  11  March  1996.  This  will 
accommodate more flexible policies at national levels within the Internal Market. The options 
being  considered  consist  of  a  differentiation  of  the  minimum  levels  of  taxation  applied  to 
heavy  fuel  oils,  related  to the  sulphur  content,  and  the  explicit  possibility  for  member  states 
to  differentiate  national  tax  rates  on  energy  products  on  the  basis  of  their  environmental 
qualities.  In  addition,  new  energy  products  could  fall  under  the  scope  of  Community 
legislation,  and future  reviews  of  the  Community  levels  of taxation  would  take into  account 
environmental  objectives.  The  proposal  is  expected  to  lead  to  small,  but  not  negligible, 
reductions  in  emissions  of NOx,  S02  and  C02. 

4.9.2 

Shipping 

Section 4.5 reported on the current discussions within the International Maritime Organization 
limits  on  the  sulphur  content  of  bunker  fuels.  However,  the  approaches 
(EVIO) on  setting 
discussed  in the  context  of  the MARPOL  are not  exhaustive  and  additional  mechanisms  are 
available  for  reducing  S02  emissions  from  shipping  still  further.  In  addition  the  current 
discussions in the context of MARPOL  do not adequately  address the issue of NOx  emissions 
from  shipping. 

One possible further  line of action is the use of environmentally  differentiated  shipping dues. 
The  Swedish  administration  seeks  to  use  a  general  due  system,  compatible  with  current 
shipping  dues,  for  this  purpose.  Regarding  NOx,  the  Swedish  proposal  discusses the  option 
of rebating the operating costs and part of the capital investment of catalytic converters.  Ships 
would  be  charged  higher  environmentally  based  dues  if  they  do  not  install  catalytic 
converters.  As  regards  sulphur,  Sweden  is  considering  to  increase  the  average  level  of  the 

19 

present lighthouse dues and to allow rebates for ships using low (less than 0.5%) sulphur fuel. 
In  this  context,  the  Commission  might  further  explore  the  possibility  of  differentiating 
shipping  dues  among  a  number  of  member  states  so  as  to  promote  further  cost-effective 
reductions in acidifying  emissions. 

4.9.3  Agriculture 

In the agricultural sector, it is not necessary to apply a large number of the available technical 
abatement  measures in  order  to cost-effectively  meet the intermediate  target  of  a  50% gap 
closure. On top of the potential  contribution from  further  technical measures to the reduction 
of  ammonia  emissions,  a  further  evolution  of  the  Common  Agriculture  Policy  (CAP), 
developing  the  1992 approach,  might  have positive  side impacts  on  the  level  of  ammonia 
emissions.  Such a development  could thus take into account the need of reducing ammonia 
emissions, bearing in mind that this is only one of the environmental  problems challenging 
agriculture.  Other  problems,  such  as  leakage  or  run-off  of  nitrates  to  surface  and  ground 
waters,  and  emissions  of  methane,  are also relevant  and  could,  together  with  acidification, 
preferably  be  addressed 
In  the  1996  review  of  the 
Fifth  Environmental Action Programme (COM(95) 647 final), integration of environment into 
other  policy  areas is  one  of the  key  priorities.  Especially  relevant  for  acidification  are the 
following  priorities mentioned  in the  1996 review: 

in  a  consistent  framework. 

(a) 

(b) 

to  further  develop  links  between  agricultural  market  instruments  and  environmental 
requirements pursuant to the process of further  evolution  of the Common Agricultural 
Policy  with  reduced  reliance  on market  price  support  as well  as better  integration  of 
market policies, rural  development  and environmental  policies; 

to promote extensive production, sustainable farming technologies and organic farming 
products  in  close  cooperation  with  the  actors  concerned:  the  Regulation  (EEC) 
No 2078/92 provides a good  example of such a cooperation  and has some potential  to 
contribute to reducing ammonia emissions. 

Finally,  economic  instruments  (e.g.  fertilizer  taxes,  which  have  been  applied  in  some 
countries)  could  be  explored  to  induce  further  emission  reductions  towards  meeting  the 
critical loads. 

4.9.4 

Joint implementation  of national  ceilings 

Joint implementation implies that two or more actors cooperate to fulfil  specific commitments 
or obligations. In the context of the acidification  strategy  this means the joint implementation 
of agreed national  emission  ceilings. Joint implementation  is discussed  since it offers  more 
flexibility  to meet agreed  ceilings at lower  costs. The  1994  Sulphur Protocol  states that the 
Parties  to  the  Protocol  may,  under  specific  rules  and  conditions  to  be  elaborated,  jointly 
implement  the  obligations  (the  national  emission  ceilings).  Some  studies  show  that  the 
potential  cost savings of joint  implementation  are significant.  It is less straightforward  how 
these  cost  savings could  be realized  while at the  same time meeting  environmental  quality 
targets. The Commission will  examine the potential  contribution  of joint  implementation  in 
the context  of its future  proposal  for  a Directive on national  emission ceilings. 

20 

4.10 

Possible  further  action  related  to  emissions  from  transport 

The  control  of  emissions  from  road  transport  are  regulated  by  an  extensive  set  of  existing 
Community  legislation.  Proposals  for  new,  tightened,  emissions  and  fuel  standards,  to  be 
introduced by the year 2000, were recently  adopted by the Commission (COM(96) 248 final). 
By the end of  1998, the Commission  will come forward  with proposals for further  vehicle and 
fuel  quality  standards to  come  into  effect  as from  2005. 

A Commission  proposal  (COM(95) 350 final) for  Community-wide  legislation  to reduce the 
emissions  from  non-road  mobile  sources  is well  advanced,  and  expected  to  be  adopted  by 
Council  and Parliament  in the near future.  The Commission  will investigate the  opportunities 
of  further  strengthening  these  emission  standards,  as  well  as  of  expanding  them  to  cover  a 
wider  category  of  vehicles. 

4.11  Actions  to  promote  energy  efficiency  and  energy  conservation 

As  described  elsewhere  in  the  text  (section  3.4  and  the  Annex)  changes  in  energy 
consumption  and  the  pattern  of  energy  production  may  have  a  significant  impact  upon  the 
amount  of  acidifying  emissions  released  to  the  atmosphere.  As  a  consequence  initiatives 
aimed  at  the  development  of  alternative  and  renewable  energy  sources  as  well  energy 
conservation  can  lead  to  reductions  in  acidifying  emissions. 

At the level  of the  Community,  The JOULE  programme  is providing  insights  into the  more 
rational use of energy and energy conservation.  The FAIR programme is inter alia  examining 
the  use  of  renewable  raw  materials  and  the  production  of  "clean"  energy.  Demonstration 
programmes  such  as  ALTENER  and  SAVE  will  facilitate  the  development  of  alternative 
energy  sources and  energy  saving technologies. Results from  these research  programmes  and 
demonstration  programmes  will 
influence  energy'  consumption  and  the  balance  of 
energy  production  from  different  sources  and  will  as  a  result  lead  to  a  reduction  in 
acidifying  emissions. 

Finally,  in  Communication  (COM(95)  509  final)  "Cohesion  Policy  and  the Environment"  it 
is  underlined  that  the  structural  funds  are  providing  incentives  for  the  promotion  of 
environmentally  friendly  production,  among others, to promote renewable  energy  and use of 
energy  saving  technologies. 

4.12 

Review  process 

As mentioned  above, the ultimate target  could  not be attained  by  2010, even when  assuming 
application  of  technically  feasible  abatement  measures  within  the  EC.  Therefore,  the 
Commission  will  have  to  come  back  and  address  this  issue  again,  at  a  later  stage.  The 
Commission  would then  review the acidification  strategy  and  evaluate the results attained  so 
far  as well  as the prospects  of member  states meeting the  emission  ceilings required  to meet 
the  interim  target  by  the  2010  deadline.  Based  on  that  evaluation,  and  on  possible  new 
scientific  evidence  on the  matter,  for  example  as regards  critical  loads  for  acidification,  and 
taking  into  account  measures  already  taken  to  reduce  emissions,  the  Commission  should 
identify  and  propose  which  additional  measures  are  needed  to  complement  the  existing 
acidification  strategy,  in  order  to  reach  the  goal  of  no  exceedance  of  critical  loads. 

21 

It  is  proposed  that  the  Commission,  before  the  end  of  2004,  should  come  forward  with  a 
report  to  the  Council,  presenting  the  progress  made  in  reducing  emissions  of  acidifying  air 
pollutants, as well  as an evaluation  of the prospects of member states meeting their  emissions 
ceilings  by  2010.  Based  on  this  report,  and  on  possible  new  scientific  evidence  relating  to 
acidification,  the Commission  should present to the Council, before the end of 2004, a revised 
acidification  strategy. 

5. 

PRELIMINARY  ASSESSMENT  OF  THE  ENVIRONMENTAL  BENEFITS 
AND  THE  COSTS  OF  THE  COMMISSION'S  STRATEGY 

The  Commission's  strategy  will  result  in  the  achievement  of  the  50%  gap  closure  interim 
target  across the European  Community.  Translated  into terms  of the  ecosystem  area  in  each 
country  in  which  critical  loads  will  be  exceeded  the  Commission's  strategy  will  result  in  a 
significant  improvement  as compared  to the  situation  in  1990  (see  Table  5). 

Table  5:  Ecosystems where critical loads for acidification  are exceeded. The  situation 
in  1990,  in  2010  according  to  the  reference  scenario  (REF),  and  after 
implementation  of  the  acidification  strategy  (STRAT)  (thousand  hectares) 

Country 

Austria 

Belgium 

Denmark 

Finland 

France 

Germany 

Greece 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Spain 

Sweden 

UK 

EC15 

1990 

2010  (REF) 

2010  (STRAT) 

2  896  (59%) 

943  (19%) 

642  (13.2%) 

477  (77%) 

117  (19%) 

9  (  1.4%) 

174  (18%) 

38  (3.9%) 

21  (2.2%) 

5  016  (16%) 

1  211  (3.8%) 

1  144  (  3.6%) 

618  (4.3%) 

82  (0.6%) 

40  (0.3%) 

6  972  (80%) 

2  541  (29%) 

978  (11.3%) 

0  (0%) 

23  (4.8%) 

0  (0%) 

4  (0.7%) 

0  (  0%) 

1  (0.1%) 

1  160  (18%) 

285  (4.3%) 

103  (  1.6%) 

15  (17%) 

7  (7.5%) 

2  (  2.2%) 

282  (88%) 

121  (38%) 

23  (7.3%) 

1  (0%) 

0  (0%) 

0  (  0%) 

74  (0.9%) 

24  (0.3%) 

10  (0.1%) 

10  108  (23%) 

1  235  (2.8%) 

699  (  1.6%) 

4  741  (60%) 

2  112 

(27%) 

809  (10.3%) 

32  557  (24%) 

8  719  (  6.5%) 

4  481  (3.3%) 

In  this  context  it  should  be  recalled  that  further  reductions  than  those  envisaged  for  the 
interim  target  of  a  50%  gap  closure  are  necessary  to  meet  the  ultimate  target  of  no 
exceedance of critical loads. Moreover, that acidification  is only one of several  environmental 
aspects  motivating  the  need  for  reduced  emissions  of  sulphur  dioxide,  nitrogen  oxides,  and 
ammonia.  Therefore,  when  considering  the possible  need  and  options  for  measures  to  abate 
emissions,  also these  related  aspects  should  be  taken  into  account  (see  section  2.2). 

22 

The  additional  abatement  costs,  that  is the  annual  cost  of  additional  measures  as  compared 
to  the  reference  scenario,  for  the  whole  of  EC  from  attaining  the  interim  target  has  been 
estimated to ECU  7 billion by  2010  (see Table 6). This estimate  is based  on the  assumptions 
that  the  reductions  are  being  obtained  by  the  use  of  technical  measures  only.  It  should  be 
noted  that  the  abatement  options  analysed  do  not  take  into  account  non-technical  abatement 
measures,  such  as  structural  changes  (including  fuel  switching)  in  the  various  sectors. 
Furthermore,  the  Community's  international  commitments  in  relation  to  climate  change  and 
the associated reductions in the emissions of "green-house" gases, particularly  carbon dioxide, 
will  also  imply  significant  reductions  in  the  emissions  of  acidifying  pollutants  and 
consequently  in  the  estimated  costs  of  the  acidification  strategy  (see  section  3.4).  In 
conclusion, it is therefore  likely that the costs for achieving the necessary  emission  reductions 
have  been  overestimated.  A  more  detailed  presentation  of  the  costs  associated  with  the 
achievement  of  the  50% gap  closure  target  is given  in  the  Annex. 

Table  6: 

Additional  emission  control  costs  of  meeting 
(million  ECU/year  in  2010) 

the 

interim 

target 

EC15 

so2 
2  940 

NOx 

1 795 

NH3 

2  305 

Total 

7  040 

6. 

POSITIVE  SIDE-EFFECTS/DOUBLE  BENEFITS 

Although  the focus  of this  strategy  is on  acidification  (as acid  deposition),  it  is important  to 
note that airborne emissions of the acidifying  pollutants have other detrimental  effects  on the 
environment.  Reducing  emissions  of  acidifying  air  pollutants  will  thus  deliver  "secondary" 
benefits,  because  it  helps  reducing  other  environmental  problems  caused  by  the  same 
pollutants,  such  as eutrophication,  ground-level  ozone,  corrosion  of  buildings  and  materials, 
and  damage  to  human  health.  Furthermore,  emission  reductions  in  the  EC  will  result  in 
deposition  reductions in countries  outside the EC.  Some of these side-effects  have been  more 
thoroughly  analysed,  namely  the  impacts  on  eutrophication  and  on  ozone,  as  well  as  the 
benefits  for  countries  outside  of  the  EC.  Side-effects  on  air  quality  have  not  been  analysed 
in  detail,  but  seme  conclusions  can  still  be  made.  The  results  are  summarized  below. 

6.1 

Eutrophication 

The  analysis  has  shown  that  in  1990,  critical  loads  for  eutrophication  were  exceeded  over 
34%  of the  ecosystem  area  of  the  EC.  This  represents  an  area  of  about  38  million  hectares. 
As  a  result  of  emission  reductions  foreseen  by  2010  in  the  reference  scenario,  this  will  be 
reduced  to  19%, or  21  million  hectares.  Reductions  needed  for  the  interim  target  of  a 50% 
gap  closure,  would  result  in  exceedance  over  13%, or  15 million  hectares,  of  the  ecosystem 
area.  This would  mean  an  improvement  that  is more than  half  of the way  from  the  situation 
in the reference  case towards what was estimated to be maximum  technically feasible to attain 
with  measures  within  the  EC. 

As  a  sensitivity  analysis,  the  result  of  using  combined  environmental  quality  targets,  based 
on the critical loads for both acidification  and eutrophication,  as explicit deposition  objectives 
for the optimization, was evaluated.  The outcome showed some move of emission reductions, 

23 

from  sulphur  dioxide  to  nitrogen  oxides  and  ammonia.  This  was  especially  the  case  for 
countries in the south and central parts of the EC, such as Spain, Italy, France, and Germany. 
The  level  of  ecosystem  protection  for  eutrophication  increased  -  resulting  in  less  than 
10 million hectares exceeded - as did that for acidification. Also the costs increased: The total 
additional costs for this scenario amounted to ECU 9.4 billion, as compared to ECU 7 billion 
for  the main scenario. 

6.2 

Ozone 

The  impacts  on  ground-level  ozone  was  analysed  using  the  EMEP  model,  based  on 
emissions of  NOx  as  given 
in  the  acidification  analysis.  Projected  emissions  of 
volatile organic  compounds  (VOCs)  for  2010 were  taken  from  the  current  reduction  plans 
(CRP) of the UN ECE/CLRTAP, which are based primarily on nationally submitted data. For 
reasons of consistency and realism, additional emission reductions expected from the auto-oil 
package of proposals, were included  for  the EC Member States. 

The  analysis  showed  a  significant  improvement  in  most  member  states.  In  the  reference 
scenario, by 2010 the exceedance of the critical threshold level for forests,  crops and natural 
vegetation of 40 ppb (parts per billion) as well as of the indicative critical threshold level for 
health  of  60 ppb were reduced  over  almost the entire EC  area,  as compared  to  1990.  The 
largest improvements were found  in the exceedance of the 60 ppb level, a level used by the 
CLRTAP as a substitute to indicate possible effects on human health. The additional emission 
reductions in the main scenario will  lead to further  declining ozone levels over most of the 
affected  areas.  In  some  smaller  areas,  however,  ozone levels would  increase  slightly.  It  is 
expected that further  requirements to  reduce VOC emissions will  eliminate  or  significantly 
reduce this negative  side-impact. 

6.3  Air quality 

As a result of reduced emissions of S02 and NOx, ambient concentrations of these pollutants, 
as well  as of their  secondary  products  (e.g.  particulates  and  ozone), will  be reduced.  This 
would bring subsequent benefits for human health as well as for buildings and materials, and 
the  historic  and  cultural  heritage.  Some  of  these  benefits  were  included  in  a  study  of 
economic valuation (see section 6.5). 

6.4  Improvements outside the EC 

Emission reductions in the EC will, because of the transboundary  nature of these pollutants, 
result  in  reduced  deposition  and  consequently  reduced  exceedance  of  critical  loads  for 
acidification in countries outside the EC.  For example, the calculations indicate that the level 
of  ecosystem  protection  in  these  countries  would  by  2010  improve  from  97 to  98%, as a 
result  of  reductions in the main  scenario,  as compared  to the reference  scenario. Expressed 
differently,  the ecosystem  area on which  critical  loads are exceeded  in  countries outside of 
the EC will be reduced  from  11 to 9 million  hectares. The biggest improvements,  in terms 
of reduction in the area exceeded, were to be found  in Norway, the Czech Republic, Poland, 
Russia  and  Switzerland.  By  2010, the exceedance  of the critical  threshold  levels for  ozone 
(see section 6.2) were reduced in all non-EC countries. 

24 

As regards eutrophication,  in  1990 critical  loads were exceeded  over  10% of the ecosystem 
area, that is over 39 million hectares, in the non-EC countries. The reference  scenario would 
by 2010 reduce this to about  27 million  hectares. Emission  reductions in the  EC as in the 
main alternative, would reduce the exceedance further,  to about 6%, or 25 million hectares. 
'The improvements could be found in many of the non-EC countries, but in terms of absolute 
area  protected,  they  were  biggest  in  the  Czech  Republic,  Norway  (where  exceedance  is 
brought down to zero), Switzerland, Poland  and Hungary. 

6.5 

Economic evaluation of certain  benefits 

Further reductions in acidifying  emissions will lead to a number of benefits for human health, 
materials  and  buildings,  crops,  forests,  and  for  terrestrial  and  aquatic  ecosystems.  The 
economic  valuation  of  these  benefits  have  been  the  subject  of  work  by  DGXII  under  the 
so-called ExternE project.  The method  developed under that project  was applied to estimate 
some of the benefits of the emission reductions required for attaining the interim target of the 
acidification  strategy.  More  specifically,  additional  monetary  benefits  resulting  from  the 
avoided  environmental  effects,  were calculated.  The consultant  evaluated  impacts on public 
health  in  the form  of  mortality  and  morbidity;  on  crops;  and,  damage to  modern  building 
materials. A number  of major  benefits  were not  assessed  in the study,  such  as the reduced 
(risk  of)  forest  damage;  improvement  of  forest  functioning  (e.g.  soil  stabilization,  carbon 
retention, and biodiversity); improvements in other terrestrial or aquatic ecosystems; and, the 
impacts on the historic and cultural  heritage. 

The  dominating  economic  benefits  were,  according  to  the  study,  to  be  found  in  reduced 
damage to human health, primarily  as a result of reduced levels of the secondary  pollutants 
sulphate and nitrate aerosols, and ozone. It was concluded that for EC as a whole, the benefits 
outweigh the costs. The largest benefits were to be found in Germany, France, the UK, Italy, 
Spain, the Netherlands, Belgium  and Denmark.  Only for  one country, Ireland,  it was  found 
that the additional costs for pollution control outweighed the estimated incremental monetary 
benefits.  However,  if  effects  of  long-term  (chronic)  exposure  to  air  pollution  on  mortality 
were also to be considered,  the benefits  outweighed  by far  the costs for  all  member states. 
The  inclusion  of  benefits  to  ecological  and  cultural  resources,  which  currently  can  not  as 
easily  be  quantified 
the  benefits  of 
emission reductions. 

terms,  would  further 

in  monetary 

increase 

In summary, the incremental  annual benefits of the additional emission reductions (i.e. those 
needed on top of the reference scenario to attain the interim target) were estimated to amount 
to  nearly  ECU  20  billion  in  2010  for  the  Member  States.  Moreover,  benefits  arising  in 
non-EC countries were estimated to about ECU 4 billion. In both these figures, the so-called 
chronic effects  on mortality  were excluded. 

25 

Annex  to 

Communication  to  the  Council  and  the  European  Parliament  Parliament 
on  a Community  strategy  to  combat  acidification 

LIST  OF  CONTENTS 

1. 

THE  ENVIRONMENTAL  QUALITY  OBJECTIVE:  CRITICAL  LOADS 

2. 

3. 

INTERIM  TARGETS:  THE  GAP-CLOSURE  APPROACH 

INTEGRATED  ASSESSMENT  MODELLING:  COST-EFFECTIVENESS 

ASSUMPTIONS  AND  STARTING  POINT  FOR  THE  SCENARIO  ANALYSIS 
The  baseline 
Assumptions  on  energy  use 
Reference  scenario  (REF) 

4. 
4.1 
4.2 
4.3 
4.4  Maximum  technically  feasible  reductions  (MFR) 

5. 
5.1 
5.2 
5.3 

RESULTS  FROM  THE  SCENARIO  ANALYSIS 
Identifying  the  interim  target 
Sensitivity  analyses 
Binding  grid  cells 

Tables  and  figure 

26 

1. 

THE ENVIRONMENTAL  QUALITY OBJECTIVE: CRITICAL LOADS 

The critical load indicates the sensitivity  of a particular environment by defining  how much 
exposure to pollution  it can tolerate before  long-lasting  or other  significant  damage occurs. 
The concept  of  critical  loads is  science-based.  Consequently,  the  data used  reflects  current 
best  knowledge and includes  a certain  level  of  uncertainty.  Critical  loads  have  significance 
for  sustainable development,  since depositions above the critical  loads are not sustainable in 
the long term. 

The data on critical  loads for  acidification  that are being used when elaborating the strategy 
have  been  developed  under  the  Convention  on  Long-Range  Transboundary  Air  Pollution 
(CLRTAP),  and  were  revised  and  updated  in  1996.  The  data  have  been  supplied  by  the 
CLRTAP's mapping centre for critical loads, the Coordination Center of Effects  (CCE) in the 
Netherlands. Of the EC member  states, ten countries have produced  and submitted  national 
data to CCE; These are Austria, Denmark, Finland, France, Germany, Italy, the Netherlands, 
Spain,  Sweden,  and the United Kingdom.  Outside the EC,  six countries have also done so. 
For the remaining five Member States, as well as for other countries in Europe that have not 
submitted  national  data,  the  CCE  has  estimated  critical  loads  based  on  information  in  its 
European background data base. In all countries critical loads have been calculated for  forest 
ecosystems,  and  in  several  countries  also  for  freshwater  ecosystems.  Some  countries  have 
calculated critical loads also for  peatlands, heathlands and grasslands. The ecosystem  area is 
the area for  which  critical  loads have been  estimated. 

When  establishing  critical  loads  for  acidification,  the  combined  acidifying  effect  of  both 
sulphur and nitrogen compounds is taken into account. Their relative share in contributing to 
acidification will depend on the characteristics of the ecosystems considered as well as on the 
amount  of  deposition  of  sulphur  and  nitrogen  compounds,  respectively.  By  comparing 
the critical  loads  with  actual  and  forecasted  deposition  levels,  the  levels  of  emission 
reductions  -  in  various  combinations  -  needed  to  avoid  exceedance  of  critical  loads  can 
be  quantified. 

As there is no single critical load value for each of the three pollutants (sulphur, oxidized and 
reduced  nitrogen)  involved,  the  exceedance  of  critical  loads  can  not  be  expressed  as  the 
difference  between  the  critical  load  and  the  deposition  of  a  single  pollutant.  Therefore, 
exceedance  is now expressed  in terms  of the proportion  of the  ecosystems  in  each EMEP2 
grid  cell  which  is  not  protected  from  acidification  at  a given  combination  of  sulphur  and 
nitrogen  deposition  in that grid.  (An EMEP grid  cell  is  150 times  150 kilometres, which is 
the  resolution  used  by  the  CLRTAP  when  mapping  critical  loads  on  a  European  scale, 
and  also  when  monitoring  emissions  and  depositions  of  air  pollutants).  The  term 
ecosystem protection is used to indicate the percentage of ecosystems in a grid cell, country, 
or other area, where the critical  loads are not exceeded. 

The  ultimate  target  of  the  Fifth  Environmental  Action  Programme,  echoed  in  the 
Council  conclusions from  18 December  1995, is that  critical  loads  should  not be exceeded. 
This  means  that  for  each  ecosystem  in  the  EC  acid  deposition  should  be  lower  than  the 
critical load. As both deposition and critical loads data are mapped in accordance with EMEP 

EMEP  stands  for  the  Cooperative  Programme  for  Monitoring  and  Evaluation  of  the 
Long-Range Transmission of Air Pollutants in Europe, and is subsidiary to the CLRTAP. 

27 

grid  cell  resolution,  it was  decided  to use  100% ecosystem  protection  in  each  such  grid  cell 
within  the  EC  as  a  target.  By  applying  the  target  for  each  grid  cell,  it  is  also  ensured  that 
improvements  will  take  place  in  all  geographical  areas  where  exceedance  of  critical  loads 
occurs,  i.e.  that  the  benefits  of  emission  reductions  are  widely  distributed,  rather  than 
concentrated  to  a  few  areas  only.  In  practice,  the  resulting  exceedance  of  critical  loads  can 
be  shown  both  as  percentage  ecosystem  protection  country-by-country,  and  as  the  specific 
area  remaining  as  unprotected. 

2. 

INTERIM  TARGETS:  THE  GAP-CLOSURE  APPROACH 

The  ultimate  target  of  no  exceedance  of  critical  loads  for  acidification  might,  for  practical 
and/or political  reasons, not be achievable by 2010. The modelling of future  emissions for the 
purpose  of  this  strategy  indicated  that  even  when  applying  so-called  maximum  technically 
feasible  reductions  in  the  whole  of  Europe,  it  would  not  be  possible  to  reach  the  ultimate 
target  for  the  whole  of  the  EC  by  2010. 

The Council conclusions of December  1995 recognized the difficulty  of meeting the  objective 
of no exceedance of critical loads in the immediate future.  It therefore  invited the Commission 
not only to prepare  a more coherent  acidification  strategy to reach  the goal  of no  exceedance 
of  critical  loads,  but  also to  identify  interim  targets  on the  path  to  reaching  that  goal. 

the  Commission 

Using  a  so-called  gap-closure  approach, 
therefore  has  analysed 
various  possible  interim  targets.  A  similar  approach  was  used  in  the  negotiations  for  the 
1994  Sulphur  Protocol under the CLRTAP. However,  due to the more complex critical  loads 
now used - with both  sulphur and nitrogen  compounds involved  - the gap closure is based on 
grid-by-grid  ecosystem  protection  data.  The  concept  applied  aims  at  closing  the gap,  that  is 
the  difference,  between  the  level  of  ecosystem  protection  in  1990  and  the ultimate  target  of 
100%) ecosystem  protection,  by  a certain  minimum  percentage  in  each EMEP grid  cell  in the 
EC  by  the  year  2010.  Based  on  the  ecosystem  protection  resulting  from  full  application  of 
technically feasible reduction options, the maximum attainable percentage gap closure towards 
the ultimate goal was determined, and cost-optimized  scenarios were consequently  constrained 
to gap  closure  targets below  that  figure. 

After  thorough  analysis  of  several  options,  it  was  found  that  the  most  appropriate  interim 
target  was a 50% gap  closure. In  practice that  means that in  each EMEP  grid  cell  within  the 
EC,  the area  of  sensitive  ecosystems in which  critical  loads where  exceeded  in  1990,  should 
be  at  least  halved,  i.e.  reduced  by  at  least  50%.  The  main  motive  for  selecting  this  interim 
environmental  quality target was that it provided the highest  level  of ecosystem  protection  at 
the  least  cost,  given  that  additional  measures  are  restricted  to  within  the  Community.  The 
reason  for  applying  the  gap  closure  target  for  each  EMEP  grid  cell  was  to  ensure  that 
improvements  should  take  place  everywhere  where  the  critical  loads  were  exceeded,  i.e.  all 
affected  areas  should  receive  benefits. 

Examples: In one grid cell the ecosystem  protection  level  in  1990 was 40% (i.e. critical  loads 
where  exceeded  over  60%  of  the  ecosystems).  The  50%  gap  closure  means  that  the  area 
where  critical  loads  are  exceeded  -  here  60  %  -  should  be  at  least  halved.  In  this  case  the 
percentage  ecosystem  protection  therefore  should  increase  by  a  minimum  of  30  percentage 
points (half of 60%). The end result would be a level  of ecosystem  protection  of at least 70% 
(40+30=70). In another grid cell, the ecosystem protection level in  1990 was 80%, i.e. critical 

28 

loads were exceeded  over 20%. Following  the same line of reasoning  as above, for  this cell, 
the  50% gap  closure  would  result  in  a minimum  protection  level  of  90%  (80+10=90). 

Alternative  effects-based  approaches to the gap closure approach  were considered.  One such 
alternative  could  be  to minimize  the  area  - or  set an  interim  target  for  a maximum  area  - of 
exceedance  within  the  EC,  irrespective  of  geographical  location.  The  advantage  of  this 
approach  is  that  it  would  result  in  a  higher  level  of  ecosystem  protection  at  less  cost,  as 
compared  to the gap  closure  approach.  The  main  disadvantage,  however,  is that  the  benefits 
would  be  concentrated  to  a  few  geographical  areas,  i.e.  to  a  limited  number  of  countries. 
Another alternative could be to minimize, or set an interim target for,  the absolute exceedance 
(in  terms  of  e.g.  deposition  of  acid  equivalents).  A main  problem  with  this  approach  is that 
it  implies  a  linear  relationship  between  the  level  of  exceedance  and  environmental  effects, 
i.e.  the  higher  the  exceedance,  the  higher  the  damage. 

3. 

INTEGRATED  ASSESSMENT  MODELLING:  COST-EFFECTIVENESS 

the  range  of  technical  measures  available  and 

The  strategy  shall  reach  the  objective,  and  possible  interim  objectives,  in  a  cost-effective 
manner.  In  order  to  identify 
their 
cost-effectiveness  for  the  purpose  of  reducing  acidification,  the  Commission  has  chosen  to 
work  with  integrated  assessment  modelling.  That  method  has  been  used  successfully  for 
several  years  under  the  LRTAP  Convention,  and  as  all  member  states,  as  well  as  the 
European  Community, are parties to that Convention, the method is well known and generally 
approved  by  the  member  states.  Moreover,  the  choice  of  this  method  ensures  compatibility 
with  ongoing  and  future  work  under  the  UN  ECE/CLRTAP  in  their  development  of  new 
international  agreements  to  reduce  air  pollution.  The  consultant  chosen  by  the  Commission 
for  the purpose  of both the acidification  and ozone  strategies is the International  Institute  for 
Applied  Systems  Analysis  (IIASA),  that  has  developed  the  principal  model  for  integrated 
assessment,  the RAINS  model. 

The  RAINS  model  can be  operated  either  in  the  scenario  analysis  mode  or  the  optimization 
mode. The first alternative can be used for the evaluation  of emissions, costs, depositions, and 
environmental  impacts  resulting  from  specified  emission  control  strategies,  such  as  current 
legislation  or application of best available techniques. The optimization  mode can be used  for 
minimizing emission control  costs for  a certain region,  subject  to the constraint that  specified 
environmental  targets, in this case grid-specific  acid  deposition  targets, are attained.  Such an 
optimization  can  also be done in combination  with  given  constraints  on  emission  reductions. 

For  the  purpose  of  the  analysis  for  the  strategy,  the  optimization  mode  was  used  primarily, 
but  not  exclusively,  to  minimize  total  costs  of  reducing  S02,  NOx,  and  NH3  in  the 
Member  States  of  the EC,  subject  to  the  conditions  that: 

-  •  acid  deposition  is  equal  or  lower  than  the  desired  acid  deposition  target  (the  50% 

gap  closure)  in  each  of  the  grid  cells  in  the EC; 

emissions  from  each  country  are  always  equal  or  lower  than  what  would  result  from 
current  legislation  or  current  reduction  plans  (the  reference  scenario); 

emissions  in  countries  outside  the  EC  remain  equal  to what  would  result  from  current 
legislation  or  current  reduction  plans  (the  reference  scenario). 

29 

In  the  model,  the  cost  estimates  for  various  abatement  options  are  combined  with  the 
projected pattern of energy use-and agricultural activity for the year 2010. Starting from these 
unabated  national  emission  levels,  national  cost  curves  are  produced,  in  which  all  the 
technical  abatement  options  are  ranked  according  to  their  marginal  costs.  Non-technical 
abatement options, such as structural changes, fuel switching, and energy conservation are not 
included,  unless they  are assumed  in the underlying  energy  scenario. This also implies that 
the model  overestimates the abatement costs. 

The (static) optimization procedure employs the national cost functions to determine the least-
cost  allocation  for  meeting  a  set  of  environmental  targets  at  one  point  in  time.  For  this 
purpose  investment  outlays  are  recalculated  as  annual  capital  cost» (annuities),  using  a 
discount  factor  and the technical  lifetime  assumed.  Annual  capital  costs are then  combined 
with other costs to determine the total  annual costs for  each technology. Annual costs of all 
technologies are then combined in the national cost functions. The optimization gives the level 
of the annual  costs in one specific year - in the case of the acidification  strategy for the year 
2010. The model  does not  provide information  on the Net Present  Value of the costs for a 
specific time horizon. Annual costs can be lower or higher than calculated for a specific point 
in time, depending on the level  of energy use and agricultural  activity. 

The result of the optimization procedure provides a set of national emission ceilings for each 
acidifying  pollutant (see Table 1), determined on the basis of maximum cost-effectiveness  for 
the region analysed. It also provides information country-by-country on the least-cost technical 
measures  to  attain  those  emission  ceilings.  A  preliminary  assessment  of  the  additional 
emission  control  costs  associated  with  the  achievement  of  the  50%  gap  closure  target  is 
presented  in Table 2. 

30 

Table 1: 

The emission levels in 2010 which according to the preliminary  scientific 
analysis would be necessary to achieve the 50% gap closure target shown 
together with projected emissions without the acidification strategy (REF). 

Country 

S02  (ktonnes) 

NOx  (ktonnes) 

NH3  (ktonnes) 

REF 

LEVEL 

REF 

LEVEL 

REF 

LEVEL 

Austria 

Belgium 

Denmark 

Finland 

France 

Germany 

Greece 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Spain 

Sweden 

UK 

57 

215 

71 

116 

691 

740 

361 

155 

847 

4 

56 

194 

1  035 

97 

980 

57 

52 

31 

116 

235 

414 

361 

41 

204 

4 

38 

194 

618 

66 

279 

116 

196 

119 

163 

895 

116 

129 

88 

163 

766 

1 279 

1  079 

282 

73 

282 

42 

1  160 

1  160 

10 

140 

206 

851 

207 

1,244 

10 

140 

206 

826 

207 

753 

93 

106 

103 

30 

669 

539 

76 

126 

391 

6 

81 

84 

373 

53 

270 

93 

74 

82 

30 

630 

318 

76 

126 

305 

6 

81 

84 

373 

49 

224 

Sum  EC 15 

5  619 

2  710 

6  921 

5  967 

3  000 

2  551 

31 

Table 2: 

Additional  emission  control  costs  of  meeting  the 
(million ECU/year in 2010) 

interim  target 

Country 

Austria 

Belgium 

Denmark 

Finland 

France 

Germany 

Greece 

Ireland 

Italy 

Luxembourg 

Netherlands 

Portugal 

Spain 

Sweden 

UK 

EC15 

so2 

NOx 

NH3 

Total 

0 

364 

59 

0 

294 

624 

. 

. 

0 

75 

433 

0 

76 

0 

159 

145 

711 

0 

118 

42 

0 

153 

586 

0 

26 

0 

0 

0 

0 

5 

0 

865 

0 

193 

80 

0 

36 

0 

675 

181 

0 

483 

1 435 

2  645 

0 

0 

400 

0 

0 

0 

0 

18 

143 

0 

101 

833 

0 

76 

0 

164 

163 

1  719 

7  040 

2  940 

1  795 

2  305 

4. 

ASSUMPTIONS AND STARTING POINT FOR THE SCENARIO ANALYSIS 

For the purpose  of this document,  scenario means a series of assumptions on combinations 
on  abatement  measures,  emissions,  costs,  and  environmental  objectives.  A  detailed 
description  of  the  modelling  work  and  its  results  is  given  in  the  first  and  second  interim 
reports  by  IIASA  on  Cost-Effective  Control  of  Acidification  and  Ground-Level  Ozone 
(contractNo B4-3040\96\000086\MAR\B1), available upon request from the Commission. For 
each scenario,  data  on  emissions,  the  abatement  measures  assumed  to  be  applied 
country-by-country  as well  as their  costs, and the resulting  exceedance of critical  loads for 
acidification  (expressed  both  as%  and  hectares  of  ecosystems  unprotected),  have 
been produced. 

4.1 

The baseline 

The  base  year  chosen  was  1990,  as  this  was  the  most  recent  year  for  which  there  were 
extensive sets of verified  emission data available. The same base year is expected to be used 
by  the  CLRTAP when  negotiating  the new multi-pollutant  protocol. Due to the increasing 

32 

"uncertainty  the longer the time horizon being applied when  making scenarios, for  example as 
regards energy use, and the fact that any legal  obligations entered into by member states must 
be  introduced  and  implemented  in  a  reasonable  time  span,  scenarios  for  the  acidification 
strategy  were  restricted  up  to  the year  2010. 

4.2 

Assumptions  on  energy  use 

For  the  EC  member  states,  the  analysis  was  based  on  energy  projections  provided  by 
DG  XVII, extracted from the so-called Conventional Wisdom Scenario, and updated with new 
official  data  submitted  by  one  member  state.  In the  Conventional  Wisdom  Scenario,  a 20% 
increase  in  energy  consumption  and  a  10% increase  in  the  emissions  of  C02  between  1990 
and 2010, is envisaged. For non-EC countries, energy  projections were based  on national  data 
officially  submitted  to the UN/ECE,  and  published  in  the  UN/ECE  Energy  Data  Base. 

In order to reflect  the need to reduce C02  emissions, and also for the purpose of  investigating 
how an alternative  energy  scenario would  impact upon the emissions of acidifying  pollutants 
as well  as on the  costs for  their  abatement,  a  sensitivity  analysis  was  made with  a  so-called 
low-C02  energy  scenario,  which  would  result  in  a reduction  in  C02  emissions  from  the EC 
of  10%, between  1990  and  2010. 

4.3 

Reference  scenario  (REF) 

In  order  to  evaluate  the  need  for  additional  measures,  and  their  respective  costs  and 
effectiveness,  a  reference  scenario  (REF)  was  determined.  In  order  to  accommodate  the 
different  approaches  adopted  by  countries,  two  scenarios were  constructed: 

The  first  one is the  current  legislation  scenario  (CLE): Based  on  projections  on  future 
energy  use,  the  emission  levels  resulting  from  current  national,  EC,  and  international 
legislation  were estimated.  For this purpose  a detailed  inventory  of  relevant  legislation 
in  individual  countries,  EC  Directives,  and  mandatory  technical  requirements  in 
protocols  of  the  CLRTAP,  was  used.  As  regards  EC-Directives,  the  scenario  includes 
the  Directive  on  large  combustion  plants  (88/609/EEC),  the  Directive  on  sulphur  in 
liquid  fuels  (93/12/EEC),  the  IPPC  Directive  (96/61/EEC),  and  Directives  related  to 
emissions from  road vehicles as well as non-road vehicles. Moreover, proposals adopted 
by  the  Commission,  such  as  those  of  the  auto-oil  programme  (COM(96)  248  final, 
96/0163(COD),  96/0164(COD)),  were  also  included. 

The  second  is  the  current  reduction  plans  scenario  (CRP):  In  case  countries  have 
officially  adopted  or  internationally  submitted  (to  the  UN  ECE/CLRTAP)  national 
emission  ceilings, or have entered  into international  agreements on emission  reductions 
(for  example  by  signing  protocols  under  the  CLRTAP),  the  resulting  obligations  were 
covered  in  this  scenario. 

In  order  to  properly  reflect  both  these  types  of  constraints,  when  determining  the  reference 
scenario the one of these two  scenarios (CLE  and CRP) that resulted  in the lowest  emissions 
by  2010,  was  then  used  for  the  reference  scenario.  The  specific  abatement  measures 
assumed  to be applied in the member  states for this scenario are presented  in full  detail in the 
country-by-country  cost-Tables  contained  in  the  interim  reports  by  IIASA. 

33 

The reference  scenario (REF)  shows that if  current,  and well-advanced  planned,  legislation 
is fully  implemented  in  all  European  countries,  emissions of  S02,  NOx and NH3 would be 
reduced by  58, 36, and  16%, respectively,  between the base year  1990 and 2010. 

The ecosystem  area  in the EC where  critical  loads for  acidification  are exceeded  would be 
reduced from 33 million hectares in 1990 to 9 million hectares. Expressed in%, the ecosystem 
protection would increase from  76% to 93%.  The lowest levels of gap closure achieved are 
less than  10% (in northern  Germany/Netherlands, and in northern Finland). 

4.4  Maximum  technically  feasible  reductions scenarios (MFR) 

In  the RAINS-model,  the  maximum  possible  abatement  of  air  pollutants  is  limited  by the 
technical abatement measures available. For some types of measures, the implementation takes 
place gradually over time, as is the case for example as regards the effect  of introducing new 
emission  standards  for  new  motor  vehicles.  The  turnover  time  of  the  vehicle  fleet,  which 
varies between countries, will determine how long it takes until  all new vehicles will live up 
to  the  new  standards.  For  that  reason  two  MFR-scenarios  have  been  developed:  the first, 
called MFR^,  shows the maximum technically feasible  reductions that can be implemented 
by the year 2010, assuming a standard turnover rate of motor vehicles and installations. The 
second,  called  MFR^t^ç,  shows the result  after  full  implementation  of the  same measures. 
And,  in  addition  to  MFR^,  the  vehicle  emission  standards  indicated  in  the  auto-oil 
programme for the year 2005 were introduced in the latter scenario. An unrealistically rapid 
turnover rate is thus assumed, while still assuming energy use as forecasted for the year 2010. 
It  should  be  noted  that  the  abatement  scenarios  presented  do  not  take  into  account 
non-technical  abatement measures,  such as structural  changes (including  fuel  switch) in the 
various  sectors of  society.  Thus, the MFR-scenarios tend  to underestimate  the potential  for 
emission reductions, and to overestimate the costs for  achieving the reductions indicated. 

According to MFRTCal, emissions in the EC of S02,  NOx, and NH3 would be reduced by 91, 
69, and 44%, respectively, between  1990 and 2010. The additional annual costs, as compared 
to REF, would be ECU 30 billion for  the EC. Ecosystem  protection  in the EC would reach 
99%, leaving 1.1 million hectares unprotected. MFRTll!imatc would reduce emissions by 92% for 
S02, 84% for NOx, and 44% for NH3. Ecosystem protection in the EC would reach over 99%, 
leaving 0.8 million hectares unprotected. 

In order to find out the maximum attainable ecosystem protection levels for the EC by 2010 
when limiting further  emission reductions to the EC, a third MFR-scenario was investigated, 
called EU^.  Here emissions as in MFR^  for the EC and as in REF for  the rest of Europe 
were assumed. The resulting ecosystem protection level for the EC by 2010 was 98%, leaving 
about 3 million hectares unprotected. 

5. 

RESULTS FROM THE SCENARIO ANALYSIS 

Between the extremes of the REF scenario and the MFR scenarios, that is doing nothing more 
than  is  expected  from  current  legislation  or  applying  all  technically  feasible  reduction 
measures, a number of least cost  scenarios were elaborated  and analysed. 

34 

5.1 

Identifying  the interim target 

Initially,  three  different  gap  closure  targets  were  investigated,  of  45,  50,  and  55%, 
respectively.  For  these,  deposition  targets  were restricted  to  grid  cells within  the EC only. 
Optimization of emission reductions were also confined to the EC, while emissions as in REF 
were assumed for the rest of Europe, except for  the 55% gap closure, where also emissions 
from  ships in the Baltic  Sea were included  in the optimization. 

A given policy  constraint  for  the acidification  strategy  is that measures to reduce emissions 
must  primarily  take  place  within  the  EC,  since  the  EC  can  not  impose  legally  binding 
commitments/measures outside of its territory. Therefore,  the 50% gap closure was the most 
relevant to  consider,  as it is attainable with measures  within the EC, and  since it results in 
deposition  levels  closer  to  the  ultimate  target.,Moreover,  scenarios  with  more  significant 
reductions  in  acid  deposition  resulted  in  a  sharp  increase  in  marginal  costs  relative  to  the 
additional  ecosystem  protection  obtained (see Figure 1). 

5.2 

Sensitivity  analyses 

In order to explore alternative options as well  as to check the consistency  of data input and 
robustness of the modelling results, a series of scenarios, based on various assumptions and 
introducing different  constraints, were performed.  The results could be compared with those 
of the main scenario, i.e. the one aiming for a 50% gap closure, based on optimized emission 
reductions within the EC. All of these scenarios achieve the interim target of at least a 50% 
gap closure of the ecosystem protection  in each EMEP grid cell within the EC. 

Acidifying  air pollutants are transported by winds over long distances, and the potential and 
costs for  emission  reductions  vary  between  countries.  Thus,  in  order  to find the  least-cost 
option to meet environmental  targets, it was thought worthwhile to investigate if reductions 
outside the EC could  provide a cheaper  option  than  further  reductions within  the EC. The 
following four scenarios explored this issue, and the results are also summarized in Table Al : 

Scenario  1 : Optimization with ships 

When including  emissions from  international  shipping  in the optimization,  it was shown to 
be cost-effective  to reduce emissions of  S02 in the Baltic Sea and the North  Sea, and those 
of NOx in the North Sea and the Atlantic Ocean. Such reductions would relieve some of the 
member  states  from  taking  more  expensive  abatement  measures  on  land-based  emission 
sources. For  the EC as a whole, the  additional  cost  of  meeting the interim  target  could be 
reduced  by  more than ECU 2 billion  per year.  The additional  annual  costs for  measures to 
reduce emissions from  ships was estimated to amount to about ECU 300 million. 

Scenario 2: Optimization with whole of Europe, excluding ships 

This  scenario  explored  the  cost  effectiveness  of  including  non-EC  countries  in  the 
optimization for taking further  action to reduce emissions, while keeping the environmental 
quality  target  restricted  to  the  member  states.  Under  such  conditions  it  was  found  to  be 
cost effective  to further  reduce S02 emissions in Poland, Hungary, the Czech Republic, and 
Slovenia. Emission reductions in those countries would replace some measures taken by EC 
member  states, thus reducing the costs for  those member states. For the EC as a whole, the 

35 

additional  annual  costs,  as  compared  to  the  main  scenario,  could  be  reduced  by  nearly 
ECU  1 billion,  a cost:saving of about  14%, while the extra costs for  measures taken  in those 
four  non-EC  countries  would  amount  to  about  ECU  400  million.  The  resulting  potential 
cost-saving  thus amounted  to  about  ECU  600 million.  The  level  of  ecosystem  protection  for 
the EC  would  be nearly  97%, with  critical  loads  exceeded  over  4.5  million  ha. 

Scenario  3: Optimization  with  whole  of  Europe.  EC  interim  target  for  whole  of  Europe 

This  scenario  explores  the  Europe-wide  perspective,  that  is  assuming  the  50%  gap  closure 
target  and  performing  cost-optimization  for  the whole  of  Europe,  including  ships.  To  attain 
that target, the emissions in the EC would  need to be reduced more than in the main scenario, 
thus increasing  the costs for  the EC. Emissions  from  international  shipping  were  reduced  in 
all  three  sea  areas.  Moreover,  emissions  in  countries  outside  the  EC  would  need  to  be 
substantially  reduced.  The  additional  annual  costs  as  compared  to  REF  were  ECU  8  billion 
for  the  EC  (nearly  on  billion  more  than  in  the  main  scenario),  0.5  billion  for  measures  to 
reduce emissions from  ships,  and  3.4  billion  for  measures taken  in  countries  outside the EC, 
adding  up  to  a  total  additional  cost  of  nearly  ECU  12  billion.  In  the  EC,  the  level  of 
ecosystem  protection  attained  was 98%, leaving  2.9  million  ha unprotected.  For  Europe  as a 
whole,  ecosystem  protection  reached  99%, leaving  6.1 million  ha  unprotected. 

Scenario 4:  Optimization  with  EC.  setting  sulphur  in  bunker  fuel  oil  to  1.5% 

In  the  revision  of  the  MARPOL  Convention  (see  section  4.5  in  the  Communication)  it  has 
been  suggested  to  designate  the North  Sea and  the  Baltic  Sea as sensitive  areas,  and  thus to 
limit  the  sulphur  content  of  bunker  fuels  used  by  ships  there  to  maximum  1.5%.  In  this 
scenario it was assumed that such a limit was applied.  It was found  that such a measure could 
reduce  the  cost  for  the  EC  to  attain  the  interim  target  of  a  50% gap  closure  by  more  than 
ECU  1.1  billion.  The  additional  costs  for  reducing  the  sulphur  content  in  bunker  fuels  was 
estimated  to  less  than  ECU  100  million.  The  resulting  level  of  ecosystem  protection  was 
slightly  lower  than  for  the  main  scenario:  96.4,  as  compared  to  96.7% - leaving  4.7  million 
ha unprotected,  as compared  to  4.5  million  ha  in  the  main  scenario. 

On  top  of  these  four  scenarios,  a  number  of  other  issues  related  to  the  main  assumptions 
made, were investigated through  scenario analysis. The main results are presented below, and 
for  scenarios  5 and  6,  also  in  Table A2: 

Scenario  5:  Optimization  with  EC.  using  alternative  0ow-CO2)  energy  scenario 

For reasons described  in section 4.2 above, the impacts of assuming an alternative  (low-C02) 
energy  scenario  was  analysed.  In  this  scenario,  the  increase  in  final  energy  demand  was 
restricted,  energy  efficiency 
improved,  and  the  share  of  renewable  sources  of  energy 
increased.  As  a  result,  C02  emissions  were  reduced  by  10% between  1990  and  2010,  and 
moreover, the emissions of S02 and NOx were also reduced. For these reasons, less abatement 
measures  were  needed  to  meet  the  interim  target  for  acidification.  Consequently,  the 
additional  annual cost for this scenario was estimated to ECU 2.9 billion,  a reduction  of more 
than ECU 4 billion,  or nearly  60%, as compared  to the main  scenario. It should be noted that 
costs associated with the shift  in energy  systems have not been estimated,  and could  therefore 
not  be  taken  into  account.  The  level  of  ecosystem  protection  attained  was  96.5%,  with 
4.7  million  ha  unprotected. 

36 

Scenario 6: Optimization  with EC. including  eutrophication 

A  scenario  using  combined  environmental  quality  targets,  based  on  the  critical  loads  for 
both acidification  and eutrophication,  as explicit  deposition  objectives  for  the optimization, 
was  evaluated.  Obviously,  the  outcome  of  such  a  combined  scenario  depends  on  the 
environmental  quality targets assumed. In this case, the target for acidification  was kept the 
same (50% gap closure), and a similar target was used also for eutrophication. (To use exactly 
the  same target  for  eutrophication  was found  to be infeasible.  Therefore  some  adjustments 
were  made,  and  also  some  infeasible  grid  cells  -  on  the  border  of  Belgium/France  and 
Netherlands/Germany  - had to be disregarded when performing the optimization.) The result 
was that some emission reductions "moved" from  S02 to NOx and NH3. The area unprotected 
for  eutrophication  was  reduced  from  21  million  ha  in  REF  (14.6  million  ha  in  the 
main  scenario),  down  to  9.4  million  ha.  There  was  also  some  improvement  as  regards 
acidification,  the  area  unprotected  being  reduced  to  4.2  million  ha.  Total  additional  costs 
increased by 40%, to ECU 9.4 billion. 

Scenario 7: Optimization  with EC. using different  UK critical loads 

During the time of preparation of the acidification  strategy, it was found that the critical loads 
data for the UK, specifically,  was too low, and that new, correct data could not be submitted 
in time to be considered in the modelling activities. By request from the UK, it was therefore 
agreed to, as a sensitivity  analysis, run the model  with an alternative set of data,  submitted 
by the UK, where the critical  loads for  the UK where too high.  This was done, and it was 
found that such a change did not have any impact on emission reduction requirements for any 
country.  The  only  change  in  the  results was  that  the  level  of  ecosystem  protection  in  the 
UK increased. 

Scenario 8: Optimization  with EC. using 95 percentile cut-off  point 

For technical as well as practical  reasons, the modelling for the acidification  strategy used a 
so-called  cut-off  point  at the 98-percentile level, i.e. the critical loads data for  the two% of 
the  most  sensitive  ecosystems  were  excluded  as  targets  for  the  optimization.  The 
1994 Sulphur Protocol is based on the so-called 5-percentile critical loads, i.e. here the critical 
loads data for the five% most sensitive ecosystems were excluded. To investigate the possible 
impact of the choice of cut-off  point,  a sensitivity  analysis was made using a 95-percentile. 
The results showed  some relatively  small changes to the effect  that  Spain could increase the 
emissions  of  S02  from  618  ktonnes  in  the  main  scenario  to  730  ktonnes,  while  -  most 
probably as an effect  of that - the UK would decrease the emissions of S02, from 279 ktonnes 
to 272 ktonnes. The overall  costs and the ecosystem  protection  level  for  the EC as a whole 
remained  about the same, 

5.3 

Binding grid cells 

Inevitably,  when running  cost-optimized  gap closure  scenarios,  some EMEP grid  cells will 
be "binding" This implies that in these grid  cells the deposition target is met  exactly, while 
in all  other grid cells deposition is lower than the target. It could be said that these binding 
grid cells will  "drive" emission reduction demands for  one or more countries that contribute 
to deposition  over these grid  cells. As a result  of  the large geographical  area involved,  for 
each scenario a number (usually 3-6) of such binding grid cells, well spread out in the north, 

37 

south, east, west, and central parts of the EC, will occur. The primary reason being that some 
grid  cells,  because  of  the  jecosystems  they  contain,  have  lower  critical  loads  than  the 
surrounding  grid  cells in  the region.  In the optimizations performed,  the binding  grid cells 
were usually the same in the different  scenarios (except for scenario 3, with the target applied 
for thé whole of Europe) appearing in northern  Germany/Netherlands,  southeastern  Sweden 
(the  island  of  Gotland  in  the  Baltic  Sea),  eastern  Germany,  and  northern  Italy.  Although 
removing  or relaxing the deposition  target for  such binding  grid  cells would  decrease total 
abatement  costs, it does not necessarily  relieve the countries contributing to deposition over 
those  grid  cells  from  action  to  reduce  emissions.  The  reason  being  that  other,  usually 
neighbouring, grid cells, will become binding instead. 

V; 

In some circumstances the deposition/gap closure target set might not be attainable in certain 
grid  cells, which then become  "unfeasible".  For  example,  it was found  that three grid  cells 
located  on  the  border  between  northern  Finland  and  Russia  were  unfeasible  when  the 
optimization of measures was restricted to the EC only. The main problem of the exceedance 
in  this  area  was  related  to  sulphur  deposition  primarily  emanating  from  sources  in 
neighbouring areas of Russia. In all scenarios, except those including the whole of Europe in 
the  optimization,  these three  grid  squares were  deleted  from  the gap  closure  targets when 
performing  the optimization. 

Again, for the purpose of sensitivity  analysis, two additional  optimizations were done: One 
excluding the binding grid on the island of Gotland in the Baltic Sea, and another excluding 
the binding grid in northern Italy. 

The first case resulted in higher  S02 emissions in Sweden, with the side-impact that the UK 
would need to lower S02 emissions somewhat more. NOx-emissions in Germany  increased, 
while those in Belgium decreased. The overall costs for the EC remained about the same, but 
the level of ecosystem  protection  was reduced, leaving 4.6 million ha unprotected. 

The  second  case,  excluding  the  binding  grid  in  northern  Italy,  the  main  result  was  that 
emissions of all three pollutants from Italy remained at the same level as in the REF-scenario, 
with resulting cost-savings for that country. A side-effect  of that was that emissions of  S02 
in the UK and Denmark were somewhat lowered, with resulting increases in costs. The net 
result was reduced costs by about ECU 700 million. As regards ecosystem protection, for the 
EC  as  a whole  an  area  of  4.7  million  ha  remained  unprotected.  Specifically  for  Italy,  the 
unprotected area increased from  103 000 ha in the main scenario, to 246 000 ha. Some impact 
could also been noted in surrounding countries, such as Austria, where the unprotected area 
increased  as compared to the main scenario. 

38 

Table Al:  Overview of results from  REF, the main scenario, and scenarios 2-4. 

Scenario 

REF 

50%  gap 
closure 

MFR 
real 

Seen. 2 
non-EC 

Seen.  3 
whole 
Europe 

Seen.  4 
Ships 
1.5%  S 

Emission  change 
in EU 
(from  1990): 
S02 
NOx 
NH3 

Additional  costs 
for  EC, 
compared  to  REF 

(bill.  ECU/yr) 

Ecosystem  area 
unprotected  in 
EC 
(million  ha) 

-66% 
-48% 
-15% 

-84% 
-55% 
-27% 

-91% 
-69% 
-44% 

-83% 
-55% 
-26% 

-85% 
-56% 
-28% 

-83% 
-54% 
-26% 

-

7.0 

30.0 

6.1 

8.0 

5.9 

8.7 

4.5 

1.1 

4.5 

2.9 

4.7 

Table A2: Overview of results from, REF, the main scenario, and scenarios  5 and 6, 

Scenario 

REF 

50%  gap 
closure 

Seen.  5 
low-C02 

Seen.  6 
Eutro 

Emission  change 
in EU 
(from  1990): 
S02 
NOx 
NH3 

Additional  costs 
for  EC, 
compared  to  REF 

(bill.  ECU/yr) 

Ecosystem  area 
unprotected  in 
EC 
(million  ha) 

-66% 
-48% 
-15% 

-84% 
-55% 
-27% 

-85% 
-57% 
-24% 

-82% 
-59% 
-37% 

-

7.0 

2.9 

9.4 

8.7 

4.5 

4.7 

4.2 

39 

Figure  1. 

Cost-effectiveness  of scenarios. 

10 

Million 
hectares 
unprotected 

30 

40 

50 

60 

70 

80 

Total  costs (billion  ECU/year) 

40 

Explanatory  Memorandum  to  the 
Proposal  for  a 
COUNCIL  DIRECTIVE 
relating  to  a reduction  of  the  sulphur  content  of  certain  liquid  fuels 
and  amending  Directive  93/12/EEC 

1. 

Introduction 

Sulphur  is  naturally  present  both  in  coal  and  liquid  petroleum  products,  the  sulphur  being 
derived  from  the proteins present in the tissues of the plants and other organisms from  which 
coal  and  oil  are formed.  When  coal  and  liquid  petroleum  products  are combusted  (burnt) in 
power  stations,  Industry,  domestic  heating  appliances,  internal  combustion  engines  etc.,  the 
sulphur  is  oxidized  to  sulphur  dioxide  and,  in  the  absence  of  suitable  abatement  measures, 
released to the atmosphere  (see Table  1 for the relative contribution  of different  fuel  types to 
total  S02  emissions).  Sulphur  dioxide  is  one  of  the  principal  pollutants  (the  others  being 
oxides  of  nitrogen  and  ammonia)  which  cause  acidification  (acid  rain).  Sulphur  dioxide  is 
directly  toxic  to  humans  and  plants.  In  addition,  sulphur  dioxide  can  also  contribute  to  the 
formation  of  small,  suspended,  atmospheric  particles  which  are  now  recognized  to  have  a 
significant  impact  upon  human  health. 

The objective of this Directive is to reduce emissions of S02 across the European  Community 
by  placing  restrictions  on  the  sulphur  content  of  certain  liquid  fuel  products.  The  proposed 
to 
Directive 
combat  acidification  as  well  as  problems  of  air  pollution  caused  by  sulphur  dioxide  and 
particulate  matter. 

integrated  package  of  measures  designed 

is  only  one  part  of  an 

2. 

Environmental  and  human  health  impact  of  sulphur  dioxide  emissions 

2.1.  Acidification 

The  present  proposal  is  put  forward  together  with  the  Commission's  Communication  for  a 
Community  strategy  to  combat  acidification3.  As  set  out  in  that  Communication  and  on  the 
basis  of  an  extensive  analysis,  the  Commission  considers  that  the  control  of  the  sulphur 
content  of  certain  liquid  fuels  constitutes  an  integral  part  of  a  cost-effective  strategy.  The 
environmental  challenge  presented  by  acidification  as well  as  a  description  of  the  rationale 
underlying the Commission's proposed  strategy is to be found  in the Communication and will 
not be repeated here  However,  a number of issues are of critical importance in shaping  future 
policy  and  need,  therefore,  to  be  underlined. 

First  of  all,  the  nature  of  the  acidification  problem  constitutes  a  significant  challenge  to  the 
policy  maker  in that the sensitivity  of ecosystems  to acid  deposition  varies  widely  across the 
Community.  In  general,  countries  in  the  northern  part  of  the  Community  have  the  most 
sensitive  ecosystems.  However,  because  atmospheric  emissions  of  gases  such  as  sulphur 

Ref  ... 

41 

dioxide  can  be  carried  hundreds  even  thousands  of  kilometres  before  they  are  deposited,  in 
order to reduce  acidification  in  one country  it will  be necessary  to reduce  emissions  in many 
of  the  countries  across the  Community  even  in  those  countries  where  acidification  does  not 
constitute a major  environmental  problem. The Commission  proposal for  a strategy to combat 
acidification  takes into account the different  environmental  sensitivities across the Community 
as well  as the  patterns  of  emissions  and  acid  deposition.  In order  for  the  strategy  to  remain 
cost-effective,  it  is  essential  that  the  individual  measures  which  are put  forward,  even  those 
dealing  with  products,  are  responsive  to  these  regional  patterns  in  ecosystem  sensitivity, 
emissions  and  acid  deposition. 

Table  1 
Total  emissions  of  S02  in  1993  from  different  fuels 

F U EL 

Gasoline 

Kerosene 

Gasoil/Diesel 

Bunkers 

Heavy Fuel Oil 

Coal 

Refinery  Fuels 

Other 

TOTAL 

1993 Emissions of SO^ 

^ 

= 

Millions Tonnes/Year 

Percentage 

EC15 

(_09 

0.03- 

_08 

03 

2_2 

__66 

0_99 

0.38 

1535 

EC15 

06 

0.2 

7£i 

2.0 

__4 

62.9 

6_ 

2.5 

100 

The  Commission's  strategy  for  the  control  of  acidification  is  designed  to  make  significant 
progress towards the achievement of the objective set down in the Fifth Environmental  Action 
Programme  and  endorsed  once  again  by  the  Council  in  December  1995,  namely  that  the 
critical loads for  acidification  shall not be exceeded. The Commission's strategy is considered 
as representing the  least  cost  package  of  measures  necessary  to  achieve  significant  progress 
towards  meeting  the  environmental  objective. 

2.2.  Effects  on  human  health 

Sulphur  dioxide  is  directly  toxic  to  humans.  It  acts  upon  the  mucous  membranes  of  the 
mouth,  nose  and  lungs  and  its  main  impact  is  on  respiratory  function.  The  sectors  of  the 
population  most  at  risk  from  the  effects  of  sulphur  dioxide  pollution  are the  young,  the  old 
and the sick,  particularly  those  suffering  from  chronic respiratory  conditions  such  as asthma, 
bronchitis and chronic obstructive pulmonary disease.  Sulphur dioxide can, through its impact 
upon  respiratory  function,  also aggravate  cardiovascular  conditions. 

42 

In  addition  to  the  direct  effects  of  sulphur  dioxide,  there  is  also  evidence  of  indirect  effects 
due  to  the  formation  of  small  acidic  particles  resulting  from  the  interaction  of  oxides  of 
sulphur  and  small  water  droplets.  These  small  particles  are  believed  to  provoke  further 
respiratory  and  cardiovascular  problems  among  vulnerable  sectors  of  the  population. 

The Community  has, since  1980, had legislation establishing  air quality  standards for  sulphur 
dioxide and  particulate matter  (Directre  80/779/EEC on air quality  limits values for  sulphur 
dioxide and  suspended  particulates4). While a report  produced  by the Commission5  indicated 
a clear downward trend in ambient  concentrations of sulphur  dioxide and general  compliance 
with  the  air  quality  objectives  set  down  in Directive  80/779/EEC,  recent  studies  (APHEA6) 
indicate that  sulphur  dioxide  continues to cause health  problems throughout  the  Community, 
contributing  to  mortality,  morbidity  and  reduced  quality  of  life.  A  significant  proportion  of 
the inhabitants of towns and cities in the Community  are exposed to concentrations of sulphur 
dioxide  exceeding  the  latest  WHO  guidelines  for  long  term  exposure  (50ug/m3)7. 

In the light  of the recent  epidemiological  evidence on the  continuing  health  effects  and  costs 
of  sulphur  dioxide  pollution  the  Commission  is  currently  in  the  process  of  preparing  a 
proposal 
to  revise  the  air  quality  objectives  for  sulphur  dioxide  established  under 
Directive  80/779/EEC using as a basis for its proposal the most recent recommendations  from 
the WHO. 

2.3.  Damage  to vegetation  from  atmospheric  sulphur  dioxide 

In  addition  to  contributing  to  acid  deposition,  atmospheric  sulphur  dioxide  directly  affects 
vegetation  by  uptake through  parts  of the plants that  are above the ground.  Potential  effects 
include  degradation  of  chlorophyll,  reduced  photosynthesis,  raised  respiration  rates,  and 
changes in protein metabolism. The sensitivity of different  types of plants varies considerably, 
with lichens the most susceptible. The WHO has adopted  a series of guidelines for  annual and 
winter  concentrations  of  sulphur  dioxide  which  would  provide  protection  to  different  types 
of vegetation.  The Commission  is taking these guidelines  as a starting  point  in  preparing  its 
proposals  for  revised  air quality  objectives  for  sulphur  dioxide  in  pursuance  of the  objective 
set  down  in  the  Fifth  Environmental  Action  Programme  and  endorsed  once  again  by  the 
Council  in December  1995, that  "permitted  concentration  levels  of air pollutants  should  take 
into  account  the  protection  of the  environment". 

OJNoL229,  30.8.1980, p. 30. 
COM(95) 372 final: Report from the Commission on the state of implementation  of ambient 
air quality directives. 
Katsouyanni  K., Zmirou  D., Spix C,  Sunyer J.,  Schouten  JP., Ponka A., Anderson HR., Le 
Moullec Y., Wojtyniak  B., Vigotti  MA.,  Bacharova  L.  (1994).  -  Short-term  Effects  of Air 
Pollution on Health: A European Approach Using Epidemiological  Time  Series Data. - Eur 
ResirJ  1995; 8: 1030-1038. 
Draft position paper on S02 prepared in the framework  of the Commission's future  proposals 
for revised  air quality standards. Available from DG XI. 

43 

2.4.  Damage to buildings and  materials 

In  addition  to  the  damage  to  ecosystems  and  human  health,  sulphur  dioxide  pollution 
contributes to the weathering and corrosion  of buildings and building materials. Store work, 
cement, concrete and plaster are all subject to corrosion by acidifying  emissions. In particular, 
old buildings which form part of Europe's rich architectural heritage are especially susceptible 
to attack. 

2.5.  The costs of sulphur dioxide pollution 

A  number  of  studies8  9  have  been  carried  out  on  the  costs  of  sulphur  dioxide  and  other 
acidifying  emissions. Studies of this type do necessarily contain a certain level of uncertainty. 
Taking  that  into  account,  in  general,  these  studies  have tended  to  provide  relatively  good 
estimates  in  relation  to  the  economic  cost  of  the  impact  on  human  health  and 
buildings/building  materials.  However,  the  damage  to  the  structure  and  functioning  of 
ecosystems and in particular biodiversity  have not been quantified.  While the impact of  S02 
emissions varies from  region to region in relation to the population which is exposed and the 
sensitivity  of  the  environment,  it  is  estimated  that,  on  average,  the  economic  cost  of  the 
damage  resulting  from  1  tonne  of  S02  emissions  in  the  Community  is  approximately 
4000 ECU: the majority  (80+ %) of these costs being attributed to damage to human health. 

3. 

Directive 93/12/EEC 

Directive  93/12/EEC10  relating  to  the  sulphur  content  of  certain  liquid  fuels  lays  down 
concentration  limits for  sulphur  in  gas oils (0.2% by weight  as from  1 October  1994) and 
diesel fuels (0.2% by weight as from  1 October 1994 going down to 0.05% by weight as from 
1 October 1996). In Article 2 of Directive 93/12/EEC, the Commission was requested to bring 
forward,  before  1st January  1994, a report indicating the progress which  had been made in 
controlling emissions of S02 and in addition a proposal  introducing yet tighter standards for 
the sulphui  content of gas oil and diesel fuels  plus new limit values for the sulphur content 
of aviation kerosene. 

The Commission was reluctant to bring forward  proposals introducing further  restrictions on 
the sulphur content of liquid fuels until such time as these measures could be justified  in the 
context  of  a  global,  cost-effective  and  integrated  strategy  for  combatting  acidification. 
Furthermore  the  analysis  undertaken  to  support  the  Commission's  proposed  acidification 
strategy  indicates that tightening the controls on the sulphur content of gas oils and diesel 
fuels may not be the most effective way to reduce S02-emissions arising from the combustion 
of liquid fuels  and that other products, in particular heavy fuel  oils, are a far more important 
source of pollution. 

Case Study 2: Benefits of an Acidification  Strategy for the European Union. ExtemE Project, 
1996. European  Commission, DG XII, JOULE programme. 
Cost  Benefit  Analyses  of  the  Different  Municipal  Solid  Waste  Management  Systems, 
Objectives  and  Instruments  for  the  year  2000.  Carried  out  for  DG  XI  by  Coopers 
and Lybrand, Final  Report  1996. 
O J N o L 7 4,  27.3.1993, p. 81. 

10 

44 

With regard  to diesel  fuels,  the Commission  has recently  brought forward  a proposal  for  a 
Directive  relating  to  the  quality  of  petrol  and  diesel  fuels11.  In  this  proposal  the  sulphur 
content  of  diesel  fuels  is to be reduced  to  0.035% by  weight  as compared  to the value of 
0.05% as set down in Directive 93/12/EEC.  However, this reduction in sulphur content was 
motivated  more  by  the  need  to  reduce  particulate  emissions  rather  than  the  need  to 
reduce  S02. 

With  regard  to aviation  kerosene,  the  Commission  considers that  emissions  of  S02  arising 
from  this  source  make  a  very  small  contribution  to  the  problems  of  acidification  and 
atmospheric pollution. Therefore, the Commission does not, at this stage, consider it necessary 
to legislate to impose mandatory limits on the sulphur content of aviation kerosene. 

As  part  of  its  strategy  to  combat  acidification  and  to  reduce  S02 -pollution  in  cities,  the 
Commission  considers that it is cost-effective  to introduce/maintain  controls on the  sulphur 
content  of  certain  liquid  fuels  namely  heavy  fuel  oils  and  gas  oils.  A  description  of  the 
proposed  measures and their relationship to the current market  situation  is given below. 

4. 

Products to be regulated  in the this proposal 

4.1.  Heavy fuel oil 

Heavy fuel  oil is the most important source of S02 emissions arising from the combustion of 
liquid  fuels  (see Table  1). Heavy  fuel  oil  is used  in refineries,  power  stations  and industry 
with smaller quantities used for  domestic purposes and transport. 

The  consumption  and  the  average  sulphur  content  of  heavy  fuel  oil  used  in  each  of  the 
Community  countries is shown in Table 2. There are clearly  significant  differences  between 
the Member States, with Italy,  Spain, France, Greece and Ireland and to a lesser extent UK, 
Germany and Belgium showing a significant dependence on heavy fuel  oil as a source of heat 
and  power.  Furthermore,  the  estimated  average  sulphur  content  of  the heavy  fuel  oil  used 
across the Community  also show considerable variations with many Member  States having 
average figures of  1% sulphur  or  less whereas in  others  some categories  of  heavy  fuel  oil 
have average sulphur concentrations  as high as 3.5%. 

The Commission  has decided to put forward  a general limit value for the sulphur content of 
heavy fuel  oil across the Community of  1% by weight. As can be seen from  Table 7 this will 
have a significant  benefit  in terms of reducing  sulphur dioxide emissions. 

The Commission is however sensitive to need for measures to be cost-effective.  It is apparent 
that in  some regions of the Community  where air quality  objectives  with regard to sulphur 
dioxide are respected and where emissions of S02 do not contribute to any significant degree 
to problems of acidification,  that it may not be necessary to impose a strict  1% limit on the 
sulphur  content  of  heavy  fuel  oil.  In  such regions  a higher  sulphur  limit  could be allowed 
without  compromising  the  environmental  objectives.  In  such  regions  the  Commission  is 
proposing that the use of heavy fuel  oil with a sulphur content up to a limit of 2.5% should 

C0M(96) 248 final: Proposal for a European Parliament and Council Directive relating to the 
quality of petrol and diesel fuels  and amending Council Directive 93/12/EEC. 

45 

be permitted.  The reason  for  imposing  an upper limit  on  the sulphur content  of the heavy 
fuel  oils  is  to  avoid  the  "dumping"  of  heavy  fuel  oil  with  a very  high  sulphur  content  in 
regions which currently benefit from  good environmental  quality: the Commission's proposal 
should not result in the deterioration  of the environmental  quality  in these regions. 

Table 2 
Statistics  on the use and average sulphur content 
of heavy fuel  oil  in the Member States 

Total  annual  consumption^ 
in  1995  (kilotonnes) 
Includes  heavy  fuel  oil  used  in 
refineries 

Average  sulphur 
content 
(percent) 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Austria 

Portugal 

Finland 

Sweden 

^ 

1 975 

811 

7 012 

2  677 

8 222 

7 275 

1284 

(1  925) 

("} 

(811) 

(3  160) 

(102) 

(720) 

(1 215) 

(60) 

30  586 

(19  406) 

98 

1 176 

930 

3 335 

1 678 

1_930 

9 028 

(98) 

(170) 

(475) 

(339) 

(1  220) 

(1  930) 

(  ?) 

-1.0 

1.0 

1.2 

2.7 

l-3.5("*} 

2A 

-2.0 

1.53 

2.2 

0.96 

-

1.1 

03 

2.18 

United  Kingdom 
(*) 

Information  provided by Member States in Nov./Dec. 1996. 
Figures in brackets give the estimated consumption of heavy fuel  oil with a sulphur content 
of less than 1%; figures provided by Member States to DG XI in Nov ./Dec. 1996 or provided 
to DG XVII as part of the annual submission of statistics. 
Dependent upon the specific  type of heavy fuel  oil. 

(***) 

46 

The  analysis  carried  out  to  support  the  proposed  strategy  to  combat  acidification  also 
demonstrated that for  power  stations and certain industries it would be more cost-effective  to 
remove  the  S02  from  their  emissions  using  technologies  such  as  flue  gas  desulphurisation 
rather than to use low sulphur heavy fuel  oils. The Commission  is also conscious of the need 
to  avoid  any  unnecessary  overlap  between  the  current  Directive  and  the  provisions  of 
Directive  88/609/EEC12 on large combustion plants. It clearly would not make sense to require 
such  plants  to  use  1%  sulphur  heavy  fuel  oil  while  at  the  same  time  requiring  the  use  of 
sophisticated  technologies  to  remove  S02  from  their  emissions. 

In  the  light  of  the  above  considerations,  the  Commission  considers  that  all  new  (as  defined 
in  Article  2.9  of  Directive  88/609/EEC)  combustion  plants  above  a  rated  thermal  input  of 
50 Megawatt which comply with the requirements of Directive 88/609/EEC should be exempt 
from  the  requirement  to  use  heavy  fuel  oil  with  a  sulphur  content  of  1% by  weight  or less. 
With regard to all other combustion plants, the Commission considers that these plants should 
either be  required  to use  heavy  fuel  oil  with  a  sulphur  content  of  1% or  less  OR respect  an 
emission  standard  of  1700  mg  S02/m3  which  is  approximately  the  equivalent,  in  terms  of 
emissions,  of  burning  heavy  fuel  oil with  a  1% sulphur  content. 

With  regard  to the  relationship  between  this Directive  and  Directive  88/609/EEC,  it  should 
be remembered that the Commission  has already  announced its intention to bring forward  by 
the end of  1997, proposals to modify  Directive 88/609/EEC.  The provisions of this Directive 
as they  relate to  large  combustion  plants  will  need  to  be  reviewed  in  the  light  of the  future 
revision  to Directive  88/609/EEC. 

4.2.  Gas  oils 

A  limit  of  0.2%  sulphur  by weight  was  laid  down  for  gas  oils in Directive  93/12/EEC.  The 
current  consumption  and  the  average  sulphur  content  of  gas  oils  used  in  the  different 
Member  States is  shown  in  Table 3. 

indicated 

The  analysis  carried  out  to  support  the  Commission's  proposed  strategy  to  combat 
acidification 
that  for  six  Member  States  -  Belgium,  Denmark,  Germany, 
Netherlands,  Sweden and the UK - a further  reduction in the sulphur content in gas oil would 
be a cost-effective  measure. However, in France, Greece, Ireland, Italy, Luxembourg, Portugal 
and  Spain  such  a  measure  would  not  be  cost-effective.  With  regard  to  Austria  and  Finland 
both  of  these  countries  had  a  limit  value  of  0.1%  prior  to their  accession  to  the  Union  and 
under the terms of the Accession  Treaties with these countries they  are permitted to maintain 
their lower limit values during a transition  period of four years ending on 31 December  1998. 
During the period from  1  January  1995 to the end of the transition period and under the terms 
of the accession  treaties the provisions  of  Directive  93/12/EEC  as they  apply  to gas  oils  are 
to be  reviewed  in  accordance  with  EC  procedures. 

12 

OJNoL336,  7.12.1988, p. 1. 

47 

Table  3 
Statistics*"* on  the  use  and  average  sulphur  content  of  gas  oils  in  the  Member  States 

Total annual consumption 

Average sulphur content 

in  1995 (kilotonnes) 

(percent) 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Austria 

Portugal 

Finland 

Sweden 

United Kingdom 

5 623 

1  643 

34 382 

2 259 

1  650 

14 050 

1  214 

3 578 

1  594 

2 460 

900 

2 334 

- 

2 700 

3 815 

0.20 

0.20 

0.16 

027 

0.30 

0.15 

0.16 

O20 

019 

< 0.2 

information  not provided 

0.05 

0.076 

0.14 

(*) 

Information provided by Member States in Nov./Dec. 1996. 

In  the light  of the  above considerations,  the Commission  does not  consider  it  appropriate  to 
impose a sulphur limit of 0.1%  sulphur for  gas oil across the Community.  On the other hand, 
neither  is it  considered  appropriate  to oblige Member  States that  wish  to go further  than  the 
current 0.2% limit and in particular Austria and Finland, to refrain  from  doing so. For reasons 
which  are explained  in  more  detail  further  in  the text,  the  Commission  considers that  as the 
primary  motivation  for  the present  measures  is an  environmental  one, it is more  appropriate 
for  the  current  Directive  to  be  based  upon  Article  130s  of  the  Treaty.  The  Commission 
therefore  intends  to  maintain  the  current  standard  of  0.2%  sulphur  in  gas  oil  but  as  a 
minimum  standard.  Member  States  will  not  be  prevented  from  maintaining  or  introducing 
more  stringent measures  on condition that such measures are compatible with the Treaty  and 
are  notified  to  the  Commission.  Where  a Member  State  wishes  to  introduce  more  stringent 
measures  they  will  be  required  to notify  the  Commission  in  accordance  with  the  provisions 
of  Directive  83/189/EEC.  In  the  case  of  Austria  and  Finland  these  countries  will  be  able  to 
maintain  their  current  provisions  from  the  time  of  entry  into  force  of  this  Directive  in 
accordance  with  the  provisions  of  Article  130t  of  the  Treaty. 

48 

While the majority  of gas oils are used for purposes of domestic heating a certain proportion 
is used for power and heat generation in shipping. For Greece throughout its territory and for 
Spain  with  regard  to the Canary  Islands, a limit value of 0.2% sulphur in gas oils used  for 
marine  purposes  may  have  significant  economic  consequences.  Furthermore,  emissions  of 
sulphur dioxide from  shipping around mainland  Greece and the many Greek Islands as well 
as shipping in the vicinity of the Canary Islands has a minimal effect  upon human health and 
the  environment.  For  the  reasons  given  above  the  Commission  considers  it  appropriate  to 
allow  Greece for  the entirety  of its territory  and  Spain in the case of the Canary  Islands to 
have a derogation  with regard to the implementation  of the 0.2% sulphur limit for  gas oils 
used for  marine purposes. 

4.3.  Other types of liquid fuel  including  bunker fuels 

As indicated  in section 3, this Directive will not cover diesel fuels  used in road transport or 
aviation  kerosene.  Another  category  of liquid  fuel  which will,  for  the present,  be excluded 
from  the  scope  of the Directive  is  bunker  fuel.  Bunker  fuel  is used  in  ships  and  has been 
shown in the analysis underlying the Commission's  acidification  strategy  to be a  significant 
source  of  acidifying  emissions  particularly  in  the  Baltic  Sea  and  certain  parts  of  the 
North  Sea. Controlling emissions of S02 arising from  the combustion of bunker fuels would 
also be an extremely cost-effective  measure. However, although the sulphur content of bunker 
fuels is currently not subject to any international regulation, proposals to that effect  are being 
discussed  in the context  of the International  Maritime Organisation's (IMO) Convention on 
Marine  Pollution  (MARPOL).  The  MARPOL  Convention  is  currently  in  the  process  of 
revision and it is expected that the new Convention will be completed by autumn  1997. As 
part  of  the  revised  Convention  it  is  foreseen  that  certain  areas  can  be  designated  as  SOx 
sensitive areas. In such areas ships will be required to use bunker fuel  with a sulphur content 
of  1.5%  or less as compared  to the general  limit  value of 4.5% which, it  is proposed,  will 
apply elsewhere. Rather than introduce unilateral EC wide measures to limit the concentration 
of sulphur in bunker fuels, the Commission considers that it would be more effective  for the 
Community countries to pursue a common position in the current negotiations for the revision 
of the MARPOL Convention whereby the Baltic Sea and parts or all of the North Sea/English 
Channel  would  be  designated  as  SOx  sensitive  areas under  the  Convention.  Following  the 
conclusion  of  the  revision  to  the  MARPOL  Convention  the  Commission  will  review  its 
position  as to the need to include provisions for  bunker oils in this Directive. 

5. 

The European refining  industry 

The  European  Community  (15)  has  106  refineries  with  a  total  distillation  capacity  of 
13 212 833 barrels  per  day.  In  the  past,  refineries  have  been  categorized  in  three  types: 
simple, catalytic cracking and full  upgrading. 

However, these categories no longer represent the range of refineries  operational  in Europe. 
Over the last three to five years, some refiners  have upgraded their installations in response 
to tighter  product  specifications  such as the reduction  of lead in petrol  and the lowering of 
the sulphur content in gas oil and diesel  fuel. 

49 

The  currently  existing  refinery  types  are best  categorized  as  follows: 

Simple  - including  thermal  operations  &  some  vacuum  distillation 
Fluid  Catalytic  Cracking  (FCC) 
-  with  or  without  feed  pretreatment 
T with  or  without  C6-Isomerisation 
Hydrocracking 
Fluid  Catalytic  Cracking  (FCC)  and  hydrocracking 
Others  (e.g.  lube  oil  production,  etc.) 

The  refinery  type  most  common  in  Europe  is  the  fluid  catalytic  cracking  (FCC)  type  (with 
or  without  pretreatment  and  with  or  without  C6-Isomerisation  but  not  including  the 
combination  FCC  plus  Hydrocracker)  accounting  for  around  61%  of  total  atmospheric 
distillation  capacity  in  the  European  Community. 

Table 4 provides  an  overview  of European  refinery  types  and  their  percentage  share  of total 
European  distillation  capacity.  Figure  1 shows the types  of  refinery  existing  in  each  country 
and  their  total  distillation  capacity. 

Table  4 
European  refinery  types  and  their  share  of  European  distillation  capacity  (1994) 

Refinery  Type 

Simple  without thermal  or C6  Isomerization 

Simple  without  thermal  but  with  C6  Isomerization 

Simple  with thermal  but without  C6  Isomerization 

Simple  with  thermal  and  C6  Isomerization 

Hydrocracker  without  C6  Isomerisation 

Hydrocracker  with  C6  Isomerization 

FCC without  Pretreatment  or  C6  Isomerization 

FCC without  Pretreatment  but  with  C6 
Isomerisation 

FCC with  Pretreatment  but without  C6 
Isomerisation 

FCC with  Pretreatment  and  C6  Isomerization 

FCC and  Hydrocracker  without  pretreatment  or  C6 
Isomerization 

FCC and  Hydrocracker  without  Pretreatment  but 
with  C6  Isomerization 

Other 

Number  of 
Refineries 

Total 
Atmospheric 
Distillation 
Capacity  (b/cd) 

% of 
European 
Capacity  in 
Each 

18 

3 

10 

9 

7 

3  t 

19 

17 

8 

3 

4 

2 

3 

969  030 

244  000 

737  118 

696  700 

881  160 

494  000 

3  218  500 

2  793  000 

7.3% 

1.8% 

5.6% 

5.3% 

6.7% 

3.7% 

24.4% 

21.1% 

1 454  025 

11.0% 

598  300 

737  000 

4.5% 

5.6% 

390  000 

3.0% 

0 

0% 

Total  in  Europe 

106 

13 212  833 

50 

Figure 1 
European Refinery Types per Country (1994) 

18 

16  + I 

et 
S*  14 
U 
§  12 
a 
£ io 
8 
* 
« 

M r 

i Q Hydro 

Q FCC and Hydro without 

Pretreatment 

•  FCC with Pretreatment 

Q FCC without Pretreatment 

•Simple 

ÎJ 

4 

2 

Q 

It can be seen from Figure 1  that in Austria, Belgium, France, Italy, the Netherlands, the UK 
and  Spain the various types of FCC refineries  predominate.  Greece's distillation  capacity is 
divided between simple and FCC refineries however, one of the FCC refineries also has some 
hydrocracking capacity which increases its flexibility with regard to the fuel  quality changes 
required.  German  refineries  have the biggest hydrocracking  capacity  of all Member States. 
Finland has a simple and a FCC/hydrocracking  refinery.  Denmark  and Ireland only operate 
simple refineries.  Sweden's distillation capacity is nearly equally divided  between the simple 
and the FCC refinery  type. One of the latter however has some hydrocracking capacity. 

The refinery  configuration  has a major influence on the oil industry's ability to meet product 
specifications  and is the key indicator as to the technical  capacity  of an individual  refinery 
to cope with tighter  specifications  as a consequence of European environmental  legislation. 

In  general  FCC  refineries  are the  least  favoured  configuration  for  generating  low  sulphur 
products.  It  is  therefore  clear  that  the  proposed  legislation  will  constitute  a  significant 
challenge to the refining  industries in France, Belgium, Portugal, UK and Spain. 

51 

6. 

Effects  on trade 

In  order  to  produce  a  range  of  fuels  and  satisfy  local  demand  it  is  often  necessary  for  a 
refiner to trade a portion of their refinery  products. This enables refiners  to balance  refinery 
configuration  and  design  against  fuel  demand  and  the  nature  of  the  crude  oil  supply. 
Presently this trade is both between Member States and, to a lesser extent, externally to third 
parties. Indicative figures for the scale of this trade are given in Table 5 below. 

Table 5: External  trade in heavy fuel  oil EC15  1995 (Source: COMEXT2 data base) 

N.C.  Code 

Sulphur  Content 

Import 

Export 

(millions  of  tonnes) 

2710  00  74 

2710  00  76 

2710  00  77 

2710  00  78 

<  1  % 

1 - 2 % 

2  - 2.8 % 

>  2.8 % 

TOTAL 

11.662 

1.125 

2.749 

1.332 

16.868 

3.041 

0.582 

1.028 

14.151 

18.802 

Net  trade  balance  : 1.934  million  tonnes 

Trade  between  refining  operations,  product  reprocessing  and  reclassification  means  that  a 
certain amount of double counting and masking can distort trade statistics. Nevertheless, the 
Table  indicates  that  net  trade  in  these  liquid  fuels  is  small  compared  to  production  and 
consumption levels. 

Much of the substantial trade flows, both between regions of the Community  and externally 
with  third  countries,  is  a  result  of  seasonal  factors  and  quality fluctuations. Whilst  high 
sulphur fuel  oils are in general exported from the EC and low sulphur grades imported, there 
are also substantial  movements of residual  products for further  processing. 

The proposal is likely, at least in the medium term, to lead to an increase in the overall level 
of  trade  in  liquid  fuels  and  a  proportion  of  this  increase  will  be  external  trade  with  third 
countries especially  in low sulphur heavy fuel  oil. At the same time, however, the proposal 
is not expected to alter in any significant  manner the net external trade balance in liquid fuels 
as a whole. Indeed in the longer term refiners  may find that increases in the import  of low 
sulphur  heavy  fuel  oil  will  lead  to  an  increased  price  differential  between  high  and  low 
sulphur  heavy  fuel  oils,  making  investment  in  fuel  oil  upgrading  capacity  and  flue  gas 
desulphurisation  equipment more attractive. 

There is wide variation  in the sulphur content of crudes imported into the Community. The 
average sulphur content in the first quarter of  1995 was approximately  1.0%,  and indicative 
figures for  the sulphur  content  of various  crudes from  different  producer regions are given 
in Table 6. 

52 

Table 6: Indicative sulphur content  in crude oils from  different  producer regions 

Crude  oil 

Community  Imports^ 

Price^^ 

Volume 
(1  000  Barrels) 

% o f EU 
Imports 

(US$/Brl) 

Range of  percentage 
content  of Sulphur**** 

Saudi  Arabia 

Light 

Medium 

Heavy 

Berri 

Other 

Libya 

Light 

Medium 

Heavy 

Russia 

Urals 

Other 

Mexico 

Maya 

Isthmus 

Norway 

Statfjord 

Gullfaks 

Oseberg 

Ekofisk 

Other 

97  010 

11 243 

10 881 

21  564 

9  024 

36  690 

42  785 

3  889 

49  501 

46  610 

13 065 

296 

54  725 

15 067 

23  252 

29  925 

30  589 

11.4 

1.3 

1.3 

2.5 

1.1 

4.3 

5.0 

0.5 

5.8 

5.5 

1.5 

0.0 

6.5 

1.8 

2.7 

3.5 

3.6 

18.3 

17.7 

17.45 

18.61 

-

18.76 

18.68 

18.04 

18.40 

17.81 

16.54 

19.23 

18.68 

19.08 

18.89 

19.11 

18.75 

1.33  -  1.9 

2.4  - 2.41 

2.55-2.8 

1.2-  1.33 

1.1 

0.1  -0.43 

0.18-0.39 

1.8  -  1.85 

0.88  -  1.6 

0.3  -  3.7 

2.32-3.31 

n.k. 

0.2  -  0.3 

0.25  -  0.45 

0.3  -0.31 

0.17-0.2 

0.02  -  0.26 

n 
(*+) 

First Quarter  1995, data supplied by DG XVII. 
Figures taken from  April  1995, data supplied by DG XVII. 

The trade in refined  liquid fuels will to some extent lessen the impact of the Directive on the 
trade  in  crude  oils. Nevertheless,  since  reserves  of  low  sulphur  crude  oil  are  limited,  it is 
reasonable to expect the price differential  to widen between low sulphur  "sweet" crudes and 
higher  sulphur  "sour" crudes. It is also reasonable to expect imports into the Community of 
the highest sulphur crudes to decline. Table 6 indicates, however, that all the producer regions 
which presently  supply the highest sulphur crudes also supply lighter crudes nearer or at the 
current average sulphur content of  1.0%. 

53 

7. 

The Costs and the emission  reduction  benefits  of the Commission's  proposal 

The  estimated  benefits  expressed  in  terms  of  reduced  S02  emissions  resulting  from  the 
imposition  across the Community  of  1% limit  on the sulphur  content  of  heavy  fuel  oil are 
shown  in  Table  7.  The  figures  shown  in  Table  7  do  not  differentiate  between  emission 
reductions which  are directly  associated  with  the burning  of  1% sulphur  heavy  fuel  oil  as 
opposed to those reductions which result from  users either switching fuels  or installing fluè 
gas desulphurization  as alternative,  possibly  cheaper,  means to reduce their  emissions. The 
figures  shown in Table 7 also do not take into account the derogations which are foreseen  for 
certain  regions  and  as a consequence the  emission  reduction  benefits  for  countries  such as 
Greece, and Portugal are undoubtedly overestimated.  Notwithstanding these qualifications the 
introduction of the  1% sulphur limit for heavy fuel  oil will reduce S02 emissions in 2010 by 
approximately  1  million tonnes as compared to what would be the case in the absence of the 
Commission's proposal. 

Table 7: 

Estimated  emissions  of  S02  in 2010 resulting from  the burning of heavy 
fuel  oil (thousands tonnes) 

Reference/Business 
As  Usual 

With  1% Sulphur 

Difference 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

* 

Luxembourg 

Netherlands 

Austria 

Portugal 

Finland 

Sweden 

United  Kingdom 

TOTAL 

104.1 

12.0 

125.2 

79.0 

400.1 

177.1 

94.6 

500.2 

0.2 

18.2 

22.9 

74.7 

36.0 

23.6 

451.2 

2  119.0 

54.4 

10.6 

76.2 

27.4-

151.9 

63.6 

33.7 

240.7 

0.1 

17.7 

21.9 

32.4 

35.9 

23.6 

197.5 

987.6 

49.7 

1.4 

49.0 

51.6 

248.2 

113.5 

60.9 

259.5 

0.1 

0.5 

1.0 

42.3 

0.1 

~ 

253.5 

1  131.4 

The  estimated  costs  of the  Commission's  proposal  in  each  country  and  for  each  sector  are 
presented  in  Table 2 in the attached  Impact Assessment Form.  Taking account  of the costs 
and the benefits,  it is the Commission's view that the right balance has been  found. 

54 

8. 

Opinions of affected  parties 

The  impact  on  business  as  well  as  the  opinions  of  affected  parties  can  be  found  in  the 
attached  Impact Assessment Form. 

9. 

Legal base 

Emissions of sulphur dioxide contribute to problems of acidification  as well  as having both 
direct and indirect impacts upon human health (see  section 2). The motivation for  reducing 
such emissions is therefore primarily an environmental one. Reducing the sulphur content of 
certain  liquid  fuels  is  an  integral  part  of  a  cost  effective  package  of  measures  designed 
to  reduce  emissions  of  S02  to  levels  compatible  with  the  attainment  of  ambitious 
environmental  objectives with regard to both acid deposition  and air quality targets for  S02 
and particulate matter. 

In developing  cost-effective  strategies to combat  acidification  and  atmospheric pollution,  it 
is  also  necessary  to  take  account  of  the  nature  of  the  environmental  problem  under 
consideration.  With regard  to acidification,  there are marked  differences  in  the sensitivities 
of the  ecosystems throughout  the  Community.  This means that  the  deposition  of the  same 
amount of acidifying  substances may have severe consequences for example in the soils and 
lakes of Sweden whereas it may have a negligible impact on the well buffered  soils of Spain 
or  Portugal.  Acidifying  emissions  are  also  carried  hundreds/thousands  of  kilometres  by 
prevailing  winds  to  cause  damage  far  away  from  their  point  of  origin.  A  cost  effective 
strategy must take these considerations into account. The analysis carried out to support the 
Commission's  strategy  to  combat  acidification  and  which  takes  into  account  inter  alia 
differences  in ecosystem  sensitivity, regional patterns in emissions and deposition as well as 
cost effectiveness,  has demonstrated  that controls on the sulphur content of liquid fuels will 
be  cost  effective  in  some  countries/regions  but  not  in  others.  If  considerations  of  cost 
effectiveness,  which have been an integral part of building the strategy, are to be retained it 
is essential that the legislative measures which are put forward to implement the strategy are 
flexible  and responsive to the spatial complexity of the environmental phenomena which are 
being addressed. 

The above considerations which  put the emphasis  on the environmental  objectives  and the 
need for flexibility would clearly  argue in favour  of using Article  130s of the Treaty  as the 
legal base. However, consideration must also be given to the rules of the internal market: the 
possibility  allowed  by  Article  130t,  that  Member  States  adopt  more  stringent  protective 
measures, does not exonerate those measures from  the obligation  of being compatible with 
the Treaty, that is to say, inter alia, justified  and proportional. The proposal indeed  foresees 
that where a Member State wishes to introduce more stringent measures they will be required 
to  notify  the  Commission  in  accordance  with  the  provisions  of  Directive  83/189/EEC. 
Moreover, the Commission notes incidentally that the nature (type of product, monetary value, 
method of trading, etc.) of the product is such that the flexibility permitted  cannot result in 
severe disruption in the market with  significant  economic dis-benefits.  In the case of heavy 
fuel  oil and gas oil there is no evidence that the existence of a restricted number of  different 
national  standards  would  have  negative  economic  consequences.  Indeed,  the  opposite  is 
probably  true,  in  that  variations  in  the  market  place  will  allow  the  refining  Industry  the 
opportunity  to blend  and mix their products  such that the high  sulphur fuels  can be sold in 
regions  or  to  industries  which  benefit  from  the  various  derogations  allowed  under  the 

55 

Directive whereas the low sulphur products will be sold to those regions and industries which 
due  to  their  location  contribute  significantly  to  environmental  problems.  Finally,  the 
establishment  of  national  programmes  for  the  sampling  and  analysis  of  the  fuel  products 
covered by the Directive and as foreseen  in Article 6, will ensure that control  of compliance 
will be carried out on the fuels as they are used rather than at the border, thereby minimizing 
any disruptive effects  on trade. 

Finally,  it  should  be  borne  in  mind  that  an  act  based  on  Article  130s  allows  Austria  and 
Finland to continue with the limit value of 0.1% which  was in place before  their accession 
and which they are currently allowed to maimain during a four-year transition period ending 
in December  1998. 

In conclusion,  given that: 

(a) 

the primary  motivation  for the measure is environmental; 

(b) 

(c) 

the  nature  of  the  environmental  problems  to  be  addressed  demands  a  flexible  and 
spatially  differentiated  response; 

there is no evidence that the existence of different  sulphur limit values for gas oil and 
heavy  fuel  oil  in  different  countries  and  regions  in  the  Community  would  cause 
significant  market disruption  or economic  dis-benefits; 

the  Commission  has  decided  that  the  most  appropriate  legal  base  for  this  Directive  is 
Article  130s of the Treaty. 

.. 

10.  Need for  action at the level  of the Community  subsidiarity 

10.1.  What  are  the  objectives  of  the  action  envisaged 

in  relation  to  the 

Community's  obligations? 

The  proposed  measure  is  an  integral  part  of  a  cost-effective  strategy  designed  to 
combat  acidification  as  well  as  reducing  atmospheric  pollution  by  sulphur  dioxide  and 
particulate matter. 

Acidification  is a major  environmental  challenge. It is transboundary  in nature and requires 
a Community-wide strategy in order to bring about improvement. Actions taken by individual 
Member  States  acting  alone  will,  in  the  absence  of  complementary  actions  taken  in  other 
Member  States, have, at most, a minimal impact. 

In the Fifth  Environmental  Action Programme, the objective  in relation to acidification  was 
"no exceeding ever of critical  loads and levels". This objective was endorsed once again by 
the  Environment  Council  meeting  in  December  1995.  At  this  Council  meeting  the 
Commission  was requested to come forward,  by the beginning  of  1997, with a Community 
strategy  to  combat  acidification  and  aimed  ultimately  at  no exceeding  of the critical  loads 
and levels. 

56 

The Commission  has now put forward  its strategy to combat acidification.  This proposal  is 
part of that strategy. 

With  regard  to  air  quality,  the  Community  already  has  air  quality  standards  for  sulphur 
dioxide  and  particulate  matter:  these  standards  are  currently  in  the  process  of  revision. 
Atmospheric pollution by sulphur dioxide and particulate matter contribute to respiratory and 
cardiovascular  diseases  among  sensitive  sectors  of  the  population.  Sulphur  dioxide 
concentrations  also  have  direct  effects  on  the  environment.  Significant  reductions  in  the 
emissions of sulphur dioxide will be necessary to achieve satisfactory  air quality with respect 
to  sulphur  dioxide  and  particulate  matter  (sulphur  dioxide  contributes  to  the  formation  of 
sulphates  which  in  turn  contribute to  the  formation  of  secondary  particulate  matter  in the 
atmosphere). The reduction of S02 emissions arising from the combustion of liquid fuels and 
which result from the introduction of the present proposal will make a significant  contribution 
towards the attainment of satisfactory  air quality  objectives. 

Combatting acidification and improving air quality are part of the Community's environmental 
policy, as set out in Article  130r of the Treaty. In addition, Article  129 of the Treaty  foresees 
that  health  protection  shall  form  a  constituent  part  of  the  Community's  other  policies. 
Furthermore, Article 3(o) of the treaty also foresees that activities of the Community should 
include a contribution to the attainment  of a high level  of health  protection. 

10.2.  Is the action  envisaged  an exclusive competence of the Community  or a shared 

competence with the Member States? 

The  Community  has  a  general  competence  to  adopt  measures  in  order  to  achieve  the 
environmental  objectives  referred  to in Article  130r. 

The  proposal  for  a  Community  strategy  for  combatting  acidification  which  was  recently 
adopted  by the Commission  quantifies  the emission  reductions which  must be achieved by 
each Member State in order to achieve the environmental  objective. The emission reductions 
are to be achieved in a cost-effective  manner and this will require an integrated  package of 
interlocking and mutually reinforcing  measures.  Some of these measures should be taken at 
the  level  of  the  Community  such  as the present  proposal  and  the  forthcoming  revision  to 
Directive 88/609/EEC on the limitation  of  emissions of certain pollutants into the air from 
large  combustion  plants.  Other  measures  such  as the  negotiation  of  emission  ceilings with 
industry sectors or sub-sectors will be done at the national level. In addition further measures 
will need to be taken in international  fora  such as the International  Maritime Organisation's 
Convention on Marine Pollution and the UN ECE Convention on Long-Range Transboundary 
Air Pollution. 

With regard to the attainment of air quality objectives this will also require concerted action. 
Measures such as the present proposal will be taken at the level  of the Community  whereas 
others such as local fuel  standards, fiscal incentives for low sulphur fuels  and local  emission 
management plans will be taken  at the national, regional  or local level. 

Taken  together,  the  concerted  actions  taken  at  different  levels,  will  achieve  the  emission 
reductions necessary to reduce acidification  and to achieve satisfactory  air quality while at the 
same time fully  respecting the principles of cost-effectiveness  and  subsidiarity. 

57 

10.3.  What is the Community  dimension  to the problem? What solution  has been in 

force  until now? 

Acidification  is a transboundary problem which can best be tackled by concerted action at the 
level of the Community. Simila/ly, atmospheric pollution is an environmental challenge which 
demands concerted  action. 

In  the  absence  of  a  Community  strategy  with regard  to  acidification,  measures  have,, until 
now, tended to be introduced in a rather ad-hoc fashion. Community legislation does exist for 
the  control  of  emissions  from  combustion  plants  (Directive  88/609/EEC)  and  limiting  the 
sulphur content of certain liquid fuels (Directive 93/12/EEC). The Commission's proposal for 
a Community strategy to combat acidification provides a clear framework for the development 
of future  policy instruments. 

10.4.  What is the most effective  solution, comparing the means of the Member States 

and the Community? 

The  analysis  carried  out by  the  Commission  to  support  the  development  of  a  Community 
strategy  to  combat  acidification,  clearly  identified  control  of the sulphur  content  of  certain 
liquid  fuels  as an integral  part of a cost-effective  strategy to reduce acidifying  emissions. 

10.5.  What  is  the  added  value  brought  about  by  the  action  envisaged  to  the 

Community  and what would  be the cost of inaction? 

The economic consequences of acidification  and air pollution are significant  (see section 2). 
Unilateral  action  taken  by  one  Member  State  acting  alone  will  not  be  successful  in  the 
absence of complementary  action being taken in other Member States, indeed in the absence 
of  a clear  strategy  and  concerted  action  Member  States risk to  take  mutually  antagonistic 
actions. The implementation  of an integrated  Community  strategy  is a means to ensure that 
the environmental  objectives will be secured  in an effective  manner.  A clear strategy based 
upon  principles of  cost-effectiveness  and burden  sharing  and with  a clear  definition  of the 
roles of the Community  and the Member States is an advantage to Industry  in that it allows 
long-term  investment  and  planning  on the basis  of  a rationale  and transparent  approach  to 
environmental  policy  development. 

The costs of the proposal are estimated at ECU 0.8 billion/year. This achieves a reduction of 
1113 ktonnes S02 compared to no further  action beyond business as usual at an average cost 
of around ECU 700 per tonne of S02. Studies suggest that the benefits might, in as far as they 
have been monetarized, be as high as ECU 4 000/ton  S02. 

10.6.  What actions are available to the Community? 

The purpose  of the action  is to reduce the emissions  of  sulphur  dioxide resulting from  the 
combustion  of  certain  liquid  fuels.  The  means .which  has  been  identified  to  achieve  this 
objective  is the establishment  of limit values for the sulphur content  of certain  liquid  fuels. 
The establishment  of limit values is best achieved by Regulation  or Directive. 

58 

10.7.  Is uniform  regulation necessary or is a Directive setting out the general  principles 

leaving the  detailed  execution  to  the  Member  States  enough? 

The  imposition  across  the  Community  of  general  limits  on  the  concentration  of  sulphur  in 
certain  liquid  fuels  is  a  cost-effective  measure  for  reducing  emissions  of  sulphur  dioxide 
arising  from  the  combustion  of  such  fuels.  The  cost-effectiveness  of  the  measure  is 
considerably  improved particularly  in the case of heavy fuel  oil (see section  4.1 ) by building 
in flexibility to allow for the diversity  of environmental  conditions across the Community  and 
the fact  that installations may  chose to use alternative technologies to reduce  sulphur  dioxide 
emissions. 

An  assessment  of  the  environmental  conditions  which  prevail  in  different  regions  of  the 
Community  and the  permitting  of  industrial  installations  can be  carried  out  most  effectively 
by the authorities  in the  different  Member  States in cooperation  ,where appropriate,  with  the 
regional  and  local  authorities.  In  addition,  the monitoring  and  control  of the  quality  of  fuels 
used  in the  Community  can  also be  carried  out  effectively  by  the  national  authorities. 

For  the  reasons  given  above  the  Commission  considers  that  a  Directive,  rather  than  a 
Regulation  is  the  most  appropriate  choice  of  legal  instrument.  In  particular,  the  extensive 
involvement  of  the  national  authorities  and  the  considerable  discretion  allowed  to  those 
authorities  will  ensure the  most  cost-effective  implementation  of  the  foreseen  measures. 

11. 

Description  of  the  legislative  situation  in  the  Member  States 

11.1.  Gas  oil 

With  regard  to  gas  oil  all  Member  States  with  the  exception  of  Austria  and  Finland  are 
required to comply with the limit value of 0.2% laid down in Directive 93/12/EEC. In Austria 
and  Finland  a limit  value  of  0.1%  sulphur  in  gas  oil  is  currently  in  force. 

11.2.  Heavy  fuel  oil 

With  regard  to heavy  fuel  oil  the  current  situation  in the Member  States is  as  follows: 

Austria 

A general  limit of  1% sulphur in heavy fuel  oil is in force.  However, more severe  restrictions 
(0.2%, 0.3% and 0.6% sulphur content) exist in relation to combustion  plants dependent upon 
their  age  and  capacity. 

Belgium 

There  are  three  different  types  of  heavy  fuel  oil  recognized  under  Belgian  legislation. 
Different  sulphur  limits of  1%, 2% and 3% are applied  to the three types of  fuel.  In  1995, it 
is estimated  that  approximately  1 925  kilotonnes  of heavy  fuel  oil  with  a  sulphur  content  of 
less than  or equal  to  1% were used  as compared  to  only  51 kilotonnes  of fuel  with  a  sulphur 
content  greater  than  1%.  Tax  incentives  are  also  offered  to  encourage  the  use  of  low 
sulphur  fuels. 

59 

Denmark 

A limit of  1% is imposed  on the sulphur content of heavy fuel  oils. In addition  a charge of 
DKK  10 per  kilogram  is  applied  to  S02  emissions  in  order  to  encourage  the  use  of  low 
sulphur  fuels. 

Finland 

The sulphur content of heavy fuel  oils is limited to 1%. 

France 

Three different types of heavy fuel oil are recognized under French legislation. Three different 
sulphur limits are applied to each type -  1%, 2% and 4%. In  1995 it is estimated that  1215 
kilotonnes of the  1% sulphur fuel  were used as compared to  1 162 and 2 608 kilotonnes of 
the  2% and  4% sulphur  fuels  respectively.  A further  2 290  kilotonnes  of heavy  fuel  oil of 
undefined  sulphur content were used in  refineries. 

Germany 

For combustion plants with a capacity of greater than  1  Megawatt, either the sulphur content 
of  the  heavy  fuel  oil  used  must  be  limited  to  1% or the  S02  emissions  must be less than 
1700 mg per cubic metre of flue gas. 

Greece 

The sulphur content of heavy fuel  oils is generally  limited to 3.2%. However in the Athens 
(Attica) area a limit of 0.7% applies. 

Ireland 

There  are  no  legal  limits  in  force  with  regard  to  the  sulphur  content  of  heavy  fuel  oils. 
However,  certain  industries  must comply with  S02  emission  limits which  are equivalent  to 
using heavy fuel  oil with a  1% sulphur limit. 

Italy 

Within the industrial  sector,  combustion  plants with  an output  of 3 Megawatts or less must 
use fuel  with  a sulphur content of  0.3% or less. Plants with  a capacity  of 50 Megawatts or 
greater  and  refineries  can use fuel  with  a sulphur  content  up to  3% on condition  that they 
respect defined  emission limits. 

Luxembourg 

There are no limit values applied to the sulphur content of heavy fuel  oil 

60 

Netherlands 

Combustion  plants  in  the  industrial  sector  (excluding  refineries)  must  either  use  heavy  fuel 
oil  with  a  sulphur  limit  of  1%  or  respect  an  emission  standard  for  S02  of  1 700  mg  per 
cubic  metre  of  flue  gas.The  refining  industry  has a general  emission  limit  of  1 500  mg  S02 
per  cubic  metre  of  flue  gas  taken  across the  whole  Industry.  No  limit  values  with  regard  to 
the  sulphur  content  of  heavy  fuel  oils  are  imposed  on  the  refining  Industry. 

Portugal 

Four  different  types  of heavy  fuel  oil  are recognized  under Portuguese  legislation.  Different 
sulphur  limits  -  1%,  2%,  3% and  3.5% are  applied  to  the  different  types  of  fuel. 

Spain 

There  are  two  different  types  of  heavy  fuel  oil  with  sulphur  limits  of  2.7%  and  3.5%. 

Sweden 

For  the  majority  of  Swedish  territory  emission  standards  are  imposed  such  that  the  sulphur 
emissions  arising  from  the  combustion  of  different  fuel  types  must  not  exceed: 

(i) 

50mgS/MJ  (yearly  average)  if  the  total  emissions  of  sulphur  exceed  400  tonnes 
per  annum; 

(ii) 

100mgS/MJ  (yearly  average)  if  the total  sulphur  emissions  are less  than  400  tonnes. 

These  limit  values  are  valid  for  all  boilers  together  within  one  district  heating  system  or 
industrial  site.  These  emission  standards  compare  to  a  sulphur  limit  value  in  heavy  fuel  oil 
of 0.2%  and  0.4%  respectively.  In certain  regions  of  Sweden,  a sulphur  limit  of  0.8% or the 
equivalent  in  sulphur  emissions  applies. 

In  addition  to the use  of  emission  standards,  Sweden* also  imposes  a  sulphur  tax  of  SEK  27 
per  cubic  metre  of  fuel  per  0.1% sulphur  content. 

United  Kingdom 

There  are  currently  no  limits  imposed  on the  sulphur  content  of  heavy  fuel  oil. 

12. 

Explanation  of  the  detailed  provisions  of  the  proposal 

12.1.  The  purpose  and  scope  of  the  Directive  (Article  1) 

The  purpose  of  the  proposal  is  to  reduce  emissions  of  S02  arising  from  the  combustion  of 
certain  liquid  fuels.  This  objective  is  to  be  achieved  by  controlling  the  sulphur  content  of 
certain  liquid  fuels. 

61 

The proposal  does  not apply  to fuel  contained  in the  fuel  tanks  of vessels crossing  a  frontier 
between  a third  country  and  a Member  State. The proposal  does not cover fuels  intended  for 
processing  in  the  refining  Industry. 

12.2.  Definitions  (Article  2) 

The  definitions  of  the various  fuels  are  compatible  with  definitions  given  in  other  pieces  of 
Community  legislation. 

12.3.  Maximum  content  of  sulphur  in  heavy  fuel  oil  (Article  3) 

A general  limit  of  1% for  the  sulphur  content  of heavy  fuel  oil  is proposed.  Derogations  are 
provided  for  countries  or regions where  S02  emissions  do  not  contribute to human  health  or 
environmental  problems. Derogations  are also provided  for  new combustion  plants which  are 
covered  by  Directive  88/609/EEC  and  for  other  combustion  plants  which  respect  an 
S02  emission  standard  which 
fuel  oil  with  a  1% 
sulphur  concentration. 

to  using  heavy 

is  equivalent 

12.4.  Maximum  content  of  sulphur  in  gas  oil  (Article  4) 

The current  limit value  of 0.2%  sulphur  as laid  down  in Directive  93/12/EEC  is  maintained. 
Derogations  are provided  for  Greece  and for  the  Canary  Islands with  regard  to gas  oils used 
for  marine  purposes. 

12.5.  Changes  in  the  supply  of  crude  oil  (Article  5) 

In order to avoid problems caused by a sudden change in the supply of crude oil or petroleum 
products,  the  Commission  can  authorize  a  higher  limit  value  for  the  sulphur  content  of  the 
different  fuel  types  for  a  period  not  exceeding  six  months. 

12.6.  Sampling  and  analysis  (Article  6) 

Procedures  for  sampling  and  analysis  are  outlined. 

12.7.  Reporting  and  review  (Article  7) 

Member  States will  be required  each  year to submit to the Commission  a short  report  on the 
sulphur  content  of  liquid  fuels  marketed  in  their  territory.  On  the basis  of these  reports  and 
the observed  trends in air  quality  and  acidification,  the  Commission  will  by  the  end  of  2003 
submit  a  report  to  Council.  This  report  will  if  appropriate  be  accompanied  by  proposals  to 
revise  the  provisions  of  the  Directive. 

12.8.  Repeal  of  the  existing  Directive  (Article  8) 

All  relevant  provisions  of  Directive  93/12/EEC  as they  relate to  gas  oils  will  be  taken  over 
by the  present  proposal.  The provisions  of Directive  93/12/EEC  must  therefore  be  repealed. 

12.9.  Transposition/sanctions/entry  into  force  (Articles  9,  10  and  11) 

These  Articles  contain  standard  provisions. 

62 

Proposal  for  a 
COUNCIL  DIRECTIVE 
relating  to  a reduction  of  the  sulphur  content  of  certain  liquid  fuels 
and  amending  Directive  93/12/EC 

97/0105  (SYN) 

THE  COUNCIL  OF  THE  EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130s(l)  thereof, 

Having  regard  to the  proposal  from  the  Commission13, 

Having  regard  to the  Opinion  of  the  Economic  and  Social  Committee14, 

Acting  in  accordance  with  the  procedure  laid  down  in  Article  189c  of  the  Treaty  in 
cooperation  with  the European  Parliament, 

(1)  Whereas the objectives  and principles of the Community's environmental  policy as set 
out  in  the  action  programmes  on  the  environment  and  in  particular  the  fifth 
Environmental Action Programme15 on the basis of principles enshrined in Article  130r 
of  the  Treaty,  aim  in  particular  to  ensure  the  effective  protection  of  all  people  from 
the  recognized  risks  from  sulphur  dioxide  emissions  and  to  protect  the  environment 
by  preventing  sulphur  deposition  exceeding  critical  loads  and  levels; 

(2)  Whereas Article  129 of the Treaty provides that health  protection  requirements  are to 
form  a constituent part of the Community's other policies; whereas Article 3(o) of the 
Treaty also provides that the activities of the Community  should include a contribution 
to the  attainment  of  a high  level  of  health  protection; 

(3)  Whereas  emissions  of  sulphur  dioxide  contribute  significantly  to  the  problem  of 
acidification  in  the  Community;  whereas  sulphur  dioxide  also  has  a  direct  effect  on 
human  health  and  on  the  environment; 

(4)  Whereas acidification  and  atmospheric  sulphur  dioxide damage  sensitive  ecosystems, 
reduce  biodiversity  and  reduce  amenity  value  as well  as  detrimentally  affecting  crop 
production  and  the  growth  of  forests;  whereas  acid  rain  falling  in  cities  may  cause 
significant  damage to buildings and the architectural heritage; whereas sulphur dioxide 
pollution  may  also  have  a  significant  effect  upon  human  health,  particularly  among 
those  sectors  of the  population  suffering  from  respiratory  diseases; 

(5)  Whereas  acidification  is a transboundary  phenomenon  requiring  Community  as  well 

as national  or  local  solutions; 

13 
14 
15 

OJ No C 
. OJNoC 
OJNoC  138, 17.5.1993, p. 5. 

63 

(6)  Whereas emissions of sulphur dioxide contribute to the formation  of particulate matter 

in  the  atmosphere; 

(7)  Whereas the  Community  and  the individual  Member  States  are contracting  parties to 
the UN ECE Convention on Long-Range Transboundary  Air Pollution; whereas under 
the  protocol  on  further  reduction  of  sulphur  emissions  established  under  that 
convention,  contracting  parties  should  make  significant  reductions  in  emissions  of 
sulphur  dioxide; 

(8)  Whereas  sulphur  which  is naturally  present  in  small  quantities in  oil  and  coal  has  for 
decades  been  recognized  as the  dominant  source  of  sulphur  dioxide  emissions  which 
are  one  of  the  main  causes  of  "acid  rain"  and  one  of  the  major  causes  of  the  air 
pollution  experienced  in  many  urban  and  industrial  areas; 

(9)  Whereas 

the  Commission  has  recently  published  a  Communication16  on  a 
cost-effective  strategy  to combat acidification  in the Community; whereas the control 
of  sulphur  dioxide  emissions  originating  from  the  combustion  of  certain  liquid  fuels 
was  identified  as being  an  integral  component  of  this  cost-effective  strategy; 

(10)  Whereas,  in  conformity  with  the  principle  of  subsidiarity  and  the  principle  of 
proportionality  referred  to  in  Article  3b  of  the  Treaty,  the  objective  of  reducing  the 
emissions  of  sulphur  dioxide  arising  from  the  combustion  of  certain  types  of  liquid 
fuels cannot be achieved effectively  by Member States acting individually and whereas 
unconcerted  action  offers  no  guarantee  of  achieving  the  desired  objective,  is 
potentially  counterproductive  and will  result in considerable uncertainty in the market 
for  the  fuel  products  affected  and  whereas,  in  view  of  the  need  to  reduce 
sulphur  dioxide  emissions  across  the  Community,  it  is  more  effective  to  take  action 
at  the  level  of  the  Community;  whereas  this  Directive  limits  itself  to  the  minimum 
requirements  necessary  to  achieve the  desired  objective; 

(11)  Whereas,  it  should  only  be  possible  to  use  gas  oils  and  heavy  fuel  oils  within  the 
territory  of  the  Community  on  condition  that  their  sulphur  content  does  not  exceed 
certain  limits  set  out  in  this  Directive; 

(12)  Whereas,  in  accordance  with  Article  130t  of  the  Treaty,  this  Directive  should  not 
prevent  any Member  State from  maintaining  or introducing  more stringent  protective 
measures  and whereas  such  measures must be compatible with the  Treaty  and  should 
be notified  to  the  Commission; 

(13)  Whereas  a  Member  State,  before  introducing  new,  more  stringent  protective 
measures,  should  notify  the  draft  measures  to  the  Commission  in  accordance  with 
Council  Directive  83/189/EEC  of  28  March  198317,  as 
last  amended  by 
Directive  96/139/EC18,  laying  down  a  procedure  for  the  provision  of  information  in 
the  field  of  technical  standards  and  regulations; 

O J N oC 
OJNoL  109, 26.4.1983, p. 8. 
OJNoL32,  10.2.1996, p.  31. 

64 

(14)  Whereas,  with  regard  to  the  limit  on  the  sulphur  content  of  heavy  fuel  oil,  it  is 
appropriate  to  provide  for  derogations  in  Member  States  and  regions  where  the 
environmental  conditions  allow; 

(15)  Whereas,  with  regard  to  the  limit  on  the  sulphur  content  of  heavy  fuel  oil,  it  is  also 
appropriate to provide for derogations for their use in combustion plants which comply 
with  the  emission  limit  values  laid  down  in  Council  Directive  88/609/EEC  of 
24 November  198819 on  the  limitation  of  emissions  of  certain  pollutants  into  the  air 
from  large  combustion  plants,  °s  last  amended  by  Directive  94/66/EC20;  whereas  in 
the light  of the forthcoming  revision  of Directive  88/609/EEC,  it will  be necessary  to 
review  and,  if  appropriate,  to  revise  certain  provisions  of  this  Directive; 

(16)  Whereas  a  limit  value  of  0.2%  for  the  sulphur  content  of  gas  oils  has  already  been 
established  under  Council  Directive  93/12/EEC  of  23  March  1993  relating  to  the 
sulphur  content  of  certain  liquid  fuels21,  as  amended  by  the  Act  of  Accession 
of  Austria,  Finland  and  Sweden;  whereas  that  limit  value  should  continue  to  be 
generally  applicable; 

(17)  Whereas,  in  accordance  with  the  Act  of  Accession  of  Austria,  Finland  and  Sweden, 
Austria  and  Finland  have  a  derogation  for  a  period  of  four  years  from  the  date  of 
accession  regarding  the  provisions  in  Directive  93/12/EEC  concerning  the  sulphur 
content  of  gas  oil; 

(18)  Whereas  the  limit  value  of  0.2%  for  the  sulphur  content  of  gas  oils  intended  for 
marine  use  in  sea-going  ships  may  present  technical  and  economic  problems  for 
Greece  throughout  its  territory  and  for  Spain  with  regard  to  the  Canary  Islands; 
whereas  a  derogation  for  Greece  and  the  Canary  Islands  should  not  have  a  negative 
effect  upon  the  market  in  gas  oil  intended  for  marine  use  and  given  that  exports  of 
gas  oil  for  marine  use  from  Greece  and  the  Canary  Islands  to  other  Member  States 
should  satisfy  the  requirements  in  force  in  the  importing  Member  State;  whereas 
Greece  and  the  Canary  Islands  should  be  afforded  a  derogation  from  the  limit  value 
of  0.2%  sulphur  by  weight  for  gas  oil  used  for  marine  purposes; 

(19)  Whereas  in  the  case  of  a  disruption  in  the  supply  of  crude  oil  or  petroleum 
products,  the  Commission  may  authorize  application  of  a  higher  limit  within  a 
Member  State's  territory; 

(20)  Whereas Member  States  should  establish  the  appropriate  mechanisms  for  monitoring 
compliance  with  the  provisions  of  this  Directive;  whereas  regular  reports  on  the 
sulphur  content  of  liquid  fuels  should  be  submitted  to the  Commission; 

(21)  Whereas,  for  reasons  of  clarity,  it will  be  necessary  to  amend  Directive  93/12/EEC; 

19 

20 

21 

OJNoL336,  7.12.1988, p. 1. 
OJNoL337,  24.12.1994, p. 83. 
OJNoL74,  27.3.1993, p.  81. 

65 

HAS  ADOPTED  THIS  DIRECTIVE: 

Article  1 
Purpose  and  scope 

1. 

2. 

The  purpose  of  this Directive  is to  reduce the  emissions  of  sulphur  dioxide  resulting 
from  the combustion of certain types of liquid  fuels  and thereby to reduce the  harmful 
effects  of  such  emissions  on  man  and  the  environment. 

Reductions  in  the  emissions  of  sulphur  dioxide  resulting  from  the  combustion  of 
certain  petroleum-derived  liquid  fuels  shall  be  achieved  by  imposing  limits  on  the 
sulphur  content  of  such  fuels  as  a  condition  for  their  use  within  the  territory  of 
the  Community. 

The limitations on the sulphur content of certain petroleum-derived  liquid fuels as laid 
down  in  this Directive  shall  not,  however,  apply  to  fuels: 

(a) 

contained 
in  the  fuel 
third  country  and  a Member  State; 

tanks  of  vessels  crossing  a  frontier  between  a 

(b) 

intended  for  processing  prior  to  final  combustion; 

(c) 

used  for  processing  in  the  refining  industry. 

Article  2 
Definitions 

For  the  purpose  of this  Directive: 

1. 

2. 

fuel  oi!"  means  any  petroleum-derived 

falling  under 
"Heavy 
CN  code  2710  00  71 to  2710  00  78 or  any  petroleum-derived  liquid  fuel  (other  than 
gas oil as defined  in point 2) which, by reason of its distillation  limits, falls within the 
category  of heavy oils intended for use as fuel  and of which  less than 65% by volume 
(including  losses)  distils  at  250°  C  by  the  ASTM  D86  method. 
If  the  distillation 
cannot  be  determined  by  the  ASTM  D86  method,  the  petroleum  product  is  likewise 
categorized  as a heavy  fuel  oil. 

liquid 

fuel 

"Gas oil" means any petroleum-derived  liquid fuel  falling  under CN code 2710  00  69 
or  any  petroleum-derived  liquid  fuel  which,  by  reason  of  its  distillation  limits,  falls 
within the category  of middle  distillates intended  for use as fuel  and of which at least 
85%  by  volume  (including  losses),  distils  at  350'  C  by  the  ASTM  D86  method. 
Diesel  fuels  as defined  in  Article 2(2)  of European  Parliament  and  Council  Directive 
[relating  to  the  quality  of  petrol  and  diesel  fuels]  are  excluded  from 

22 

this  definition. 

22 

OJ No L 

66 

3. 

1. 

2. 

3. 

4. 

5. 

The term  "ASTM method" means the methods laid down by the American  Society  for 
Testing and Materials in the  1976 edition of standard definitions  and specifications  for 
petroleum  and  lubricating  products. 

Article  3 
Maximum  sulphur  content  of  heavy  fuel  oil 

Member  States  shall  take  all  necessary  steps  to  ensure  that  as  from  1 January  2000 
within  their  territory  heavy  fuel  oils  cannot  be  used  if  their  sulphur  content  exceeds 
1.0%  by  weight. 

that 

in 
the  air  quality  standards  for  sulphur  dioxide 
Provided 
Council  Directive  80/779/EEC23  and  other  relevant  Community  provisions  are 
respected and the contribution to transboundary pollution is negligible, a Member State 
may authorize heavy fuel  oils with a sulphur content between  1.0  and 2.5% by weight 
to be used  in  part  or the  whole  of  its  territory. 

laid  down 

Paragraphs  1 and  2  shall  not  apply  to heavy  fuel  oils used  in  combustion  plants with 
a rated thermal  input equal to or greater than  50 MW which are considered  new plants 
in  accordance  with  the  definition  given  in  Article  2.9  of  Directive  88/609/EEC  and 
which  comply  with  the  sulphur  dioxide  emission  limits  for  such  plants  set  out  in 
Article  4  of  and  Annex  IV  to that  Directive. 

Paragraphs  1 and 2  shall  not  apply  to heavy  fuel  oils used  in  combustion  plants  and 
industrial  cement  plants  other  than  those  mentioned  above,  if  the  emissions  of 
sulphur  dioxide  from  the  plant  are less than  or  equal  to  1700  mg  S02/Nm3. 

Member  States shall  take the necessary  measures to ensure that any  combustion  plant 
using  heavy  fuel  oil  with  a  sulphur  concentration  greater  than  that  referred  to  in 
paragraph  1 shall  not  be  operated  without  a  permit  issued  by  a  competent  authority 
which  specifies  the  emission  limits. 

The  provisions  of  paragraph  3  shall  be  reviewed  and,  if  appropriate,  revised  in  the 
light  of  any  future  revision  of Directive  88/609/EEC. 

If  a Member  State avails itself  of the possibilities  referred  to in  paragraphs  2 or  3, it 
shall,  at  least  12  months  beforehand,  inform  the  Commission  and  the  public.  The 
Commission  shall  be  given  sufficient  information  to  assess  whether  the  criteria 
mentioned  in  paragraphs  2  or  3 respectively  are  met.  The  Commission  shall  inform 
the  other  Member  States.  Within  six  months  of  the  date  on  which  it  receives  the 
information  from  the  Member  State,  the  Commission  shall  examine  the  measures 
envisaged  to ensure that they  comply with this Directive and with other provisions of 
Community  law  and  shall  communicate  its  decision  to the Member  States. 

23 

OJNoL229,  30.8.1980, p. 30. 

67 

Article 4 
Maximum  sulphur content in gas oil 

1.  Member  States  shall  take all  necessary  steps to ensure that as from  1 January  1999 
within their territory and waters, gas oils, including gas oils for marine use, cannot be 
used if their  sulphur content exceeds 0.2 % by weight. 

2. 

By way  of derogation  from  paragraph  1, Spain,  for the Canary Islands, and Greece, 
for the whole or part of its territory, may authorize the use of gas oils for marine use 
with a sulphur content in excess of 0.2 % by weight. 

Article 5 
Change in the supply  of crude oil 

If,  as a result of a sudden change in the supply of crude oil or petroleum products, it becomes 
difficult  for  a Member State to apply the limits on the maximum  sulphur content referred to 
in Articles 3 and 4, that Member State shall inform the Commission thereof. The Commission 
may authorize a higher limit to be applicable within the territory  of that Member State for a 
period  not  exceeding  six  months  and  shall  notify  its  decision  to  the  Council  and  the 
Member  States. Any Member State may refer that decision to the Council within one month. 
The  Council,  acting  by  a  qualified  majority,  may  adopt  a  different  decision  within 
two months. 

Article 6 
Sampling and analysis 

1.  Member States shall take all necessary measures to check by sampling that the sulphur 
content  of  fuels  used  comply  with  Articles  3 and 4.  The  sampling  shall  commence 
within  six  months  of  the  date  on  which  the  relevant  limit  for  maximum  sulphur 
content in the fuel  comes into force.  It shall be carried out with  sufficient  frequency 
and in such a way that the samples are representative of the fuel  examined. 

2. 

The  reference  method  adopted  for  determining  the  sulphur  content  shall  be  that 
defined  by: 

(a) 
(b) 

ISO method  8754 (1992) for  heavy fuel  oil and marine diesel oil; 
ISO method 4260 (1987) for  gas oil. 

The statistical  interpretation  of the verification  of the sulphur content of the gas oils 
used shall be carried out in accordance with ISO standard 4259 (1992). 

Article 7 
Reporting and review 

1. 

On the basis of the results of the sampling and analysis carried out in accordance with 
Article 6, Member States shall by 30 June of each year supply the Commission with 
a short report on the sulphur content of the liquid fuels falling within the scope of this 
Directive and used within their territory  during the proceeding calendar year. 

68 

2. 

On the basis inter alia  of the annual  reports submitted  in accordance with paragraph  1 
and  the  observed  trends  in  air  quality  and  acidification,  the  Commission  shall,  by 
31 December 2003, submit a report to the Council. The Commission  may submit with 
its report  proposals  aimed  at  revising this Directive  and  in  particular  the  limit  values 
laid  down  for  each  fuel  category  and  the exceptions  and  derogations  provided  for  in 
Article  3(2),  Article  3(3)  and  Article 4(2). 

Article  8 

Amendments  to Directive  93/12/EEC 

Directive  93/12/EEC  is  amended  as  follows: 

(1) 

In  Article  1, paragraph  1(a)  and  paragraph  2  are  deleted; 

(2) 

In  Article  2, the  first  subparagraph  of  paragraph  2  and  paragraph  3  are  deleted; 

(3) 

Articles  3 and  4  are  deleted. 

The  first  paragraph  shall  apply  as from  1 January  1999. 

Article  9 
Transposition 

1. 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions  necessary  to  comply  with  this  Directive  before  1 June  1998.  They  shall 
immediately  inform  the  Commission  thereof. 

Member  States  shall  apply  these  provisions  from  1 January  1999. 

When  Member  States  adopt  these  provisions,  these  shall  contain  a  reference  to  this 
Directive  or  shall  be  accompanied  by  such  reference  at  the  time  of  their  official 
publication.  The  procedure  for  such  reference  shall  be  adopted  by  Member  States. 

2. 

Member  States  shall  communicate  to  the  Commission  the  text  of  the  provisions  of 
national  law which  they  adopt  in the  field  covered  by  this  Directive. 

Article  10 
Sanctions 

Member  States  shall  lay  down  the  system  of  penalties  for  breaching  the  national  provisions 
adopted  pursuant  to  this  Directive  and  shall  take  all  the  measures  necessary  to  ensure  that 
those  penalties  are applied.  The  penalties  thus  provided  for  shall  be  effective,  proportionate 
and  dissuasive.  Member  States shall  notify  the relevant provisions to the Commission  before 
1  June  1998  and  shall  notify  any  subsequent  changes  as  soon  as possible. 

69 

Article 11 
Entry  into force 

This Directive shall enter into force  on the twentieth  day following  that of its publication in 
the Official Journal of the European  Communities. 

Article 12 
Addressees 

This Directive is addressed to the Member States. 

Done at Brussels, 

For the Council 
The President 

70 

IMPACT ASSESSMENT FORM 

The Impact of the Proposal  on Business with  Special  Reference to 
Small and Medium-Sized  Enterprises (SMEs) 

TITLE OF THE PROPOSAL 

Proposal  for  a  Council  Directive  relating  to  a  reduction  of  the  sulphur  content  of  certain 
liquid fuels  and amending Directive 93/12/EC 

Reference Number (Repertoire): 

1. 

TAKING  INTO ACCOUNT  THE PRINCIPLE  OF  SUBSIDIARITY,  WHY IS 
COMMUNITY  LEGISLATION  NECESSARY  IN  THIS  AREA  AND  WHAT 
ARE ITS MAIN AIMS? 

The Commission has recently brought forward,  following the request of the Council, 
a  proposal  for  a  Community  strategy  to  combat  acidification24.  This  strategy  has 
identified  the  need  for  concerted  and  cost-effective  actions  to  reduce  emissions  of 
acidifying  pollutants  such as sulphur dioxide, oxides of nitrogen  and  ammonia.  The 
strategy identified  a number of  measures to be taken at the level of the Community, 
at national  and local  level  and in  international  fora.  Controls of the sulphur content 
of certain  liquid fuels  are an integral part of the strategy. 

In addition to the need for  reducing emissions of sulphur dioxide in order to combat 
acidification,  sulphur  dioxide also has significant  effects  on human health  and upon 
the corrosion of buildings and building materials. The Community has established air 
quality  objectives  in  relation  to  sulphur  dioxide  (Directive  80/779/EEC)  and  the 
Commission  is  currently  in  the  process  of  preparing  proposals  to  make  these  air 
quality  objectives  more  severe.  Reducing  emissions  of  sulphur  dioxide through  the 
control of the sulphur content of certain liquid fuels, will be an important contribution 
towards the attainment of the new air quality guidelines and will produce  significant 
benefits  for the environment  and human health. 

The proposal  does not cover all categories of liquid fuel.  The existing sulphur limits 
for  gas  oils  established  under  Directive  93/12/EEC  are  maintained.  The  most 
significant new element in the proposal concerns the introduction of a general sulphur 
limit of  1% (with extensive exemptions) for  heavy fuel  oils. 

24 

Réf.... 

71 

2.  WHO WILL BE AFFECTED BY THE PROPOSAL? 

-  Which sectors of industry? 

The major sector of industry to be affected  will be the refining industry which will 
be required to produce heavy fuel  oil with a lower sulphur content. Oil traders will 
also be  affected. 

The major  users of heavy fuel  oil are power stations, refineries  and industry with 
smaller quantities being used for  domestic and transport  purposes. It is clear that 
the price of heavy  fuel  oil with a low sulphur content will  increase although the 
extensive  derogations  allowed  for  in  the  proposal  will  mitigate  these  costs  in 
many areas. 

-  Which sizes of business? 

Oil  refining  companies  are  large  often  multi-national  concerns.  Oil  trading 
companies may  be small/medium  sized  enterprises.  Power generation  companies 
are also large concerns. The users of heavy fuel  oil in industry and transport will 
be a mixture of large, medium  and small enterprises. 

-  Are  there  particular  geographical  areas  of  the  Community  where  these 

businesses are found? 

The businesses which produce and use heavy fuel  oils are distributed throughout 
the Community.  However, in many Member  States the sulphur content  of heavy 
fuel  oil  is  already  at  or  around  the  limit  of  1%  proposed  by  the  Commission 
(see Table 1). Where the economic impact of the proposal will be felt mosc keenly 
is in those Member States where the sulphur content of heavy fuel  oil is currently 
quite high and where consumption of this type of fuel  is also high for example in 
France, Greece, Ireland, Italy, Portugal, Spain and the United Kingdom. However, 
many of these countries will be able to benefit  from  the derogation which allows 
Member  States to permit the use of heavy  fuel  oil with  a higher  sulphur content 
in those parts of their territory  which do not  suffer  from  problems of air quality 
and  which do not contribute significantly  to problems of  acidification. 

3.  WHAT  WILL  BUSINESS  HAVE  TO  DO  TO  COMPLY  WITH 

THE PROPOSAL? 

Some refineries will have to change their refinery  processes, install new process units 
and/or  undertake  blending  operations  in  order  to  achieve  he  changes  in  sulphur 
content. The technology used to reduce the sulphur content of heavy fuel  oils are all 
currently  available and proven technologies. 

Refineries  will  also be able to go some way to reducing the sulphur content of their 
products  by  changing  their  crude  oil  supply  towards  crudes  with  a  lower  sulphur 
content. In general North  Sea crudes tend to be lower in sulphur content than crudes 
originating in the middle east. 

72 

With regard to the users of heavy fuel  oils they will be required to ensure that the fuel 
oil used by them  conforms  to the sulphur limit of 1%. 

WHICH ECONOMIC EFFECTS IS THE PROPOSAL LIKELY TO HAVE? 

-  On employment  and investment  and the creation of new businesses 

In those countries where the sulphur content of heavy fuel  oil is already around the 
1%  limit  proposed  by  the  Commission  the  economic  consequences  will  be 
minimal.  However,  in  those  countries  where  a  significant  drop  in  the  sulphur 
content  of  heavy  fuel  oil  will  be  necessary  (see  Table  1)  the  economic 
consequences  for  the  refining  industry  will  be  more  severe.  The  degree  of 
investment  which  will  be  required  will  be  heavily  dependent  upon  the  current 
configuration  of the  refining  industry  in  each  country.  In  particular,  in  France, 
UK,  Spain and Portugal  where the majority  of the refinery  capacity  is based on 
Fluid  Catalytic  Cracking  (a technology  which  is poorly  adapted  to  dealing with 
demands  for  a low  sulphur  product)  considerable  investment  will  be necessary. 
Given the current over-capacity in the European refining industry and the very low 
operating  margins  it  is  not  excluded  that  the  proposals  will  precipitate  some 
restructuring  in  the  Industry  with  consequent  job 
losses.  However,  the 
Commission's  proposals  will  not  on  their  own  lead  to  such  changes  only  when 
taken together with other pressures on the industry. 

The investment in the new plant required for refineries to produce the low sulphur 
product  will  produce  increased  revenue  for  companies  which  manufacture  and 
install  such  plant.  This  will  undoubtedly  give  rise  to  increased  employment 
opportunities in these industries. 

The  increased  production  costs  for  refineries  will  probably  be  passed  on to the 
users of heavy fuel  oil. In Table 2 the estimated additional costs for each industrial 
sector in each country are given. It is clear that there will be significant  differences 
in  the  addtional  costs  faced  by  industrial  sectors  in  different  parts  of  the 
Community  if they  continue to use heavy  fuel  oil  for  heat and power.  However, 
a very  strong trend  over previous years  has been the  shift  away  from  solid and 
liquid  fuels  to gas. The present proposal  will reinforce  that trend. 

-  On the competitiveness  of business 

As explained  above,  the  impact  on  the  refining  industry  will  vary  considerably 
from  country  to  country.  While  the  competitiveness  of  some  refineries  may  be 
negatively  affected  others  which  are  already  equipped  with  the  appropriate 
technology, will have a competitive advantage. Taken as a whole it is considered 
that their will be a minor negative impact on the competitiveness of the European 
refining  industry. 

With  regard  to  the  users  of  heavy  fuel  oil  it  is  not  considered  that  their 
competitivity  will be affected  significantly  by the proposal. 

73 

5. 

DOES THE PROPOSAL CONTAIN MEASURES TO TAKE INTO ACCOUNT 
THE  SPECIFIC  SITUATION  OF  SMALL  AND  MEDIUM-SIZED  FIRMS 
(REDUCED OR DIFFERENT REQUIREMENTS, ETC)? 

Given  that  the  major  impact  of  the  proposals  will  be  on  the  refining  industry  and 
given that the impact upon the users of heavy fuel  oil will  not be significant,  it was 
not considered  necessary  to introduce special  provisions for SMEs. 

6. 

CONSULTATION 

During the course of  1996 and  1997 the Commission  held three meetings (29 May, 
31 October,  and  16 January) with the Member  States, Industry and NGOs to discuss 
the  proposed  strategy  for  combatting  acidification  and  the  associated  legislative 
proposals.  Bilateral  discussions  have  also  been  held  with  UNICE,  EUROPIA  and 
EURELECTRIC.  The  following  is  a  summary  of  the  positions  of  the  Industry 
organisations  as  expressed  at  the  last  meeting  held  on  16  January  1997  and  in 
correspondence exchanged  subsequent to that meeting. 

UNICE (the employers organisation  representing European  industry)  representatives 
expressed  the view that given  the uncertainty  associated  with  the model  predictions 
concerning acidification  and the considerable progress which had already been made 
to reduce acidifying emissions, it was premature to pursue further emission reductions, 
including  the  present  proposal,  before  having  a  clearer  appreciation  of  the 
environmental  improvements which would be achieved by already  agreed measures. 

The Commission considers that the views expressed by UNICE are incompatible with 
the  request  made  by  the  Council  to  come  forward  with  a  Community  strategy  to 
combat acidification  by the beginning of  1997. Furthermore,  while recognizing that 
there  will  be  a  degree  of  uncertainty  associated  with  all  model  predictions  the 
Commission is confident  that the RAINS model which has been used to underpin its 
acidification  strategy  and  associated  proposals  is  a  solid  basis  upon  which  to base 
policy.  Finally,  the  Commission  considers  that  in  the  case  of  environmental 
phenomena such as acidification  which are well documented and understood that the 
precautionary principle contained in the Treaty precludes the " wait and see" approach 
which is seemingly  favoured  by UNICE. 

EURELECTRIC,  (the  organisation  representing  European  electricity  suppliers) 
expressed concerns with regard to the balance of the emission reductions which would 
be  required  as  a  consequence  of  the  Commission's  proposed  strategy  to  combat 
acidification.  In  particular,  this  organisation  felt  that  the  emission  reductions  for 
sulphur  dioxide were too  ambitious.  Such  a conclusion  obviously  places a question 
mark  against  the  present  proposal  which  is  aimed  at  reducing  sulphur  dioxide 
emissions.  In  correspondence  EURELECTRIC  have  also  expressed  the  view  that 
revision  of 
the present  proposal  should  be 
Directive 88/609/EEC  on the emissions from  Large Combustion Plants. 

incorporated 

the  future 

into 

The  Commission  considers  that  the  assessment  from  EURELECTRIC  is  flawed. 
Indeed  the  Dutch  studies  which  are  cited  by  this  organisation  as  evidence  that  the 
emission  reductions  for  sulphur  dioxide  are  too  high  was  directed  at  resolving  a 

74 

regard 

situation  in  the Netherlands  rather than  a Community  wide  transboundary  problem. 
With 
and 
Directive  88/609/EEC and future revisions to that Directive, the Commission considers 
that the derogations and cross-references included  in the present proposal will ensure 
the necessary  level  of coherence. 

the  present  proposal 

relationship  between 

the 

to 

EUROPIA  (the  organization  representing  the  European  petroleum 
industry) 
representatives expressed reservations with regard to the reliability of the models upon 
which the Commission had based its proposed strategy  to combat acidification.  This 
organization  also  cautioned  against  a  piecemeal  approach  to  the  problem  of 
acidification  which 
the  related  problems  of  eutrophication  and 
tropospheric  ozone. 

ignored 

With regard to the present proposal,  EUROPIA  considers that heavy  fuel  oil  used in 
refineries  should  be  excluded  from  the  scope  of  the  Directive.  Secondly  this 
organization considers that Member States should be given more freedom with regard 
to the application of the derogations foreseen under Article 3.2 and 3.3. In particular, 
EUROPIA argued against the imposition of a  ceiling on the sulphur content of heavy 
fue1  oil  in  areas benefitting  from the derogation  foreseen  under Article 3.2. 

The Commission's position with regard to the reliability of the models used to support 
its policy has already been given in relation the observations made by UNICE (above). 
The Commission policy  on acidification  also takes account of tropospheric ozone and 
eutrophication.  The present proposal does provide for a derogation for fuels destined 
for processing in refineries. However, fuels burnt by refineries as a source of heat and 
power in their production processes generate polluting emissions in the same way  as 
any production process and there is no reason why the refining Industry should receive 
special  treatment  as  compared  to  other  industrial  sectors.  The  issue  of  the  sulphur 
ceiling  imposed  under Article  3.2  of the proposal  is  dealt with  in  section  4.1  of the 
explanatory  memorandum. 

The  European  Cement  Organization  were  concerned  to  ensure  that  the  derogation 
foreseen  under Article  3.3  of the proposal  with respect to heavy  fuel  oil  would  also 
apply  to plant in cement factories. 

The  proposal  from  the  Commission  provides  the  safeguards  requested  by  the 
cement  manufacturers. 

75 

Table  1 

Statistics0  on  the  use  and  average  sulphur  content  of  heavy  fuel  oil  in 
the  Member  States 

Total  annual  consumption 
in  1995  (kilotonnes) 

Average  sulphur  content 
(percent) 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Austria 

Portugal 

Finland 

Sweden 

United  Kingdom 

1 976 

811 

7 012 

2  677 

8 222 

7 275 

1 284 

30  586 

1 176 

930 

1 678 

1 930 

9  028 

(*}  Information provided by Member States in Nov./Dec. 1996. 
(  *  Dependent upon the specific  type of heavy fuel oil. 

~L0 

-1.0 

1.2 

2.7 

l-3.5("> 

2A 

-2.0 

JL53 

2.2 

096 

U 

03 

118 

. 

76 

The  incremental  costs  by  country  and  by  industrial  sector  associated  with  the  introduction  of 
a  1% sulphur  limit  for  heavy  fuel  oil  (million  ECU/year) 

Table  2 

Country/Sector 

Refineries  & 
oth.  conv. 

Other 
industry 

Domestic 

Transport 

Power  Plant 

Total 

Belgium 

Denmark 

Germany 

Greece 

Spain 

France 

Ireland 

Italy 

Luxembourg 

Netherlands 

Austria 

Portugal 

Finland 

Sweden 

United  Kingdom 

19.1 

0.5 

17.5 

5.1 

44.0 

37.1 

0.5 

11.3 

0.0 

0.0 

0.0 

4.6 

0.0 

0.0 

9.2 

0.0 

0.0 

25.4 

2.3 

74.0 

27.4 

16.5 

20.1 

0.1 

0.2 

0.0 

21.3 

0.0 

0.0 

8.4 

Sum 

148.9 

195.8 

7.1 

0.4 

0.1 

0.6 

18.4 

6.4 

3.3 

0.1 

0.0 

0.0 

0.0 

3.0 

0.0 

0.0 

35.3 

74.8 

9.1 

0.0 

0.0 

16.2 

20.7 

0.0 

0.0 

0.0 

0.0 

0.0 

0.0 

0.3 

0.0 

0.0 

2.5 

48.8 

2.1 

0.4 

0.2 

11.0 

21.0 

1.9 

19.5 

68.0 

0.0 

0.2 

0.5 

4.3 

0.0 

0.0 

162.2 

291.1 

37.4 

1.2 

43.3 

35.1 

178.1 

72.7 

39.9 

99.6 

0.1 

0.4 

0.5 

33.6 

0.0 

0.0 

217.5 

759.4 

The estimated costs are based on the assumption that power plants and large boilers in industry and in  refineries 
will, whenever it is cheaper, use flue gas desulphurization rather than low sulphur fuel oil. The figures do not 
take account of the fact that the Directive also allows for derogations in those regions where air quality standards 
for  S02 are respected and where emissions do not contribute significantly  to  acidification. 

77 

Explanatory  Memorandum  to the 
Proposal  for a 
COUNCIL DECISION 
on the conclusion  by the European Community  of the Protocol  to the 1979 
Convention  on long-range  transboundary  air pollution  on further  reductions of 
sulphur emissions 

On the basis of the Council Decision of 9 June 1994, the Community signed on 14 June 1994 
in  Oslo the Protocol  to the  1979 Convention  on long-range  transboundary  air pollution  on 
further  reduction  of sulphur emissions. 

The Community  has been a Party to the Convention  since  19.82. On 28 September  1984 the 
Community signed and on  17 July  1986 approved the Protocol on long-term financing of the 
cooperative  programme  for  monitoring  and  evaluation  of  the  long-range  transmission  of 
air pollutants  in Europe  (EMEP).  The Community  acceded  to the Protocol  concerning the 
control  of emissions of nitrogen oxides or their transboundary  fluxes on  17 December  1993 
and  signed the Protocol  concerning  the control  of emissions  of volatile organic  compounds 
or their transboundary fluxes on 2 April  1992. A proposal for a Council Decision concerning 
the approval  of the latter Protocol  is submitted  separately. 

The aim  of  the Protocol  on  further  reduction  of  sulphur  emissions  is to  reduce  the annual 
sulphur emissions  of  the  Parties,  to  establish  emission  limit  values  and  to  ensure  that 
depositions of oxidized sulphur compounds in the long term do not exceed critical loads. The 
Fifth  Environmental  Action  Programme  of  the  Community  stipulates  a  similar  long-term 
target. 

The aim of the Protocol  therefore  coincides with the objectives  of Community policy in the 
field of environment as provided in Article  130r of the Treaty. The approval of the Protocol 
will  contribute to the achievement  of these objectives. 

In the field of Community  legislation, several Directives specifically  address the question of 
sulphur  emissions.  Among  the  most  recent  legislation,  Council  Directive  96/61/EC  of 
24 September  1996 concerning integrated pollution prevention and control is also applicable 
to  sulphur  emissions  from  major  stationary  combustion  sources.  The  recently  adopted 
acidification  strategy  of  the  Commission  foresees  a  particularly  broad  range  of  measures 
which  seeks to cut back sulphur emissions from  various sources. 

The  measures  foreseen  in  the  Protocol  represent  environmental  policy  instruments.  The 
proposal for a Council Decision is therefore based on Article  130r(4) in conjunction  with the 
first sentence of Article 228(2) and the first subparagraph  of Article 228(3) of the Treaty. 

78 

Proposal  for a 
COUNCIL  DECISION 
on the conclusion  by the European Community  of the Protocol  to the  1979  Convention on 
long-range  transboundary  air pollution  on further reductions  of  sulphur  emissions 

97/0107  (CNS) 

THE COUNCIL  OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  130r(4)  in  conjunction  with  the  first  sentence  of  Article  228(2)  and  the  first 
subparagraph  of  Article 223(3)  thereof, 

Having  regard to the poposal  from  the Commission25, 

Having  regard to the Opinion  of  the European Parliament26, 

Whereas the Community signed in Olso on 14 June 1994 the Protocol to the 1979 Convention 
on  long-range  transboundary  air  pollution  on  further  reductions  of  sulphur  emissions 
(hereinafter  "the Protocol"); 

Whereas  the  Protocol  seeks  to  establish  ceilings  for  sulphur  emissions  for  all  contracting 
parties to the Convention; 

Whereas  the  measures  envisaged  in  the  Protocol  contribute  to  achieving  objectives  of  the 
Community  policy  on the environment; 

Whereas  the  Community  and  the  Member  States  cooperate,  in  the  framework  of  their 
respective  competences,  with third countries and the competent international  organizations; 

Whereas,  in consequence,  the Community  should approve the  said Protocol, 

HAS  ADOPTED  THIS DECISION. 

Article 1 

The  Protocol  to  the  1979  Convention  on  long-range  transboundary  air pollution  on  further 
reductions  of  sulphur  emissions,  signed  on  14 June  1994,  is  hereby  approved  on  behalf  of 
the Community. 

The text  of the Protocol  is  attached to this Decision. 

25 
26 

OJ No C 
OJ No C 

79 

Article  2 

The President of the Council  is hereby  authorized to designate the person entitled to deposit 
the instruments of approval  with the Secretary  General  of the United Nations, in accordance 
with Article  14 of the Protocol. 

This Decision  will  be published  in the Official Journal of the European  Communities. 

Article 3 

Done  at Brussels, 

For the Council 
The President 

80 

ISSN 0254-1475 

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