Communication from the Commission - Progress towards achieving the Kyoto objectives (required under Article 5 of 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(2008) 2636}
Date: 2008-10-16
Institutions: European Commission
Subjects: EU Member State, cooperation policy, greenhouse effect, prevention of pollution, reduction of gas emissions

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.11.2008 
COM(2008) 651 final/2 

CORRIGENDUM 
Annule et remplace le document COM(2008)651 du 16.10.2008 
Concerne uniquement la version EN 

COMMUNICATION FROM THE COMMISSION 

PROGRESS TOWARDS ACHIEVING THE KYOTO OBJECTIVES 

(required under Article 5 of 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(2008) 2636}

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

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

ACTUAL PROGRESS 1990-2006 .............................................................................. 5 

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

Per capita emissions and GHG intensities in 2006 ...................................................... 6 

GHG emissions in 2006 compared to 2005 ................................................................. 7 

Emission trends in the main 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.................................................................................................... 10 

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 ................................................. 15 

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

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1. 

SUMMARY 

On track to reach the Kyoto target, 2008-2012 

Under  the  Kyoto  Protocol,  the  EU-15  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  20062,  total  GHG  emissions  in  the  EU-15  were  2.7%  below  base  year 
emissions without Land Use, Land Use Change and Forestry (LULUCF). Since 1990, the EU-
15  economy  (expressed  as  GDP)  grew  by  almost  40%.  In  2006,  EU-15  GHG  emissions 
decreased by 0.8% compared to 2005 while the EU-15 economy grew by 2.8%.  

Projections3 as shown in Figure 1 indicate that the Community will reach its Kyoto target. In 
addition,  the  sectors  covered  by  the  EU  ETS  are  also  expected  to  contribute  3.3%  of 
reductions - currently not fully captured in the projected estimates (for details see Table 11 in 
the Staff Working Document (SWD)).  

Figure 1: Actual and projected emissions for EU-15 

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EU-15 emissions

EU-15 existing measures

EU-15 additional measures

EU-15 target (Kyoto)

Business as usual

Kyoto mechanisms and carbon sinks

Kyoto mechanisms

Carbon sinks

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By 2010, eight Member States (MS) out of the EU-15, Belgium, Germany, Greece, Ireland, 
the  Netherlands,  Portugal,  Sweden  and  the  United  Kingdom,  are  currently  projected  to 
achieve  their  targets  using  existing  policies  and  measures,  carbon  sinks  and  the  Kyoto 
mechanisms. In addition, four MS (Austria, Finland, France and Luxembourg) are projected 
to  reach  their  targets  when  also  accounting  for  additional  policies  and  measures  planned. 
There are currently three MS (Denmark, Italy and Spain) which are projected not to achieve 
their  Kyoto  target.  However,  the  gaps  between  these  countries’  projections  and  their 
respective targets have been significantly reduced since last year, in particular for Spain and 
Italy. Furthermore the EU ETS and its effect on national emissions in Denmark and Spain, not 
accounted for in projections this year, should make a significant contribution towards helping 
these countries achieving their target.  

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Total EU-27 GHG emissions were, in 2006, 10.8% below base year levels without emissions 
and removals by LULUCF and 0.3% lower compared to 2005. The EU-27 economy grew by 
3.0% in 2006. 

Despite  the  fact  that  in  most  of  the  EU-12  new  MS,  emissions  are  projected  to  increase 
between 2006 and 2010, nine of them that have a Kyoto target are projected to meet or even 
over-achieve their Kyoto targets using only existing policies and measures. Slovenia projects 
that  it  will  only  meet  its  Kyoto  target  when  also  accounting  for  planned  additional  policies 
and measures, the use of Kyoto mechanisms and carbon sinks. 

New measures required to reach the EU’s ambitious 2020 target 

In  spring  2007,  the  European  Council  adopted  the  unilateral  commitment  to  reduce  EU-27 
GHG emissions by at least 20% by 2020 compared to 1990 levels and by 30%, provided that 
other  developed  countries  commit  themselves  to  comparable  emission  reductions,  and  that 
economically more advanced developing countries to contribute adequately according to their 
responsibilities and respective capabilities.  

As a follow up to its commitment, the European Commission put forward in January 2008 the 
climate  change  and  energy  package  including  new  legislative  measures  covering  the  main 
sectors  of  the  EU  economy.  The  proposed  measures  include:  a)  an  improved  emissions 
trading system (ETS), b) an emission reduction target for industries not covered by the ETS 
(e.g.,  agriculture,  buildings,  transport,  waste)  -  emissions  covered  by  the  EU  ETS  are  to  be 
reduced  by  21%  from  2005  levels  by  2020  and  those  not  covered  by  the  EU  ETS  by  10%, 
with  differentiated  targets  per  MS  according  to  relative  levels  of  current  and  projected 
GDP/capita, c)legally enforceable targets for increasing the share of renewables in the energy 
mix, and d) new rules on carbon capture and storage and on environmental subsidies.  

In  addition  to  the  package,  the  European  Commission  also  proposed  a  comprehensive  new 
strategy to reduce CO2 emissions from new cars and vans sold in the European Union. The 
new  strategy  will  enable  the  EU  to  reach  its  long-established  objective  of  limiting  average 
CO2  emissions  to  120  grams  per  km4  by  2012  -  a  reduction  of  around  25%  from  current 
levels. The new strategy is followed with a revision of the EU fuel quality standards. The fuel 
quality  Directive5  will  not  only  make  the  fuels  themselves  'cleaner'  but  will  also  allow  the 
introduction of vehicles and machinery that pollute less. The Directive is expected to lead to 
GHG emission reductions of 10% between 2011 and 2020. This would cut emissions by 500 
million tonnes of CO2 by 2020.  

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. Depending on the actual target, in 2020 emission reductions will have to 
amount to 1,000 – 1,500 Mt CO2 equivalents compared to current projections. This underlines 
the  need  for  the  EU  and  its  MS  to  adopt  and  implement  as  soon  as  possible  the  new 
legislation. 

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Figure 2: Actual and projected emissions for EU-27 

2. 

ACTUAL PROGRESS 1990-2006 

2.1. 

GHG emission trends  

The  overall  EU  GHG  emission  trend  is  strongly  influenced  by  the  two  largest  emitters 
Germany  and  the  United  Kingdom,  accounting  for  about  one  third  of  total  EU-27  GHG 
emissions. These two MS have achieved total GHG emission reductions of 339 million tonnes 
CO2 equivalents 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 due to significant 
improvements in energy efficiency driven by a wide range of policies across the main energy 
using sectors and, partly resulting from the liberalisation of the energy market, the major shift 
away  from  more  carbon  intensive  fuels  such  as  coal  and  oil  towards  lower  or  zero  carbon 
electricity generation, such as gas, nuclear and renewables as well as N2O emission reduction 
measures in the adipic acid production. 

Italy  and  France  are  the  third  and  fourth  largest  emitters  both  with  a  share  of  11%.  Italy’s 
GHG  emissions  were  about  10%  above  1990  levels  in  2006.  The  observed  increases  since 
1990  in  Italy's  GHG  emissions  are  primarily  due  to  road  transport,  electricity  and  heat 
production and petroleum-refining. France’s emissions were 4% below 1990 levels in 2006. 
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 2006. 

Spain  and  Poland  are  the  fifth  and  sixth  largest  emitters  in  the  EU-27,  both  accounting  for 
about 8% of total EU-27 GHG emissions. Spain increased emissions by 51 % between 1990 
and 2006. This was largely due to emission increases from road transport, electricity and heat 

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production, and manufacturing industries. Poland decreased GHG emissions by 12 % between 
1990 and 2006 (-29% since the base year, which is 1988 in the case of Poland). Main factors 
for decreasing emissions in Poland — as for other Central and Eastern European MS — 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 2006, 10 MS had GHG emissions above base year levels whereas the remaining 15 MS had 
emissions  below  base  year  levels.  Cyprus  and  Malta  do  not  have  emission  reduction 
commitments  under  the  Kyoto  protocol.  In  those  countries,  emissions  in  2006  were  above 
1990  levels.  The  percentage  changes  of  GHG  emissions  from  the  base  year  to  2006  range 
from -55.7% (Estonia) to +49.5 (Spain).  

2.2. 

Per capita emissions and GHG intensities in 2006 

In 2006, an EU citizen emitted in average 10.4 tCO2-eq. In the EU-15, the average was 10.7 
tCO2-eq. per capita, a decrease of 0.2 tCO2-eq. compared to 2005. However, GHG emissions 
per  capita  show  significant  differences  across  European  countries.  Emissions  per  capita  are 
correlated to the energy intensity (primary energy consumption per capita) and the energy mix 
(affecting the level of emissions by energy unit produced) of each country. 

In  the  current  economic  conditions,  increasing  emissions  per  capita  can  be  explained  by 
higher  energy  consumption  per  capita  stemming  from  increasing  living  standards,  while 
decreasing emissions per capita can be explained by improvements in energy efficiency and 
increasing shares of renewable energy sources in the energy mix of a country. 

In the 1990s, per capita emission trends have followed the overall decreasing trends for total 
GHG emissions. However after 2000, emissions per capita kept on decreasing in the EU-15 
while  they  have  been  growing  in  the  Central  and  Eastern  European  MS  (-3.2%  and  +4.2% 
between 2000 and 2006, respectively). In the EU, GHG emissions per capita have increased 
most since 1990 in Spain, Portugal, Cyprus and Malta – although they although they have not 
reached yet the EU average.  

Figure  3  shows  that  emissions  in  both  EU-15  and  EU-27  have  been  decreasing  while  the 
economy  has  grown  significantly.  This  may  indicate  that  a  relative  decoupling  has  been 
taking place in the EU-15 since 1993, and in the EU-27 since 1996. Between 1990 and 2006, 
GDP in the EU-27 grew by 40 % while emissions decreased by 7.7 % and during the same 
period  in  the  EU-15,  the  GDP  growth  was  almost  39  %  with  a  2.2  %  reduction  of  GHG 
emissions.  

All EU MS, except Portugal, have significantly reduced their emissions while their economy 
grew  strongly  between  1990  and  2006.  Strong  economic  growth  but  decreasing  emissions 
were  in  particular  observed  in  the  MS  in  Central  and  Eastern  Europe,  due  to  the 
transformations of the inefficient heavy industry based manufacturing sector.  

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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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140.0

120.0

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80.0

60.0

40.0

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1990

1995

2000

2005

CO2 emission

GDP (constant prices)

Energy consumption

GHG/GDP EU-15

GHG/GDP EU-27

2.3. 

GHG emissions in 2006 compared to 2005 

Between  2005  and  2006,  emissions  within  the  EU-27  fell  by  14  MtCO2-eq.  (0.3%).  This 
overall  decrease  is  the  consequence  of  two  diverging  trends,  while  emissions  in  the  EU-15 
decreased  by  35  MtCO2-eq.  (0.8%),  they  rose  by  21  MtCO2-eq.  (2.2  %)  in  the  other  MS. 
GHG emissions decreased or were stable in all EU-15 MS except for Finland and Denmark. 
Emissions increased in most other MS except in Estonia, Hungary and the Slovak Republic. 

GHG emissions from aviation  and  shipping activities, international and domestic, continued 
to  rise  sharply  in  2006.  Contributions  from  these  sectors,  currently  not  fully  included  under 
the  Kyoto  Protocol,  rose  in  the  EU-15  by  nearly  5.2  MtCO2  (aviation)  and  11.4  MtCO2 
(shipping).  

Emissions from road transport continued to grow in most countries, especially in Spain and 
Poland, while they decreased notably in Germany. In Spain, the rise reflected an increased use 
of diesel (5.1%), which more than offset the decrease in gasoline use (-4.6%). In Poland, both 
gasoline  and  diesel  consumption  increased  by  6.1%  and  7.2%,  respectively.  The  German 
emissions reductions mainly reflect lower gasoline consumption (– 4.3%). 

Four  EU-15  MS  contributed  significantly  to  the  overall  decrease:  France  (14  MtCO2-eq.), 
Italy  (10  MtCO2-eq.),  Spain  (8  MtCO2-eq.)  and  Belgium  (5  MtCO2-eq.).  The  emission 
decreases  were  due  in  particular  to  lower  consumption  of  gas  and  oil  in  households  and 
services. This was a result of reduced heating needs in Europe due to a warmer year in 2006, 
together with higher gas prices. Electricity demand remained largely stable in households. In 
addition,  Italy  experienced  significant  reductions  of  N2O  emissions  from  adipic  acid 
production due to abatement techniques (5 MtCO2-eq.). 

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The decrease in 2006 EU-15 emissions was due mainly to lower CO2 emissions from public 
electricity and heat production, households and services, and notably road transport.  

Total  GHG  emissions  grew  most  in  Poland  (14  MtCO2-eq.),  Finland  (11  MtCO2-eq.)  and 
Denmark  (7  MtCO2-eq.).  These  increases  occurred  mainly  in  the  energy  supply  sector  and 
reflect: 

• 
increased  electricity  production  in  thermal  power  plants  and  increased  fossil  fuel 
consumption  from  households  in  Poland,  as  well  as  increased  CO2  emissions  from  the  iron 
and steel industry; 

increased  electricity  production  in  coal-fired  power  stations,  reduced  electricity 

• 
production from hydropower and decreased net imports of electricity in Finland; 

increased electricity production in coal-fired power stations and decreased net imports 

• 
of electricity in Denmark. 

Romania  (5  MtCO2-eq.)  and  the  Czech  Republic  (2  MtCO2-eq.)  also  experienced  notable 
increases  in  total  GHG  emissions,  which  occurred  mainly  in  the  power  supply  sector 
(Romania) and the chemical industry (Czech Republic). These two countries, along with Italy, 
experienced increases in CO2 emissions from the iron and steel industry. 

2.4. 

Emission trends in the main sectors 

The most important sector, as highlighted in Figure 4, is energy (including transport) which 
accounted in 2006 for 80% of total EU-15 emissions. Transport is responsible for 21% of total 
GHG emissions, agriculture is responsible for 9%, industrial processes are responsible for 8% 
and waste for 3%.  

The  increase  in  the  transport  sector  has  been  countered  by  significant  decreases  in  other 
source  categories  except  transport  (for  further  details  see  also  the  SWD).  In  summary, 
compared to 1990, emissions in the EU-15 from: 

–  energy (excluding transport) decreased by 4%, 

–  transport increased by 26%, 

–  industrial  processes  decreased  by  12%  mainly  due  to  lower  emissions  from  adipic  acid 
production and production of halocarbons and sulphur hexafluoride, but also due to lower 
emissions from nitric acid production and from iron and steel, 

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

fertiliser and manure, 

–  waste decreased by 39% 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 in 2006 

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Industrial processes

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Industrial processes

Agriculture

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-15%

Waste

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Total GHG 2006

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9%

Industrial 
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Energy use 
excluding 
transport
59%

Source:EEA.

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3. 

PROJECTED PROGRESS TOWARDS MEETING THE KYOTO TARGET 

3.1. 

Projections by Member States 

3.1.1.  EU-27  

By 2010, total EU-27 GHG emissions are projected to be about 10.1% below base-year levels 
(see  Tables  7  and  8  in  the  Annex).  This  projection  is  based  on  the  compilation  of  MS  own 
estimates which take into account all existing domestic policies and measures. The projected 
decline is 13.4% when the effect of the Kyoto mechanisms and carbon sinks are accounted for 
and  it  could  reach  16.3%  if  the  additional  domestic  policies  and  measures  currently  under 
discussion were to be implemented on time and 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 3.6% below base-year levels by 2010 (4.4% distance from the 
Kyoto target). When including the,  

(1) 

(2) 

government use of the Kyoto mechanisms which are expected to deliver an additional 
3% emission reduction, and  

total removal due to Art. 3.3 and 3.4 activities in the EU-15 corresponding to a 1.3% 
reduction,  

the EU-15 is projected to reduce its emissions by 8.0% by 2010, reaching the Kyoto target. 
Given, however, the existing uncertainties and the EU's ambitious reduction target of 20% by 
2020,  it  is  imperative  that  MS  not  only  ensure  the  timely  delivery  of  emissions  reductions 
from  existing  policies  and  measures  but  also  that  they  accelerate  the  development  and  full 
implementation  of  their  planned  policies  and  measures.  Assuming  that  all  these  measures 
deliver as expected, the projected overall reduction of GHG emissions could be up to 11.3% 
compared to base year levels. 

Moreover, it is estimated that the NAP decisions on allowance allocation for the 2nd trading 
period  under  the  EU  ETS  would  contribute  an  estimated  3.3%  of  the  EU-15's  Kyoto  target 
which, as yet, has not been fully factored into all MS projections. 

3.1.3.  EU-12  

Aggregate emissions from the other 12 MS are projected to increase after 2006 but will still 
be 28.4% 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.  Slovenia,  Czech  Republic  and  Poland  intend  to 
account for carbon sinks. 

3.1.4.  Candidate countries 

In 2006, Croatia’s emissions were almost 31 MtCO2-eq., 14.4% below base year emissions. 
Croatia is projected to slightly exceed its Kyoto target taking into account existing measures 
and carbon sinks, but would meet and indeed overachieve the target with the effect of planned 
(additional) measures. 

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In  2006,  Turkey’s  emissions  were  332  MtCO2-eq  compared  to  170  MtCO2-eq.  in  1990,  an 
increase of 95.1%. Turkey is an 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  2006,  per  capita  GHG  emissions  have  increased  in  both  Turkey  and 
Croatia. However, at 4.6 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.  

Currently, there is no information available for the Former Yugoslav Republic of Macedonia.

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Figure 5: Relative gaps (over-delivery or shortfall) 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, and in part the effect of the EU ETS. 

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

Estonia
Latvia
Romania
Bulgaria
Poland
Lithuania
Czech Republic
Hungary
Slovak
Slovenia

-3.3%

0.0%

-9.7%

-7.5%

-5.2%

-1.9%

-0.2%

-4.3%

-4.2%

-4.2%

-2.2%

-2.4%

0.1%

-1.0%

-0.6%

-0.4%
-0.6%

-0.2%

0.011

0.0%

5.1%

1.9%

16.9%

18.2%

5.5%

9.4%

15.1%

-54.8%

-57.7%

-38.1%

-27.3%

-26.9%

-23.4%

-21.8%

-23.0%

-22.4%

-17.7%

-20.8%

-18.9%
-19.4%

-10.4%

-13.6%

-5.2%

3.5%

-70%

-60%

-50%
Percentage points over-delivery (-) or shortfall (+) of respective emission targets

-40%

-20%

-30%

-10%

10%

0%

20%

30%

Gap between 2010 projections (with the existing measures and including carbon sinks and Kyoto mechanisms) and Kyoto target
Gap between 2010 projections (including additional measures, carbon sinks and Kyoto mechanisms) and Kyoto target

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3.2. 

Implementation of the European Climate Change Programme (ECCP) 

Across  the  EU-27,  an  assessment  of  Member  States'  policies  and  measures  identified  eight 
Common and Coordinated Policies and Measures (CCPMs) that are both widespread and are 
projected  to  deliver  significant  GHG  emissions  savings  in  the  EU.  These  are  the  EU  ETS 
Directive (estimated effect by the reporting MS: 123 MtCO2-eq.), in the energy supply sector 
the  Renewables  (RES-E)  Directive  (related  to  the  promotion  of  electricity  produced  from 
renewable energy sources), in the transport sector the biofuels Directive and EU-wide ACEA 
agreement with car manufacturers, in the energy demand sector the Directives on the energy 
performance  of  buildings,  energy  taxation  and  promotion  of  co-generation  (combined  heat 
and power), and finally the Kyoto Protocol flexible mechanisms. 

In  addition  to  these  eight  key  policies  and  measures,  a  further  five  CCPMs  were  identified 
that are also predicted to deliver important savings across the EU (from 4 to 7 MtCO2-eq. per 
policy).  These  five  policies  are  the  Landfill  Directive,  the  efficiency  requirements  for  new 
hot-water  boilers,  the  Directive  on  Integrated  pollution  prevention  and  control  (IPPC),  the 
Directive on labelling of appliances and the Motor Challenge programme, aimed at improving 
the energy efficiency of industrial electric motors.  

The top eight policies account for 86% of the total savings attributed to CCPMs in the EU-27. 
This highlights the importance of these key policies in helping MS to achieve their emission 
reduction commitments.  

The 2007 and 2008 estimates are very similar. In 2007, 95% of all savings from CCPMs was 
derived from the top 13 policies, while in 2008 the figure was 94%. 

Recent developments 

The climate change and energy package was introduced in January 2008 and included: 

(1) 

(2) 

(3) 

(4) 

EU ETS: A legislative proposal6 to expand, stengthen and improve the functioning of 
the EU ETS post-2012. 

Effort Sharing: A legislative proposal7 for a framework for national commitments to 
reduce emissions which are outside the scope of the EU ETS.  

Renewables: A legislative proposal8 to increase the share of renewable energy in the 
EU’s final energy consumption to 20% by 2020, and of biofuels in transport to 10%. 

CCS: Policies9 to encourage early demonstration of capture and geological storage of 
carbon including a legislative proposal for a regulatory framework10. 

Other important developments have included: 

(5) 

Aviation:  legislative  proposal  adopted  by  the  European  Parliament  on  8  July  2008 
integrating aviation into EU ETS. It is estimated that a total of 183 million tonnes of 
CO2  will  be  saved  per  year  on  the  flights  covered  by  the  scheme  equal  to  a  46% 
reduction by 2020 compared with business as usual. 

(6) 

Fluorinated  gases:  adoption  of  a  Regulation  and  Directive  (July  2006)  to  limit 
emissions  of  fluorinated  gases,  including  those  from  air-conditioning  in  cars.  The 

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estimated effect of the Regulation and Directive by 2020 is around 40-50 MtCO2-eq. 
per annum with full benefits of phase out of HFC-134a in air-conditioning. 

CO2  and  cars:  Communication  (February  2007)  setting  out  strategy  for  reducing 
emissions  and  legislative  proposal  (December  2007)  to  set  standards  for  CO2 
emissions from cars. 

Transport  fuels:  legislative  proposal  (January  2007)  to  revise  the  fuel  quality 
Directive  which  includes  targets  for  reducing  GHG  emissions  associated  with  the 
production of petrol and diesel. 

Energy Efficiency: Action Plan for Energy Efficiency (October 2006), which sets out 
10 priority actions to realise up to 20% energy savings by 2020. 

(7) 

(8) 

(9) 

(10)  Research: the European Strategic Energy Technology Plan (SET Plan)  11 (November 
2007)  whose  main  goal  is  to  accelerate  the  development  and  implementation  of  low 
carbon technologies, as these will play a vital role in reaching our energy and climate 
change targets.  

3.3. 

Implementation of the EU Emissions Trading Scheme (EU ETS) 

In 2007, the total amount of verified emissions from EU ETS installations in the EU-27 was 
2.050  billion  tonnes  of  CO2,  0.8%  higher  than  the  2.034  billion  tonnes  recorded  in  2006. 
However, when adjusted for the entry and closure of installations since 2006, which led to a 
net  addition  of  581  installations  to  the  system,  the  overall  emissions  increase  last  year  was 
only 0.68%.  

3.3.1.  First trading period (2005 to 2007) 

On  average  10,675  installations  participated  in  the  first  trading  period.  These  installations 
received emission rights for 2,155 Mt CO2 per year and on average emitted 3%12 less (2,084 
Mt  CO2  per  year).  The  share  of  the  EU  ETS  in  2005  was  about  41%  of  total  EU-25 
greenhouse gas emissions. Almost two thirds of all installations are classified as combustion 
installations13 and these are responsible for 72% of overall emissions. Verified emissions were 
higher than allocations in only six MS (Austria, Ireland, Italy, Slovenia, Spain and the United 
Kingdom).  

3.3.2. 

Second trading period (2008 to 2012) 

Following  the  assessment  of  national  allocation  plans,  the  EU-wide  cap  for  2008  to  2012 
amounts  to  2.08  billion  allowances  per  year,  10.4%  or  243  Mt  CO2  lower  than  what  was 
initially  proposed  in  the  national  allocation  plans  submitted  by  the  Member  States  to  the 
Commission for approval. This implies a reduction compared to average emissions in 2005 to 
2007 of 6%. This corresponds to an actual average reduction of 12.7% of the total allowances 
for  23  Member  States,  and  the  acceptance  of  NAPs  without  cuts  for  four  MS  (Denmark, 
France, Slovenia and the United Kingdom). 

3.3.3.  Use of JI and CDM by operators 

As  part  of  the  second  NAPs,  a  limit  was  established  by  each  MS  for  the  maximum  use  of 
project based credits by operators (JI and CDM). In total, up to 278 million CERs or ERUs 
may  be  used  per  year  by  ETS  installations  from  all  MS  in  the  second  trading  period.  This 

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corresponds to 13.4 % of the EU-wide cap for the second trading period. In practice it appears 
unlikely that the full limit will be exploited.  

3.4. 

Projected use of Kyoto mechanisms by government 

Thirteen  MS  updated  or  confirmed  information  on  their  intended  use  of  the  Kyoto 
mechanisms in 2008 through a questionnaire under the EC monitoring mechanism decision. 
For the remaining MS previously provided information through the questionnaire on the use 
of  Kyoto  mechanisms  as  indicated  in  the  second  national  allocation  plant  under  the  ETS 
Directive (2003/87/EC) was used (Table 12 in the SWD).  

Ten MS of the EU-15 and Slovenia have decided to use the Kyoto mechanisms to reach their 
Kyoto  targets.  Together  these  EU-15  MS  would  acquire  126.5  Mt CO2-eq.  per  year  for 
compliance  under  the  first  commitment  period  under  the  Kyoto  Protocol.  This  represents 
approximately 3 percentage points towards the EU-15 Kyoto target of -8 %.  

These 11 MS together have decided to invest around € 2.95 billi on to acquire units through JI, 
CDM  or  emissions  trading.  Austria,  Luxembourg,  the  Netherlands,  Portugal  and  Spain 
allocated the largest budgets (€ 531 million, € 400 million, € 505 million, € 354 million and € 
384 million, respectively, for the five-year commitment period).  

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 13 in the SWD). In 2008, eleven MS submitted updated 
estimates while information for nine additional MS had been submitted in the previous years. 
Seven MS have never submitted the voluntary questionnaire. 

The  information  provided  so  far  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 23.9 MtCO2 per year; an additional sequestration of 0.4 million tonnes 
CO2 per year has been reported by Slovenia. In addition, the use of activities under Art.3.4 is 
projected to contribute 25.7 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 
Spain due to the lack of detailed data. 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  57.5 
million tonnes CO2 per year of the commitment period equivalent to almost 17% of the EU-15 
reduction  commitment  of  341 Mt  CO2  per  year  during  the  commitment  period  compared  to 
base year emissions. Czech Republic, Poland and Slovenia expect an additional reduction of 
5.9 million tonnes CO2 per year during the commitment period. 

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