Implementation of the EU climate policy in the EU Member States: the case of Poland
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1 Implementation of the EU climate policy in the EU Member States: the case of Poland Mr Wojciech Stepniewski, Climate Coalition, Poland 11 October 2013 Clima East 1
2 Scope of presentation 1. Poland s strategies to implement European Union climate policy and legislation 2. How emissions versus Kyoto targets look like in Poland and the European Union? 3. Emissions trading scheme 4. Effort sharing 5. Renewable energy 6. Other measures undertaken 7. Implications of climate policies for the Polish economy
3 Implementation of EU climate policy to Polish law The climate and energy package comprises four main documents which have to be implemented to the Polish legislation : EU ETS Directive (2009/29/EC) Reform of the EU Emissions Trading System (EU ETS) Ministry of Environment Effort Sharing Decision (406/2009/EC ) National targets for non-eu ETS emissions Ministry of Environment Carbon capture and storage Directive (2009/31/EC) a legal framework for the environmentally safe use of carbon capture and storage technologies Ministry of Environment Renewable Energy Directive (2009/28/EC) binding national targets for raising the share of renewable energy in their energy consumption by 2020 Ministry of Economy Energy efficiency The climate and energy package does not address the energy efficiency target directly. This is being done through the Energy Efficiency Plan and the Energy Efficiency Directive Ministry of Economy
4 GHG [mln Mg of CO2 eq.] GHG [mln Mg of CO2 eq.] GHG [mln Mg of CO2 eq.] Emissions vs. Kyoto Target PL Kioto Target non ETS ETS EU15 Poland well below the Kyoto target as a result of technology development and structural change of high energy intensity industries EU slightly below the Kyoto target as a result of the crisis and due to accesion of CEE states EU27 Source: UNFCCC Kioto Target Kioto Target non ETS non ETS 1000 ETS 1000 ETS
5 [mln Mg] [mln Mg] Emission of GHG versus GDP PL $ $ $ $ $ $ $ $ $ $ 0 $ EU $ $ $ $ $ $ $ - 0 $ Total emission Gross domestic product based on purchasing-power-parity (PPP) per capita GDP Sources: GDP International Monetary Fund, World Economic Outlook Database; Emissions UNFCCC
6 Targets of emission reduction in the EU package Source: EC PL +14%
7 Emissions trading scheme ETS
8 EU ETS - rules Free allocation Free allocation Auctioning (with exemptions) 3 year-period 5 year-period 8 year-period Constant cap Cap on the national level Decreasing cap (-1,74%/year) Cap on the EU level NAP (all sectors) NIM (industry and heat) + derogation (electricity) Allocation methodology on the national level No banking Banking Harmonised methodology on the EU level Benchmarks Heat for household Subinstallation Carbon leakage
9 Key changes in EU ETS EU GHG emission reduction target 21% (1,74% annual reduction) Separation EU policy from Kyoto Protocol (base year bonus for earlier reduction) Introduction of NIMs National Implementation Measures (enhanced role of EU) Auctioning main and future allocation methodology 5% of the total EU cap reserve for new entrants Adding other GHG gases: N 2 O i PFC (depending on the sector and type of activity (aluminum, nitric acid production) Restrictions in clearing some types of CER/ERUs
10 Key changes in EU ETS - allocation of allowances Depends on types of sectors Power sector No free allowances in whole period with the exception of eight MS (including Poland) which made use of a derogation (Article 10c of EU ETS Directive) 70% in % in 2020 Sectors not exposed to carbon leakage (including heat) 80% in % in % in 2027 Sectors exposed to carbon leakage 100% throughout the III period of EU ETS
11 Key changes in EU ETS - allocation of allowances Benchmarks: new method for the allocation of CO 2 allowances in the EU ETS; Pan European product benchmarks; the average of 10% most efficient installations in the EU (CO 2 emissions) lack of the specification of fuel, installations geographical location, age, output, quality of raw materials used Carbon leakage: direct up to 100% free allowances; indirect possibility of financial compensation (EC Guidelines)
12 [Mt CO2 eq.] Structure of emissions in the EU ETS in Poland, Verified GHG emissions in EU ETS [Mt] Freely allocated EUAs [Mt CO2 eq.] Source: KOBiZE
13 Estimated free allocation ( ) vs. Emissions in 2012 in Poland Mt Lack of allowances compared to emissions Derogation for electricity generators 200 Installations covered by EU ETS in ,24 63,87 73,17 83,21 93, ,63 212,70 77,82 72,26 66,70 60,03 52,25 105,41 43,36 118,76 32,24 153,10 0,00 64,56 60,50 56,75 53,39 50,42 47,86 45,63 43,53 0 Source: KOBiZE; the crosssectoral correction factor was included
14 Effort sharing
15 Key elements for the ESD decision Binding annual greenhouse gas emission targets : PL +14% for 2020 (from 2005 level) Covers emissions from sectors not included in the EU Emissions Trading System, such as transport (except aviation which was included in ETS), buildings, agriculture and waste It is mainly Member States responsibility to implement policies and measures, which will help limit emissions from the sectors covered by the ESD Emissions from LULUCF (land use, land use change and forestry) and international shipping are not included
16 Emission limits for Poland in non- ETS [mln ton CO2 eq.] 250 Reducing the cap due to exclude part of emissions from non-ets (included in the EU ETS for the period ) Target for non-ets ,07 10,87 10,67 10,46 10,26 10,06 9,85 9, ,50 194,18 186,90 188,06 189,21 190,37 191,52 192,67 193,83 194, Emissions from non- ETS in 2005 Average emissions from non- ETS ( ) Source: KOBiZE
17 Implemented measures at the EU level Emission standards for new cars and vans Emission reductions from buildings improve the energy performance of buildings Eco-design requirements for energy related products Withdrawal of incandescent lamps Energy labelling systems to inform consumers Restrictions on fluorinated industrial gases (F-gases) and implementation of other EU environmental policies, e.g. on soil protection and waste
18 Example of measures at the national level Shift from transport based on fossil fuels to sustainable one, elements of green procurement included in public orders Promotion of public transport and municipal bicycles schemes Energy performance standards for buildings introduced, stste financial support in place More efficient remote heating systems Renewable energy or coal to gas - for heating More efficient farming practices Conversion of maze, animal waste to biogas
19 Example of measures at the national level Directive 2010/30/EU on the labeling and standard product information, the consumption of energy and other resources by energy-related products. Poland adopted the act on providing information on energy-using products, and other essential resources. The new Directive introduced, among others new energy classes A +, A + +, A Polish Act introduces to the Polish system the monitoring and control of energy labels. Includes: Refrigerators, washers, dryers and their combinations, dishwashers, ovens, clothes dryers, air conditioners, televisions, lamps.
20 Example of measures at the national level energy efficiency 2006/32/WE Energy Efficiency Directive is addressed in Poland by Energy Efficiency Law from April 15th, 2011 Ist and IInd National Energy Efficiency Action Plan, April, 2012 Introduction of the Energy Efficiency Law should bring energy savings of 2 2,5 Mtoe w 2016 r. The Law sets among others: 1. National energy efficiency target; 2. Public sector actions and tasks to increase efficiency; 3. Rules for acquiring energy efficiency certificates (white certificates) 4. Rules of preparing energy audits and gaining energy auditor certificates
21 Example of measures at the national level energy efficiency Directive 2010/31/EU on the energy performance of buildings The new Law on Energy Performance of Buildings is still being prepared by the Ministry of Transport, Construction and Maritime Economy. Passive construction - only several objects, however this business is growing Not properly introduced buildings energy certificates From December 31, 2020 all new buildings would have to be "nearly zero-energy" What will be the Polish standard of efficiency (energy consumption) for such buildings kwh/m 2 y or 30 kwh/m 2 y? Member States required to present a plan how to increase the number of "nearly zero-energy" buildings.
22 Renewable energy
23 Renewable Energy Sources (RES) development benefits enhance security of fuel and energy supply rural areas development through the increase in the field of non-food purposes production improvement of national financial balance (energy resources import reduction) RES industry development, which will directly influence the labour market and new technology export ability
24 Statistical data of final energy use including large hydro, 2010 Renewables share of electricity, heat and transport 16% 12% 9,5% Renewables share of electric energy only 19% 21% 7% Data: REN21, URE
25 Scenarios of final energy use including large hydro, 2020 Renewables share of electricity, heat and transport N/A 20% 15% Renewables share of N/A 34,3% 19% electric energy only Data: REN21, URE in accordance with Directive 2009/28/EC Intermediate targets for Poland set out in Directive: 2012 r. 8,76%, 2014 r. 9,36%, 2016 r. 10,44%, 2018 r. 11,88%
26 World s trends of renewables development For the first time in 2010 half of newly built generation capacities in electrical energy sector were Renewable Energy Sources Data: REN21
27 World s trends of renewables development, 2010 Ranking based on new capacity created in Total RES Wind Fotovoltaics Solar heat Ethanol Biodiesel production production 5 Data: REN21
28 Support mechanism for electricity from renewables in Poland Green certificates mechanism introduced in October 2005 Obligation of purchase of the whole amount of electricity generated from renewables at average market price of conventional electricity from the previous year Average market price announced by the President of the Energy Regulatory Office Renewable Energy Law delayed, for the time being only amendments to the Energy Law introduced, majorily in order to avoid European Commision penalties Presently the auctioning system is under consideration
29 Support mechanism for heat production from renewables Purchase obligation imposed on heat sellers The purchase obligation must be within range of needs for the heat (sellers can not be obligated to buy more than they can sell) 29
30 Support mechanism for biofuels Obligation imposed on producers and importers of fuels to ensure at least minimal share of biocomponents in overall quantity of liquid fuels placed on the market Minimal share of biocomponents National indicative target established by the Council of Ministers: 7,1% in
31 Demand for gross final energy from renewable energy sources ktoe transport biofuels heat electricity % Share of renewable energy in total gross final energy 16,0% ,10 14,0% 12,0% ,10 10,0% ,90 549, , ,90 8,0% 6,0% 4481,60 4,0% ,70 370,60 714, , ,0% 0,0% Source:Polish Energy Policy till 2030,
32 Implications of climate policies for the Polish economy
33 Costs Huge investment is needed in the power sector - estimated around bln PLN (25-75 bln EUR) until 2020 (Fitch; EIB) Polish Economic Chamber with energy companies and EnergSys present their own calculations Potential cost of buying additional allowances in the period will be approximately 5 bln EUR Additional costs for Poland in case of increasing the target to: -25% is 0,76% GDP -30% is 0,69% GDP (lower because of additional measures) [IA to Beyond 20% EC Communication] 33
34 Finance Auctioning revenues = 4 bln EUR (however this number is uncertain due to current carbon price circumstances = prices much below those projected) New state aid rules (limited scope of application) Support for innovative low-carbon technology (not enough for Carbon Capture and Storage CCS) 34
35 THANK YOU WOJCIECH STEPNIEWSKI T: Clima East
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