EU CLIMATE CHANGE LAW

Transcription

1 March 2016 EU CLIMATE CHANGE LAW Justin Wolst 1

2 AGENDA Introduction: EU structure and components EU policy cycle and UNFCCC EU Climate Change Policy Achievements and future policy (discussion) 2

3 INTRODUCTION: EU 28 Member States Approx. 7% of the world s population Responsible for approx. 11% of worldwide GHG emissions Depends on imports for more than 50% of its energy needs Taking the initiative in Climate Change 3

4 EU POLITICAL SYSTEM Source: wikipedia 4

5 LEGAL FOUNDATION: ENVIRONMENT/CLIMATE CHANGE 1972 First recognition of environment in the context of economic expansion 1987 First title and legal basis for environment in EEC 1993 Sustainability, environment and the precautionary principle in the EC Treaty 2009 Title XX of the TFEU: Environment (Chapter): Article 191 TFEU 1. Union policy on the environment shall contribute to pursuit of the following objectives: preserving, protecting and improving the quality of the environment, protecting human health, prudent and rational utilisation of natural resources, promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change. (emphasis added) 5

6 LEGAL FOUNDATION: EU COMPETENCE Exclusive EU has full competence (art. 3 TFEU) Shared EU and MS share competence (art. 4 TFEU) Supporting MS competence and supported by EU (art. 5 TFEU) Energy & Environment - Shared competence: Principles of proportionality and subsidiarity (Art. 5(3) TEU & Protocol (No 2)) proportionality the involvement of the institutions must be limited to what is necessary to achieve the objectives of the Treaties the content and form of the action must be in keeping with the aim pursued. subsidiarity decisions are taken as closely as possible to the citizen and that constant checks are made to verify that action at Union level is justified in light of the possibilities available at national, regional or local level decision-making at the lowest possible level of government 6

7 EU LEGISLATIVE ACTS AND DOCUMENTS Strategy Flagship Initiatives Roadmap White Paper Communication Energy Union Directive Regulation Decision Initiative Impact Assessment EU Policy Visionary/ Strategic Legislative Strategy (in EU perspective) Long-term plan of action: Europe 2020 strategy for smart sustainable and inclusive growth (e.g. new: Energy Union etc.) Flagship Initiatives (7) Areas that have been identified as new engines to boost growth and jobs (as part of the Europe 2020 strategy) Roadmap A (policy) strategy in more detail including a way or path to achieve the set goal Communication Position paper from the Commission that often signals the start of a proposal White Paper A document containing proposals for Community action in a specific area Directive Legislative Act, that sets legally binding goals, without dictating the way to achieve the goals to the member states Regulation Legally binding legislative act for all member states Decision Legally binding legislative act for a special case or member state. Initiative Non-binding policy paper that pursues a certain objective by stimulating policy Impact Assessment A document that evaluates the possible impacts of a Commission proposal and is mandatory before every proposal 7

8 AGENDA Introduction: EU structure and components EU policy cycle and UNFCCC EU Climate Change Policy Achievements and future policy (discussion) 8

9 EU POSITION PROCESS UP TO A UNFCCC MEETING EU Presidency Working Groups COREPER Environment Council Council of the EU Commission Initiative First draft of EU position National experts negotiations No limit to no. of meetings Agree on draft as much as possible Article 240 TFEU Permanent Representatives negotiations (diplomatic) Agree on outstanding issues Draft almost ready Meeting of all ministers of the environment / climate change Agree on last details of EU position Meeting of all heads of Governments/State Agree on final text (summary) of the EU position 2-4 months 9

10 EU MANDATE: COUNCIL CONCLUSIONS 10

11 THE EU IN THE UNFCCC 28 countries, one position: The 28 members of the European Union meet in private to agree on common negotiating positions. The country that holds the EU Presidency - a position that rotates every six months - then speaks for the European Union and its 28 member states. As a regional economic integration organization, the European Union itself can be, and is, a Party to the Convention. However, it does not have a separate vote from its members. (UNFCCC website) Council Decision of 25 April 2002 concerning the approval, on behalf of the European Community, of the Kyoto Protocol to the United Nations Framework Convention on Climate Change and the joint fulfillment of commitments thereunder (2002/358/CE) Who negotiates? How does a EU position come together? 11

12 AGENDA Introduction: EU structure and components EU policy cycle and UNFCCC EU Climate Change Policy Achievements and future policy (discussion) 12

13 EU CLIMATE CHANGE POLICY Climate change legislation can be divided in: 1. Mitigation reducing GHG emissions 2. Adaptation anticipating the adverse effects of climate change and take action to prevent damage Further reading: Strategic and legislative documents: Roadmap towards a low-carbon economy in 2050 Energy Roadmap 2030 Climate and Energy Package targets: o A 20% reduction in EU greenhouse gas emissions from 1990 levels; o Raising the share of EU energy consumption produced from renewable sources to 20%; o A 20% improvement in the EU's energy efficiency Proposal for a 2030 Climate Framework (later) Energy Union 13

14 EU CLIMATE CHANGE POLICY - MITIGATION EU Climate mitigation policies: 1. EU Emission Trading Scheme Large emitting sources 2. Effort-sharing decision Small emitting sources 3. Low carbon technologies 4. Protection of the Ozone Layer 5. Fluorinated greenhouse gasses 14

15 EU EMISSION TRADING SCHEME (EU ETS) Based on Directive 2003/87/EC with various amendments and supporting regulations (5 Directives, ca 9 Regulations and x other documents, e.g. studies and guidance documents) Cornerstone of EU Climate Policy Compliance ( 100 fine per tonne of CO 2, repair deficit and naming/shaming) -20% irt 1990 levels Cap - 1,74% every year CO 2 Allowances: - Auctioned - Awarded - Bought (incl. international credits) time

16 EU ETS: PHASES (4) TIMELINE Phase 1 ( ) Phase 2 ( ) Phase 3 ( ) Phase 4 ( ) Approx. 40% of emissions covered Free allocation Energy generation Setting-up of national registries Linking directive: international credits CDM JI Including Norway, Iceland and Liechtenstein In 2012 full activation of the scheme 45% of emissions covered A single EU wide cap on emissions Auctioning, not free allocation, is now the default method for allocating allowances More sectors and gases are included limiting banking of allowances between Phases II and III 16

17 EU ETS: SURPLUS Source: Staff Working Document on the functioning of the carbon market Over the last years a surplus of allowances has accumulated: - Over-allocation (windfall profits and new entrants) - Financial crisis - International credits - Carbon leakage - Overlap of EU policies - Fraud (Tax and registries) 17

18 EU ETS: BACK-LOADING & CHALLENGES Very low EU ETS price: The radical build-up of allowances affected the credibility of the ETS system, hence the Commission came with a temporary solution to back-load a number of allowances. Commission Regulation (EU) No 176/2014: Postponing auctioning of 900 million allowances to allow demand to pick up: Distribution limit in 2014 of 400 million Distribution limit in 2015 of 300 million Distribution limit in 2016 of 200 million Other challenges: Linking: Australia from 2018? (postponed indefinitely) New Zealand Switzerland, ongoing negotiations California, China, in the future? Other sectors: Transport Aviation (Coming up next week) International shipping (Coming up next week) 18

19 EU ETS IN PROPOSAL FOR 2030 FRAMEWORK 43% (so a declining curve of 2,2%) Market Stability Reserve (MSR) from 2019 Back-loaded allowances directly into MSR Auctioning progressively replaces free allocation (even more) Widening of sectors (to be discussed) Cap - 1,74% every year -20% irt 1990 level CO 2-43% irt 2005 level Allowances: - Auctioned - Awarded - Bought (incl. international credits) Cap - 2,2% every year time

20 EFFORT SHARING DECISION (ESD) Effort-Sharing Decision (Decision No 406/2009/EC): 10% mandatory emission reduction targets for all non-ets emissions: transport (except aviation and shipping) buildings agriculture waste Targets have been set by Gross Domestic Product per capita (GDP) Responsibility of the Member States to achieve its target national measures Source: European Commission 20

21 ESD DETAILS Annual Emission Allocation Linear trajectory of its annual average greenhouse gas emissions based on Annual Emissions Decision by Commission Annual emission allocation (AEA) means the annual maximum allowed greenhouse gas emissions in the years 2013 to 2020 as specified in Article 3(2) ESD Mandatory reporting on progress and compliance takes up to 1,5 years. (So soon 2013 will be published) Registry Regulation ((EU) no 389/2013) AEAs are measured in tons of CO2-equivilant (CO2eq) 1 ton of CO2eq = 1 AEAunit (AEAu) (transferable carbon unit for EU Member States) Every country has a compliance account for every year that contains the initial amount of AEAus corresponding to that year Annual reporting and balancing 21

22 ESD FLEXIBILITY AND COMPLIANCE Compliance National emission reduction Flexibility in (subsequent and following) years Selling between MS International Credits Flexibility Use of international Credits (art. 5 ESD) up to 3%+1% of AEA Transfer of unused CDM quota (art. 5.6 ESD) within the 3% of AEA Domestic offsets (art. 24a ETS-Directive) Borrowing AEA entitlements from future years maximum up to 5% (art. 3.3 ESD) (before compliance deadline) Banking of AEAus that are not used unlimited and can be used when need (art. 3.3 ESD) Transfer AEAus between MS of a future year maximum up to 5% (art. 3.4 ESD) (before compliance deadline) Transfer unused AEAus between MS unlimited (art. 3.5 ESD) (after compliance deadline) In case of non-compliance: Any shortfall in emission reductions will have to be achieved in the next year, multiplied by a factor of 1.08 as a penalty. Member States will have to submit a corrective action plan to the Commission detailing, among other things, how and when they intend to get back on track towards meeting their 2020 targets. 22

23 ESD COMPLIANCE INTERACTION WITH RES Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources 3 types of Renewable energy sources (RES): Electricity (RES-E) Heating and Cooling (RES-H&C) Transport (RES-T) National support schemes: e.g. Subsidies, Loans, Feed-in tariffs, Premiums, Quota System, Tax regulation, Net-metering, Tendering etc. Measures of international cooperation between Member States: Statistical transfer between Member States (all types of RES) Joint Projects between Member States (only for RES-E and RES C&H) Joint projects between Member States and third countries (only for RES-E) Joint Support Schemes (only for RES-E and RES C&H) 23

24 LU DK NO SE NL AT FI IE UK BE DE FR IT ES CY GR PT MT CZ HU EE HR SK PL LT LV RO BG EU28+1 ESD IN PROPOSAL FOR 2030 FRAMEWORK 30% annual emission reduction target for EU for all non-ets emissions. All MS will contribute to the overall EU reduction in 2030 with the targets spanning from 0% to -40% compared to 2005; Targets for the MS with a GDP per capita above the EU average will be relatively adjusted to reflect costeffectiveness in a fair and balanced manner; A new flexibility in achieving targets - for MS with national reduction targets significantly above both the EU average and their cost effective reduction potential as well as for Member States that did not have free allocation for industrial installations in will be established through a limited, one-off, reduction of the ETS allowances, to be decided before 2020, while preserving predictability and environmental integrity; 0 Indicative: GHG reductions example under new ESD

25 LOW CARBON TECHNOLOGIES (CCS & NER) Carbon Capture and Storage is a technique for trapping carbon dioxide as it is emitted from large point sources, compressing it, and transporting it to a suitable storage site where it is injected into the ground. Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide and amending Council Directive 85/337/EEC Framework to/for: Minimize risk to environment Preventing risk to operation Currently has the development in this area stagnated: Low EU ETS price Surplus of allowances Local appeals Couple of pilot project ongoing in US, Canada, UK and Norway NER 300 is a funding program for CCS and renewable energy sources projects. Under the first call for proposals the European Commission in December 2012 made funding awards for a total value of 1.2 billion to 23 renewable energy projects. This amount is estimated to have leveraged additional funding of over 2 billion from private sources. In July 2014, under the second decision, 1 billion in funding was awarded to 19 pioneering projects including the first example of a large-scale carbon capture and storage project in the EU. 25

26 OTHER GHG POLICIES Protection of the ozone layer Basis: Montreal Protocol n Substances that Deplete the Ozone Layer (potent GHG) ODS are often those of (old) refrigerators and air conditioners EU legislation: Regulation (EC) 1005/2009 of 16/09/2009 on substances that deplete the ozone layer (updated) Commission Regulation (EU) 537/2011 on mechanism for the allocation of quantities of controlled substances allowed for laboratory and analytical uses Commission Regulation (EU) No 291/2011 on essential uses of controlled substances other than hydrochlorofluorocarbons for laboratory and analytical purposes Commission Decision 2010/372/EU on the use of controlled substances as process agents (updated) Fluorinated greenhouse gasses (in various legislation) (2% of EU s overall GHG) Replace often ODS and do not damage the atmospheric ozone layer Target of two-thirds cut by 2030 EU legislation: Regulation (EC) No 842/2006 of the European Parliament and of the Council of 17 May 2006 on certain fluorinated greenhouse gases (Text with EEA relevance) Directive 2006/40/EC on mobile air-conditioning systems 26

27 INTERNATIONAL TRADE OF REDUCTION UNITS Commonly used types of carbon credits in Europe: Certified emission reductions (CERs) Clean Development Mechanism produced allowance Assigned amount Unit (AAU) an individual allowance European Union Allowance (EUA) an European individual allowance Individual trading possible (exchanges) What determines the price of carbon? (non-exhaustive) Demand and supply several market places (like stock exchanges) The allowance is based on CO 2 -equivalent Used interchangeable to a certain extent Additionality and lifetime Lack of homogeneity between projects Environmental integrity of projects 27

28 ADAPTATION Adaptation Strategy: Promoting action by Member States: The Commission will encourage all Member States to adopt comprehensive adaptation strategies and will provide funding to help them build up their adaptation capacities and take action. 'Climate-proofing' action at EU level by further promoting adaptation in key vulnerable sectors such as agriculture, fisheries and cohesion policy, ensuring that Europe's infrastructure is made more resilient, and promoting the use of insurance against natural and man-made disasters. Better informed decision-making by addressing gaps in knowledge about adaptation and further developing the European climate adaptation platform (Climate-ADAPT) as the 'one-stop shop' for adaptation information in Europe. But it remains an inherent national issue. All states will have different needs in combating the effects of climate change. 28

29 AGENDA Introduction: EU structure and components EU policy cycle and UNFCCC EU Climate Change Policy Achievements and future policy (discussion) 29

30 POLICY CHANNEL EU ACHIEVEMENTS Progress on EU climate and energy policies: Greenhouse gas emissions in 2014 decreased by 23% relative to emissions in 1990 and expected to reduce further by 24% by 2020 on the basis of current policies The share of renewable energy has increased to 13% in 2012 as a proportion of final energy consumed and is expected to rise further to 21% in 2020 and 24% in 2030 on the basis of current policies The energy intensity of the EU economy is reduced by 24% between 1995 and 2011 whilst the reduction of industry was about 30%. The carbon intensity of the EU economy fell by 28% between 1995 and 2012 Source: COM(2014) 15 final A policy framework for climate and energy in the period from 2020 to

31 SUMMARY EU 2030 CLIMATE AND ENERGY FRAMEWORK Key elements of the 2030 policy framework proposed by the Commission Commission : A binding greenhouse gas reduction target of 40% below 1990 level. 43% in ETS Sector and 30% in non-ets sector below the 2005 level. An EU-wide binding renewable energy target of at least 27% (EUC) in 2030 not be translated into national targets through EU legislation Energy efficiency framework will be further considered in a review of the Energy Efficiency Directive due to be concluded later this year (27% now, and hoped to be 30%) Reform of EU ETS: a market stability reserve for the next ETS trading period and starting in 2019? ETS cap would be increased from 1.74% now to 2.2% after 2020 A set of key indicators to assess progress over time and to provide a factual base for potential policy response. New governance framework based on national plans for competitive, secure and sustainable energy 31

32 THANK YOU FOR YOUR ATTENTION Reading suggestions: Website European Commission, Climate-Action Edwin Woerdman, Martha Roggenkamp and Marijn Holwerda eds., Essential EU Climate Change Law, Edward Elgar Publishing, United Kingdom,