Communication from the Commission - Progress towards achieving the Kyoto objectives (required under Decision 280/2004/EC of the European Parliament and of the Council concerning a mechanism for monitoring Community greenhouse gas emissions and for implementing the Kyoto Protocol) {SEC(2007)1576}
Date: 2007-11-27
Institutions: European Commission
Subjects: EU environmental policy, climate change, greenhouse gas, pollution control, reduction of gas emissions, report, tradeable emission permit

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.11.2007 
COM(2007) 757 final 

COMMUNICATION FROM THE COMMISSION 

PROGRESS TOWARDS ACHIEVING THE KYOTO OBJECTIVES  

(required under Decision 280/2004/EC of the European Parliament and of the Council 
concerning a mechanism for monitoring Community greenhouse gas emissions and for 
implementing the Kyoto Protocol) 

{SEC(2007)1576} 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

SUMMARY ................................................................................................................. 3 

ACTUAL PROGRESS 1990-2005 .............................................................................. 5 

GHG emission trends ................................................................................................... 5 

Per capita emissions and GHG intensities in 2005 ...................................................... 6 

GHG emissions in 2005 compared to 2004 ................................................................. 7 

Emission trends in the main economic sectors ............................................................ 8 

PROJECTED PROGRESS TOWARDS MEETING THE KYOTO TARGET ........ 10 

3.1. 

Projections by Member States.................................................................................... 10 

3.1.1.  EU-27 ......................................................................................................................... 10 

3.1.2.  EU-15 ......................................................................................................................... 10 

3.1.3.  EU-12 ......................................................................................................................... 10 

3.1.4.  Candidate countries.................................................................................................... 11 

3.2. 

3.3. 

Implementation of the European Climate Change Programme (ECCP).................... 13 

Implementation of the EU Emissions Trading Scheme (EU ETS) ............................ 14 

3.3.1.  First trading period (2005 to 2007) ............................................................................ 14 

3.3.2.  Second trading period (2008 to 2012)........................................................................ 14 

3.3.3.  Use of JI and CDM by operators................................................................................ 14 

3.4. 

3.5. 

Projected use of Kyoto mechanisms by government ................................................. 14 

Projected use of carbon sinks..................................................................................... 15 

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1. 

SUMMARY 

Under  the  Kyoto  Protocol,  the  European  Community  (EC)  has  agreed  to  reduce  its 
greenhouse gas (GHG) emissions by 8% by 2008–12 compared to base year levels1. Based on 
the  latest  available  inventory  data  of  20052,  total  GHG  emissions  in  the  EU-15  were  2% 
below  base  year3  levels  when  excluding  Land  Use,  Land  Use  Change  and  Forestry 
(LULUCF). In 2005, EU-15 GHG emissions decreased by 0.8% compared to 2004 while the 
EU-15 economy grew by 1.6%.  

Projections4 as shown in Figure 1 indicate that the Community will reach its Kyoto target on 
the condition that MS put in place and implement as soon as possible their additional policies 
and measures (for details see Tables 1, 2 and 3 in the Annex). In this respect a significant step 
has  been  made  with  the  recent  decisions  on  the  National  Allocation  Plans  (NAP)  under  the 
EU Emissions Trading Scheme (ETS) for the period 2008-2012 which will bring an estimated 
emission reduction of 3.4% for the EU-15 and 2.6% for the EU-255 compared to base year. 
These estimated reductions are, as yet, not accounted for in the projections.  

1 

2 

3 

4 
5 

In  the  Council  decision  (2002/358/EC)  on  the  approval  by  the  EU  of  the  Kyoto  Protocol  the  various 
commitments of the Member States are expressed as percentage changes from the base-year. In 2006 
the respective emission levels were expressed in terms of tonnes of CO2-equivalent in the Commission 
Decision 2006/944/EC. In connection with Council decision 2002/358/EC, the Council of Environment 
Ministers  and  the  Commission  have,  in  a  joint  statement,  agreed  to  take  into  account  inter  alia  the 
assumptions in Denmark’s statement to the Council Conclusions of 16–17 June 1998 relating to base-
year emissions in 2006. In 2006, it was decided to postpone a decision on this until after all community 
and MS initial reports have been reviewed under the Kyoto Protocol. 
Under the EU monitoring mechanism decision (Decision 280/2004), all MS submitted GHG inventories 
for  2005  except  for  Malta.  All  reporting  MS  submitted  all  or  almost  all  Common  Reporting  Format 
(CRF) tables (i.e., more than 90 %) for 1990–2005. 
For  EU-15  the  base  year  for  carbon  dioxide,  methane  and  nitrous  oxide  is  1990;  for  the  fluorinated 
gases 12 Member States have selected 1995 as the base year, whereas Austria, France and Italy have 
chosen 1990. As the EU-15 inventory is the sum of Member States’ inventories, the EU-15 base year 
estimates for fluorinated gas emissions are the sum of 1995 emissions for 12 Member States and 1990 
emissions  for  Austria,  France  and  Italy.  The  EU-15  base  year  emissions  also  include  emissions  from 
deforestation for the Netherlands, Portugal and the UK. 
Based on Member State (MS) submissions until May 31st. 
Due to Bulgaria's and Romania's recent accession to the EU, the notified emissions for 2005 have not 
been independently verified.  

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Figure 1: Actual and projected emissions for EU-15  

5000

4500

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4000

EU-15 emissions

EU-15 existing measures

EU-15 additional
measures
EU-15 target (Kyoto)

Business as usual

Linear target path

Kyoto mechanisms

Carbon sinks

3500

0
9
9
1

5
9
9
1

0
0
0
2

5
0
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2

0
1
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2

By  2010,  three  MS  out  of  the  EU-15,  Germany,  Sweden  and  the  United  Kingdom,  are 
currently projected to be on track to achieve their targets using only existing domestic policies 
and  measures.  In  addition,  8  MS  are  projected  to  reach  their  targets  when  the  effect  of  the 
Kyoto  mechanisms,  carbon  sinks  and  additional  domestic  policies  and  measures,  that  are 
already  being  discussed,  are  accounted  for.  According  to  this  analysis,  Denmark,  Italy,  and 
Spain appear not to be able to achieve their Kyoto target. However, it should be noted that this 
analysis does not yet fully include the potential effect of the recent Commission decisions on 
the  NAPs  on  2008-2012  emissions.  Furthermore,  it  does  not  include  the  effect  of 
supplementary actions that most of these MS have recently identified or are in the process of 
identifying  in  order  to  reach  their  Kyoto  target6,7.  Such  measures,  however,  must  be 
introduced swiftly for them to be effective. 

Total EU-27 GHG emissions were, in 2005, 11% below base year level without emissions and 
removals by LULUCF and 0.7% lower compared to 2004. EU-27 economy grew by 1.8% in 
2005. 

Despite the fact that in most of the EU-12 MS, emissions are projected to increase between 
2005 and 2010, 9 of them that have a Kyoto target but are not part of the EU-15 bubble are 
projected to meet or even over-comply with their Kyoto targets using only existing domestic 
policies  and  measures.  Slovenia  projects  that  it  will  meet  its  Kyoto  target  with  planned 
additional policies and measures, the use of Kyoto mechanisms and carbon sinks.  

6 

7 

According  to  Denmark’s  NAP  for  the  period  2008-12  and  additional  information  submitted  to  the 
Commission,  Denmark  will  reach  its  target  by  initiating  new  national  climate  initiatives  and  through 
state purchases of JI/CDM credits. 
Spain  established  in  the  NAP2,  a  compliance  strategy  that  included  the  identification  of  additional 
reduction measures to fill the gap. A part of these measures is included in a Plan of Urgent Measures 
against Climate Change which will be implemented during 2007.  

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In spring 2007, the European Council endorsed the EU's independent commitment to reduce 
GHG  emissions  by  at  least  20%  by  2020  compared  to  1990  levels  even  if  no  international 
agreement is reached. The EU would be prepared to increase this reduction to 30%, provided 
that  such  an  agreement  would  indeed  materialize.  Figure  2  illustrates  the  significant  gap 
between  MS  projections  for  2020  and  the  EU's  2020  targets  requiring  the  EU  to  get  onto  a 
much steeper emission reduction path after 2012 as compared to 1990-2012. This underlines 
the need for the EU and its MS to put as soon as possible the necessary legislation in place to 
implement  all  the  new  policies  and  measures  identified  in  the  climate  change  and  energy 
package. The Commission will put forward legislative proposals by the end of 2007 including 
the EU ETS review, renewables targets, emission reduction measures for sectors outside the 
EU ETS, a regulatory framework for carbon capture and geological storage, CO2 and cars. 

Figure 2: Actual and projected emissions for EU-27 

6000.00

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EU-27 emissions

EU-27 existing measures

EU-27 additional measures

EU-27 2020 projection

Primes-GAINS baseline projection

EU-27 20% target by 2020

EU-27 30% target by 2020

1990

1995

2000

2005

Year

2010

2015

2020

2. 

ACTUAL PROGRESS 1990-2005 

2.1. 

GHG emission trends  

The overall EC GHG emission trend is dominated by the two largest emitters Germany and 
the United Kingdom accounting for about one third of the total EU-27 GHG emissions. These 
2 MS have achieved total GHG emission reductions of 340 million tonnes CO2 eq. compared 
to 1990. 

The main reasons for the favourable trend in Germany are increasing efficiency in power and 
heating  plants  and  the  economic  restructuring  of  the  five  new  Länder  after  the  German 
reunification.  The  reduction  of  GHG  emissions  in  the  United  Kingdom  was  primarily  the 
result of liberalising energy markets and the subsequent fuel switches from oil and coal to gas 
in electricity production and N2O emission reduction measures in the adipic acid production. 

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Italy  and  France  are  the  third  and  fourth  largest  emitters  both  with  a  share  of  11 %.  Italy’s 
GHG emissions were about 12% above 1990 levels in 2005. Italian GHG emissions increased 
since 1990 primarily from road transport, electricity and heat production and petrol-refining. 
France’s  emissions  were  2 %  below  1990  levels  in  2005.  In  France,  large  reductions  were 
achieved  in  N2O  emissions  from  the  adipic  acid  production,  but  CO2  emissions  from  road 
transport increased considerably between 1990 and 2005. 

Spain  and  Poland  are  the  fifth  and  sixth  largest  emitters  in  the  EU-27  each  accounting  for 
about 9 % and 8 % of total EU-27 GHG emissions respectively. Spain increased emissions by 
53 % between 1990 and 2005. This was largely due to emission increases from road transport, 
electricity  and  heat  production,  and  manufacturing  industries  largely  driven  by  significant 
population growth and economic development. Poland decreased its GHG emissions by 18 % 
between  1990  and  2005  (-32 %  since  the  base  year,  which  is  1988  in  the  case  of  Poland). 
Main factors for decreasing emissions in Poland — as for other MS in Eastern Europe — was 
the decline of energy inefficient heavy industry and the overall restructuring of the economy 
in  the  late  1980s  and  early  1990s.  The  notable  exception  was  transport,  especially  road 
transport, where emissions increased. 

In 2005, 11 MS had GHG emissions above base year levels whereas the remaining 14 MS had 
emissions below base year levels. The percentage changes of GHG emissions from the base 
year and 1990 respectively to 2005 range from -58% (Latvia) to +64% (Cyprus).  

2.2. 

Per capita emissions and GHG intensities in 2005 

EU-27  per  capita  emissions  declined  by  11.7  %  (1.4  tonne  per  capita)  between  1990  and 
2005, mainly due to a strong decrease in the early 1990s (Figure 1 in the Annex). While per 
capita emissions in the EU-27 did not change over the period 2000-2005, a slight decrease of -
1.2% occurred in the EU-15, but per capita emissions increased by 3.4% in the EU-12. While 
GHG emissions per capita converge they still are significantly different. There is a factor of 
three difference between the MS with lowest emissions per capita (Latvia, Lithuania, Portugal 
and Sweden), and those with highest per capita emissions (Luxembourg and Estonia).  

As regards GHG intensity, which reflects the amount of GHG emissions produced per unit of 
GDP, Figure 3 shows the decoupling of emissions from economic growth that was observed 
in  the  EU-27  particularly  from  1998  onwards.  This  is  due  to  the  economic  growth  of, 
primarily, the eastern European MS in the late 1990s. In the EU-27, GHG intensity between 
1990-2005  decreased  by  about  32%.  However,  the  individual  GHG  intensities  of  the 
economies of the MS can vary widely and are still quite high in some of them. In all new MS, 
except Latvia, the absolute GHG intensity in 2005 is higher than the EU-27 average.  

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Figure  3:  GHG  intensity  for  EU-15  and  EU-27,  GDP,  energy  consumption  and  CO2 
emissions for EU-15 

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0
1
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9
1
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I

160

140

120

100

80

60

40

20

0

1990

1995

2000

2005

CO2 emissions

GDP

Energy consumption

GHG/GDP EU-15

GHG/GDP EU-27

2.3. 

GHG emissions in 2005 compared to 2004 

Compared to 2004, EU-15 GHG emissions decreased by 0.8 % or 35.2 million tonnes CO2 eq. 
in 2005 and EU-27 emissions decreased by 0.7% or 37.9 million tonnes. 

Germany,  Finland,  the  Netherlands  and  Romania  contributed  most  to  the  2005  decrease  in 
absolute  terms.  Germany  reduced  its  emissions  by  2.3%  or  23.5  million  tonnes  of  CO2 
equivalents,  Finland  by  14.6%  (11.9  million  tonnes),  the  Netherlands  by  2.9%  (6.3  million 
tonnes)  and  Romania  by  4%  (6.4  million  tonnes).  Belgium,  the  Czech  Republic,  Denmark, 
Estonia, France, Luxembourg, Slovakia, Sweden and the UK also recorded falls.  

The overall decrease in 2005 EU-15 emissions was due mainly to lower CO2 emissions from 
public  electricity  and  heat  production,  households  and  services,  and  road  transport.  CO2 
emissions from public electricity and heat production fell by 0.9% mainly due to a reduction 
in  the  use  of  coal.  CO2  emissions  from  households  and  services  decreased  by  1.7%  with 
substantial falls in Germany, UK and the Netherlands. In Germany and the Netherlands this 
might  be  due  to  a  milder  than  usual  winter.  As  in  previous  years,  Germany  also  achieved 
significant reductions in methane emissions from the waste sector due to innovative policies 
and measures. Remarkably, CO2 emissions from road transport dropped by 0.8% in the EU-
15, largely due to a significant fall in Germany.  

Among EU-15 MS, Spain recorded the biggest emissions increase in absolute terms in 2005, 
with a rise of 3.6% or 15.4 million tonnes of CO2 eq. This was due mainly to a 17% increase 
in  electricity  production  by  fossil-fuel  power  stations  coupled  with  a  33%  fall  in  electricity 
generation by hydro-power plants due to reduced river levels. 

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Poland saw the biggest emissions increase in absolute terms among the EU-12 MS, with a rise 
of 0.6% or 2.3 million tonnes of CO2 eq. This was mainly due to a 1% increase in fugitive 
CH4 emissions from energy and rises in CH4 and N2O emissions from the agriculture sector of 
5%  and  4.5%  respectively.  Austria,  Bulgaria,  Greece,  Hungary,  Ireland,  Italy,  Latvia, 
Lithuania, Malta, Portugal and Slovenia also saw their emissions increase in 2005.  

2.4. 

Emission trends in the main economic sectors 

The most important sector, as highlighted in Figure 4, is energy which accounted in 2005 for 
80%  of  total  EU-15  emissions,  a  3%  increase  of  energy  GHG  emissions  compared  to  base 
year. The energy sector also covers transport which is responsible for 26% of the emissions of 
this  sector.  Agriculture  is  responsible  for  9%  of  the  overall  GHG  emissions,  industrial 
processes are responsible for 8% and waste for 3%.  

Between  1990  and  2005,  CO2  emissions  from  road  transport  had  the  highest  increase  in 
absolute  terms  of  all  energy-related  emissions,  while  CO2  emissions  from  manufacturing 
industries  decreased  substantially.  The  increase  in  the  energy  sector  has  been  offset  by 
decreases  in  all  other  source  categories  (for  further  details  see  also  the  Annex  in  the  Staff 
Working Document). In summary, compared to 1990, emissions from: 

–  industrial processes decreased by 16% due to lower nitric acid production, lower emissions 

from iron and steel and due to changes in processing; 

–  agriculture  declined  by  11%  due  to  declining  cattle  numbers  and  decreasing  use  of 

fertiliser and manure; 

–  waste by 38% due to lower CH4 emissions from managed landfills. 

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Figure 4: Change in EU-15 GHG emissions by sector and share of sectors for EU-27 in 2005 

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Energy excl. transport

-3%

Transport

Industrial processes

Agriculture

-16%

-11%

Waste

-38%

Energy excl. transport

-3%

Transport

Industrial processes

Agriculture

Waste

-47%

-12%

-14%

25%

25%

Energy excl. transport

-7%

Transport

18%

Industrial processes

Agriculture

Waste

-47%

-15%

-15%

-60%

-40%

-20%

0%

20%

40%

Agricult ure
9%

Wast e
3%

 T o t a l G H G
2 0 0 5

Indust rial 
processes
8%

Transport
21%

Source: EEA 

Energy use 
excluding 
transport
59%

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3. 

PROJECTED PROGRESS TOWARDS MEETING THE KYOTO TARGET8 

3.1. 

Projections by Member States 

3.1.1.  EU-27  

By 2010, total EU-27 GHG emissions are projected to be about 10.7% below base-year levels 
(see Tables 2 and 3 in the Annex). This projection is based on MS’ own estimates which take 
into account all existing domestic policies and measures. The projected decline is 13.2% when 
the  effect  of  the  Kyoto  mechanisms  and  carbon  sinks  are  accounted  for  and  it  could  reach 
16.7% if the additional domestic policies and measures currently under discussion were to be 
implemented on time and would deliver as estimated. 

3.1.2.  EU-15  

The aggregate projections based on existing domestic policies and measures show that GHG 
emissions of the EU-15 will be 4% below base-year levels by 2010. When including the,  

•  government  use  of  the  Kyoto  mechanisms  which  are  expected  to  deliver  an 

additional 2.5% emission reduction, and  

•  total removal (39.1 MtCO2 eq. per year) due to Art. 3.3 and 3.4 activities in the 

EU-15 corresponding to a 0.9% reduction,  

the EU-15 is projected  to reduce  its  emissions  by  7.4%.  In  order  for  the  EU-15  to  reach  its 
Kyoto target, it is imperative that the additional measures planned both at Community and MS 
level are implemented as soon as possible. In case that these measures deliver as expected, the 
projected overall reduction of GHG emissions could be up to 11.4% compared to base year 
levels signifying that the EU would overachieve its Kyoto target. 

Moreover, it is estimated that the recent NAP decisions on allowance allocation for the 2nd 
trading period under the EU ETS would contribute an estimated 3.4% of the EU-15's Kyoto 
target which, as yet, has not been fully factored into MS projections. 

3.1.3.  EU-12  

Aggregate emissions from the other 12 MS are projected to increase after 2005 but will still 
be 29% below their base year levels by 2010. With additional measures, however, emissions 
are  projected  to  be  further  reduced  by  2%.  Slovenia  is  the  only  MS  out  of  the  EU-12  that 
intends to invest in Kyoto mechanisms and to include carbon sinks. 

8 

This assessment contains information on the 27 EU MS, but is most detailed for the EU-15. Updated 
projections were available from 18 MS. Information on the use of flexible mechanisms under the Kyoto 
Protocol was available for 20 MS. Activities concerning LULUCF (‘carbon sinks’) under Art. 3.3 and 
3.4 of the Kyoto Protocol were included as reported by a total of 14 MS. 

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3.1.4.  Candidate countries 

In  2005,  Croatia  was  on  track  to  meet  its  Kyoto  target.  However,  projections  indicate  that 
Croatia  might  not  be  able  to  reach  its  target  when  relying  only  on  domestic  measures.  The 
Former  Yugoslav  Republic  of  Macedonia  ratified  the  Kyoto  Protocol  in  2005  but  as  a  non-
Annex I country, it does not have any reduction commitments. Turkey is Annex I Party to the 
UN  Framework  Convention  on  Climate  Change,  but  has  no  reduction  commitments  under 
Annex B of the Kyoto Protocol. Turkey has not yet ratified the Kyoto Protocol.  

Between  1990  and  2005,  per  capita  GHG  emissions9  have  increased  in  both  Turkey  and 
Croatia. However, at 4.4 tonnes per year, the per capita emissions in Turkey are less than half 
of the average EU-27 per capita emissions. In both countries, the emission level per GDP has 
also declined, indicating a decoupling of economic growth and resource consumption. 

9 

There is currently no information available on 2005 GHG emissions for the Former Yugoslav Republic 
of  Macedonia.  As  a  non-Annex  I  country  without  a  target  under  the  Kyoto  Protocol,  the  Former 
Yugoslav Republic of Macedonia is not required to report annually such information. 

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Figure 5: Relative distance between GHG projections for 2010 and the respective 2010 targets based on ‘existing’ and ‘additional’ domestic policies 
and measures, the use of Kyoto mechanisms and carbon sinks.  
(A negative sign (-) indicates an overachievement of the Kyoto target while a positive sign (+) a shortfall) 

EU-15
United Kingdom
Sweden
Spain
Portugal
Netherlands
Luxembourg
Italy
Ireland
Greece
Germany
France
Finland
Denmark
Belgium 
Austria

Slovenia
Slovakia
Romania
Poland
Lithuania
Latvia
Hungary
Estonia
Czech Republic
Bulgaria

-11.2%

-10.4%

-3.4%

0.6%

-3.9%

-4.1%

0.2%

0.0%

2.7%

0.5%

14.2%

12.7%

-0.7%
-0.5%

-4.7%

-1.4%

-3.4%

-2.0%

-0.9%
-0.4%

-0.1%

9.7%

0.9%

2.0%

15.4%

17.9%

-4.7%

3.5%

-15.3%

-12.2%

-40.6%

-38.2%

-51.9%

-48.6%

-27.8%

-23.9%

-22.4%

-22.2%

-22.7%
-22.5%

-20.8%

-17.8%

-33.7%

-29.0%

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Percentage points over-delivery (-) or shortfall (+) of respective emission targets

With existing measures, KM and carbon sinks With all measures, KM and carbon sinks

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3.2. 

Implementation of the European Climate Change Programme (ECCP) 

In  June  2001,  the  ECCP  identified  a  number of  EU-wide  common  and  coordinated  policies 
and  measures  (CCPMs)  (Table  4  in  the  Annex).  With  only  a  few  exceptions,  policies  and 
measures under the ECCP I are now implemented. 

An  assessment  of  policies  and  measures  across  the  EU-27  showed  that  the  EU  Emissions 
Trading  Scheme  (ETS)  including  the  use  of  project-based  mechanisms  will  substantially 
contribute to achieving the Kyoto commitments. Other CCPMs that are both widespread and 
are expected to deliver significant GHG emissions savings are the RES-E directive (related to 
the promotion of electricity produced from renewable energy sources), the directives on the 
energy  performance  of  buildings,  the  biofuels  directive,  the  promotion  of  co-generation 
(combined heat and power), and energy taxation.  

In addition to these key policies and measures further CCPMs that are also expected to deliver 
important  reductions  across  the  EU  are  the  directive  on  Integrated  Pollution  Prevention  and 
Control (IPPC), the efficiency requirements for new hot-water boilers, the F-gases regulation, 
the  directive  on  HFC  emissions  from  air  conditioning  in  motor  vehicles,  and  the  landfill 
directive.  CCPMs  that  are  particularly  important  for  the  EU-12  include  the  directives  on 
waste,  large  combustion  plants  and  the  Common  Agricultural  Policy  (CAP)  direct  support 
schemes. 

In total, the most important policies as identified above are estimated to account for up to 89% 
of the total savings attributed to CCPMs in the EU-27. 

ECCP II was launched in October 2005 with a stakeholder conference held in Brussels. The 
focus  for  ECCP  II  was  on  the  ECCP  I  review,  and  on  exploring  new  policy  areas  such  as 
adaptation,  aviation,  CO2  and  cars,  carbon  capture  and  storage,  and  the  EU  ETS.  ECCP  II 
working  groups  met  throughout  2006  and  2007.  As  a  result,  the  Commission  has  proposed 
several actions: 

•  Aviation: Legislative proposal integrating aviation into EU ETS (December 2006) 

•  Fuel quality directive: Legislative proposal (January 2007) 

•  CO2  and  Cars:  Communication  (February  2007)  and  legislative  proposal  (end 

2007 – early 2008) 

•  Impacts and Adaptation: Green Paper on Adaptation (June 2007) 

•  Carbon  Capture  and  Geological  Storage:  Legislative  proposal  on  carbon  capture 

and geological sequestration (end 2007) 

•  EU ETS review: Legislative proposal (end 2007)  

The first three proposals, if adopted timely, could still contribute to reaching the EU’s Kyoto 
target. 

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In addition to the actions to be implemented in the context of the ECCP, the Commission will 
give particular importance to the reduction of the GHG emissions by shipping, in the context 
of the recently proposed Maritime Policy10.  

3.3. 

Implementation of the EU Emissions Trading Scheme (EU ETS) 

2005  is  the  first  year  for  which  verified  CO2  emissions  data  are  available  from  installations 
covered  by  the  EU  ETS.  In  2005,  the  EU  ETS  covered  about  50%  of  total  EU-25  CO2 
emissions and about 40% of all EU-25 GHG emissions, equivalent to about 2 billion tonnes.  

A  lack  of  independently  verified  emissions  data  for  the  years  before  the  introduction  of  the 
EU ETS makes it difficult to measure the scheme's full impact on emissions. However, early 
academic research indicates that emissions may have fallen in 2005 compared with their level 
before the start of the EU ETS. 

3.3.1.  First trading period (2005 to 2007) 

Table 5 in the Annex gives an overview over the covered sectors and installations during the 
first  trading  period  based  on  the  verified  emission  reports  for  2005  and  2006.  On  average 
10,800  installations  participated  in  the  first  two  years  of  the  trading  scheme  emitting 
approximately  2,020  Mt  CO2/yr.  These  installations  received  emission  allowances  for  about 
2,080 Mt CO2/yr. Two thirds of all installations are classified as combustion installations; and 
are responsible for 72% of overall emissions. In 5 MS (Austria, Ireland, Italy, Spain and the 
UK) verified emissions were higher than allocation (Table 6 in the Annex). 

3.3.2. 

Second trading period (2008 to 2012) 

The assessment process for the second NAPs started in 2006. Bulgaria and Romania, which 
joined the EU on 1 January 2007, had to prepare NAPs for year 2007. On average, after the 
assessment of all NAPs the cap for the EU-255 was reduced by roughly 7% compared to the 
2005/2006 verified emissions (for further details please see Table 6 in the Annex). The future 
price  for  2008  allowances  has  remained  between  12  €  and  25  €  since  the  start  of  the 
assessment of the second national allocation plans in July 2006. 

3.3.3.  Use of JI and CDM by operators 

As part of the second NAPs, a limit is established by each Member State for the maximum 
use  of  project  based  credits  by  operators  (JI  and  CDM).  In  total,  as  yet  around278  million 
CERs or ERUs may be used per year by ETS installations from the 27 MS in the 2nd trading 
period. This corresponds to about 13.4% of the approved cap.  

3.4. 

Projected use of Kyoto mechanisms by government 

Twenty  MS  provided  information  on  their  intended  use  of  the  Kyoto  mechanisms  in  2007 
through  a  questionnaire  under  the  EC  monitoring  mechanism  decision.  For  the  remaining 
7 MS (Germany, Greece, Hungary, Italy, Latvia, Luxembourg and Poland) the use of Kyoto 
trading  Directive 
Mechanisms 
(2003/87/EC) has been used (Table 7 in the Annex).  

the  second  NAP  under 

the  European  emissions 

in 

10 

COM(2007) 575 final. 

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10 MS of the EU-15 and Slovenia have decided to use the Kyoto mechanisms to reach their 
Kyoto targets. Together the 10 EU-15 MS would acquire 107.5 Mt CO2eq. per year of the first 
commitment  period  under  the  Kyoto  Protocol.  This  represents  approximately  2.5%  towards 
the EU-15 Kyoto target of -8 %. In Slovenia, the exact amount of units to be bought depends 
on the actual development of GHG emissions, especially in the transport sector.  

These 10 MS together have decided to invest around € 2.9 billion to acquire units through JI, 
CDM or international emissions trading. Austria, Luxembourg, the Netherlands, Portugal and 
Spain allocated the largest budgets (€ 319 million, € 300 million, € 693 million, € 354 million 
and € 310 million, respectively, for the five-year commitment period).  

Sweden has made the necessary arrangements to use the Kyoto mechanisms if needed but is 
currently not planning to do so. The German government decided to support prototype funds 
for the establishment of a carbon market. 

3.5. 

Projected use of carbon sinks 

In addition to the policies and measures targeting various sources of GHG emissions, MS can 
make use of carbon sinks (see Table 8 in the Annex). The information provided by the EU-15 
MS indicates that the total net sequestration during the commitment period from afforestation 
and reforestation activities under Art. 3.3 of the Kyoto Protocol will be about 13.5 MtCO2 per 
year.  In  addition,  the  use  of  activities  under  Art.3.4  as  estimated  by  MS  is  projected  to 
contribute 17.6 MtCO2 per year of the commitment period in the EU-15. These figures take 
the  maximum  allowance  for  forest  management  into  account  but  do  not  include  the  sinks 
under  Art.  3.3  and  Art.3.4  from  Spain  (which  only  provided  an  aggregate  estimate  for  the 
whole  carbon  sink)  and  from  other  MS  (i.e.,  FR,  DE  and  GR)  which  elected  forest 
management  activities  but  did  not  provide  yet  any  estimate  on  the  projected  sink.  Together 
with the Spanish aggregate, all activities under Art. 3.3 and 3.4 in the EU-15 MS are projected 
to reduce emissions by 39.1 Mt CO2 per year of the commitment period equivalent to 11% of 
the  EU-15  reduction  commitment  of  342 Mt  CO2  per  year  of  the  commitment  period 
compared to base year emissions. Slovenia expects an additional reduction of 1.7 Mt CO2 per 
year of the commitment period. 

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