European Commission DG Environment. National Emission Ceilings Directive Review Task 3 First Draft Review Report. Prepared for the Final Report

Transcription

1 European Commission DG Environment National Emission Ceilings Directive Review Task 3 First Draft Review Report Prepared for the Final Report Entec UK Limited

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3 Report for Michel Sponar DG ENV-C.1 European Commission Avenue de Beaulieu 5 6/103B-1160 Brussels Belgium Main Contributors Katherine Wilson Ben Grebot Andriana Stavrakaki Alistair Ritchie Alun McIntyre Issued by Katherine Wilson Approved by European Commission DG Environment National Emission Ceilings Directive Review Task 3 First Draft Review Report Prepared for the Final Report Entec UK Limited Alistair Ritchie Entec UK Limited Windsor House Gadbrook Business Centre Gadbrook Road Northwich Cheshire CW9 7TN England Tel: +44 (0) Fax: +44 (0) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3 Certificate No. EMS Certificate No. FS In accordance with an environmentally responsible approach, this document is printed on recycled paper produced from 100% post-consumer waste, or on ECF (elemental chlorine free) paper

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5 i Summary Introduction This first draft review report has been prepared by Entec UK Ltd for the European Commission in accordance with the requirements set out in the National Emission Ceilings Directive (2001/81/EC) (NECD). The NECD sets ceilings for emissions of sulphur dioxide (SO 2 ), nitrogen oxides (NO X ), volatile organic compounds (VOCs) and ammonia (NH 3 ) in Member States. The long-term objectives (LTOs) of the NECD are to eliminate the adverse effects of acidification and reduce exposure to ground-level ozone of man and the environment. As it is not technically feasible to meet the LTOs in the short term, the NECD sets interim environmental objectives (IEOs), to take account of technical feasibility and the associated costs and benefits. Member States must limit national annual emissions of the four pollutants to NECs specified for each Member State within Annex I of the Directive for EU15 and as set out in Article 20 of the Act of Accession for the New Member States. Member States must also develop national programmes for the progressive reduction of the relevant pollutants, and annually provide the Commission with emission inventories and projections for In turn, the Commission must report to the European Parliament and the Council on progress on the implementation of the NECs and towards attaining the IEOs and the LTOs set by the Directive. This report is a first draft to fulfil the Directive requirements on behalf of the Commission. It is structured to incorporate the Directive requirements in a straightforward manner. A table of requirements and sections in which the requirements are fulfilled is presented in the main report. The report is structured as follows: Section 1: Introduction; Section 2: Policy drivers; Section 3: Business as usual (BAU) emissions projections; Section 4: Consequences for IEOs and LTOs; Section 5: Meeting the NECs; and Section 6: Meeting the IEOs and LTOs. The Commission has linked the review of the Directive with the preparation of the Clean Air For Europe (CAFE) Thematic Strategy on air pollution, which is required under the Sixth Environmental Action Programme. Many of the projects commissioned under the CAFE Program have provided input to the NECD review. Policy drivers Since the publication of the NECD, there have been a number of policy developments, which have impacted upon emissions of SO 2, NO X, VOCs and NH 3. The report identifies the following: a) new Community legislation adopted setting emission limits and product standards for relevant sources of emissions: h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

6 ii b) developments of best available techniques in the framework of the exchange of information under Article 16 of the IPPC Directive (96/61/EC); c) emission reduction objectives for 2008 for emissions of SO 2 and NO X from existing LCPs, reported by Member States under the LCPD (2001/80/EC); d) emission reductions and reduction commitments by third countries, with particular focus on measures to be taken in the accession candidate countries; e) new Community legislation and international regulations concerning ship and aircraft emissions; f) the development of transport and further action to control transport emissions; g) developments in the field of agriculture, new livestock projections and improvements in emission reduction methods in the agricultural sector; and h) major changes in the energy supply market within a Member State and new forecasts reflecting the actions taken by Member States to comply with their international obligations in relation to climate change. Business as usual (BAU) emissions projections Figure A presents Member States 2010 emission projections with the NEC targets. Where possible, BAU projections have been compared alongside Beyond Business-As-Usual (BBAU) projections, which include impacts of additional/proposed policies and measures. SO 2 NO X 160% 160% 140% 140% % of NEC % of NEC 120% 100% 80% 60% % of NEC 120% 100% 80% 60% 40% 40% 20% 20% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU14 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU14 VOCs NH 3 140% 140% 120% 120% % of NEC 100% 80% 60% % of NEC 100% 80% 60% 40% 40% 20% 20% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU14 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU14 Figure A BAU Projections BBAU Projections BAU and BBAU emission projections as a proportion of each Member States NEC (100% is marked by the line and equates to each Member States NEC for VOCs) Graphs constructed from Member States National Projections. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

7 iii Most Member States meet their NECs for SO 2, with the exception of Belgium, France, the Netherlands and Malta, whose BAU emissions may exceed the ceilings under various scenarios. Conversely, most EU15 Member States are projected to exceed their NO X NECs. NO X emissions from all New Member States (NMSs) are within their own NECs. For VOCs, the projections show a mixed pattern of compliance for the EU15 under BAU, with Belgium, Germany, Ireland, the Netherlands, Portugal and Spain potentially requiring additional measures as outlined in their National Programmes. Projections for NH 3 emissions also show a mixed pattern of compliance. A number of EU15 Member States are predicted to exceed their NECs under BAU, including Denmark, France, Germany and Italy. Consequences for interim environmental objectives and long term objectives The IEOs are measured through the exceedance of critical loads (for acidification and eutrophication) and critical levels (for concentrations of ozone), beyond which which significant adverse effects on specified sensitive elements of the environment may occur, according to present knowledge. Excedences of critical loads are expressed as area-weighted averages for all ecosystems in a grid cell (150 x 150 km square). Critical levels for ozone are measured in terms of AOT40 and AOT60. AOT40 is the sum of the differences between hourly ozone concentrations greater than 40 ppb and 40 ppb during daylight hours, accumulated from May to July each year. AOT60 uses 60 ppb as a reference value. The IEOs are presented within the NECD as a means of moving towards the LTOs of eliminating the adverse effects of acidification and reducing exposure to ground level ozone of man and the environment to the guideline values established by the WHO. Developments since the original NECD negotiations Since the negotiations of the NECD, methods used to model environmental impacts have been refined. The new Unified EMEP Eularian model represents a substantial improvement on the earlier model used during the negotiations of the Directive 1. Estimates generated using the new model have altered baseline projections for exceedances of critical loads, such that the extent of the acidification and eutrophication problems in 1990 was actually worse than predicted at the time of the original NECD negotiations. Developments in human health research for ozone have meant that models are now run for SOMO35, rather than the previous AOT60 parameter. As such, the results reported refer to the projected changes in SOMO35 and are therefore not directly comparable to the IEO in the NECD. This exposure parameter is known as SOMO35 (sum of means over 35) and is the sum of excess of daily maximum 8-h means over the cut-off of 35 ppb calculated for all days in a year. Acidification Figure B presents the percentage change in Member States forest area with acid deposition above critical loads from 2000 to Significant reductions are seen for forest areas in many Member States, notably Belgium, Denmark, Luxembourg, Sweden, the UK, Poland and Slovakia. However, even in 2020, critical loads are exceeded in more than 40% of forest area in Germany, the Czech Republic and the Netherlands (where 80% of forests remain at risk). 1 Simpson, D, Fagerli, H., Jonson, J.E., Tsyro, S., Wind, P. and Tuovinen, J-P. (2003). Transboundary acidification, eutrophication and ground level ozone. Status report 1/2003. Part I: Unified EMEP model description, EMEP Report 1/2003. MSC-W, Oslo, Norway. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

8 iv The IEO is to reduce areas where critical loads are exceeded by at least 50% (in each grid cell) in 2010 compared with the 1990 situation. Whilst significant reductions in acidification have been made, the modelled outputs demonstrate that a number of grid cells are predicted to remain 100% at risk by As such, the currently available modelling work indicates that the IEO for acidification will not be met, considering the new EMEP grid cell resolution of 50 x 50 km square. However, it is noted that the NECD defines a grid square as 150 x 150 km square. The projected reductions in acidification are not highly significant, indicating that further reductions will be required to fulfil the long-term environmental objectives Figure B Acid deposition to forests - Percentage of forest area with acid deposition above critical loads, using ecosystem-specific deposition; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies; Critical loads database of Eutrophication Figure C demonstrates that substantial improvements in eutrophication are not expected by 2010, with the percentage of ecosystem area within the EU25 for which nutrient nitrogen critical loads are exceeded reducing from 88% in 1990 to 73% in Further significant improvements are not expected up to Figure C Excess of critical loads for eutrophication - Percentage of total ecosystems area with nitrogen deposition above critical loads for the no further climate measures emission projections, using grid-average deposition; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies; Critical loads database of Amann, M., Bertok, I., Cofala, J., Gyarfas, F., Heyes, C., Klimont, Z., Schöpp, W. and Winiwarter, W. (2004a) Baseline Scenarios for the Clean Air for Europe (CAFE) Programme. October Available online at: Accessed January Amann et al. (2004a) op cit. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

9 v The IEO is to reduce areas where critical loads are exceeded by at least 50% (in each grid cell) in 2010 compared with the 1990 situation. The modelled outputs demonstrate that a large number of grid cells are predicted to remain 100% at risk by As such, the currently available modelling work indicates that the IEO for eutrophication will not be met, considering the new EMEP grid cell resolution of 50 x 50 km square. However, it is noted that the NECD defines a grid square as 150 x 150 km square. Further reductions will be required to fulfil the long-term environmental objectives. Vegetation-related ground level ozone Figure D presents the vegetation-relevant projections for ozone concentrations in AOT40, which show that whist significant reductions are expected by 2010 and further by 2020, problem areas still remain in Southern Europe and the Mediterranean. In 2010, large areas of Europe exceed the absolute limit vegetation-relevant IEO of 10 ppm.h. As such, the currently available modelling work indicates that the vegetation-relevant IEO will not be met, considering the new EMEP grid cell resolution of 50 x 50 km square. However, it is noted that the NECD defines a grid square as 150 x 150 km square. Even by 2020, the critical level for crops and semi-vegetation of 3 ppm.h is projected to be exceeded across large parts of Europe. Further action should therefore be taken if the levels of ozone are to be reduced below critical levels Figure D Vegetation-relevant ozone concentrations AOT40 [ppm.hours]m - Critical level for crops and semi-vegetation = 3 ppm.hours (under the IEOs); Calculated for the with climate measures baseline scenario; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies 4 Health-related ground level ozone Figure E presents the health relevant IIASA projections for 2010 and 2020 using the SOMO35 measure. The pattern of health-related exceedance mirrors that presented in Figure D, with the highest levels of exceedance in the Mediterranean. The health-relevant IEO has not been assessed due to changes in the way the impacts on human health are assessed since the negotiations for the NECD. However, reductions in health-relevant ozone concentrations by 2020 will not be sufficient to reduce ozone exposure below 35 ppb, which is the cut-off value suggested by the UN ECE 5. 4 Amann et al. (2004a) op cit. 5 UN ECE (2003) Modelling and assessment of the health impact of particulate matter and ozone. Executive Body for the Convention on Long-Range Transboundary Air Pollution. Working Group on Effects (Twenty-second session, Geneva, 3-5 September 2003). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

10 vi Figure E Health-relevant ozone concentrations (SOMO35, ppb.days) - Rural concentrations; Calculated for the no further climate measures baseline scenario; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies 6 Indicative emission ceilings for the Community as a whole The indicative emission ceilings for the EU15 set out in Annex II cover only SO 2, NO X and VOCs and are lower than the sum of the NECs for the EU15 in Annex I. The Annex II ceilings represent those originally proposed by the Commission on the basis of cost-effective analyses that calculated the emissions required to meet the IEOs. Article 20 of the Act of Accession set temporary ceilings for the EU25 (Table A) 7. Table A Comparison of RAINS projections (Aug 04) for the EU25 with indicative emissions ceilings set out in Annexes I and II of the NECD and Article 20 of the Act of Accession 8 - Sum of Annex I ceilings (kt) Annex II ceiling (kt) with climate measures 2010 emissions (kt) without climate measures Compliance level SO Compliance with both Annex I and Annex II for both scenarios EU15 NO X Compliance with neither Annex I nor Annex II for either scenario VOCs Compliance with Annex I but non-compliance with Annex II for both scenarios SO Compliance with both Annex I and Annex II for both scenarios EU25 NO X Compliance with Annex I but non-compliance with Annex II for both scenarios VOCs Compliance with Annex I but non-compliance with Annex II for both scenarios 6 Amann et al. (2004a) op cit. 7 Emission projections from RAINS are used so that information from New Member States is consistent with those from the EU15 8 Amann, M., Cofala, J., Heyes, C., Klimont, Z., Mechler, R., Posch, M. and Schöpp, W. (2004b) RAINS Review The RAINS model. Documentation of the model approach prepared for RAINS review. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

11 vii Modelling projections indicate that all IEOs will not be attained. On this basis, further emissions reductions will be necessary to meet the IEOs and LTOs. Meeting the national emission ceilings Whilst not a specific directive requirement, a number of Member States have presented information within their National Programmes on the costs involved with implementing and complying with the NECD. However, this information is very limited in nature and it is outside the scope of this report to undertake a review or verification of this data. As such, it is not possible to draw conclusions on the cost-effectiveness of measures to comply with the NECs from this data. RAINS uses an effects-based cost-effectiveness approach to determine solutions that minimize the cost of control necessary to attain specified environmental targets, taking into account differentiated environmental sensitivities, atmospheric source-receptor relationships, and marginal abatement costs 9. During the original development of the NECD, such an interface was operated to determine the monetary benefits of the various emission control strategies 10. This analysis calculated the additional cost of achieving a reduction in emissions equivalent to the H1 scenario described above. The cost of meeting these community wide emissions ceilings for SO 2, NO X and VOCs (as set out in Annex II) was calculated to be 5.4 billion per annum (1999 prices). More recent cost data has been sourced from the RAINS cost curves. During the original negotiations for the Directive, a cost benefit analysis was conducted following the cost-effectiveness study presented above 11. This estimated the associated benefits of the H1 scenario, in addition to lower ambition ( H2 ) and higher ambition ( H3 ) scenarios. Whilst following political agreement, the final NECs were lower than the H1 scenario emissions, the H1 scenario environmental targets were retained as the IEOs. As such, the CBA provides a direct indication of the potential benefits, if the IEOs were to be achieved, based on methods and data available at that time. Benefits were calculated to be significantly greater than the costs of implementation for all scenarios considered. As part of the CAFE programme, this methodology has been revised and will now be used to examine the costs and benefits of various scenarios under the CAFE programme 12. The results of the analysis were not available in time for inclusion within this report. Consideration has been given to potential administrative and policy measures to facilitate the implementation of the NECD and achieve compliance with the ceilings. These include: 9 Swedish Environmental Research Institute (SERI et al.) (2004) Service contract for Review of the RAINS Integrated Assessment Model - Reference ENV.C1/SER/2003/0079. Draft Final Report for Commission Comment 16 th July European Commission (EC) (1999a) Economic Evaluation of a Directive on National Emission Ceilings for Certain Atmospheric Pollutants. Part A: Cost-effectiveness Analysis. Report by International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria AEA Technology, Culham, UK. 11 European Commission (EC) (1999b) Economic Evaluation of a Directive on National Emission Ceilings for Certain Atmospheric Pollutants. Part B: Benefit Analysis. Report by International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria AEA Technology, Culham, UK. 12 AEA Technology (AEA T) (2004a) Service Contract for Carrying out Cost-Benefit Analysis of Air Quality Related Issues, in particular in the Clean Air for Europe (CAFE) Programme. Methodology for the Cost-Benefit analysis for CAFE: Volume 1: Overview of Methodology h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

12 viii monitoring progress: improving consistency with other Member States and other submissions; development of indicators; Commission report and inventories each year; reporting requirements: potential submission with other inventories; use of RAINS model as a default; use of same reporting formats for all submissions; tools for knowledge exchange: database of policies and measures; annual workshops; setting ceilings; and the use of economic instruments. Meeting interim environmental objectives and long term objectives This section looks beyond the current requirements of the NECD, to consider the means by which Europe can achieve interim environmental objectives and move towards the long-term objectives of protecting human heath and the environment. Current limitations on the scope of the Directive: Shipping Emissions from international maritime traffic are not currently included within the NECD (Article 2). Emissions of SO 2 and NO X from shipping are projected to grow substantially in the future (Figure F). These emissions have been shown to have a significant effect on acidification, eutrophication and ground-level ozone 13. SO 2 NO X Figure F Range of SO 2 emission projections [kt] EMEP MSC-W (2000) Effects of international shipping on European pollution levels ISSN: Norwegian Meteorological Institute research report No. 41 (NMI) 14 Amann, M., Bertok, I., Cofala, J., Gyarfas, F., Heyes, C., Klimont, Z., Schöpp, W. and Winiwarter, W. (2004c) The CAFE Baseline Scenarios: Emission projections. Presentation at the CAFE baseline dissemination workshop September 27, 2004, Brussels. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

13 ix For emissions of SO 2, BAU reductions are expected under the proposal for a directive amending Directive 1999/32/EC as regards the sulphur content of marine fuels. In addition, Annex VI of the Marine Pollution Convention, MARPOL 73/71 of the International Maritime Organisation enters into force in. This contains provisions on special SO X Emission Control Areas (the Baltic Sea, the North Sea and the English Channel) and NO X emissions standards for ships engines. Overall, these measures are expected to result in significant SO 2 emission reductions in some areas, although only moderate NO X emission reductions. Despite these policy measures, there are strong arguments for the potential inclusion of international shipping within the the NECD, principally due to the significant and increasing proportion of ship emissions to total EU emissions of NEC pollutants and the significant contribution ship emissions make to exceedances of critical loads in many Member States. However, prior to any further consideration of the potential inclusion of international shipping within the NECD, it would be necessary to: consider updated environmental impact modelling of ship emissions following the impact of planned policies on ship emissions in the future; consider any planned international level policy development on ship emissions, particularly through the IMO; identify a satisfactory way of allocating ship emissions to individual Member States; and determine whether a significant proportion of overall ship emissions in EU waters could be controlled by Member States if international shipping was included within the NECD. An alternative approach would be a sector specific emission ceiling, which could incorporate market based approaches as identified by NERA 15, but could also take account of ship-specific optimal areas of control. Current limitations on the scope of the Directive: Aviation Emissions from aviation beyond the landing and take-off cycle are not currently included within the NECD (Article 2). Non-LTO emissions of NO X affect regional air quality at the surface significantly more than LTO emissions (NMI et al, 2004a). Global non-lto emissions of NO X affect surface air quality in Europe by 2-3% for nitrogen deposition, and 1% for air concentrations of NO 2 and O 3. Overall, emissions from aviation have a small but not insignificant impact on acidification, eutrophication and ground level ozone in Europe. International policy development through CAEP / ICAO has recently recommended a reduction in NO X emission standards and further reductions in NO X emissions are being sought through this committee. However, these standards are focussed on LTO emissions of particular engine types and trends for increased overall pressure ratio (OPR) and increased air traffic indicate that emissions from the sector as a whole are likely to increase. Establishing a methodology for allocating emissions to individual Member States would be a complex issue, and any methodology would need to be robust, transparent, practicable and effective. Developments in the ICAO to reduce emissions of CO 2 and NO X from international aviation should be followed closely. If necessary, after the effects of these measures have been taken into account, further policy measures to reduce emissions from aviation should be considered. These policy measures could comprise the inclusion of aviation emissions beyond the landing and take-off cycle within the NECD. However, more detailed research and reflection on current developments would be required before this recommendation could be made. 15 NERA Economic Consulting (2004) Evaluation of the Feasibility of Alternative Market-Based Mechanisms To Promote Low-Emission Shipping In European Union Sea Areas h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

14 x Current limitations on the scope of the Directive: Geographical Exclusions The current NECD also does not apply to the Spanish Canary Islands, French overseas departments (Guadeloupe, Martinique, French Guiana and La Réunion) or the Portuguese Islands of Madeira and the Azores. The distance at which the remote regions are located from Europe, coupled with the apparent relatively low emissions of NECD pollutants, indicates that these areas do not have a significant impact on acidification, eutrophication and ground level ozone in Europe. Furthermore, emissions from the remote regions are already controlled by a number of EU directives. The benefits arising from potential additional emission reductions by including these areas within the NECD are therefore expected to be relatively limited. Harmonised Community measures There are a number of important considerations in developing harmonised Community measures for the most relevant economic sectors and products contributing to acidification, eutrophication and formation of ground-level ozone. 1. The projected problem remaining in 2010 and 2020 Changes in relative sectoral contributions to total emissions of pollutants: By 2020, the relevance of different sources will change for the current NECD pollutants as current legislation reduces emissions in selected sectors. In future, the dominant sectors will include shipping, industrial processes, off-road vehicles, diesel road vehicles, solvents and small combustion. Changes in relative contributions of pollutants to environmental impacts: Analysis has indicated that by 2010, the contribution made by NH 3 to acidity and eutrophication will be greater than that made by NO X as a result of more significant reductions in the latter Geographical scales for control Optimal areas: It is evident that different environmental problems affect different areas, but all of the European Union is impacted by at least one environmental effect. Given this geographical variation, it will be useful to consider the optimal areas for control of environmental impacts, rather than simply assigning emissions ceilings to individual Member States. Regional, hemispherical and global emissions: As the EU targets emissions from Member States, the relative contribution of emissions from outside the Community to environmental impacts within the Community will increase. This is particularly true of background ozone concentrations, for which methane has been cited as an important precursor. Intercontinental strategies will be very important in the future, if background contributions are to be tackled effectively. 3. Further integration with climate change policies Streamlining of NECD emissions reporting with those related to greenhouse gases would relieve some of the administrative burden on Member States. Further integration with climate change polices themselves will be important because future climate change policies will influence the fulfilment of future air pollution strategies. 16 Hettelingh, J.P. (2004) New developments on air pollution effects to ecosystems: ozone and acidification. Presented at the Workshop on Review and Assessment of European Air Pollution Policies. Gothenburg, October h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

15 xi Contents 1. Introduction This Report Background Acidification, eutrophication and ground-level ozone The National Emission Ceilings Directive (NECD) The CAFE programme Structure of the Report 3 2. Policy Drivers Affecting NEC Sources Policy drivers listed in the NECD (a) any new Community legislation which may have been adopted setting emission limits and product standards for relevant sources of emissions (b) developments of best available techniques in the framework of the exchange of information under Article 16 of Directive 96/61/EC (c) emission reduction objectives for 2008 for emissions of sulphur dioxide and nitrogen oxides from existing large combustion plants, reported by Member States pursuant to Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants into the air from large combustion plants (d) emission reductions and reduction commitments by third countries, with particular focus on measures to be taken in the accession candidate countries, and the possibility for further emission reductions in regions in the vicinity of the Community (e) any new Community legislation and any international regulations concerning ship and aircraft emissions (f) the development of transport and any further action to control transport emissions (g) developments in the field of agriculture, new livestock projections and improvements in emission reduction methods in the agricultural sector (h) any major changes in the energy supply market within a Member State and new forecasts reflecting the actions taken by Member States to comply with their international obligations in relation to climate change Summary 19 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

16 xii 3. Business as usual emissions projections Emissions inventories for Member States Sources of emissions estimates Policies considered as Business as Usual (BAU) Performance against NECs SO NO X VOCs NH Uncertainty Uncertainties highlighted by Member States Uncertainties highlighted in research contributing to the CAFE Baseline Uncertainties highlighted by EMEP Consequences for Interim Environmental Objectives and Long-term Objectives Introduction Progress in scientific understanding since the negotiations for the NECD Modelling environmental impacts Appropriate parameters Results of environmental modelling Acidification Eutrophication Ozone exposure Uncertainty associated with environmental modelling The model used Atmospheric dispersion (transboundary transport and deposition) Critical loads and levels Comparison of model calculations and observations Discussion of resulting uncertainty Implications for future emission ceilings Meeting the NECs Introduction Cost-effectiveness of compliance Cost effectiveness reported by Member States Cost-effective analysis using RAINS 60 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

17 xiii 5.3 Marginal cost benefit analysis Previous cost-benefit analysis during the NECD negotiations Cost-benefit analysis to be undertaken as part of the CAFE programme Uncertainty Uncertainty relating to cost-effectiveness of compliance Uncertainty relating to cost-benefit analysis Implementation Socio-economic impacts Compliance Meeting Interim Environmental Objectives and Long-term Objectives - Protecting Human Health and the Environment Introduction Current limitations of the scope of the Directive Shipping Aviation Geographical exclusions Harmonised Community measures The projected problem remaining in 2010 and Geographical scales of control Further integration with climate change policies References 99 Table 1 Location of response to specific elements detailed in Article 9, paragraph (1) 4 Table 2 Location of response to specific elements detailed in Article 9, paragraph (1) (a)-(n) 4 Table 3 Location of response to specific elements detailed in Article 10 5 Table 4 Location of response to specific elements detailed in Article 12 5 Table 5 New Community legislation adopting emission limits and product standards 7 Table 6 Comparison of emission projections and ceilings for signatories to the Gothenburg Protocol for Accession Candidate Countries and countries in the vicinity of the EU (exceedances marked in red) 12 Table 7 Measures considered as technically feasible under the IIASA maximum feasible reduction scenario for NH 3 15 Table 8 Impacts of policy drivers 20 Table 9 Summary of legislation considered for the CAFE baseline scenarios (IIASA, 2004b) 23 Table 10 Percentage of ecosystem area within the EU25 for which acidity and nutrient nitrogen critical loads are exceeded (Tarrasón et al., 2004) 37 Table 11 Taxonomy of uncertainty within the RAINS model (Amann et al., 2004d) 46 Table 12 Comparison of RAINS projections for EU15 with indicative emissions ceilings in Annexes I and II and for EU25 with indicative emissions ceilings set out in the revised Annexes I and II after Article 20 of the Act of Accession (after Amann et al., 2004j) 54 Table 13 Control costs calculated for the more stringent H1 scenario for EU15 (EC, 1999a) 61 Table 14 RAINS Model SO 2 Cost Curve Data for 2010 (CP_CLE Nov 04) 62 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

18 xiv Table 15 RAINS Model NO X Cost Curve Data for 2010 stationary sources only (CP_CLE Nov 04) 63 Table 16 RAINS Model VOC Cost Curve Data for 2020 stationary sources only (CP_CLE Nov 04) 63 Table 17 Control costs calculated for under the CP_CLE scenario (IIASA, 2005) 65 Table 18 Comparison of costs and benefits for Scenarios H1 and H2, using the value of life years (VOLY) and value of statistical life (VOSL) approach. Shading denotes the number of groups required for benefits to exceed costs in each scenario (after EC, 1999b). 67 Table 19 Emissions ceilings for EU15 under different scenarios (after EC, 1999b) 67 Table 20 Land and Ship emission projections for Table 21 Qualitative Assessments of Market-Based Approaches for Shipping (NERA, 2004). 84 Table 22 Advantages and limitations of the inclusion of shipping within the NECD 85 Table 23 Comparison of total European anthropogenic emissions with aircraft emissions over the European area. European anthropogenic emission values reported to UNECE/EMEP for year 2000 (NMI et al., 2004a) 86 Table 24 Overview of the impact of emissions from aviation at regional scale increase on average air quality indicators over Europe (NMI et al, 2004a) 89 Table 25 Advantages and limitations of the inclusion of non-lto aviation emissions within the NECD 91 Table 26 Socio-economic characteristics of the remote regions (EC, 2004e) 92 Figure 1 Links between the CBA, RAINS and EMEP models and other related activities in Europe (AEA T, 2004a) 2 Figure 2 Historic and projected changes in emissions from accession candidate countries (calculated after EMEP, 2004) 10 Figure 3 Historic and projected changes in emissions from countries within the vicinity of the EU (calculated after EMEP, 2004) 11 Figure 4 Livestock projections from various sources (IIASA, 2004a; EC, 2004a; AEAT, 2001) 14 Figure 5 RAINS projections for relative changes in livestock numbers (IIASA, 2004a August 04 Baseline, with climate measures) 15 Figure 6 Projected change in conventional thermal production (TWh ) (Eurelectric, 2003) 16 Figure 7 Projected changes: Gas and coal sourced generation ( ) (Eurelectric, 2003) 17 Figure 8 Projected Changes in Alternative Sources of Generation (TWh) (Eurelectric, 2003) 17 Figure 9 Range of RAINS projections for SO 2, NO X and VOCs for the with climate measures and the no further climate measures projections. The figures have been compiled from information in the CAFE baseline, August 2004 (after Amann et al., 2004h) 19 Figure 10 SO 2 - BAU and BBAU emission projections as a proportion of each Member States NEC (100% equates to each Member States NEC for SO 2) 24 Figure 11 SO 2 emissions projected for 2010 compared to NEC emission ceilings, August 2004 (Amann et al., 2004a) 24 Figure 12 SO 2 emissions by sector With climate measures scenario [kt], August 2004 (Amann et al., 2004a) 25 Figure 13 NO X - BAU and BBAU emission projections as a proportion of each Member States NEC (100% equates to each Member States NEC for NO X) 26 Figure 14 NO X emissions projected for 2010 compared to NEC emission ceilings, August 2004 (Amann et al., 2004a) 26 Figure 15 NO X emissions by sector With climate measures scenario [kt], August 2004 (Amann et al., 2004a) 27 Figure 16 VOC - BAU and BBAU emission projections as a proportion of each Member States NEC (100% equates to each Member States NEC for VOC) 28 Figure 17 VOC emissions projected for 2010 compared to NEC emission ceilings, August 2004 (Amann et al., 2004a) 28 Figure 18 VOC emissions by sector With climate measures scenario [kt], August 2004 (Amann et al., 2004a) 29 Figure 19 NH 3 - BAU and BBAU emission projections as a proportion of each Member States NEC (100% equates to each Member States NEC for NH 3) 30 Figure 20 NH 3 emissions projected for 2010 compared to NEC emission ceilings, August 2004 Figure 21 (Amann et al., 2004a) 30 NH 3 emissions by sector With climate measures scenario [kt], August 2004 (Amann et al., 2004a) 31 Figure 22 RAINS emission estimates (August 2004) vs. national inventories for the year 2000 (Amann et al., 2004a) NB RAINS estimates are higher for Luxembourg because RAINS calculates emissions for all fuel sold in a country, whereas national estimates refer only to fuel consumed within the country. 33 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

19 xv Figure 23 Number of IEF flagged values by pollutant as a percentage of the number of IEF comparisons that were made (Vestreng et al., 2004) 35 Figure 24 Exceedances of critical loads of acidity for 1990 and 2010; assumptions regarding emission data, critical loads and deposition are given in Table 10 (Tarrasón et al., 2004) 39 Figure 25 Percent of forest area with acid deposition above critical loads for the no further climate measures scenario (critical loads database of 2004) (Amann et al., 2004c) 39 Figure 26 Acid deposition to freshwater bodies - Percentage of catchment area with acid deposition above critical loads, using ecosystem-specific deposition; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies, using grid-average deposition; Critical loads database of (Amann et al., 2004h) 40 Figure 27 Acid deposition to forests - Percentage of forest area with acid deposition above critical loads, using ecosystem-specific deposition; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies; Critical loads database of (Amann et al., 2004h) 40 Figure 28 Exceedances of critical loads for nutrient nitrogen calculated for 1990 and 2010; assumptions regarding emission data, critical loads and deposition are given in Table 10 (Tarrasón et al., 2004) 41 Figure 29 Excess of critical loads for eutrophication - Percentage of total ecosystems area with nitrogen deposition above critical loads for the no further climate measures emission projections, using grid-average deposition; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies; Critical loads database of (Amann et al., 2004h) 42 Figure 30 Percent of ecosystem area with nitrogen deposition above critical loads for eutrophication for the no further climate measures scenario (critical load database of 2003) (Amann et al., 2004c) 42 Figure 31 Vegetation-relevant ozone concentrations AOT40 [ppm.hours]m - Critical level for crops and semi-vegetation = 3 ppm.hours (under the IEOs); Calculated for the with climate measures baseline scenario; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies. (Amann et al., 2004c) 43 Figure 32 Health-relevant ozone concentrations (SOMO35, ppb.days) - Rural concentrations; Calculated for the no further climate measures baseline scenario; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies (Amann et al., 2004c) 44 Figure 33 Provisional estimates of premature mortality attributable to ozone for the no further climate measures CAFE baseline scenario (cases of premature deaths). These calculations are based on regional scale ozone calculations (50*50 km) and average over the meteorological conditions of four years (1997, 1999, 2000, 2003). No estimates have been performed for Cyprus and Malta. (Amann et al., 2004h) 45 Figure 34 Variability in national exposure estimates for ozone (expressed as SOMO35) for the EU25 (excluding Cyprus) in 2000, run with the EMEP model for meteorology in 1997, 1999, 2000 and Figure 35 Increase in background ozone Current legislation scenario, (ppbv) (Amann et al., 2004e) 49 Figure 36 Monthly averaged daily maximum ozone for 54 European sites with continuous measurements from 1990 to 2002 modelled (blue) compared with monitored (red) (Tarrasón et al., 2004) 52 Figure 37 Acidity exceedance in 2010 by S, NO X and NH 3 (Hettelingh, 2004) 55 Figure 38 Nutrient nitrogen exceedance in 2010 by NO X and NH 3 (Hettelingh, 2004) 55 Figure 39 Acid deposition to freshwater bodies. Percentage of freshwater ecosystems area receiving acid deposition above critical loads. Results for meteorological conditions of 1997, using grid-average deposition. Critical loads data base of (Areas shown in white - no critical loads estimates provided) (Amann et al., 2004i) 56 Figure 40 Acid deposition to forests. Percentage of forest area receiving acid deposition above the critical loads. Calculation results for the meteorological conditions of 1997, using ecosystem-specific deposition for forests. Critical loads data base of (Amann et al., 2004i) 57 Figure 41 Excess of critical loads for eutrophication. Percentage of total ecosystems area receiving nitrogen deposition above the critical loads for eutrophication. Calculation results for the meteorological conditions of 1997, using grid-average deposition. Critical loads data base of (For areas shown in white no critical loads estimates have been provided.) (Amann et al., 2004i) 57 Figure 42 Vegetation-relevant ozone concentrations. AOT40 in ppm.hours. Calculation results for the meteorological conditions of The critical level for forests is set at 5 ppm.hours. (Amann et al., 2004i) 58 Figure 43 Health-relevant ozone concentrations. Grid-average ozone concentrations expressed as SOMO35 in ppb.days. Calculation results for the meteorological conditions of (Amann et al., 2004i) 58 Figure 44 Range of SO 2 emission projections [kt] (Amann et al., 2004a) 80 Figure 45 Sulphur and Nitrogen annual total depositions (wet and dry) from international shipping for all sea areas based on emissions in (mgm -2 ) (EMEP, 2000) 81 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

20 xvi Figure 46 Figure 47 Figure 48 Figure 49 Figure 50 Figure 51 Accumulated exceedance of the critical loads of acidity and nutrient nitrogen from international ship traffic based on emissions in 1990 (difference between the model run with all emissions and model runs excluding emissions from ships - mgm -2 ) (EMEP, 2000) 82 Differences in AOT40 and AOT60 (ozone exposure indexes) between the model run with all emissions included and the model run excluding emissions in 1990 from international shipping (EMEP, 2000). The AOT40 (AOT40c and AOT40f ppb hours represent critical levels for crops and forests respectively) and AOT60 (although AOT30 is currently more accepted) levels reflect interest in long-term ozone exposure, considered important for vegetation and health effects respectively. 82 Modelled percentage reduction of SOMO35 in 2010 if all ship emissions are reduced by 15% from the CAFE CLE scenario (Tarrasón, 2004). NB a negative figure indicates that concentrations are projected to rise 83 The percentage increase (%) of wet NO X deposition values for year 2000 due to the effect of non-lto aircraft emissions (NMI et al, 2004a). 87 The increase in AOT40f for forests (ppbv hours) in Europe caused by non-lto aircraft emissions (NMI et al, 2004a). 88 The increase in AOT60 (indicating health exposure - ppbv hours) in Europe caused by European LTO aircraft emissions (NMI et al, 2004a). 88 Figure 52 SO 2 emissions With climate measures scenario, EU-25 (Amann et al., 2004e) 94 Figure 53 NO X emissions With climate measures scenario, EU-25 (Amann et al., 2004e) 94 Figure 54 VOC emissions With climate measures scenario, EU-25 (Amann et al., 2004e) 95 Figure 55 Remaining problem areas in 2020 (after Amann et al., 2004e) 95 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

21 1 1. Introduction 1.1 This Report This first draft review report has been prepared by Entec UK Ltd for the European Commission in accordance with the requirements set out in the National Emission Ceilings Directive (2001/81/EC). The following sections present the background to this review and set out the structure for the report. 1.2 Background Acidification, eutrophication and ground-level ozone It has long been recognised that significant areas of the European Community are exposed to depositions of acidifying and eutrophying substances which have adverse impacts on the environment. Furthermore, the WHO guideline values for the protection of human health and vegetation from photochemical pollution are substantially exceeded in all Member States. The fact that acidifying, eutrophying and ozone forming air pollutants can be transported over long distances necessitates the collaboration of neighbouring countries in the setting of emission reduction targets. Such collaboration evolved during the 1980s with the establishment of the UNECE Convention on Long-Range Transboundary Air Pollution (CLRTAP) and related Protocols to cover sulphur dioxide (SO 2 ), nitrogen oxides (NO X ), volatile organic compounds (VOCs), particulate matter (PM) and ammonia (NH 3 ). EU Directives have been developed inter alia in support of the protocols. The Protocol to Abate Acidification, Eutrophication and Ground-level Ozone was adopted in Gothenburg in December 1999 and sets emission ceilings for sulphur, nitrogen oxides, NH 3 and NMVOCs. The European National Emission Ceilings Directive sets more stringent national emission ceilings than were agreed under the Protocol The National Emission Ceilings Directive (NECD) The long-term objectives (LTOs) of the NECD are to eliminate the adverse effects of acidification and reduce exposure to ground-level ozone of man and the environment. The Directive states that it is not technically feasible to meet these long-term objectives in the short term. As such, the Directive provides for interim environmental objectives (IEOs), which have been set to take account of technical feasibility and the associated costs and benefits. Under Article 4 of the Directive, Member States must limit national annual emissions of sulphur dioxide (SO 2 ), nitrogen oxides (NO X ), volatile organic compounds (VOCs) and ammonia (NH 3 ) to the national emission ceilings (NECs) specified for each EU15 Member State from 2010, presented in Annex I. The NECs were calculated as such that their achievement would broadly meet the IEOs and thereby move towards the LTOs. The New Member States are required to meet ceilings set out in Article 20 of the Act of Accession. Implementation of the NECD requires Member States to develop national programmes for the progressive reduction of the relevant pollutants, in addition to the provision of information on h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

22 2 the likely impact of policy measures on emissions in The NECD further requires Member States to provide annually updated emission inventories and emissions projections for 2010, which will subsequently be made available to all other Member States. Articles 9, 10 and 12 of the NECD set out the requirements for a review of the national emissions ceilings, incorporating further investigation of costs and benefits of national emissions ceilings. The Commission must report in 2004, 2008 and 2012 to the European Parliament and the Council on progress on the implementation of the ceilings and towards attaining the interim environmental objectives and the long-term objectives set by the Directive. The Commission has decided to link the review of the Directive with the preparation of the Clean Air For Europe (CAFE) Thematic Strategy on air pollution, which is required under the Sixth Environmental Action Programme. Many of the projects commissioned under the CAFE Program have provided input to the NECD review The CAFE programme 17 The Clean Air For Europe (CAFE) programme was launched in March 2001 with the aim of developing long-term, strategic and integrated policy advice to protect against significant negative effects of air pollution on human health and the environment. The integrated policy advice from the CAFE programme is planned to be ready by the beginning of The European Commission will present its Thematic Strategy on Air Pollution during the first half year of 2005, outlining the environmental objectives for air quality and measures to be taken to achieve the meet these objectives. The key aspects of the CAFE process are summarised in Figure 1. A brief outline of each of these elements is described below. Figure 1 Links between the CBA, RAINS and EMEP models and other related activities in Europe (AEA T, 2004a) EMEP The Unified EMEP model calculates long-term source-receptor relationships of air pollutants at the European regional scale, modelling the transport, chemical transformation and deposition of 17 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

23 3 approximately 75 species including ozone, NO X, SO 2, NH 3, VOCs and primary particulate matter. The model is centred over Europe, but also includes most of the North Atlantic and polar region with a resolution of approximately 50 km 50 km. Dry deposition is modelled using a resistance approach. Wet scavenging is set to be proportional to the precipitation intensity using species-specific scavenging coefficients. Photolysis rates are tabulated for clear sky and cloudy conditions (Laurila et al., 2004). A detailed model description is presented in Simpson et al. (2003). The model has been tested (e.g. Fagerli et al., 2003; Simpson et al., 2003; Tarrasón et al., 2004) and reviewed (e.g. UN ECE, 2004a; Velders et al., 2003). The RAINS Integrated Assessment Model The IIASA RAINS model has evolved over more than 20 years, in order to provide scientific support for International policy development, particularly with regard to transboundary air pollution in Europe. The model has been used to assist the negotiations of both the NECD and the Gothenburg Protocol. Since then, the CAFE initiative has extended the priorities and proposed scope of integrated air policies to include health effects from particles. The model can link socio-economic projections with potential air pollution impacts on human health and environment and is capable of identifying least cost strategies with differentiated control requirements for different countries and emission sources. The model has been reviewed under the CAFE process by a consortium lead by the Swedish Environmental Research Institute (2004). Cost-Benefit Analysis The cost-benefit analysis (CBA) will account for all of the impacts linked to the measures under investigation in the CAFE programme. The main impacts that will be quantified in the analysis are: impacts on health (mortality and morbidity, both from acute and longer-term chronic exposure); impacts on building materials and cultural heritage; impacts on agricultural and horticultural production; impacts on ecosystems; other impacts (visibility, secondary pollutants including greenhouse gas emissions); and consideration of wider social and economic effects. As full quantification will not be possible for all impacts, a modified form of multi-criteria assessment will be incorporated to ensure that impacts remain visible throughout the analysis. The methodology was peer reviewed in October 2004 (Krupnick et al., 2004) 1.3 Structure of the Report The various requirements of the review report are set out in the Directive under articles 9, 10 and 12. The report is structured as follows: Section 2 provides background on the policy drivers affecting NEC pollutant sources; h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

24 4 Section 3 presents the business as usual (BAU) emissions projections for Member States; Section 4 demonstrates the consequences of these emissions on human health and the environment, by comparing modelled outputs with the IEOs and LTOs; Section 5 goes on to discuss cost-effectiveness and issues surrounding the associated marginal costs and benefits; and Section 6 discusses wider issues of whether meeting NECs will achieve the IEOs and LTOs and thereby protect human health and the environment. The following tables identify the requirements of Articles 9, 10 and 12 in the Directive and indicate the sections of the report under which these requirements are fulfilled. Table 1 Location of response to specific elements detailed in Article 9, paragraph (1) Requirement progress on implementation of the national emission ceilings laid down in Annex I extent to which the interim environmental objectives set out in Article 5 are likely to be met by 2010 and on the extent to which the long-term objectives set out in Article 1 could be met by 2020 economic assessment, including cost-effectiveness, benefits, an assessment of marginal costs and benefits and the socioeconomic impact of the implementation of the national emission ceilings on particular Member States and sectors limitations of the scope of this Directive as defined in Article 2 an evaluation of the extent to which further emission reductions might be necessary in order to meet the interim environmental objectives set out in Article 5 Section of the review report 3. BAU emissions projections 4. Consequences for IEOs / LTOs 5. Meeting the NECs 6. Meeting IEOs / LTOs protecting human health and the environment 4. Consequences for IEOs / LTOs Table 2 Location of response to specific elements detailed in Article 9, paragraph (1) (a)-(n) Requirement Section of the review report (a) any new Community legislation which may have been adopted setting emission limits and product standards for relevant sources of emissions; (b) developments of best available techniques in the framework of the exchange of information under Article 16 of Directive 96/61/EC; (c) emission reduction objectives for 2008 for emissions of sulphur dioxide and nitrogen oxides from existing large combustion plants, reported by Member States pursuant to Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants into the air from large combustion plants; (d) emission reductions and reduction commitments by third countries, with particular focus on measures to be taken in the accession candidate countries, and the possibility for further emission reductions in regions in the vicinity of the Community; (e) any new Community legislation and any international regulations concerning ship and aircraft emissions; 2. Policy drivers affecting NEC sources 2. Policy drivers affecting NEC sources 2. Policy drivers affecting NEC sources 2. Policy drivers affecting NEC sources 2. Policy drivers affecting NEC sources (f) the development of transport and any further action to control transport emissions; 2. Policy drivers affecting NEC sources (g) developments in the field of agriculture, new livestock projections and improvements in emission reduction methods in the agricultural sector; 2. Policy drivers affecting NEC sources h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

25 5 Requirement (h) any major changes in the energy supply market within a Member State and new forecasts reflecting the actions taken by Member States to comply with their international obligations in relation to climate change; Section of the review report 2. Policy drivers affecting NEC sources (i) assessment of the current and projected exceedances of critical loads and the WHO's guideline values for ground-level ozone; 4. Consequences for IEOs / LTOs (j) the possibility of identification of a proposed interim objective for reducing soil eutrophication; Not to be included within this project, as identified in the Technical Annex. (k) New technical and scientific data including an assessment of the uncertainties in: (i) national emission inventories; (ii) input reference data; (iii) knowledge of the transboundary transport and deposition of pollutants; (iv) critical loads and levels; (v) the model used; and an assessment of the resulting uncertainty in the national emission ceilings required to meet the interim environmental objectives mentioned in Article BAU emissions projections 4. Consequences for IEOs / LTOs 4. Consequences for IEOs / LTOs 4. Consequences for IEOs / LTOs 4. Consequences for IEOs / LTOs 4. Consequences for IEOs / LTOs (l) whether there is a need to avoid excessive costs for any individual Member State; 5. Meeting the NECs (m) a comparison of model calculations with observations of acidification, eutrophication and ground-level ozone with a view to improving models; (n) the possible use, where appropriate, of relevant economic instruments. 4. Consequences for IEOs / LTOs 5. Meeting the NECs Table 3 Location of response to specific elements detailed in Article 10 Requirement evaluation will be carried out of the indicative emission ceilings for the Community as a whole set out in Annex II with the aim of attaining the interim environmental objectives set out in Article 5, for the Community as a whole by 2010 investigation of the estimated costs and benefits of national emission ceilings, computed with stateof-the-art models and making use of the best available data with the aim of avoiding distortion of competition, and taking into account the balance between benefits and costs of action examine further the need to develop harmonised Community measures, for the most relevant economic sectors and products contributing to acidification, eutrophication and formation of ground-level ozone measures to ensure compliance with the ceilings Section of the review report 4. Consequences for IEOs / LTOs 5. Meeting the NECs 6. Meeting IEOs / LTOs protecting human health and the environment 6. Meeting IEOs / LTOs protecting human health and the environment Table 4 Location of response to specific elements detailed in Article 12 Requirement extent to which emissions from international maritime traffic contribute to acidification, eutrophication and the formation of ground-level ozone within the Community extent to which emissions from aircraft beyond the landing and take-off cycle contribute to acidification, eutrophication and the formation of ground-level ozone within the Community specify a programme of actions which could be taken at international and Community level as appropriate to reduce emissions from the sector concerned Section of the review report 6. Meeting IEOs / LTOs protecting human health and the environment 6. Meeting IEOs / LTOs protecting human health and the environment 6. Meeting IEOs / LTOs protecting human health and the environment h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

26 6 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

27 7 2. Policy Drivers Affecting NEC Sources 2.1 Policy drivers listed in the NECD Article 9, Paragraph 1 (a-h) The following sections describe developments since the publication of Directive 2001/81/EC in a variety of areas that will impact upon impact upon Member States achieving their NECs (a) any new Community legislation which may have been adopted setting emission limits and product standards for relevant sources of emissions Table 5 lists the Community legislation adopted or implemented since 2001 to set emission limits and product standards for emissions of NEC pollutants and other pollutants contributing to acidification, eutrophication and the formation of ground-level ozone. This section may be subject to change when new information becomes available in future. Table 5 New Community legislation adopting emission limits and product standards Legislation Implement Sector/ source Pollutants Binding dates 2001/80/EC ELVs (or National Plan for existing plants) LCPs SO 2, NO X, dust Emission reductions to be achieved from 1 st January /76/EC ELVs Waste incineration SO 2, NO X, dust, HCl, CO 93/12/EEC, amended by 1999/32/EC (Note) Standards apply to new plants - 28 th December 2002 Standards apply to existing plants - 28 th December 2005 Product standard Liquid fuels SO 2 Limits to be met (heavy fuel oil) 1 st January 2003 Limits to be met (gas oil) 1 st July 2000; 1 st January /13/EC ELVs Use of organic solvents in industry 96/61/EC (IPPC) 98/70/EC amended by 2003/17/EC Best Available Techniques Product standards Annex I Industrial Activities Petrol and diesel fuels VOCs Application to new installations from April 2001 Application to existing installations 31 st October 2007 All Application to new installations from 30 th Oct 1999 SO 2 Application to existing installations from 30 th Oct 2007 Requires that sulphur free petrol and diesel be made mandatory from 2009 and widely available from 2005 Auto/Oil EURO standards - 98/69/EC; 99/96/EC Emission standards Road vehicles VOCs, NO X, PM, CO 2003/77/EC Emission standards Motorcycles/moped s NO X, CO, HCs Euro III Jan 2001-Jan 2002 (depending on vehicle type) Euro IV Jan 2006-Oct 2006 (depending on vehicle type) Euro V Oct 2008 (only for heavy duty vehicles) 97/68/EC, 2002/25/EC, 2002/88/EC Emission standards Non-road mobile machinery NO X, CO, HCs, PM h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

28 8 Legislation Implement Sector/ source Pollutants Binding dates 94/25/EC, amended by 2003/44/EC Emission standards Pleasure boats NO X, CO, HCs, PM Emission limits for all but 2-stroke 1 st January 2006 Emission limits for 2-stroke 1 st January /676/EEC, Nitrates Directive Product standard Application of manure NH 3 Action Programmes either for an entire Member State, or in nitrate vulnerable zones must set out measures to ensure that after 2001, for each farm or livestock unit, the amount of livestock manure applied to the land each year, including by the animals themselves, shall not exceed 170 kg N per hectare 18. Note: In July 2004, the EC submitted a proposal to amend Directive 1999/32/EC as regards the sulphur content of marine fuels (b) developments of best available techniques in the framework of the exchange of information under Article 16 of Directive 96/61/EC The purpose of the Integrated Pollution Prevention and Control (IPPC) Directive (96/61/EC) is to achieve a high level of protection for the environment as a whole. The central principle of IPPC is that operators should take all appropriate preventative measures against pollution, and in particular apply best available techniques (BAT) to improve environmental performance. The term best available techniques is defined in Article 2(11) of the Directive as the most effective and advanced stage in the development of activities and their methods of operation which indicate the practical suitability of particular techniques for providing in principle the basis for emission limit values designed to prevent and, where that is not practicable, generally to reduce emissions and the impact on the environment as a whole. The choice of technique should take account of the technical characteristics of the installation, its geographical location and local environmental conditions, as well as economic and technical viability. Therefore, it is important to understand that BAT is not a fixed concept. It must be implemented on a case-by-case basis. What constitutes BAT for a site specific process will change with time, as new technologies and techniques emerge and become available. Under Article 16(2) of the IPPC Directive, the EC is obliged to organise an exchange of information between Member States on best available techniques, associated monitoring, and developments in them. The European IPPC Bureau (EIPPCB) exists to organise this exchange of information and publishes BAT reference documents (BREFs) for industrial sectors listed in Annex I of the Directive which inform the relevant decision makers about what may be technically and economically available and must be taken into account by competent authorities. The EIPPCB works through Working Groups comprising nominated experts from EU Member States, European Free Trade Association (EFTA) countries, Accession Candidate Countries, industry and environmental nongovernmental organisations (NGOs). The objectives of the whole information exchange exercise are to accomplish a comprehensive exchange of information and views and through the publication of reference documents to help to redress any technological imbalances in the European Community, to promote the worldwide dissemination of limit values and techniques 18 In May 2004, the Commission agreed in principle with a request for derogation from this directive by the Netherlands, which will allow 250 kg N from livestock manure per hectare. The agreement provides for the Netherlands to submit a formal request for derogation (VROM, 2004). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

29 9 used in the Community and assist Member States in the efficient implementation of this Directive (EIPPCB, 2004). Some Member States publish their own sector-specific guidelines for BAT, based on BREFs. In a report for the Commission, it was determined that all EU15 Member States had taken adequate steps to ensure that competent authorities follow or are informed of developments in best available techniques, many relying on participation in the European-wide exchange of information on BAT, and on the dissemination of BREF documents (LDK-ECO, 2004). In the framework of the CAFE program the Institute for Prospective Technological Studies (IPTS at the JRC Seville) in association with DG Environment has reported on the assessment of the impact of emerging technologies on air pollution. The aim of the project was to assist the CAFE program by providing technological and economic information on emerging technologies or applications within the industrial sector that are relevant for the reduction of air emissions in EU25 plus Norway and Switzerland (c) emission reduction objectives for 2008 for emissions of sulphur dioxide and nitrogen oxides from existing large combustion plants, reported by Member States pursuant to Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants into the air from large combustion plants Directive 2001/80/EC, referred to as the Large Combustion Plant Directive (LCPD), applies to combustion plants with a rated thermal input of 50 MW or more. The LCPD is a complex directive that places requirements upon Member States to reduce emissions of SO 2, NO X and PM from combustion plants within power plants, petroleum refineries, iron and steelworks and other industrial processes. For existing plants (licensed before 1 July 1987), each Member State is able to choose between complying with emission limit values (ELVs) as set out in part A of Annexes III to VII or implementing a national emission reduction plan as defined in Article 4(6). The compliance date for existing plants is 1 January In comparison to the ELV approach, the targets of the national emission reduction plan are defined as follows: The national emission reduction plan shall reduce the total annual emissions of NO X, SO 2 and dust from existing plants to the levels that would have been achieved by applying the emission limit values [in part A of Annexes III to VII] to the existing plants in operation in the year 2000,. on the basis of each plant s actual annual operating time, fuel used and thermal input, averaged over the last five years of operation up to and including An operator of an existing plant may be exempted from compliance with the ELVs and from inclusion in a national emission reduction plan if a written undertaking was submitted to the competent authority by 30 June 2004, not to operate the plant for more than 20,000 operational hours starting from 1 January 2008 and ending no later than 31 December To date, seven Member States have submitted National Emission Reduction Plans under the LCPD (2001/80/EC) for existing plants. These include the Czech Republic, Finland, France, Greece, Ireland, Slovenia and the UK. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

30 (d) emission reductions and reduction commitments by third countries, with particular focus on measures to be taken in the accession candidate countries, and the possibility for further emission reductions in regions in the vicinity of the Community At the time of the negotiations for the NECD, the accession candidate countries were the 10 New Member States. For the purposes of this report, emissions from the New Member States are reported alongside those from the EU15, in Section 3. Emissions from the current accession candidate countries of Bulgaria, Croatia, Romania and Turkey, are reported below, alongside those of other countries in the vicinity of the Community. This section may be subject to change when new information becomes available in future. Figure 2 presents the historic and projected changes in emissions from accession candidate countries (after EMEP, 2004). It is evident that generally, SO 2 emissions have decreased and are projected to do so by 2010 and Emissions for the other three NEC pollutants look set to remain fairly constant, with the exception of Turkey, whose emissions of NO X and VOCs are projected to rise significantly by 2010 and then fall back by SO 2 NO X VOCs NH 3 Figure 2 Historic and projected changes in emissions from accession candidate countries (calculated after EMEP, 2004) Figure 3 presents the historic and projected changes in emissions from other countries in the vicinity of the EU (after EMEP, 2004). Again, SO 2 emissions have decreased and are projected to continue to do so up to 2020, despite a projected increase in NO X emissions have fallen h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

31 11 from 1990 to 2000, but are expected to increase by 2010 and 2020, mainly through projected increases in the Ukraine and Belarus. A similar pattern is seen for VOCs and NH 3. SO 2 NO X VOCs NH 3 Figure 3 Historic and projected changes in emissions from countries within the vicinity of the EU (calculated after EMEP, 2004) The Gothenburg Protocol has been negotiated by the UN ECE and sets emission ceilings for SO 2, NO X, VOCs and NH 3. To date, 31 countries, have signed the Protocol and 14 have ratified. A further two ratifications are required for it to come into effect. Of the Accession Candidate Countries, Romania has ratified and Bulgaria and Croatia have signed. From other countries within the vicinity of the EU, Norway has ratified Protocol, and Lichtenstein, the Republic of Moldova and Switzerland have signed 19. A comparison of emissions projections and Protocol ceilings for 2010 is presented in Table Information as of December 2004 available online at: h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

32 12 Table 6 Comparison of emission projections and ceilings for signatories to the Gothenburg Protocol for Accession Candidate Countries and countries in the vicinity of the EU (exceedances marked in red) SO 2 NO X VOC NH ceiling under GP (kt) 2010 emissions predicted (kt) 2010 ceiling under GP (kt) 2010 emissions predicted (kt) 2010 ceiling under GP (kt) 2010 emissions predicted (kt) 2010 ceiling under GP (kt) 2010 emissions predicted (kt) Bulgaria Croatia Romania Norway Republic of Moldova Switzerland (e) any new Community legislation and any international regulations concerning ship and aircraft emissions This section may be subject to change when new information becomes available in future for example, ongoing negotiations at the IMO and ICAO. Shipping The Commission adopted an EU strategy in November 2002 to reduce atmospheric emissions from maritime transport. One result of the strategy was a proposed amendment to the Sulphur Content of Certain Liquid Fuels Directive (1999/32/EC) (SCLFD). This proposed amendment (COM(2002) 595 final) is linked to Annex VI of the Marine Pollution Convention, MARPOL 73/78, of the International Maritime Organisation (IMO) that received its 15th ratification on 18 May, so it will finally enter into force on 19. The European Parliament voted to support 36 amendments to the previous Commissions proposals on June The environment Ministers from the 25 EU Member States have reached political agreement on the marine fuel sulphur proposal on June The main provisions of the draft directive are: a sulphur limit of 1.5% for fuels used by all ships in the Baltic Sea, North Sea & Channel, setting implementation dates starting in 19 May 2006 for the Baltic Sea. a 1.5% sulphur limit for fuels used by passenger vessels on regular services between EU ports, from 19 May a sulphur limit of 0.2% on fuel used by inland vessels and by seagoing ships at berth in EU ports. A tighter 0.1% limit is delayed until 1 January 2010, to allow single-fuel ships time to adapt their fuel tanks In addition, Annex VI of the Marine Pollution Convention, MARPOL 73/78 of the International Maritime Organisation enters into force in. This contains provisions on special SO X Emission Control Areas (the Baltic Sea, the North Sea and the English Channel) and NO X emissions standards for ships engines. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

33 13 Aviation In 1999 the EU unveiled a strategy for sustainable development of aviation. The strategy identified fiscal instruments as a key policy option to reduce aircraft emissions. The 33rd session of the International Civil Aviation Organisation (ICAO) Assembly in October 2001 adopted a new Consolidated statement of continuing ICAO policies and practices related to environmental protection (Resolution A33-7), with emphasis on technical and operational measures and market-based measures. Community legislation dealing with aircraft emission standards are based on the certification standards of aircraft engines for CO, NO X and HC set by the ICAO. Traditionally, standards regulating emissions from aircraft engines consider emissions occurring during the landing and take-off phases (LTO). However, the standards also help to limit emissions at higher altitudes, which is important with regard to NO X. The Committee on Aviation and Environmental Protection (CAEP) is currently investigating more stringent emission standards (f) the development of transport and any further action to control transport emissions The framework for emission standards for new vehicles was laid down under the EC s AutoOil Programmes I and II between 1992 and These standards, known as Euro standards, are defined by European Directives. Since their introduction in (Euro I) the Commission has gradually set tighter limit values for emissions of carbon monoxide (CO), NO X, PM and VOCs from new petrol and diesel vehicles. In 1999, the European Parliament and the Council of Environment Ministers adopted the most recent Euro III standard (that came into force in 2001) and also adopted Euro IV (all vehicles) and Euro V (only heavy duty vehicles) to be implemented by 2005 and 2008 respectively. Negotiations for Euro V/VI standards are underway and are expected to come into force in 2010 (light duty vehicles) and 2013 (heavy duty vehicles). Emissions from motorcycles and mopeds will also be reduced through amendments to Directive 1999/24/EC, tightening legislation in 2003 and further from The AutoOil Programme also highlighted the need for control over fuel quality of petrol and diesel. Directive 98/70/EC sets fuel standards to be met by 1 st January 2000 and 2005, for petrol and diesel respectively. The EU has set requirements (EC Directive 2003/17/EC) for sulphurfree fuels to be phased in from the start of 2005 at the latest and to be fully available by This will reduce road transport emissions and should allow car manufacturers to introduce more effective catalytic converters and other devices to reduce emissions of air pollutants. The EU has recognised the need for a common target for fiscal incentives on vehicle emissions by introducing the EEV category for Enhanced Environmentally-friendly Vehicles. This sets the framework for Member States to introduce incentives such as reductions in the rate of annual or circulation tax on vehicles, a restriction on the use of more polluting vehicles in city centres and lower duty rates on cleaner fuels. Aside from technical measures, there have also been a range of initiatives aimed at reducing the demand for travel and hence overall emissions from road transport. The European Transport White Paper (EC, 2001) advocates the integration of external costs as a means of moving towards more environmentally-friendly road transport. The Commission feels that these issues are best dealt with by local authorities (via the principle of subsidiarity) and encourages the exchange of good practice across the EU. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

34 (g) developments in the field of agriculture, new livestock projections and improvements in emission reduction methods in the agricultural sector This section may be subject to change when new information becomes available in future. Common Agricultural Policy (CAP) reform The reform of the CAP was agreed by the EU Council of Agriculture Ministers on 26 June The agreement is based on the EC s proposals set out in January The reform will completely change the way the EU supports its farm sector. Single farm payments will be linked to environmental, food safety and animal welfare standards, decoupling most direct aid payments from production and thereby reducing many of the incentives to intensive production. (EC, 2005a). The environmental impacts of the proposals have been assessed for the UK (Defra, 2003). This report indicated that the proposals would generally reduce emissions of greenhouse gases and NH 3, due to associated reductions in livestock numbers, improvements in manure management and handling, reduced ploughing of grasslands, arable reversion, the planting of energy crops and the planting or natural regeneration of woodland or scrub. However, it did note that the possible intensification and specialisation of livestock production, particularly in the dairy sector, could cause localised increases in emissions. Livestock projections There are a number of available sources of livestock projections. These are presented in Figure 4. The projections show a general decrease in the number of dairy cows and other cattle, with an increase in the number of pigs up to The most recent figures have been collected by the EC (2004a), but only for dairy cows. IIASA (2004a) include livestock projections within their RAINS model, sourced from FAO (2002). Figure 5 presents the relative changes in number of animals for different types of livestock, as assumed in the CAFE baseline (with climate change measures). The RAINS CAFE baseline does not include projections for CAP reform, as such the activity rate (numbers of animals) may be overestimated for certain types of livestock. Figure 4 Livestock projections from various sources (IIASA, 2004a; EC, 2004a; AEAT, 2001) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

35 15 Figure 5 RAINS projections for relative changes in livestock numbers (IIASA, 2004a August 04 Baseline, with climate measures) Improvements in emission reduction methods in the agricultural sector Under the CAFE programme, IIASA have calculated the maximum feasible reductions for emissions of NEC pollutants (Amann et al., 2004g). The measures assumed for agriculture are presented in Table 7. These measures cannot necessarily be viewed as improvements since the negotiations for the NECD, as many were included within the Appendix for the Gothenburg Protocol (UNECE, 1999) and within the UNECE s framework advisory code of good agricultural practice for reducing ammonia emissions (UNECE, 2001). Table 7 Measures considered as technically feasible under the IIASA maximum feasible reduction scenario for NH 3 Sector Cattle Technologies considered as technically feasible under the IIASA maximum feasible reduction scenario for NH 3 Low nitrogen feed Housing adaptation Low nitrogen application (specifically distinguishing between options for liquid slurry and solid manure) Pigs Low nitrogen feed Housing adaptation and closed storage Low nitrogen application (specifically distinguishing between options for liquid slurry and solid manure) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

36 16 Sector Poultry Technologies considered as technically feasible under the IIASA maximum feasible reduction scenario for NH 3 Low nitrogen feed Housing adaptation and closed storage Biofiltration Low nitrogen application and incineration of poultry manure (limited number of countries) Sheep N-fertiliser application Fertiliser production Low nitrogen application Substitution of urea with ammonium nitrate BAT to control end-of-pipe emissions from fertiliser plants (h) any major changes in the energy supply market within a Member State and new forecasts reflecting the actions taken by Member States to comply with their international obligations in relation to climate change Progress towards compliance with national emissions ceilings may be influenced by changes in domestic energy supply markets within member states such as shifts in fuel usage and capacity investment. Moreover, domestic energy markets are increasingly exposed to international availability of transactions on a single market, which affect the price competitiveness of existing domestic sources of gas and electricity. Electricity supply market generation mix projections to end-2005 Changes in generation load, fuel mix and equipment are fundamental to shifts in energy market related emissions. Figure 6 indicates projected changes by end-2005 in total conventional thermal generation from the totals reported in TWh LUX B NL FR SP PT GER DK FIN SW UK IR IT A CZ POL SLV SLK HU ROM EST LI LA CY GRE Figure 6 Projected change in conventional thermal production (TWh ) (Eurelectric, 2003) Reduction in coal generation is a general theme throughout the EU25 and has been prior to Increases towards gas fired capacity are evident in forecasts for a number of countries. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

37 17 Figure 7 presents the changes projected in 2003 for the period reflecting that the greatest additional increase in gas sourced generation will be in Italy, owing to the projected large amounts of natural gas fired combined cycle build. At the same time, the UK and Spain will increase gas sourced production and decrease net coal-fired generation (Spain s natural gas sourced production is foreseen to grow around 300% between 2001 and 2005). Finland s increase in coal is projected to be a temporary means to satisfying demand whilst it is projected to be significantly displaced by nuclear build post The Czech Republic projects a significant decrease (around 38%) of production from brown coal between 2001 and Net coal change Net gas change (Twh) A B GER DK Sp FIN Fr UK GRE IR IT LUX NL PT SW CY CZ Hu Lith Lat Pol Rom SLV SLK -20 Figure 7 Projected changes: Gas and coal sourced generation ( ) (Eurelectric, 2003) Figure 8 places the general shift towards gas across Member States in the context of projected supply market trends with regards to alternative sources of energy. France s significant increase in production sourced from nuclear is projected to plateau post The reference period used ( ) masks a projected slight reduction in Spain s nuclear sourced production between Most of the new Member States and Accession Countries projected generation mix remains fairly constant. The most significant projected change is in the Czech Republic, where decreases in coal sourced generation is counterbalanced with increases in nuclear sources. (Twh) A B GER DK Sp FIN Fr UK GRE Ir It Lux NL PT SW Cy Cz Hu Lith Lat Pol Rom SLV SLK Nuclear Renewables Figure 8 Projected Changes in Alternative Sources of Generation (TWh) (Eurelectric, 2003) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

38 18 Electricity supply market generation mix projections to 2030 Energy projections developed for the EC (2003) and used to underpin the RAINS model provide a significant quantity of information on the estimated fuel trends to These projections are based on the use of the PRIMES model for EU15 Member States and the less sophisticated ACE model for New Member States. It is noted that projections make no assumptions on the implementation of specific new policies and measures aimed at meeting Kyoto targets in , and potentially more severe ones in the future. In particular, the EU Emissions Trading Scheme (ETS) is likely to lead to a greater dependency on gas, although this will be constrained by the extent of the transmission capacity and security of supply considerations of individual Member States. Some of the key findings for the EU25 from the abovementioned report of relevance to this analysis are listed below. Increasing requirements for electricity and steam lead to a large expansion of installed capacity in the EU25 energy system, which is projected to almost double by 2030 from 2000 levels. This is mainly through the extensive use of gas fired CCGT units. Beyond 2010 gas is projected to be the main energy carrier in electricity production. Overall, gas based electricity grows from 16% of power generation in 2000 to 36% in The strong shift towards a gas based power generation system combined with electricity market liberalisation is also projected to encourage more widespread exploitation of cogeneration options. By 2030 more than 16% of electricity will come from cogeneration units compared with 13% in Electricity production from solid fuels exhibits a continuous decline in the short / medium term, but it later recovers as a replacement fuel for nuclear both in absolute terms and as a share of total electricity generated. Overall, the solid fuel share reduces from 32% in 2000 to 27% in It is noted that hard coal is projected to make a strong comeback in the long run, whereas this is not the case for lignite. This is modelled as occurring because the EU power generation system is projected to rely heavily on competitively priced imported coal (close to 97.5% of coal used in power generation in 2030 compared to just 55% in 2000), compared to domestically produced coal and lignite. State aids for coal and in some cases also lignite are assumed to be substantially reduced by The share of electricity from renewables rises from 14% in 2000 to 17% in Oil is becoming a more limited form for power generation as many of the existing oil fired plants are kept only as part of the required reserve margin. Both industrial / refinery boilers, as well as district heating unit production are projected to grow much slower than demand for steam, given the prospects for cogeneration. Industrial boilers are characterized by a tendency towards higher use of biomass and waste whereas oil (mainly because of the increasing use of refinery gas in refinery boilers) and gas consumption remains rather stable over the projection period. Technological advances combined with changes in the market structure will reduce the dominance of large scale electricity generators (utilities) from 91% in 2000 to 82% in Consideration of commitments relating to climate change A comparison of the RAINS model outputs for the CAFE baseline scenarios with and without climate change measures for SO 2, NO X and VOCs (Figure 9) shows the potential reductions for SO 2 and NO X with climate measures (compiled using the August 2004 baseline). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

39 19 Figure 9 Range of RAINS projections for SO 2, NO X and VOCs for the with climate measures and the no further climate measures projections. The figures have been compiled from information in the CAFE baseline, August 2004 (after Amann et al., 2004h) Various aspects of future legislation are likely to have an impact on combustion emissions. For example, in December 2003, the Commission submitted a proposal for a directive on energy efficiency and energy services, which aims to set new rules designed to ensure that all member states save at least 1% more energy per year, leading to around 6% annual energy savings in Energy ministers held an initial debate on the Commission s proposals in November 2004, without coming to a common approach. The Energy Efficiency Directive will be discussed in Parliament, with a common position expected to be reached by June 2005 (Euractiv, 2005). 2.2 Summary Table 8 summarises the impacts of each of the policy drivers on the NECD pollutants and the key sectors. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

40 20 Table 8 Impacts of policy drivers NECD Pollutants Sectors Policies SO 2 NO X VOCs NH 3 Road trans. Ships Aviation LCPs Other ind. Agric Off road Waste (a) new Community legislation setting emission limits and product standards for relevant sources of emissions: o 2001/80/EC o 2000/76/EC o 93/12/EEC, amended by 1999/32/EC o 1999/13/EC o 96/61/EC (IPPC) o 98/70/EC amended by 2003/17/EC o Auto/Oil EURO standards - 98/69/EC; 99/96/EC o 2003/77/EC o o 97/68/EC, 2002/25/EC, 2002/88/EC 94/25/EC, amended by 2003/44/EC (b) developments of BAT (c) emission reduction objectives for 2008 from existing large combustion plants, reported by Member States pursuant to Directive 2001/80/EC on the limitation of emissions of certain pollutants into the air from LCPs (d) emission reductions and reduction commitments by third countries, and the possibility for further emission reductions in regions in the vicinity of the Community (e) new Community legislation and international regulations concerning ship and aircraft emissions (f) development of transport and further action to control transport emissions; (g) developments in agriculture, new livestock projections and improvements in emission reduction methods in the agricultural sector (h) major changes in energy supply market and new forecasts reflecting actions taken to comply with international obligations in relation to climate change h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

41 21 3. Business as usual emissions projections 3.1 Emissions inventories for Member States Sources of emissions estimates Emission projections for Member States are available from the following sources. Member State submissions: Under the NECD, Member States have submitted National Programmes and Emissions Projections. CAFE Baseline: As part of the development of the Thematic Strategy on Air Quality under the CAFE programme, IIASA has developed a series of baseline emission scenarios using the RAINS model (IIASA, 2004b) Policies considered as Business as Usual (BAU) Policies and measures considered as BAU within Member States NECD National Programmes This section is based on policies and measures reported within Member States NECD National Programmes. However, given the relatively poor level of reporting of policies and measures by some Member States, the information may not be entirely reflective of all policies and measures either implemented, or included within national projections. Energy All Member States have reported at least one policy or measure to reduce emissions from the energy sector within their National Programmes. The most commonly reported policies and measures are those aimed at: Large combustion plants (for example, LCPD and associated abatement technology such as SCR, SNCR, desulphurisation and low NOx burners); Improving energy efficiency at all levels, reducing energy consumption and increasing the use of renewable energy sources (for example, local, regional and national energy action plans, promotion of cleaner technology and financial incentives/disincentives); and Stage I (Directive 94/63/EC) & II controls to reduce evaporative emissions from the storage, transport and distribution of petrol. Transport The transport sector, along with the energy sector, is one of the most targeted sectors with respect to the number and variety of different implemented and planned policies and measures reported by each Member State. The most commonly reported policies and measures for reducing emissions from the transport sector are those aimed at: h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

42 22 Reducing the sulphur content and improving the quality of petrol and diesel (for example, the Sulphur Content in Liquid Fuels Directive); Reducing vehicle usage (for example, through improvements in public transport and green travel plans); and, Reducing vehicle emissions (for example, EURO vehicle emission standards and promotion of cleaner vehicles and fuels). One Member State has implemented or is planning some of the most innovative measures for the reduction of emissions from transport including congestion charging, eco-labelling (for boat engines and NRMM) and an aviation charging scheme aimed at the LTO cycle which has been in place since Industrial processes The most commonly reported policies and measures for reducing emissions from industrial processes are the IPPC Directive and primary and secondary abatement measures to reduce emissions during and after combustion (for example, SCR, SNCR, low NO X burners and limestone injection). Solvent Use The most commonly reported policies and measures for reducing emissions from solvent use are Solvent Emissions Directive (1999/13/EC) and potential implementation of the VOCs in Paints Directive limiting the use of, and solvent content of, specific products. Very few Member States have reported any other measures aside from these two policies. The majority of policies and measures reported by Member States for solvent use will be adopted at European and national level by central government but will be implemented at an installation/site level. Agriculture Member States have reported a relatively wide range of policies and measures aimed at reducing NH3 emissions from agriculture. The most commonly reported policies and measures are those aimed at reducing livestock density and number and changes in their feed, improving management of manure and slurry and improving, and ultimately reducing, the use of fertilisers. Several Member States have also reported a series of action plans and best practice recommendations. Waste Very few Member States have reported policies and measures for the reduction of emissions from waste. For those that have, the majority of measures relate to ELVs for waste incinerators. Policies and measures considered as BAU within the CAFE Baseline IIASA have developed three major emissions scenarios: BL_CLE_Aug04: Baseline scenario without climate policies. Uses "Energy and Transport - Trends to 2030" of DG Transport and Energy and Europe-wide projections of agricultural activities without CAP reform. CP_CLE_Aug04: Climate policy scenario. Energy projection "with climate measures" developed with the PRIMES model. Incorporates to the maximum possible extent national perspectives, while maintaining Europe-wide consistency in assumptions about energy prices, electricity exports and imports etc. For agriculture, a revised version of Europe-wide consistent projections of agricultural activities without CAP reform is used. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

43 23 NAT_Aug04: Official national energy projections with climate policies and national agricultural projections (if supplied by Member States 20 ). Assumptions for other countries are the same as in the Climate policy scenario (RAINS WEB, August 2004) National emissions data for these three scenarios is available disaggregated by several different source sector categories including CORINAIR SNAP 97 Level 1 (all pollutants) and UNECE NFR (SO 2, NO X and VOC only) categories. The scenarios themselves have been developed through a series of bilateral consultations between IIASA and the Member States and stakeholders and are available for all Member States. The CAFE baseline scenarios consider a wide range of European and national legislation for reducing emissions of the four NECD pollutants. This legislation is summarised in Table 9. Table 9 Summary of legislation considered for the CAFE baseline scenarios (IIASA, 2004b) Pollutant Legislation Pollutant Legislation SO 2 Large Combustion Plant Directive Sulphur Content of Liquid Fuels Directive Directives on quality of petrol and diesel fuels NH 3 No EU-wide legislation National legislation Current practice IPPC legislation on process sources National legislation and national practices (if stricter) NO X Large Combustion Plant Directive Auto Oil EURO Standards Standards for motorcycles and mopeds Legislation on non-road mobile machinery Implementation failure of EURO-II and II for HDVs IPPC legislation on process sources National legislation and national practices (if stricter) VOC Stage I Directive Directive 91/441 (carbon canisters) Auto Oil EURO Standards Fuel Directive (RVP of fuels) Solvents Directive Product Directive (paints) National legislation (for example, Stage II controls) 3.2 Performance against NECs Article 9, Paragraph 1 progress on the implementation of the national emission ceilings laid down in Annex I The following sections compare Member States projections and the CAFE baseline with the NEC targets. This section may be subject to change when new information becomes available in future relating to future updates of the CAFE baseline SO 2 Figure 10 presents 2010 emission projections for SO 2 submitted in EU15 Member States National Programmes or, where available, updated projections. Where possible, BAU projections have been compared alongside Beyond Business-As-Usual (BBAU) projections, 20 National energy pathways have been made available to IIASA for Belgium, Czech Republic, Denmark, Finland, France, Italy, Portugal, Slovenia, Sweden and the United Kingdom. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

44 24 which include impacts of additional/proposed policies and measures. Figure 11 and Figure 12 compare the RAINS with climate measures SO 2 baseline for EU25 with the NECs. It is evident that most countries are projected to fall well within their NECs for SO 2, with the exception of Belgium, France, the Netherlands and Malta, whose BAU emissions according to the NECD National Programmes may exceed the ceilings. The RAINS projections indicate that the overall targets for the EU15 and NMSs will be met with ease, mainly as a result of significant emission reductions from the power sector. 160% 140% 120% 100% % of NEC 80% 60% 40% 20% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU14 BAU Projections BBAU Projections Figure 10 SO 2 - BAU and BBAU emission projections as a proportion of each Member States NEC (100% equates to each Member States NEC for SO 2) Figure 11 SO 2 emissions projected for 2010 compared to NEC emission ceilings, August 2004 (Amann et al., 2004h) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

45 25 EU15 New Member States Figure 12 SO 2 emissions by sector With climate measures scenario [kt], August 2004 (Amann et al., 2004h) NO X Figure 13 presents the 2010 emission projections for NO X submitted in EU15 Member States National Programmes or, where available, updated projections. Figure 14 and Figure 15 compare the RAINS with climate measures NO X baseline for EU25 with the NECs. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

46 26 160% 140% 120% 100% % of NEC 80% 60% 40% 20% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU14 Figure 13 BAU Projections BBAU Projections NO X - BAU and BBAU emission projections as a proportion of each Member States NEC (100% equates to each Member States NEC for NO X) The projections show that for many EU15 MSs, BAU emissions according to the NECD National Programmes will exceed NECs for NO X. Furthermore, the RAINS projections indicate that the EU15 will not achieve the target for the Community as a whole. Emissions from all NMSs are within their own NECs and the target for NMSs as a whole. Emissions are dominated by the transport sector, where the projected reductions are not sufficient to enable compliance for the EU15 in However, projected continued reductions from the transport sector are expected to result in emissions from the EU15 dropping below the target by Figure 14 NO X emissions projected for 2010 compared to NEC emission ceilings, August 2004 (Amann et al., 2004h) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

47 27 EU15 New Member States Figure 15 NO X emissions by sector With climate measures scenario [kt], August 2004 (Amann et al., 2004h) VOCs Figure 16 presents the 2010 emission projections for VOCs submitted in EU15 Member States National Programmes or, where available, updated projections. Figure 17 and Figure 18 compare the RAINS with climate measures VOCs baseline for EU25 with the NECs. The projections based on NECD National Programmes show a mixed pattern of compliance for the EU15 under BAU, with some countries expected to achieve their NECs for VOCs by a comfortable margin, and others, such as Belgium, Germany, Ireland, the Netherlands and Portugal, with Spain potentially requiring additional measures as outlined in their National Programmes. The EU15 is projected to meet the overall target for 2010, mainly as a result of emissions reductions in the transport and solvents sectors. The RAINS projections indicate that all of the NMSs will meet their NECs comfortably. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

48 28 140% 120% 100% % of NEC 80% 60% 40% 20% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU14 BAU Projections BBAU Projections Figure 16 VOC - BAU and BBAU emission projections as a proportion of each Member States NEC (100% equates to each Member States NEC for VOC) Figure 17 VOC emissions projected for 2010 compared to NEC emission ceilings, August 2004 (Amann et al., 2004h) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

49 29 EU15 New Member States Figure 18 VOC emissions by sector With climate measures scenario [kt], August 2004 (Amann et al., 2004h) NH 3 Figure 19 presents the 2010 emission projections for VOCs submitted in EU15 Member States National Programmes or, where available, updated projections. Figure 20 and Figure 21 compare the RAINS with climate measures VOCs baseline for EU25 with the NECs. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

50 30 140% 120% 100% % of NEC 80% 60% 40% 20% 0% AT BE DK FI FR DE GR IE IT LU NL PT ES SE UK EU14 BAU Projections BBAU Projections Figure 19 NH 3 - BAU and BBAU emission projections as a proportion of each Member States NEC (100% equates to each Member States NEC for NH 3) As for VOCs, the projections for NH 3 emissions based on NECD National Programmes show a mixed pattern of compliance. It is evident that the Member States projections and the RAINS projections are not quite in agreement for a number of countries. Figure 19 shows a number of EU15 MSs are predicted to exceed their NECs under BAU, including Denmark, France, Germany and Italy, whereas the RAINS projections in Figure 20 indicate that Belgium, Finland, Ireland, Netherlands, Spain and the UK will also exceed their NECs, whereas France will not. RAINS predicts that the EU15 as a whole and all NMSs will comply with their targets. From Figure 21 it is evident that the vast majority of emissions are due to agriculture, where relatively small reductions are predicted. Figure 20 NH 3 emissions projected for 2010 compared to NEC emission ceilings, August 2004 (Amann et al., 2004h) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

51 31 EU15 New Member States Figure 21 NH 3 emissions by sector With climate measures scenario [kt], August 2004 (Amann et al., 2004a) 3.3 Uncertainty Article 9, Paragraph 1 (k - j) New technical and scientific data including an assessment of the uncertainties in national emission inventories Article 9, Paragraph 1 (k - ii) New technical and scientific data including an assessment of the uncertainties in input reference data Uncertainties highlighted by Member States Uncertainty in emission projections has been reported to varying degrees by Member States within their National Programmes. As such, the information summarised here cannot be applied to all Member States. In general, emission inventories for NO X, VOCs and NH 3 are regarded as more uncertain than those for SO 2. However, the UK notes that SO 2 emission projections are considered highly uncertain because at the time, the UK had not yet decided how the LCPD will be implemented (Defra, 2002). The French National Programme (French Republic, 2003) quantitatively estimates the uncertainty associated with each pollutant, using the orders of magnitude presented in the EMEP/CORINAIR guidebook for checking emissions inventories and taking account of uncertainty associated with projected activity levels and emission factors in The results were: SO 2 emissions (±15%); NO x emissions (±45%); VOC emissions (±30%); and NH 3 emissions (±80%). The two key sources of uncertainty are: h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

52 32 uncertainty in use of emission factors e.g.: o the UK National Programme states that estimates for NH 3 are associated with considerable uncertainty due to the wide range of agricultural and nonagricultural sources and the varying impacts of local conditions (Defra, 2002); o the Irish National Programme identifies compiling projections for solvent and other product use as most problematic (Ireland, DoELG, 2003); o the Dutch National Programme states that increased knowledge of emissions from HGVs has indicated that emissions from Euro II and Euro III HGVs have previously been underestimated by several tens of percentage points. These vehicles may have higher emissions in practice than under test conditions, which could add between 10 and 20 kt to the actual emissions of NO X from this sector. Similar uncertainty exists over impact of the discrepancy between test conditions and practice for vehicles compliant with Euro IV and V. The report also highlights the potential risk that the future use of SCR in diesel engines will increase NH 3 emissions (VROM, 2003). uncertainty associated with projections of activity levels, e.g. changes in the electricity market, economic development (encompassing industrial growth, vehicle stock, demand for services, etc.) and revisions of the Common Agricultural Policy. Other points noted by Member States are listed below: uncertainty over impacts that potential policies and measures could have on emissions (e.g. whether NO X and VOC measures are sufficient to meet ceilings as highlighted by the Programme submitted by the Flanders Region of Belgium MoFR, 2002); uncertainty over the extent to which Kyoto mechanisms are implemented i.e. extending the use of emissions trading would mean that Climate Strategies may not have to be so stringent within a particular Member State, so the associated reductions in SO 2 and NO X could be affected (Finnish National Programme Finland, MoE, 2002); the Dutch National Programme highlights a potential shift towards diesel powered cars, stating that TNO has estimated that an increase in the proportion of diesel from 20% to 40% would increase the NO X emissions from transport in 2010 by 3 kt (VROM, 2003); the Dutch National Programme states that NH 3 emission forecasts for agriculture depend on the results of the Dutch request for a derogation under the EU Nitrate Directive, the abolition of livestock quotas and milk quotas and the expansion of the EU in 2004, which could affect emissions by 10 kt up or down (VROM, 2003); a problem raised by some Member States is that the NECD contains absolute ceilings and as such, does not account for adjustments to compensate for changes in methods used to compile emission inventories, e.g. emission factors for heavy duty vehicles have changed as an outcome of the ARTEMIS research project (Assessment and Reliability of Transport Emission Modelling and Inventory Systems). As such, the Austrian air emissions inventory shows considerably higher NO x emissions compared to the 2000 version of the inventory, when NECD and ceilings were being discussed in Council. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

53 Uncertainties highlighted in research contributing to the CAFE Baseline In establishing the CAFE baseline, IIASA initiated a series of bilateral consultations with experts from Member States and industrial stakeholders during Whilst most Member States responded to this consultation process, Greece, Luxembourg, Cyprus and Malta did not (Amann et al. 2004b). As such, the baselines for these countries are unverified. IIASA has compared national emission inventories for NEC pollutants for 2000 with RAINS estimates (Figure 22) (Amann et al., 2004b; Amann et al., 2004a). For SO 2 and NO X, the match is very good. There is less of a match for VOCs, due to the variation in emission factors used between Member States. Amann et al. (2004b) notes that insufficient insight into the calculation methods applied in some Member States has made it difficult to judge the quality of some national inventories. There are larger discrepancies for NH 3, although RAINS estimates for all but three countries (Greece, Portugal and Cyprus) are within 5% of national inventories. SO 2 NO X VOCs NH 3 Figure 22 RAINS emission estimates (August 2004) vs. national inventories for the year 2000 (Amann et al., 2004h) NB RAINS estimates are higher for Luxembourg because RAINS calculates emissions for all fuel sold in a country, whereas national estimates refer only to fuel consumed within the country. Ideally, the assessment of emissions and the potential and costs of abatement should be carried out at a detailed source by source level. In reality, however, the requirement to assess abatement costs for all countries in Europe, focusing on emission levels 10 and 20 years in the future, restricts the level of detail which can be maintained. As such, in developing an integrated h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

54 34 assessment model at the pan-european scale, source categories and abatement options are aggregated within the RAINS model. Amann et al. (2004d) reports that uncertainties in calculations of emissions are strongly determined by the potential for use error compensations within the model formulae. This potential is larger, and therefore the uncertainties are smaller, if more elements of similar sizes are included and if there is no dominant emission source. The error compensation leads to the situation that in many countries levels of national SO 2 emissions turn out to be more uncertain than those of NO X and even NH 3, despite uncertainties in many of the input parameters for NO X and NH 3 calculations being larger than those for SO 2. Amann et al. (2004d) goes on to note that this finding has an implication on the optimal design of emission inventories, suggesting that more resolved emission inventories should be associated with less overall uncertainties. However, additional information at the more resolved level must be of equal quality. Real improvements in emission inventories are inextricably linked to the availability of additional information and deeper insight into the correlations of parameters. IIASA has developed a methodology to estimate uncertainties of emission calculations based on uncertainty estimates for the individual parameters of the calculation (Suutari et al., 2001). It was found that uncertainties in modelled national emissions of SO 2, NO X, NH 3 in Europe typically lie in the range between 10 and 30 percent. Generally, emission factors are an important contributor to the uncertainty in estimates of historical emissions (Amann et al., 2004j), whilst activity data is thought to form the largest source of uncertainty for emissions projections (SERI et al., 2004). RAINS relies to a significant degree on data from external bodies. Bilateral dialogues attempt to verify this data and seek to ensure that omissions and misstatements are avoided. Nonetheless, the RAINS review (SERI et al., 2004) notes problems with some aspects of the emission inventories used in RAINS, i.e. some pollutant emissions are better characterized than others. Significant technical issues remain with ammonia emissions, which contribute to the problems of modelling nitrogen deposition (Section 4.4). SERI et al. (2004) notes that there is much work ongoing to understand the influence of the uncertainty in emission estimates on model output and policy implications Uncertainties highlighted by EMEP Vestreng et al. (2004) has reviewed the emissions inventories submitted to the UN ECE under CLRTAP. A number of key sources of uncertainty were identified. Completeness the extent to which some sources under the NFR reporting format were omitted or not calculated was fairly high. Internal consistency 30% of data submitted by Parties to CLRTAP was internally inconsistent, i.e. the sum of emissions from sub-sectors did not add up to the sector or national totals. Implied emission factors Vestreng et al. (2004) ran a check on data submitted by Parties under LRTAP and sectoral activity reported to the UNFCC to indicate whether emissions appeared to have been compiled using broadly similar emission factors. Implied emission factors (IEF) were calculated by country, sector and pollutant and then compared with the average IEF from similar countries. IEFs significantly different from the average were flagged for expert review. The number of flags indicates the degree of variation in the IEFs. Figure 23 presents the percentage of flagged values by pollutant. High variability in SO 2 reflects the differences between the reduction efficiency of different abatement options. However, high variability in h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

55 35 NH 3 is less easily explained, as the major source is agriculture, where the impact of abatement techniques is much lower. On this basis, Vestreng et al. (2004) recommends a review of the guidance on calculation of NH 3 emissions. Ambiguity in allocation of emission sources Vestreng et al. (2004) reports that during the bilateral consultations held between IIASA and national experts, a common issue was the differential allocation of emissions to specific NFR codes, e.g. for NH 3 emissions, some countries included losses of N from organic fertilisers in direct soil emissions whereas others included these emissions in manure management. Figure 23 Number of IEF flagged values by pollutant as a percentage of the number of IEF comparisons that were made (Vestreng et al., 2004) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

56 36 4. Consequences for Interim Environmental Objectives and Long-term Objectives 4.1 Introduction The assessment of harmful effects to humans and the environment are considered under the IEOs through the exceedance of critical loads (for acidification and eutrophication) and critical levels (for concentrations of ozone) 21. Excedences of critical loads are expressed as area-weighted averages for all ecosystems in a grid cell (150 x 150 km square). Critical levels for ozone are measured in terms of AOT40 and AOT60. AOT40 is the sum of the differences between hourly ozone concentrations greater than 40 ppb, and 40 ppb, during daylight hours, accumulated from May to July each year. AOT60 uses 60 ppb as a reference value. The IEOs are based on these concepts and set out under Article 5 of the NECD. They should be met by the Community as a whole by 2010 and are as follows: Acidification / Eutrophication Health related ground-level ozone exposure Vegetation-related ground level ozone exposure The areas where critical loads are exceeded shall be reduced by at least 50% (in each grid cell) compared with the 1990 situation. The ground-level ozone load above the critical level for human health (AOT60 = 0) shall be reduced by two-thirds in all grid cells compared with the 1990 situation. In addition, the groundlevel ozone load shall not exceed an absolute limit of 2.9 ppm.h in any grid cell. The ground level ozone load above the critical level for crops and semi-vegetation (AOT40 = 3 ppm.h) shall be reduced by one-third in all grid cells compared with the 1990 situation. In addition, the ground-level ozone load shall not exceed an absolute limit of 10 ppm.h expressed as an exceedance of the critical level of 3 ppm.h in any grid cell. The IEOs are presented within the NECD as a means of moving towards the long-term objectives of eliminating the adverse effects of acidification and reducing exposure to ground level ozone of man and the environment to the guideline values established by the WHO. 4.2 Progress in scientific understanding since the negotiations for the NECD Modelling environmental impacts Since the negotiations of the NECD, the methods used to model environmental impacts have been refined. The UN ECE (2004a) noted that the Unified EMEP Eularian model described by 21 As set out under Article 3, a critical load for an ecosystem is an estimate of the exposure to one or more pollutants below which significant adverse effects on specified sensitive elements of the environment do not occur, according to present knowledge. A critical level is the concentration of pollutants in the atmosphere above which direct adverse effects on receptors (humans or the environment) may occur, according to present knowledge. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

57 37 Simpson et al. (2003) represents a substantial development and improvement on the earlier Langrangian model used during the negotiations of the Directive. These include: a higher spatial resolution (50 x 50 km², rather than 150 x 150 km²); an improved description of the long range transboundary transport and dispersion of pollutants, giving a more complete source allocation for deposition; a more integrated description of physical and chemical processes; and a more realistic quantification of the deposition of sulphur and nitrogen to specific ecosystem types. Estimates generated using the new Eularian model have subsequently altered baseline projections for exceedances of critical loads. The impacts of these new methods have been modelled by Tarrasón et al. (2004) and are presented in Table 10. Table 10 Percentage of ecosystem area within the EU25 for which acidity and nutrient nitrogen critical loads are exceeded (Tarrasón et al., 2004) Acidification Eutrophication Historical estimate (1) Updated estimate (2) Historical estimate (1) Updated estimate (2) % 41.4% 66.8% 88.2% % 16.1% 52.9% 73.1% Notes: 1. The historical dataset used to negotiate the NECD (1998) were based on: (a) emissions data available in 1998 (UNECE, 1999; EMEP 1998); (b) critical loads used in 1998 (CCE, 1999); and (c) deposition estimates from the EMEP lagrangian model (EMEP, 1998). The deposition estimates are provided in 150 km x 150 km² grid squares and consist of grid average depositions. Calculates are based on 12- year averaged meteorological conditions and derived from source receptor calculations calculations are based on: (a) emissions available in 2004 (Vestreng et al., 2004); new data on critical loads (Hettelingh et al., 2004) and deposition estimates from the Unified EMEP eularian model (Simpson et al., 2003). Deposition estimates are modelled at a 50 km x 50 km² resolution and land cover specific depositions have been used, rather than grid average depositions. Calculations are made for the meteorological conditions of 1999, a year close to average conditions during The new calculations show an increase in the risk for acidification and eutrophication of with respect to estimates used during the NECD negotiations. Tarrasón et al. (2004) has attributed this largely to the refinement of deposition and concentration data calculated by the new Unified EMEP model, which results in higher exceedance calculations and larger areas of exceedance than the previous EMEP Langrangian model. Additionally, the use of land cover specific deposition in the 2004 estimates results in higher deposition to forest ecosystems, which reflects the well-established fact that deposition over forests is greater than over open land Appropriate parameters Since the NECD negotiations, the WHO Task Force on Health (UN ECE, 2003b: 4) has noted that the AOT60 concept used previously might no longer be appropriate to account for the effects of ozone on human health, concluding that effects might occur at levels below 60 ppb, which was the threshold level used to calculate AOT60, and a possible threshold, if any, might h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

58 38 be close to background levels and not determinable.. Based on these considerations, the joint WHO/UNECE Task Force recommended that even though current evidence was insufficient to derive a level below which ozone has no effect on mortality, a cut-off at 35 ppb, considered as a daily maximum 8-hour mean ozone concentration, should be used within the RAINS model. This exposure parameter is known as SOMO35 (sum of means over 35) and is the sum of daily maximum 8-h means over the cut-off of 35 ppb calculated for all days in a year. Given these developments in human health research, the EMEP and RAINS models are now run for SOMO35, rather than the previous AOT60 parameter. As such, the results reported in Section 4.3 below refer to the projected changes in SOMO35 and are therefore not directly comparable to the IEO formulated in the NECD. An assessment of the projected changes in SOMO35 by 2010 and 2020, will support discussions on the need for further action as the EU moves towards the LTOs of reducing exposure to ground level ozone of man and the environment to the guideline values established by the WHO. 4.3 Results of environmental modelling Article 9, Paragraph 1 (i) assessment of the current and projected exceedances of critical loads and the WHO s guideline values for ground level ozone Article 9, Paragraph 1 extent to which the interim environmental objectives set out in Article 5 are likely to be met by 2010 and on the extent to which the long term objectives set out in Article 1 could be met by 2020 This section may be subject to change when new information becomes available in future e.g. relating to changes in RAINS estimates, the EMEP model, critical loads databases, etc Acidification Current and projected exceedances The updated projections using the Unified EMEP Eularian model referred to in Table 10 and presented in Figure 24, show that whilst the extent of the acidification problem was worse than predicted historically, projected SO 2 emissions reductions highlighted in Section will result in a significant decrease in the percentage of ecosystem area within the EU25 for which acidity critical loads are exceeded, from 41% in 1990 to 16% in h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

59 39 Figure 24 Exceedances of critical loads of acidity for 1990 and 2010; assumptions regarding emission data, critical loads and deposition are given in Table 10 (Tarrasón et al., 2004) Figure 25 presents the percentage change in Member States forest area with acid deposition above critical loads from 2000 to Significant reductions are seen for forest areas in many Member States, notably Belgium, Denmark, Luxembourg, Sweden, the UK, Poland and Slovakia. However, even in 2020, critical loads are exceeded in more than 40% of forest area in Germany, the Czech Republic and the Netherlands (where 80% of forests remain at risk). Figure 25 Percent of forest area with acid deposition above critical loads for the no further climate measures scenario (critical loads database of 2004) (Amann et al., 2004h) Figure 26 presents the same data for acid deposition to freshwater bodies in selected countries, demonstrating very little noticeable change in the percentage of catchment areas exceeding critical loads for acid deposition. Whilst there are some reductions in Finland, Sweden and the UK, significant areas of Norway and Switzerland remain at risk. Similar small reductions are projected for forests by 2020 (Figure 27). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

60 Figure 26 Acid deposition to freshwater bodies - Percentage of catchment area with acid deposition above critical loads, using ecosystem-specific deposition; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies, using grid-average deposition; Critical loads database of (Amann et al., 2004h) Figure 27 Acid deposition to forests - Percentage of forest area with acid deposition above critical loads, using ecosystem-specific deposition; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies; Critical loads database of (Amann et al., 2004h) Interim environmental objectives For acidification, the IEO is to reduce areas where critical loads are exceeded by at least 50% (in each grid cell) in 2010 compared with the 1990 situation. Whilst significant reductions in acidification have been made, the modelled outputs presented in Figure 24, Figure 25 and Figure 26 demonstrate that a number of grid cells are predicted to remain 100% at risk by As such, the currently available modelling work indicates that the IEO for acidification will not be met, considering the new EMEP grid cell resolution of 50 x 50 km square. However, it is noted that the NECD defines a grid square as 150 x 150 km square. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

61 41 Long term environmental objectives The projected reductions in acidification between 2010 and 2020 (Figure 26 and Figure 27) are not highly significant, indicating that further reductions will be required to fulfil the long-term environmental objectives Eutrophication Current and projected exceedances The updated projections using the Unified EMEP Eularian model described in Table 10 and presented in Figure 28, show that substantial improvements in eutrophication are not expected by 2010, with the percentage of ecosystem area within the EU25 for which nutrient nitrogen critical loads are exceeded reducing from 88% in 1990 to 73% in Further significant improvements are not expected up to 2020 (Figure 29). Figure 28 Exceedances of critical loads for nutrient nitrogen calculated for 1990 and 2010; assumptions regarding emission data, critical loads and deposition are given in Table 10 (Tarrasón et al., 2004) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

62 Figure 29 Excess of critical loads for eutrophication - Percentage of total ecosystems area with nitrogen deposition above critical loads for the no further climate measures emission projections, using grid-average deposition; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies; Critical loads database of (Amann et al., 2004h) Figure 30 presents the percentage change in Member States ecosystem area nitrogen deposition above critical loads from 2000 to Few Member States record significant reductions, those that do include Denmark, Italy, Spain and Sweden. Nineteen Member States will have over 40% of their ecosystems at risk of eutrophication in 2020 with nine of these predicted to have over 80% of ecosystems at risk by this date. These are Austria, Belgium, France, Germany, Luxembourg, the Czech Republic, Lithuania, Poland and Slovenia. Figure 30 Percent of ecosystem area with nitrogen deposition above critical loads for eutrophication for the no further climate measures scenario (critical load database of 2003) (Amann et al., 2004h) Interim environmental objectives For eutrophication, the IEO is to reduce areas where critical loads are exceeded by at least 50% (in each grid cell) in 2010 compared with the 1990 situation. Reductions in eutrophication have been much less significant than those for acidification. Figure 28 and Figure 29 demonstrate that a large number of grid cells are predicted to remain 100% at risk by As such, the currently h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

63 43 available modelling work indicates that the IEO for eutrophication will not be met, considering the new EMEP grid cell resolution of 50 x 50 km square. However, it is noted that the NECD defines a grid square as 150 x 150 km square. Long term environmental objectives Whilst some reductions in eutrophication are predicted between 2010 and 2020 (Figure 29), further reductions will be required to fulfil the long-term environmental objectives Ozone exposure Current and projected exceedances Figure 31 presents the vegetation-relevant projections for ozone concentrations in AOT40, using the EMEP Eularian model. Whilst significant reductions are expected by 2010 and further by 2020, problem areas still remain in Southern Europe and the Mediterranean. However, even by 2020, the critical level for crops and semi-vegetation of 3 ppm.h is projected to be exceeded across large parts of Europe Figure 31 Vegetation-relevant ozone concentrations AOT40 [ppm.hours]m - Critical level for crops and semivegetation = 3 ppm.hours (under the IEOs); Calculated for the with climate measures baseline scenario; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies. (Amann et al., 2004a) As noted in Section 4.2, the parameter of AOT60 set within the IEO for health-related ozone is no longer thought of by the WHO as an appropriate measure of the effects of ozone on human health. Figure 32 presents the IIASA health relevant IIASA projections for 2010 and 2020 using the SOMO35 measure. The pattern of health-related exceedance mirrors that presented in Figure 31, with the highest levels of exceedance in the Mediterranean. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

64 Figure 32 Health-relevant ozone concentrations (SOMO35, ppb.days) - Rural concentrations; Calculated for the no further climate measures baseline scenario; Average of calculations for 1997, 1999, 2000 & 2003 meteorologies (Amann et al., 2004h) Figure 33 presents a provisional estimate of premature mortality attributable to ozone under the CAFE baseline. These projections indicate significant reductions in ozone-related mortality by 2020 in the countries most affected by high levels of ozone concentration, i.e. France, Germany, Italy and Spain. However, the reduction in most other countries is proportionately fairly small, with the number of mortalities actually increasing very slightly between 2010 and 2020 in the UK. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

65 45 Figure 33 Provisional estimates of premature mortality attributable to ozone for the no further climate measures CAFE baseline scenario (cases of premature deaths). These calculations are based on regional scale ozone calculations (50*50 km) and average over the meteorological conditions of four years (1997, 1999, 2000, 2003). No estimates have been performed for Cyprus and Malta. (Amann et al., 2004h) Interim environmental objectives Figure 31 shows that in 2010, large areas of Europe exceed the absolute limit vegetationrelevant IEO of 10 ppm.h. As such, the currently available modelling work indicates that the vegetation-relevant IEO will not be met, considering the new EMEP grid cell resolution of 50 x 50 km square. However, it is noted that the NECD defines a grid square as 150 x 150 km square. As explained in Section 4.2, the health-relevant IEO has not been assessed due to changes in the way the impacts on human health are assessed since the negotiations for the NECD. Long term environmental objectives Whilst some reductions are predicted, critical levels for vegetation will be exceeded in 2020 across fairly large areas of Europe. Further action should therefore be taken if the levels of ozone are to be reduced below critical levels. As shown in Figure 32, reductions in health-relevant ozone concentrations by 2020 will not be sufficient to reduce ozone exposure below 35 ppb, which is the cut-off suggested by the UN ECE (2003b). 4.4 Uncertainty associated with environmental modelling The model used Article 9, Paragraph 1 (k - v) New technical and scientific data including an assessment of the uncertainties in the model used h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

66 46 The RAINS model has recently been reviewed under the CAFE framework by a wide range of collaborators (SERI et al., 2004). It was concluded that the model is a reliable and scientifically defendable tool for policy advice. Amann et al. (2004d) notes that uncertainty has been a key consideration within the development of the RAINS model, using uncertainty management as a guiding principle to systematically minimize the potential influence of uncertainties on policy-relevant model output (Schöpp et al., 1999). For example: At all phases of model development and use, explicit confidence intervals (for emission control potentials, deposition ranges, ozone levels, ecosystems sensitivities, etc.) defined the range within which the model was proven to work with sufficient accuracy. Potential reliance of optimised solutions on single point estimates were avoided through integral measures for environmental sensitivities (e.g., accumulated excess of critical loads, long-term ozone measures, etc.). Specially designed compensation mechanisms allowed controlled violation of environmental targets for single ecosystems with potentially uncertain sensitivities. Wherever possible, preference was given to relative model outcomes (comparing two model outputs) rather than to absolute values. For ground-level ozone, less weight was given to extreme meteorological situations because their representativeness was questionable and the performance of the meteorological model for such rare situations was less certain. Sensitivity analysis attempted to identify systematic biases and showed that with large probability the emission reductions resulting from the model calculations could be considered as minimum requirements, suggesting that there is only little chance that policy measures suggested by the model needed to be revised in the future in the light of new information. (Amann et al., 2004d: 145) Despite the broad endorsement of the RAINS approach, the complex nature of integrated assessment modelling is such that there are multiple input parameters and therefore multiple sources of uncertainty that should be minimised as far as possible. These have been identified by Amann et al. (2004d) (Table 11). Table 11 Taxonomy of uncertainty within the RAINS model (Amann et al., 2004d) Model structure Emission calculations Atmospheric dispersion Critical loads estimates Selected sectoral aggregation Determination of mean values Linearity in atmospheric dispersion Selected spatial resolution, ignoring in-grid variability Country size (country-to-grid) The threshold concept Selected aggregation of ecosystems Static representation of a dynamic process h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

67 47 Parameters Forcing functions Initial state Emission calculations Atmospheric dispersion Critical loads estimates Emission calculations Atmospheric dispersion Emission calculations Atmospheric dispersion Expected values for fuel quality, removal efficiencies and application rates Expected values of parameters to describe chemical and physical processes (conversion rates, deposition rates) Mean transfer coefficient with regard to inter-annual meteorological variability Expected values of base cation deposition and uptake, through flow, nitrogen uptake in critical loads calculations Accuracy of statistical information on economic activities Projections of sectoral economic activities Future implementation of emission controls Spatial distribution of emissions within countries Accuracy of meteorological data Uncontrolled emission factors State of emission controls in the base year Natural emissions Hemispheric background The following sections are based on this taxonomy and describe the most recent assessment of the uncertainties inherent within the modelling process, focussing on: - atmospheric dispersion (transboundary transport and deposition); - critical loads and levels; and - comparison of modelled and observed values Atmospheric dispersion (transboundary transport and deposition) Article 9, Paragraph 1 (k - iii) New technical and scientific data including an assessment of the uncertainties in knowledge of the transboundary transport and deposition of pollutants The RAINS review (SERI et al., 2004) reported that whilst the increased resolution of the model from a 150 km to a 50 km grid has enabled the consideration some smaller scale issues, the scale is still too large for the assessment of urban scale problems, sub-grid processes and effects relating to ecosystems, particularly with regard to NH 3. The CityDelta initiative should better estimate the urban air pollution component, but the review reports that there are still problems in establishing reliable source-receptor data on these scales. Additionally, the representation and resolution of environmental effects is dependent on the grid size used, whereby decreasing the grid size will give the appearance of greater exceedances and increasing it will appear to give fewer exceedances. The review recommends that transparency 22 Emission calculations have been discussed in Section h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

68 48 is improved and an understanding should be developed of how effects are expressed and how effect measures are influenced by geographical scales (SERI et al., 2004). The values of parameters used to describe chemical and physical processes have been assessed by SERI et al. (2004: 26-27) who note that: Atmospheric depositions calculated by EMEP in coastal areas do not reflect the effects of shipping sources ; there is still an underestimation of the deposition in complex terrain (hills, forest edges), which may lead to an underestimation of the control needs ; The underlying mechanisms for acidification due to nitrogen and sulphur deposition are well understood. There remain uncertainties with respect to the role of ammonia and nitrogen immobilisation in soils, which are important for dynamic modelling. ; and The underlying mechanisms of eutrophication due to oxidized and reduced N deposition are well understood. There is however less knowledge about the dynamics of vegetation changes in (semi)natural ecosystems. The RAINS review (SERI et al., 2004: 15) highlighted the underestimation of deposition of S and N to sensitive ecosystems as a remaining bias in the model in that the deposition calculations are still unable to fully take into account the variations in the deposition and to give an acceptable estimate of the deposition to complex terrain. Some of the most sensitive ecosystems are also found in such areas.. The RAINS review (SERI et al., 2004: 10) notes that the interannual variation in European air pollution impacts may be large, particularly for ozone (Figure 34). The Gothenburg Protocol used a five-year adjusted mean to control for interannual variations, whilst currently there is a risk that there will not be data from more than two years available for the RAINS calculations. As such, this may decrease the reliability of the model output. The review recommends that interannual variations should be further considered and source-receptor matrixes should if possible be extended to at least five years (SERI et al., 2004). This is potentially an important point, given the anomalous meteorology of recent years and the potential for climate change in the future. Figure 34 Variability in national exposure estimates for ozone (expressed as SOMO35) for the EU25 (excluding Cyprus) in 2000, run with the EMEP model for meteorology in 1997, 1999, 2000 and 2003 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

69 49 Analysis by Amann et al. (2004c) found that deposition estimates are more uncertain if deposition at a given site is dominated by the emissions of a single source region, e.g., at the Kola Peninsula and in Romania. Also an uneven distribution of emissions within a country (e.g., if there is only one large power station making a dominant contribution to national emissions) leads within the country to larger uncertainties in the deposition field due to the inter-annual meteorological variability. In general, Amann et al. (2004c) found that the combined uncertainties of emission estimates and of the inter-annual meteorological variability leads to similar uncertainties of sulphur and reduced nitrogen (NH3) deposition fields, whilst uncertainties for oxidized nitrogen are slightly lower. The RAINS review (SERI et al., 2004: 5) notes that [f]or some pollutants, air quality in Europe is severely affected by pollutants emitted outside the EMEP domain. This may lead to sub-optimal solutions, and in a long term, there is a need to include the hemispheric scale. This is particularly important for ozone, for which the increased (and probably still increasing) background concentrations may be as important for some effects as ozone produced within Europe. This is supported by Tarrasón (2004a), who states that the hemispheric background of ozone (determined by emissions and processes outside Europe) is increasingly a considerable source (Figure 35). Stations in the North and West of Europe show increasing hemispheric background concentrations. As background ozone levels increase in significance, the RAINS model may in future, underestimate the control required to afford the same level of protection for human health and the environment. Furthermore, the RAINS review (SERI et al., 2004) notes that the European climate is expected to undergo changes in the future due as a result of global warming. As such, the potential for inclusion of climate change within the model should be addressed over the long-term. Figure 35 Increase in background ozone Current legislation scenario, (ppbv) (Amann et al., 2004e) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

70 Critical loads and levels Article 9, Paragraph 1 (k - iv) New technical and scientific data including an assessment of the uncertainties in critical loads and levels The employment of critical loads and levels is based on the concept that there is a threshold below which no significant effects occur on human health or on the environment. For ozone, several limitations of the AOT approach have been recognised. The actual impacts of ozone exposure on vegetation depends on the amount of ozone reaching sites of damage within the leaf (Amann et al., 2004j), rather than the ozone concentration at the top of the vegetation canopy, as used within the critical level method. Alternative concepts, such as the ozone flux methodology have been developed (Karlsson et al., 2003). However, Amann et al. (2004j: 113) notes that uncertainties in the development and application of flux-based approaches to setting critical levels for forest trees are at present too large to justify their application as a standard risk assessment method at a European scale. Consequently, the AOT40 measure is retained within the Mapping Manual of the UN ECE Working Group on Effects, until the ozone flux approach is sufficiently refined (UN ECE, 2004b). However, Amann et al. (2004j) warns that AOT40 measures are not suitable for quantifying vegetation damage, but should only be used as indicators of progress towards LTOs. There are similar issues with regard to using a threshold approach for ozone impacts on human health. In presenting the CAFE baseline, IIASA notes that for whilst the SOMO35 measure takes account of the uncertainties in the shape of concentration response function at very low ozone concentrations as well as reflecting the seasonal cycle and geographical distribution of background ozone concentrations, the WHO Task Force stressed that it was highly likely that the overall effects of ozone on mortality are underestimated under this approach and that morbidity is not yet included. Additionally, in relation to the use of thresholds for ozone, the RAINS review (SERI et al., 2004) notes that: [t]he AOT concept will lead to a bias in the control needs in effects between dry (Mediterranean) and wet (Central and North) areas in Europe at least for agricultural crops. (SERI et al., 2004: 15); and whilst the AOT concept has been developed in relation to the common concentration pattern in Europe. [t]he concentration pattern is changing, however, with increasing background concentrations and lower concentrations during episodes. This may lead to a bias in the relations between measures and effects. (SERI et al., 2004: 29). For acidification, the RAINS review (SERI et al., 2004: 26) notes that soil processes for nitrogen may cause biases in critical loads for nitrogen. Scientific field studies indicate that the immobilisation of nitrogen in soils are larger than presently assumed in the estimation of critical loads for acidification. This means that critical loads for acidification may be higher than currently assumed. Conversely, for eutrophication, the RAINS review (SERI et al., 2004: 27) stated that critical loads are probably smaller than in present assessments. This may lead to an underestimation of h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

71 51 the control requirements to reach a certain environmental status. Additionally, it was highlighted that some of the control measures within the RAINS cost curve may lead to pollutant swapping, e.g. reduce NH 3 but increase N 2 O emissions, which would not be identified by the model. Whilst the underlying mechanisms of both acidification and eutrophication are well understood, the RAINS review (SERI et al., 2004: 26-27) states that there remain uncertainties with respect to the role of ammonia and nitrogen immobilisation in soils and the relative lack of knowledge about the dynamics of vegetation changes, both of which are important for dynamic modelling. Hettelingh (2004) has stressed that dynamic modelling is more representative of ecosystem effects. This dynamic modelling focuses on the assessment of delays in ecosystem recovery (Sliggers, 2004). However, SERI et al. (2004: 26,28) note that [t]here is not yet a final agreement on how results from dynamic modelling could be handled in RAINS with regard to acidification and whilst the present critical loads approach cannot incorporate the dynamic aspects of eutrophication, there is no model available yet that can describe the dynamics in a way that can be useful for control strategies. In analysing the uncertainties of European critical loads, Suutari et al. (2001) found that the spread of critical loads within a grid cell has a strong impact on the resulting uncertainties, i.e. countries reporting few critical loads for grid cells had more uncertain estimates of ecosystems protection since a small change in these data or in deposition might change the protection status for many ecosystems. In light of these findings, Amann et al. (2004j) conclude that the setting of interim or long-term environmental policy targets should not only address the desired level of protection but also consider the certainty with which this level should be achieved. The uncertainty range is considerable, and it needs to be explored how different confidence levels will influence the economic efforts that are needed to attain them Comparison of model calculations and observations Article 9, Paragraph 1 (m) a comparison of model calculations with observations of acidification, eutrophication and ground-level ozone with a view to improving models The comparison of modelled outputs with monitored observations is an important means of validating the models used. The following text describes the most recent validation exercises undertaken by EMEP. Sulphur and Nitrogen Tarrasón et al. (2004) notes that the agreement between model calculations and observations depends on a combination of the following elements: quality of measurement data; representativeness of measurements of the EMEP 50 x 50 km² grid square average; adequacy of emissions data, in terms of estimates of national totals, sector breakdown, geographical and temporal distribution; and the model performance. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

72 52 Validation of the new Unified EMEP model (Fagerli et al., 2003) showed that modelled sulphur components (SO 2 in air, sulphate in air -, sulphate in precipitation) compare favourably with measurements. Modelled and observed seasonal cycles agree, although some overestimation of SO 2 during cold periods is noted. The sum of nitric acid and particulate nitrate in the air is over predicted by the model by approximately 50%, particularly in winter. However, it is noted that few monitoring sites record gas and particulate nitrate simultaneously. Model results of ammonia plus ammonium in air agree well with monitoring data for West European sites, but less well for North and East European stations, with summer concentrations generally underestimated compared to measurements. Modelled wet deposition of sulphate agreed well with observations, except for the South European stations. Wet deposition for reduced and oxidised nitrogen is underestimated for remote regions, whereas agreement is better in central Europe. Both accumulated precipitation and wet depositions of nitrogen and sulphur are heavily underestimated in South Europe. In general, model performance is comparable in Northern, Western and Eastern Europe. The performance of the model in Mediterranean areas is systematically worse than other regions. Fagerli et al. (2003) estimate that this is due, to a large extent, to the poor quality of monitored air concentration data compiled in the area. However, this is not valid for measured concentrations in precipitation, which may indicate the need to review convective processes within the model. Ozone Daily maximum ozone concentrations are used to compare modelled and observed concentrations 23. Fagerli et al. (2003) focused on comparisons against 2000 modelled and monitored values. The model was found to perform well across most parts of Europe. Seasonal cycles of ozone are reproduced with good accuracy and correlation coefficients are generally higher than 0.7 at most sites (Figure 36). Model agreement was very good at almost all sites in Northern and North-Western Europe. There were more discrepancies between modelled and observed values in Eastern and South Eastern Europe, whereas the results in Southern Europe were mixed. Ozone is reproduced well at sites in Italy, southern France and Spain, but modelled ozone values are lower than observed values at sites in Malta and Greece. Figure 36 Monthly averaged daily maximum ozone for 54 European sites with continuous measurements from 1990 to 2002 modelled (blue) compared with monitored (red) (Tarrasón et al., 2004) 23 This is because the daily maximum usually represents the time when the boundary layer is well-mixed, so modelled and observed concentrations should be most comparable. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

73 53 Modelled AOT40 values also correlate well with observed values, although the scatter is significant. This is because AOT40 and AOT60 are very sensitive to small systematic errors in either the model or the measurements (Simpson and Jonson, 1998). Observations of ozone should usually have good accuracy and precision, but calibration procedures are not uniform across the EMEP network and Fagerli et al. (2003) indicate that uncertainties of at least ±5% are likely. Furthermore, measurements are highly influenced by site placement and proximity to local NO X sources, so reported ozone values cannot perfectly represent the grid average Discussion of resulting uncertainty Article 9, Paragraph 1 (k) assessment of the resulting uncertainty in the national emission ceilings required to meet the interim environmental objectives mentioned in Article 5 In assessing the use of the RAINS model for policy development, the RAINS review team (SERI et al., 2004) noted the points listed below. Major environmental and health effects from emissions of sulphur dioxide, nitrogen oxides, VOCs, ammonia and fine particles are included in RAINS to an extent defendable by scientific evidence. Additional endpoints exist, e.g. morbidity effects from ozone and particles, but there is not enough scientific data to establish quantitative relations between exposure and effects. There are also additional effects e.g. effects due to marine eutrophication and health effects from nitrogen oxides, which are not included in RAINS. If these effects were included they would influence the strategy and probably demand larger reductions. (SERI et al., 2004: 7) One of the more important factors in assessing robustness relates to the sensitivity to uncertainties in those input parameters determining the cost per reduced unit (emissions, abatement efficiency, costs). If there are small differences in costs between different policy options close to the optimisation target, small differences in these parameters may unduly influence the outcome. Another important factor influencing the optimisation and robustness is how the cost of emission controls is allocated between co-emitted compounds. (SERI et al., 2004: 13) A number of biases are identified which, overall, are likely to overestimate the protection levels to health and environment offered by a particular policy option and underestimate the emission control effort required to reach a certain protection level. Some of the most obvious biases observed in connection with the development of the Gothenburg Protocol and the NEC Directive have been taken into account in the new version of the RAINS model. There remains a risk, for a given set of circumstances, that the model may give a biased picture of the nature and location of the control measure requirements between different regions of Europe and between different sectors. The direction of potential bias will depend on the endpoint of concern. (SERI et al., 2004: 14) On the basis of these findings, the RAINS review team have made a number of short- and longterm recommendations for the future development of the RAINS model. However, given the uncertainties identified, the RAINS review team (SERI et al., 2004: 9) concluded that [i]n general, RAINS represents reality in a scientifically credible way. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

74 Implications for future emission ceilings Article 9, Paragraph 1 an evaluation of the extent to which further emission reductions might be necessary in order to meet the interim environmental objectives set out in Article 5 Article 10, Paragraph 2 evaluation will be carried out of the indicative emission ceilings for the Community as a whole set out in Annex II with the aim of attaining the interim environmental objectives set out in Article 5, for the Community as a whole by 2010 This section may be subject to change when new information becomes available in future e.g. updated RAINS baseline estimates. The indicative emission ceilings for EU15 set out in Annex II cover only SO 2, NO X and VOCs and are lower than the sum of the NECs for EU15 described in Annex I. The Annex II ceilings represent EU15 ceilings originally proposed by the Commission on the basis of costeffective analyses that calculated the target emissions required to meet the IEOs. However, during the negotiations, a political compromise was reached that resulted in less demanding emission ceilings for Member States, as presented in Annex I. Article 20 of the Act of Accession set temporary ceilings to replace those in Annex II, for EU25. The sum of EU 15 Annex I ceilings are projected to be met for SO 2 and VOCs, but not NO X, whereas the EU15 Annex II ceilings are projected to be met for SO 2, but not NO X or VOCs. The sum of EU25 Annex I ceilings are projected to be met for SO 2, NO X and VOCs, whereas EU25 Annex II ceilings are projected to be met for SO 2, but not for NO X or for VOCs (Table 12). Table 12 Comparison of RAINS projections for EU15 with indicative emissions ceilings in Annexes I and II and for EU25 with indicative emissions ceilings set out in the revised Annexes I and II after Article 20 of the Act of Accession (after Amann et al., 2004j) - Sum of Annex I ceilings (kt) Annex II ceiling (kt) with climate measures 2010 emissions (kt) without climate measures Compliance level SO Compliance with both Annex I and Annex II for both scenarios EU15 NO X Compliance with neither Annex I nor Annex II for either scenario VOCs Compliance with Annex I but non-compliance with Annex II for both scenarios SO Compliance with both Annex I and Annex II for both scenarios EU25 NO X Compliance with Annex I but non-compliance with Annex II for both scenarios VOCs Compliance with Annex I but non-compliance with Annex II for both scenarios h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

75 55 The sum of the provisional ceilings for NMSs are all projected to be attained by 2010 (Figure 11, Figure 14, Figure 17 and Figure 20). At the same time, modelling projections indicate that all IEOs will not be attained. On this basis, further emissions reductions will be necessary to meet the IEOs set out in Article 5, or alternative targets for health-relevant ozone concentrations. Two ongoing EC contracts will assist in this review: establishment of optimal control areas for acidification, eutrophication and ground level ozone in the enlarged EU ; and adaptation of target load functions for RAINS delays of ecosystems recovery. This information should be taken into account where relevant. An important consideration will be the proportional contribution made by different pollutants to the environmental impacts of concern. Analysis by Hettelingh (2004) has indicated that by 2010, the contribution made by NH 3 to acidity and eutrophication will be greater than that made by NO X as a result of more significant reductions in the latter (Figure 37 and Figure 38). S deposition S and NO X deposition S and NH 3 deposition Figure 37 Acidity exceedance in 2010 by S, NO X and NH 3 (Hettelingh, 2004) NO X deposition NH 3 deposition Figure 38 Nutrient nitrogen exceedance in 2010 by NO X and NH 3 (Hettelingh, 2004) A report by Amann et al. (2004i) has calculated the costs and environmental impacts when environmental quality objectives are tightened from the current legislation baseline to the maximum that can be achieved through full application of all presently available technical emission control measures (Figure 39 to Figure 43). It is clear that for all environmental impacts, improvements can be made under the maximum technically feasible reduction (MTFR) scenario. However, the degree of improvement varies substantially. For example, the exceedance of critical loads for eutrophication could be greatly reduced, whereas the potential improvement for acid deposition to lakes is much less marked. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

76 56 Given that this MTFR scenario would still leave significant negative impacts on health and the environment, even employing the most expensive techniques available would not be sufficient to achieve the long-term environmental objectives. As such, interim targets will be required in order to deliver progress towards long-term goal of no significant negative impacts on health and the environment in the most cost effective way. In the impact assessment for the Thematic Strategy, the Commission has considered three different levels of ambition (between 50% and 100% of the MTFR scenarios) in the following four areas: loss of life expectancy from exposure to particulates; premature deaths attributable to ozone; exceedence of critical loads for acidification; and exceedence of critical loads for eutrophication. The results will be presented in the Commission s Impact Assessment of the Thematic Strategy, discussed further in Section (baseline emissions) 2020 (current legislation climate policy scenario ) 2020 (maximum feasible reduction) Figure 39 Acid deposition to freshwater bodies. Percentage of freshwater ecosystems area receiving acid deposition above critical loads. Results for meteorological conditions of 1997, using grid-average deposition. Critical loads data base of (Areas shown in white - no critical loads estimates provided) (Amann et al., 2004i) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

77 (baseline emissions) 2020 (current legislation climate policy scenario ) 2020 (maximum feasible reduction) Figure 40 Acid deposition to forests. Percentage of forest area receiving acid deposition above the critical loads. Calculation results for the meteorological conditions of 1997, using ecosystem-specific deposition for forests. Critical loads data base of (Amann et al., 2004i) 2000 (baseline emissions) 2020 (current legislation climate policy scenario ) 2020 (maximum feasible reduction) Figure 41 Excess of critical loads for eutrophication. Percentage of total ecosystems area receiving nitrogen deposition above the critical loads for eutrophication. Calculation results for the meteorological conditions of 1997, using grid-average deposition. Critical loads data base of (For areas shown in white no critical loads estimates have been provided.) (Amann et al., 2004i) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

78 (baseline emissions) 2020 (current legislation climate policy scenario ) 2020 (maximum feasible reduction) Figure 42 Vegetation-relevant ozone concentrations. AOT40 in ppm.hours. Calculation results for the meteorological conditions of The critical level for forests is set at 5 ppm.hours. (Amann et al., 2004i) 2000 (baseline emissions) 2020 (current legislation climate policy scenario ) 2020 (maximum feasible reduction) Figure 43 Health-relevant ozone concentrations. Grid-average ozone concentrations expressed as SOMO35 in ppb.days. Calculation results for the meteorological conditions of (Amann et al., 2004i) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

79 59 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

80 60 5. Meeting the NECs 5.1 Introduction The following sections highlight information presented by Member States as well as work conducted under the CAFE programme on the costs and cost-effectiveness of meeting NECs. Reference is also made to work related to Cost Benefit Analysis of the NECD. The uncertainty inherent within these projections is highlighted, prior to discussions regarding implementation. 5.2 Cost-effectiveness of compliance Article 9, Paragraph 1 economic assessment, including cost-effectiveness Cost effectiveness reported by Member States Whilst not a specific directive requirement, some Member States have presented information within their National Programmes on the costs involved with implementing and complying with the NECD. However, this information is very limited in nature and it is outside the scope of this report to undertake a review or verification of this data. As such, it is not possible to draw conclusions on the cost-effectiveness of measures to comply with the NECs from this data Cost-effective analysis using RAINS RAINS uses effects-based cost-effectiveness to determine solutions that minimize the cost of control necessary to attain specified environmental targets, taking into account differentiated environmental sensitivities, atmospheric source-receptor relationships, and marginal abatement costs (SERI et al., 2004: 6). The model does not take the next step towards the economic evaluation of the environmental costs and benefits of control strategies. However IIASA considers the interfacing of RAINS with other tools that address economic and monetary benefits to be a useful combination for stakeholders who may wish to view such information. During the original development of the NECD, such an interface was operated to determine the monetary benefits of the various emission control strategies. Under the CAFE programme, this interface will be made with a cost-benefit methodology, developed by AEA T (2004a). The Commission s original proposal for the NECD took account of a detailed cost-effectiveness analysis (EC, 1999a). This analysis calculated the additional cost of achieving a reduction in emissions equivalent to an H1 scenario, which would meet the IEOs. However, during the negotiations, a political compromise was reached between the Council and the Parliament that resulted in less demanding emission ceilings for Member States 24. The total Community 24 Common Position (EC) No. 51/2000 adopted by the Council on 7 November 2000 with a view to adopting Directive 2000/ /EC of the European Parliament and of the Council of on national emission ceilings for certain atmospheric pollutants (2000/C 375/01) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

81 61 reductions required for SO 2, NO X and VOCs under the Commission s original H1 scenario were retained within Annex II as the indicative emissions ceilings for the EU15. The cost of meeting these community wide emissions ceilings for SO 2, NO X and VOCs (as set out in Annex II) was calculated to be 7.5 billion per annum (1999 prices). The additional cost for individual Member States was also calculated for a variety of scenarios (EC, 1999a; Amann et al., 2000a; Amann et al., 2000b). These costs are not directly comparable with the NECs set out in the Directive for all Member States, due to the subsequent modification of the ceilings following negotiations between the Council and the Parliament. Table 13 gives the total control costs for the H1 scenario. These are likely to be overestimates of the cost, because the agreed NECs are higher than the H1 scenario in most cases. Table 13 Control costs calculated for the more stringent H1 scenario for EU15 (EC, 1999a) NECs % of H1 ceilings BAU control costs ( M/a) Additional cost for H1 scenario ( M/a) SO 2 NO X VOCs NH 3 Austria 98% 113% 123% 99% Belgium 130% 139% 136% 130% Denmark 71% 100% 100% 97% Finland 95% 112% 118% 100% France 172% 119% 113% 109% Germany 112% 100% 108% 133% Greece 96% 130% 151% 99% Ireland 150% 110% 100% 94% Italy 84% 114% 120% 97% Luxembourg 133% 138% 150% 100% 98 4 Netherlands 100% 109% 119% 123% Portugal 113% 174% 176% 134% Spain 100% 108% 100% 100% Sweden 100% 97% 110% 119% UK 118% 99% 124% 113% EU % 110% 117% 110% More recent cost data has been sourced from the RAINS cost curves. The 2010 SO 2 and NO X cost curves were published in January 2005, although the cost curve for NO X is for stationary sources only. A 2020 cost curve for stationary sources for VOCs has also been published (IIASA were not required to produce a 2010 VOC cost curve under the CAFE programme). No cost curve data for NH 3 was available at the time of this report. The SO 2, NO X and VOC cost curves are based on the CP_CLE Aug 04 (Nov 04) scenario. The CP_CLE (BAU) emissions for 2010 are taken as the starting point and all additional measures that are not planned under this baseline scenario up to the maximum feasible reduction are ranked in order of cost- h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

82 62 effectiveness. Indications of the cost effectiveness of emissions reductions by sector are given below for SO 2 (Table 14), NO X (Table 15) and NH 3 (Table 16). This section may be subject to change when new information becomes available in future e.g. updating of RAINS cost curves. Table 14 RAINS Model SO 2 Cost Curve Data for 2010 (CP_CLE Nov 04) Sector Average Cost Effectiveness ( /t) Motorcycles: 4-stroke (exhaust) 142,964 Light duty vehicles: 4-stroke (excl. GDI) (exhaust) 51,540 Other transport: inland waterways (exhaust) 46,920 Other transport: other off-road; 4-stroke (military, households, etc.) 44,398 Other transport: rail (exhaust) 17,266 Combustion in residential-commercial sector (all boilers/stoves) 7,923 Industrial Process: Petroleum refineries 7,743 Heavy duty trucks and buses (exhaust) 6,317 Industry: Combustion in boilers (all boiler/furnace types) 5,844 Power plants & district heat plants: Existing other (all boiler types (except wet bottom)) 4,203 Industrial Process: Pig iron, blast furnace 3,583 Waste: Flaring in gas and oil industry 3,520 Power plants & district heat plants: New (all boiler types (except wet bottom)) 3,413 Industrial Process: Nitric acid 3,326 Industry: Other combustion (all furnace types) 3,209 Fuel production & conversion: Combustion (all boiler/furnace types) 3,115 Industrial Process: Agglomeration plant - sinter 2,711 Industrial Process: Other non-ferrous metals prod. - primary and secondary 2,651 Industrial Process: Coke oven 1,900 Waste: Open burning of residential waste 879 Other transport: ships; large vessels (exhaust) 824 Industrial Process: Lime production 792 Industrial Process: Cement production 736 Waste: Agricultural waste burning 444 Other transport: ships; medium vessels (exhaust) 385 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

83 63 Table 15 RAINS Model NO X Cost Curve Data for 2010 stationary sources only (CP_CLE Nov 04) Sector Average Cost Effectiveness ( /t) Power plants & district heat plants: New (all boiler types (except wet bottom)) 8,033 Industrial Process: Cement production 7,884 Waste: Flaring in gas and oil industry 6,286 Industrial Process: Lime production 5,404 Other transport: rail (solid fuels), heating (stationary combustion) 5,245 Industry: Combustion in boilers (all boiler/furnace types) 3,985 Power plants & district heat plants: Existing other (all boiler types (except wet bottom)) 2,936 Industry: Other combustion (all furnace types) 2,840 Fuel production & conversion: Combustion (all boiler/furnace types) 2,768 Other transport: ships 2,529 Industrial Process: Other non-ferrous metals prod. - primary and secondary 2,341 Combustion in residential-commercial sector (all boilers/stoves) 1,744 Waste: Open burning of residential waste 1,586 Industrial Process: Sulphuric acid 1,113 Industrial Process: Pig iron, blast furnace 1,083 Industrial Process: Coke oven 1,069 Industrial Process: Paper pulp mills 1,027 Industrial Process: Petroleum refineries 953 Industrial Process: Agglomeration plant - sinter 894 Waste: Agricultural waste burning 686 Table 16 RAINS Model VOC Cost Curve Data for 2020 stationary sources only (CP_CLE Nov 04) Sector Average Cost Effectiveness ( /t) Extraction, processing, distribution of liquid fuels (incl. new) 23,683 Manufacture of automobiles 10,636 Vehicle refinishing (new installations) 8,745 Dry cleaning (new installations) 8,113 Extraction, proc. and distribution of liquid fuels 5,030 Food and drink industry 4,445 Vehicle refinishing 3,980 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

84 64 Sector Average Cost Effectiveness ( /t) Domestic use of solvents (other than paint) 3,320 Combustion in residential and commercial sector 2,701 Products incorporating solvents 2,055 Industrial paint applications - General industry 1,434 Screen printing, new installations 1,162 Flexography and rotogravure in packaging, new installations 1,040 Industrial paint applications - General industry (continuous processes) 899 Screen printing 820 Printing, offset, new installations 630 Manufacturing of shoes 580 Dry cleaning 530 Waste treatment and disposal 488 Decorative paints 426 Polystyrene processing 337 Leather coating 328 Degreasing (new installations) 319 Rotogravure in publication, new installations 310 Synthetic rubber production 195 Steam cracking (ethylene and propylene production) 186 Printing, offset 175 Tyre production 171 Gasoline distribution - transport and depots (including storage at refinery) 142 Industrial paint applications - General industry (plastic parts) 131 Organic chemical industry, storage 110 Pharmaceutical industry 101 Rotogravure in publication 100 Flexography and rotogravure in packaging 90 Industrial application of adhesives (high performance solvent based) 59 Degreasing 53 Agricultural waste burning 40 Other industrial sources 15 Polyvinylchloride production by suspension process 0 Coil coating (coating of aluminum and steel) 0 Wood preservation (not creosote) 0 Industrial application of adhesives (traditional solvent based) 0 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

85 65 The costs presented in Table 17 have been calculated by comparing the RAINS CP_CLE (Aug 04) emissions with the NECs to give the required emissions reduction. The approximate cost of achieving this reduction was then read from the cost curves for each country. The RAINS CP_CLE baseline was used for purposes of consistency. However, as identified in Section 3.3, there are a number of disagreements between the Member State projections under the NECD and the RAINS projections for the CAFE baseline. This could therefore significantly affect the compliance cost estimates. Table 17 Control costs calculated for under the CP_CLE scenario (IIASA, 2005) Projected 2010 SO2 emissions under CP_CLE scenario (kt) SO2 NEC (kt) Costs of additional measures (beyond BAU) required to comply with SO2 NECs, based on 2010 cost curve ( M/a) Projected 2010 NOX emissions under CP_CLE scenario (kt) NOX NEC (kt) Costs of additional measures (beyond BAU) required to comply with NOX NECs, based on 2010 cost curve (stationary sources only) ( M/a) Projected 2010 VOC emissions under CP_CLE scenario (kt) VOC NEC (kt) Costs of additional measures (beyond BAU) required to comply with VOC NECs, based on 2020 cost curve (stationary sources only) ( M/a) Austria No further reduction required Measures in RAINS cost curve for stationary sources insufficient to enable compliance with the ceiling No further reduction required Belgium No further reduction required Denmark No further reduction required No further reduction required Finland No further reduction required No further reduction required No further reduction required France No further reduction required No further reduction required Germany No further reduction required Greece No further reduction required No further reduction required No further reduction required Ireland No further reduction required Measures in RAINS cost curve for stationary sources insufficient to enable compliance with the ceiling No further reduction required No further reduction required Italy No further reduction required No further reduction required h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

86 66 Projected 2010 SO2 emissions under CP_CLE scenario (kt) SO2 NEC (kt) Costs of additional measures (beyond BAU) required to comply with SO2 NECs, based on 2010 cost curve ( M/a) Projected 2010 NOX emissions under CP_CLE scenario (kt) NOX NEC (kt) Costs of additional measures (beyond BAU) required to comply with NOX NECs, based on 2010 cost curve (stationary sources only) ( M/a) Projected 2010 VOC emissions under CP_CLE scenario (kt) VOC NEC (kt) Costs of additional measures (beyond BAU) required to comply with VOC NECs, based on 2020 cost curve (stationary sources only) ( M/a) Luxembourg 2 4 No further reduction required Measures in RAINS cost curve for stationary sources insufficient to enable compliance with the ceiling 8 9 No further reduction required Netherlands Portugal No further reduction required No further reduction required No further reduction required Spain No further reduction required Sweden No further reduction required No further reduction required UK No further reduction required No further reduction required No further reduction required EU Milieu et al. (2004) cited the costs of reaching the emission ceilings under the Gothenburg Protocol as around 70 billion Euros per year for Europe as a whole, although the Gothenburg Ceilings are slightly less stringent than the NECs. However, this figure also includes the cost of other European policy initiatives, which will contribute to meeting the emission ceilings, e.g. the EU directives on emissions from cars and trucks. 5.3 Marginal cost benefit analysis Article 9, Paragraph 1 economic assessment, including benefits, an assessment of marginal costs and benefits Article 10, Paragraph 3 investigation of the estimated costs and benefits of national emission ceilings, computed with state-ofthe-art models and making use of the best available data Previous cost-benefit analysis during the NECD negotiations During the original negotiations for the Directive, a cost benefit analysis was conducted following the cost-effectiveness study presented above (EC, 1999b). This estimated the h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

87 67 associated benefits of the H1 scenario, in addition to lower ambition ( H2 ) and higher ambition ( H3 ) scenarios. Whilst following political agreement, the final NECs were lower than the H1 scenario emissions, the H1 scenario environmental targets were retained as the IEOs. As such, the CBA provides a direct indication of the potential benefits, if the IEOs were to be achieved, based on methods and data available at that time. Table 18 presents these benefits, alongside those of the H2 scenario, which, given the findings presented in Section 4.3, may be more indicative of the actual projected impacts. However, it must be noted that the scenario emissions for H2 are still more stringent than the actual NECs that were agreed for NO X, VOCs and NH 3 in the Directive (Table 19). Table 18 Comparison of costs and benefits for Scenarios H1 and H2, using the value of life years (VOLY) and value of statistical life (VOSL) approach. Shading denotes the number of groups required for benefits to exceed costs in each scenario (after EC, 1999b). Scenario (Note 1) H1 H2 Valuation type VOLY VOSL VOLY VOSL Costs (MEuro) Group I Cumulative benefits (MEuro/yr) (Note 2) + Group II Group III Group IV Notes: + Group V H1: central scenario for reducing acidification, eutrophication and ground level ozone; H2: low ambition scenario for reducing acidification, eutrophication and ground level ozone; 2. Group I: materials damage (excluding paint); N fertilisation on crops; acute effects on mortality (VOLY approach); morbidity (excluding restricted activity days and chronic bronchitis) Group II: restricted activity days; paint damage; ozone and SO2 effects on crops; Group III: acute effects on mortality (VOSL approach); chronic effects on bronchitis; Group IV: ozone effects on forests; chronic effects on mortality (VOLY approach); Group V: chronic effects on mortality (VOSL approach); changes in visibility. Table 19 Emissions ceilings for EU15 under different scenarios (after EC, 1999b) Scenario SO 2 NO X VOCs NH 3 Annex I NECs for total EU15 Annex II EU15 indicative ceilings n/a Scenario H Scenario H h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

88 Cost-benefit analysis to be undertaken as part of the CAFE programme As shown above, the cost-benefit analysis conducted as the basis for the NECD showed that for all countries, total estimated benefits of implementing the NECD appear likely to exceed costs for all of the scenarios considered (EC, 1999b). As part of the CAFE programme, this methodology has been developed to include the following (AEA T, 2004a): updated information on health valuation (NexExt, 2004), using both value of statistical life (VSL) and value of life year (VOLY) measures; updated information on agricultural and horticultural production, informed by the Integrated Cooperative Programmes (ICP) on Vegetation, and Mapping and Modelling; updated information on methods for quantification of damage to materials, informed by ICP Materials and other quantification studies such as ExternE and the Green Accounting Research Project; the inclusion of an extended CBA framework to qualitatively assess impacts that cannot be quantified, such as impacts on cultural heritage, damage to ecosystems and chronic human health impacts of ozone; and external consideration of social and macro-economic impacts on employment and GDP using the GEM-E3 model, which is an applied general equilibrium model for the EU25. The methodology has been revised to take account of comments made under a peer review (Krupnick et al., 2004) and will now be used to examine the costs and benefits of various scenarios under the CAFE programme. The full results of the analysis were not available in time for inclusion within this report. However, draft results from the EC s Impact Assessment for the Thematic Strategy can be presented. As described in Section 4.5, the three scenario ambition levels for 2020 have been set in the range of between 50% and 100% of the MTFR scenario 25, to achieve reductions in environmental and health impacts. These are presented in Table 20 below. Table 20 Potential ambition levels for the Thematic Strategy (EC, 2005b) percentages refer to the difference between Baseline 2020 and the MTFR Indicator Baseline 2020 Scenario A 2020 Scenario B 2020 Scenario C 2020 MTFR 2020 EU-wide cumulative years of life years lost 137 million (0%) 110 million (65%) 104 million (80%) 101 million (87%) 96 million (100%) Acidification (average excess deposition above the critical load per country expressed in chemical equivalents of acidity per hectare) 30 (0%) 15 (55%) 11 (75%) 10 (85%) 2 (100%) Eutrophication (average excess deposition above the critical load expressed in chemical equivalents of nitrogen per hectare) 266 (0%) 173 (55%) 138 (75%) 120 (85%) 87 (100%) 25 Details of the MTFR scenario can be found in the report by Amann et al. (2004g) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

89 69 Indicator Baseline 2020 Scenario A 2020 Scenario B 2020 Scenario C 2020 MTFR 2020 Ozone (Gap closure on SOMO35) 2435 (0%) 2111 (60%) 2003 (80%) 1949 (90%) 1895 (100%) The emission reductions and costs for the scenarios by pollutant and sector are presented in Table 21, Table 22 and Figure 44. Table 21 Emission reductions (kt) by pollutant (EC, 2005b) Pollutant Baseline 2020 Scenario A 2020 Scenario B 2020 Scenario C 2020 SO NO X VOC NH PM Table 22 Emission abatement costs by pollutant ( million) (EC, 2005b) Pollutant Scenario A 2020 Scenario B 2020 Scenario C 2020 MTFR 2020 SO ,021 1,477 3,124 NO X (excluding road transport) 903 2,752 4,255 6,352 VOC ,457 NH 3 1,785 3,770 5,410 13,584 PM 2.5 (excluding road transport) PM 2.5 and NO X from road transport ,335 1,868 1,868 1,868 n/a Total 5,923 10,679 14,852 > 39,720 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

90 70 Figure 44 Abatement costs by sector in 2020 ( million) (EC, 2005b) The Commission has conducted a marginal benefit/cost analysis on these scenarios, the results of which are presented in Table 23 below. Table 23 Marginal benefit/cost analysis of scenarios up to MTFR (EC, 2005b) Ambition level Cost of reduction ( bn) Human health Natural environment Life years lost (millions) [and premature deaths (thousands)] due to PM Range in monetised benefits ( bn) Ecosystem area exceeded acidification (000 km²) Forests Seminatural Freshwater Ecosystem area exceeded eutrophication (000 km²) Forest area exceeded ozone (000 km²) [348] Baseline [272] Scenario A [218] Scenario B [206] Scenario C [200] MTFR [190] Note: The benefits have been estimated for the health impacts of PM only. Those associated with exposure to ozone are small and have not been included. Ecosystem benefits have not been monetised, but still need to be considered. This section may be subject to change when new information becomes available in future i.e. the full results of the CBA study. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

91 Uncertainty Uncertainty relating to cost-effectiveness of compliance In the view of the RAINS review team (SERI et al., 2004: 17) the cost data used within the RAINS is drawn from the widest pool of expertise and information that we are aware of. Costs are formulated from literature reviews and consultation with national governments, industrial trade association, and researchers, and the data is verified through bilateral discussions with Member States and interested parties. Nonetheless, uncertainty relating to costs is important because small differences in costs close to the optimisation target can unduly affect the cost-effectiveness results. A comparison of projected cost-effectiveness of compliance (EC, 1999a) and actual costs experienced by countries is difficult, due to the low level of cost data reported by Member States and the fact that many countries have yet to implement measures that will enable them to comply with the NECs by There are few ex-post studies available, however those that have been conducted indicate that ex-ante costs are overestimated due to methodology being restricted to technological (end of pipe) measures (SERI et al., 2004). Furthermore, this emphasis within the RAINS model has resulted in an inability to assess directly the multi-pollutant reduction effects of alternative options. However, the review team does note that this conservative bias is not believed to have been significant in the policy context of the NECD (SERI et al., 2004: 18). However, this point may become more important as policy makers assess alternative multi-pollutant reduction policies and look towards the integration of climate change and air pollution targets. SERI et al. (2004: 17) also notes that [b]ias may be introduced by using a uniform discount rate for capital, which may not be suitable for New Member States. However, given the timescales of concern, the differentiation may not have a large impact. The RAINS review team (SERI et al., 2004: 18) concludes by stating that the cost curves developed by IIASA are technically defensible under their conditions of use and were appropriate for the purposes of modelling the impact of measures available for the NECD Uncertainty relating to cost-benefit analysis The CBA methodology explicitly recognises the significant uncertainty surrounding the analysis, which relates to continuous statistical uncertainty, discrete choices and assumptions as well as lack of knowledge (AEA T, 2004a). As such, the CBA methodology will include bias analysis, statistical analysis and sensitivity analysis. This section may be subject to change when new information becomes available in future. 5.5 Implementation Socio-economic impacts Article 9, Paragraph 1 (l) whether there is a need to avoid excessive costs for any individual Member State h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

92 72 Article 9, Paragraph 1 economic assessment, including the socioeconomic impact of the implementation of the national emission ceilings on particular Member States and sectors Socio-economic information from Member States Member States are required to report their socio-economic assumptions for emissions projections under the NECD (Article 8, paragraph 1). However, as described above, few have included information on the cost-effectiveness of their programmes, as such socio-economic impacts have not been elaborated on in any detail. Luxembourg have presented a cost curve for NO X and VOCs, which if all of the measures were implemented, would be sufficient to comply with their respective ceilings. However the programme does state that this would be too expensive (Luxembourg, MoE, 2003). Potential for socio-economic impacts of implementation of the NECD Whilst the results of previous cost-benefit analysis demonstrated that the cost of the implementation of the NECD would be justified through the resulting benefits, it is important to take account of the wider socio-economic impacts of the implementation. As indicated in Section 5.3.2, the CBA contract under the CAFE programme will consider these wider impacts. However, the results have not been published in sufficient time for inclusion in this report. This section may be subject to change when new information becomes available in future i.e. results of the CBA study. Previous research for DG Enterprise has investigated the implications for the competitiveness of European industry of the implementation of air quality policies (AEA T, 2004b). This study concluded that European industry has achieved large reductions in air emissions and a decoupling of emissions from economic growth (AEA T, 2004b: 2). The study states that there is very limited evidence for significant competitiveness effects resulting from European air pollution legislation. The main reasons for this are given below. Costs arising from environmental technology (integrated process measures) are often counterbalanced by cost reductions due to improvements in technology. However, in the case of end-of-pipe technologies, this counterbalancing effect is less obvious. Where it is possible to meet legislation by adoption of more modern and efficient production processes and avoidance of waste, this can have a beneficial impact on a company s economic performance. Benefits also accrue through improvements to a company s public image and thus the marketability of its products. Industrial air pollution expenditures as percentages of industrial gross value added (GVA) expenditures are less than 0.5% of industrial GVA in EU15, so the competitiveness effects are likely to be limited. When considering whether to relocate, companies tend to place higher emphasis on other factors such as cost of labour, access to markets, stability of the economic and political climate and availability of materials and resources, rather than just environmental legislation. This tends to mitigate against relocation to developing countries for environmental reasons. Relocation to another developed country is less prone to these considerations, but on the other hand environmental standards tend to be broadly comparable between developed countries. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

93 73 Nevertheless, some studies do cite evidence for pollution-intensive companies relocating or selecting locations for new plants in order to avoid environmental costs. It is possible that legislation may in some cases have a disproportionate effect on smaller firms, and may lead to industrial restructuring and mergers which may eventually lead to price rises for consumers, with indirect impacts on competitiveness in other sectors. In terms of employment impacts, effects tend to be minor (although evidence is very limited) and any reduction in the sectors affected may be compensated for by increases in employment in companies supplying environmental equipment. However, given that a number of directives have not yet been fully implemented, e.g. IPPCD, NECD, AQFWD, LCPD, the socio-economic impacts of costs to industry are still a matter of conjecture and will depend on how the individual national authorities have implemented the legislation. Competitiveness could potentially be affected if environmental policy in different regions imposes different costs on competing companies (AEA T, 2004). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

94 Compliance Article 10, Paragraph 5 (c) measures to ensure compliance with the ceilings Article 9, Paragraph 1 (n) the possible use, where appropriate, of relevant economic instruments This section considers potential administrative and policy measures to facilitate the implementation of the NECD and achieve compliance with the ceilings. The discussion focuses on: monitoring progress; reporting requirements; tools for knowledge exchange; setting ceilings; and the use of economic instruments. Monitoring progress Improving NEC National Programmes Under the current requirements of the NECD, Member States are only required to report information on policies and measures, emission inventories and projections, socio-economic assumptions and any potential changes in the geographical distribution of emissions (Sections 1.5.4, 1.5.5, and of guidelines). Entec s proposed guidelines address these requirements whilst also going beyond the current NECD to improve the consistency of national programmes between Member States and also with reporting under the greenhouse gas Monitoring Mechanism. The proposed guidelines have been prepared to ensure that all the requirements of the Directive are met by specifically defining the type of information that should be reported and, for policies and measures, providing a format for presenting it. This should ensure that the information submitted by Member States under the NECD will be much more consistent and comparable. To improve the level of consistency of reporting with greenhouse gas plans and programmes relevant sections of the proposed guidelines have been based on the guidelines for reporting to the UNFCCC (UNFCCC, 2000 & 2003) and the implementing provisions of the Monitoring Mechanism. As such, a number of requirements of the proposed NECD guidelines have been developed in line with reporting under greenhouse gas obligations. Increasing the linkages between NECD and climate change reporting should lead to the promotion and increased consideration of measures that reduce both greenhouse gases and NECD pollutants. Development of indicators A further potential improvement in the reporting guidelines for national programmes under the NECD could be the inclusion of a requirement for Member States to report annually on a series of indicators to monitor progress towards the NECD. The EEA have identified a number of criteria for selecting indicators for monitoring air pollution (EEA, 2004c). Indicators should: Answer main policy questions and communicate meaningful messages for policy makers and implementers; Be comparable between countries; and, Be transparent regarding the data used; be informative to a general public; and, provide the best available scientific insights. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

95 75 The implementing provisions of the greenhouse gas Monitoring Mechanism requires Member States to report annually with their emission inventories on a series of priority, additional and supplementary indicators (specified in Annex II of the provisions). Examples of these indicators include: specific CO 2 emissions of households ( priority ), specific CO 2 emissions of iron and steel industry ( additional ) and carbon intensity of transport ( supplementary ). A similar set of indicators could be developed for reporting under the NECD which, if prepared and submitted annually with emission inventories, would allow Member States and the Commission to monitor and compare progress towards the NECs. Review process for the NECD The Commission could set up an official NECD Review Process, similar to that in place for the greenhouse gas Monitoring Mechanism. This could include a technical evaluation of national programmes and emission inventories and projections. A specific timetable for review should be established. This would give Member States confidence that their data is being used and could encourage submission of information by the required deadlines. It should also lead to improvements in the accuracy and level of information being submitted, and enable the potential use of data for additional policy development purposes. Commission report and inventories each year The first annual LRTAP/NEC emission inventory review carried out by EMEP and the EEA has already identified the potential to harmonise and/or combine the reporting of emission inventories under the NECD and CLRTAP as some Parties/Member States report the same submission to both. The study recommended that the reporting of emission inventories under the NECD be moved to 15 th February each year to coincide with reporting to CLRTAP. Another potential option could be that Member States report their NEC emission inventories to the Commission and EEA as required by the Directive (by December 31 st each year). The Commission and/or EEA could then compile a Community report, similar to the process under the Monitoring Mechanism, which could be sent direct to CLRTAP. This would help to reduce the reporting burden on Member States. Reporting requirements Potential submission with other inventories A comparison of the NECD national programmes with other national plans and programmes has highlighted the linkages and differences between the different submissions. There is a significant overlap of policies and measures reported in NECD national programmes and in plans and programmes reported under the LCPD, Air Quality Framework Directive and under greenhouse gas obligations (to the UNFCCC and the Monitoring Mechanism). In particular, a large proportion of policies and measures reported to reduce greenhouse gas emissions will also reduce emissions of NECD pollutants and vice-versa. The proposed guidelines also highlight how similar the two sets of submissions could be in the future as they have been based on the implementing provisions of the Monitoring Mechanism. The potential for combining reporting under the NECD and the Monitoring Mechanism could be hugely beneficial in reducing the reporting burden on Member States. One complete emission inventory for all pollutants could be submitted each year and national programmes including projections, policies and measures and other relevant information could also be combined. Although there are some clear differences between the two sets of submissions, combining the reporting of greenhouse gases h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

96 76 and NECD pollutants could help to improve consistency between submissions and Member States. Aside from the linkages between reporting under the NECD and to CLRTAP and the Monitoring Mechanism, all of the policies and measures reported in LCPD plans and the majority in air quality plans will also contribute towards a Member State achieving their ceilings under the NECD. Some technical measures in air quality plans, however, are aimed specifically at reducing particulate matter emissions such as particulate traps, for example, and will not reduce emissions of current NECD pollutants. The level of consistency of reporting of policies and measures between NECD national programmes and LCPD and air quality plans varied considerably between Member States. NECD national programmes, unsurprisingly, tended to include European and national level policies and measures such as the LCPD itself without outlining what specific measures would be required at a smaller scale (for example, on a plantby-plant basis). In contrast, LCPD and air quality plans reported local and plant specific measures that have been, or will be, implemented to comply with the legislation. Although no emission reduction plans were submitted under the Solvent Emissions Directive within the timescales of this study, these plans should contain installation specific measures that have been or will be taken to reduce VOC emissions in accordance with the Directive. A potential area for further investigation could be whether or not it would be feasible for Member States to report, in one submission, a full complement of policies and measures that have been, or will be, implemented to comply with the requirements of these Directives. This could be reported on a regular basis (for example, biannually) in a standard format such as that proposed in the draft guidelines. This submission would ensure consistency and transparency of reporting between submissions and provide a detailed insight into the level of action of each Member State in each sector. As well as policies and measures reported under the NECD, LCPD, Air Quality Framework and Solvent Emissions Directives, this submission could go even further and be combined with policies and measures reported under greenhouse gas obligations. In addition to this, there is also the potential to synchronise and even combine the reporting of emission inventories and projections under the NECD, LCPD and possibly under the Monitoring Mechanism. A combined inventory would have to be sufficiently disaggregated to the level of detail required under the LCPD (for example, new and existing LCPs) or more detailed emissions for the sector could be provided as an attachment to the core inventory. The achievement of consistency in the sectoral disaggregation of the inventory would have to be investigated further, particularly if greenhouse gases were to be reported as well. Plans and programmes reported under the Air Quality Framework Directive deal with exceedances of ambient air concentration limit values rather than total emissions so this information would still have to be reported separately. Tools for knowledge exchange Database of policies and measures The wide range of policies and measures reported in each of the NECD national programmes could provide a useful tool for the next round of reporting for not only the New Member States submitting their first programmes under the NECD but also those that will be on their second round of reporting. Most countries will be aware of the more traditional policies and measures such as ELVs for LCPs, for example, but several, more innovative measures have been described for specific sectors such as the transport sector, for example. A comprehensive list h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

97 77 and/or searchable database of all policies and measures reported for each key sector could provide a useful toolkit for the next round of reporting so that each country is aware of all of the possibilities for emission reductions before preparing their programme. This type of database could be combined with that on studies and standards, produced by the Milieu Consortium under the contract for the Commission to assess the effectiveness of air quality policies and measures (Milieu et al., 2004). Annual workshops Workshops on policy and measures could be organised on an annual basis by the Commission for Member States to share their experiences. This type of knowledge exchange could be a valuable means of disseminating information on the most effective policy and administrative measures for emission reduction, covering both market-based instruments and more traditional command and control policy measures. Setting ceilings Member States have expressed concerns regarding difficulties in that the current NECD contains absolute ceilings and as such, does not account for adjustments to compensate for changes in methods used to compile emission inventories. For example, the NO X emission factor used to estimate emissions from heavy duty vehicles has increased since the negotiations for the NECD. Member States baseline emissions have therefore increased accordingly, but the NECs have remained constant. The German National Programme (German Federal Environment Agency, 2003: p.11) states that [a] measurement programme carried out jointly by Germany, the Netherlands, Austria and Switzerland showed, in February 2003, that Euro II engines of heavy duty vehicles emit 30% more NOx than previously assumed. This means, according to recent calculations, that the difference between the reference projection and the emission ceiling for NOx in 2010 will be 150 kt instead of 75 kt. This is to meet the German NO X NEC of 1051 kt. These type of changes mean that Member States need to make greater absolute reductions than they originally agreed to. As an alternative an emission ceiling could be specified as a percentage reduction in emissions relative to a base year (or period of years), as in commitments under the Climate Change Convention, rather than as absolute tonnage values. This would help to ensure countries deliver on the level of ambition they originally agreed and make agreements more robust to technical developments in inventories (Rea, 2004). However, it is important to consider the reasons for the implementation of the NECs with regard to meeting environmental objectives, which, by their nature are absolute. The use of economic instruments The draft guidelines for reporting under the NECD encourage Member States to consider a range of options of policy instruments for achieving their NECs. These include economic instruments as well as the more traditional regulatory instruments. Economic instruments may provide the opportunity to achieve a specific reduction in emissions in a more cost effective manner. Examples of some economic instruments reported in NECD national programmes include: Emissions trading: e.g. in the Netherlands a NO X trading scheme is being introduced for large installations in the industry, energy, refineries and waste processing sectors. Petrochemical plants, refineries and power plants >20 MWth capacity will trade in permits based on emissions per unit of energy whereas permits for steel, aluminium, h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

98 78 cement, saltpetre and phosphate plants as well as incinerators will be based on emissions per product unit. This trading scheme will be used to meet the industryspecific emission ceiling for NO X of 55kt by 2010 and will come into force in Emission charges. In Sweden, an aviation charging scheme is aimed at reducing emissions from the landing and take-off cycle. This has been in place since Sweden has also implemented a NO X charge for emissions from large stationary sources in the form of the NO X Act (1990). Energy taxes have been developed by a number of different Member States (for example, Finland has levied a tax on fossil fuels since 1997 calculated on the basis of CO 2 emissions). Congestion charging. Both Sweden and the UK are considering, or have already implemented, congestion charging and the establishment of low emission zones to reduce emissions from transport. Higher taxes on more polluting vehicles. Several Member States levy higher taxes on older and more polluting vehicles to encourage the purchase and use of cleaner vehicles (for example, Germany has implemented an emissions based Motor Vehicle Tax). Energy efficiency grants. Several Member States provide energy efficiency grants to encourage the use of more efficient technologies and processes such as low NO X domestic boilers, for example. Further information on the use of economic instruments is given in a report for the Commission (draft stage at the time of writing) on the Review of the LCPD (Entec, 2005). This provides an overview of economic instruments for SO 2 and NO X emissions for the power sector in the EU and the USA. Case studies that are presented include the Swedish NO X charge, the US Acid Rain Programme, the US NO X SIP Call Trading Program and the US RECLAIM Program. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

99 79 6. Meeting Interim Environmental Objectives and Long-term Objectives - Protecting Human Health and the Environment 6.1 Introduction This section looks beyond the current requirements of the NECD, to consider the means by which Europe can achieve interim environmental objectives and move towards the long-term objectives of protecting human heath and the environment. The following text considers: current limitations of the scope of the Directive, including shipping, aviation and the outlying territories of France, Portugal and Spain; and mechanisms for harmonised community measures, including both differentiated geographical scales for control, as well as further interpretation of policy with regard to other pollutants, other environmental effects and multi-scale measures. 6.2 Current limitations of the scope of the Directive Article 9, Paragraph 1 limitations of the scope of this Directive as defined in Article Shipping Article 12, Paragraph 1 extent to which emissions from international maritime traffic contribute to acidification, eutrophication and the formation of ground-level ozone within the Community Article 12, Paragraph 3 specify a programme of actions which could be taken at international and Community level as appropriate to reduce emissions from the sector concerned Emissions from shipping Emissions of SO 2 and NO X from shipping are projected to grow substantially in the future, without further emission reduction policy measures beyond those already adopted (Figure 45). Ship emissions have been incorporated into the RAINS model and they consist of international sea traffic, national sea traffic within the EMEP area, national fishing and inland waterways. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

100 80 Figure 45 Range of SO 2 emission projections [kt] (Amann et al., 2004a) SO 2 NO X In Table 24, total land emissions projected to 2010 for EU15 are compared with ship emissions projected to 2010, based on shipping movements in the EMEP domain (Entec, 2002). Table 24 Land and Ship emission projections for 2010 SO 2 (kt) NO x (kt) VOC (kt) NH 3 (kt) Ship emissions - Low _ Ship emissions - High _ Land emissions Percentage contribution of ships to total emissions (ship and land) - Low Percentage contribution of ships to total emissions (ship and land) - High Notes: 46% 36% 2% _ 49% 40% 2% _ 1. BAU scenario; Sulphur Content of 2.7%, 1.5% per annum growth rate for all vessel movements except for ferries and fishing vessels, for which no growth was assumed. 2. BAU scenario; Sulphur Content of 2.7%, 3% per annum growth rate for all vessel movements except for ferries and fishing vessels, for which no growth was assumed. 3. Based on the National Emissions Inventories submitted under the NECD (BAU). The CAFE baseline data (BLE_CLE_AUG04) were used for Spain since no emission projections were presented in Spain s national programme. 4. According to the available emission factor data, the HC / VOC emission factors comprised 98% NMVOC and 2% methane. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

101 81 Work for the Commission is underway by Entec UK to investigate methods of assigning ship emissions to individual EU25 Member States, under the Service Contract on Ship Emissions: Assignment, Abatement and Market-based Instruments. Impact of ship emissions on acidification, eutrophication and ozone Ship emissions have been shown to influence acid deposition in Europe and to affect the concentrations of boundary layer ozone in the ocean (EMEP, 2000). The effects of emissions from traffic from all sea areas in the EMEP domain have been assessed by EMEP using the Eulerian model. The EMEP assessment was based on emissions from international shipping in 1990 estimated by Lloyd s Register of Shipping, and on emission estimates for pollutants for most source categories derived from data submitted officially to UNECE/EMEP from the Parties to the Convention on Long Range Transmission on Air Pollution (EMEP, 2000). Figure 46 presents calculated annual total depositions from international shipping for oxidised sulphur and nitrogen, based on emissions in 1990 (EMEP, 2000). Most of the sulphur and nitrogen emitted is shown to be deposited in the sea, close to the sources and in areas close to the coast. For a number of countries, the contribution of shipping to total sulphur depositions was shown to be close to or above 10% (Malta 16%, Denmark 15%, Sweden, the Netherlands 13% and Cyprus 10%). For most countries bordering the sea, international shipping was shown to be among the largest contributors to the total deposition of oxidised nitrogen (Malta 38%, Cyprus 24%, Denmark 20%, Estonia 17%, Sweden 16% and Greece 15%, Portugal 14%, Netherlands and Finland 13%). For a number of countries in the Baltic and in the Mediterranean, shipping was shown to be the largest identified transboundary contributor to nitrogen deposition (EMEP, 2000). Oxidised Sulphur deposition Oxidised Nitrogen deposition Figure 46 Sulphur and Nitrogen annual total depositions (wet and dry) from international shipping for all sea areas based on emissions in (mgm -2 ) (EMEP, 2000) Figure 47 shows the accumulated exceedance of the critical loads of acidity and nutrients from international ship traffic. International shipping was modelled to be responsible for more than 90% of acidity and nitrogen exceedances in a large number of grid cells. In most of the coastal areas along the English Channel, the North Sea, Germany, Poland, and southern Sweden and Finland, ship traffic emissions were shown to contribute to acidity exceedances by more than 50%. Along the coasts of Estonia, Latvia and Lithuania, southern Norway, Sweden, Finland and Spain, in parts of the coasts of Croatia and Italy, and in parts of Greece and Denmark, ship traffic emissions were shown to contribute to nitrogen exceedances by 50% or more (EMEP, 2000). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

102 82 Acidity Nitrogen Figure 47 Accumulated exceedance of the critical loads of acidity and nutrient nitrogen from international ship traffic based on emissions in 1990 (difference between the model run with all emissions and model runs excluding emissions from ships - mgm -2 ) (EMEP, 2000) Meteorology from 1996 generated by LAM50 was used in model calculations of the effects of international shipping on ozone levels in Europe. Increases in ozone levels, and accumulated critical levels for ozone exposure are mainly observed along the coasts of the Mediterranean countries (Figure 48 and ). Figure 48 Differences in AOT40c in ppb hours Differences in AOT60 in ppb hours Differences in AOT40 and AOT60 (ozone exposure indexes) between the model run with all emissions included and the model run excluding emissions in 1990 from international shipping (EMEP, 2000). The AOT40 (AOT40c and AOT40f ppb hours represent critical levels for crops and forests respectively) and AOT60 (although AOT30 is currently more accepted) levels reflect interest in longterm ozone exposure, considered important for vegetation and health effects respectively. Whilst updated modelling is required to understand the impacts of ship emissions on acidification and eutrophication in the future under business as usual policies, given the projected increase in shipping emissions to 2010 and 2020 and simultaneous reduction in landbased sources (Figure 45), the relative impact of ship emissions on critical loads looks set to increase. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

103 83 Potential measures for the reduction of emissions from ships There is a range of options available to achieve potentially significant reductions in emissions of SO 2 and NO X from ships. These include: use of shore-side electricity to replace at berth ship engine usage; NO X abatement measures (including various internal engine modifications, direct water injection, humid air motors, exhaust gas recirculation and selective catalytic reduction); and SO 2 abatement measures (switching to low sulphur fuels and sea water scrubbing). The costs, emission reductions, cost-effectiveness and practicalities of these measures are being investigated by Entec (with IVL and NERA) in the aforementioned study for the Commission. Under the same contract, practical details are being developed for possible market-based instruments to reduce ship emissions of NO X, SO 2 and CO 2. This study is due to report in August 2005 and will contribute further to the review of the NECD. This work will build on previous work on the usefulness of a broad range of market-based approaches for the potential reduction of atmospheric ship emissions (mainly NO X and SO 2 ) in the European Union (NERA, 2004). Market-based approaches share a number of advantages relative to less flexible regulatory approaches. The results of the evaluation (weights of the criteria not indicated) are shown in Table 25. Broader approaches would promise greater cost savings and environmental gains, but would require substantial shifts in legal and political acceptability and significant administrative costs. More gradual approaches would provide smaller cost savings and environmental gains, but would involve less substantial administrative costs and fewer legal and political obstacles (NERA, 2004). Sweden operates a system of differentiated charges in response to a growing awareness of the impact of shipping emissions of SO 2 and NO X on acidification and eutrophication. Following agreement with the Swedish Shipowners Association, the National Maritime Administration introduced differentiated fairway dues in 1998, to give an advantage to ships with lower emissions of NO X and SO 2 and the Swedish ports have followed through the introduction of differentiating harbour dues. At least half of the ships in Swedish waters are now running on low-sulphur fuel. To be eligible for the lower rates, ferries must use fuel with a maximum sulphur content of 0.5 per cent. For other types of vessel the limit is 1.0 per cent. Vessels certified for lower Swedish charges for NOX have average emissions more than 80% lower than that from unequipped vessels (Blomqvist and Ågren, 2002). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

104 84 Table 25 Qualitative Assessments of Market-Based Approaches for Shipping (NERA, 2004). Policy context Consideration for the most appropriate future policy measures to reduce the impact of shipping emissions on the environment must take account of reductions that may take place under business-as-usual policies. For emissions of SO 2, BAU reductions are expected under the proposal for a directive amending Directive 1999/32/EC as regards the sulphur content of marine fuels. In addition, Annex VI of the Marine Pollution Convention, MARPOL 73/71 of the International Maritime Organisation enters into force in. This contains provisions on special SO X Emission Control Areas (the Baltic Sea, the North Sea and the English Channel) and NO X emissions standards for ships engines. Overall, these measures are expected to result in significant SO 2 emission reductions in some areas, although only moderate NO X emission reductions. Summary points on the potential inclusion of shipping within the scope of the NECD Emissions from international shipping are not currently included within the NECD (Article 2).The following table briefly summarises some key points for and against the potential inclusion of this sector within the NECD. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

105 85 Table 26 Advantages and limitations of the inclusion of shipping within the NECD Advantages Disadvantages and limitations Ship emissions in EU waters are forecast to represent a significant and increasing proportion of total 2010 EU emissions of SO 2 and NO X Whilst the proposed directive amending Directive 1999/32/EC as regards the sulphur content of marine fuels and the entry into force of MARPOL Annex VI is likely to result in significant SO 2 emissions reductions in some areas in the future, currently planned policies are not expected to have a significant impact on NO X emissions. For the key environmental impacts relevant to the NECD (ie acidification, eutrophication and ground level ozone), the relevant range of dispersion of emissions can be hundreds of kilometres, therefore the inclusion of emissions at sea within the NECD would not be inconsistent with the objectives of the NECD. Based on currently available modelling (based on emissions in 2000), ship emissions make significant contributions to exceedances of critical loads of acidity and nutrient nitrogen in many Member States. Incorporating international shipping within the NECD would allow Member States more flexibility in their compliance strategies, with a policy framework that is already established. Marginal abatement costs per tonne for SO 2 and NO X emissions from ships can be relatively low in comparison to land based sources due to the relatively limited extent of emission reduction measures for ships under business as usual policy commitments, and hence higher baseline emission factors. The mechanism for allocating ship emissions to individual Member States must be robust and effective. This is a potentially challenging aspect. Ongoing work for the Commission by Entec to investigate alternative ways of assigning ship emissions to Member States should be followed closely as this could indicate a means by which Member States can be accountable for shipping emissions. A significant portion of ship emissions in EU waters arises from ships which are not flagged in the EU, over which Member States may have limited control. Due to the location of ship emissions, their impact on human health and the environment is likely to be lower per tonne of pollutant emitted than land based sources. The IMO represents a forum for reducing emissions from ships at an international level. This could provide an alternative route to achieving lower emissions of NEC pollutants in future from EU waters. If a mechanism was developed for including ships within the NECD, then this could also pave the way for further policy development covering greenhouse gas emissions from ships. Overall, there are strong arguments for the potential inclusion of international shipping within the scope of the NECD, principally due to the significant and increasing proportion of ship emissions to total EU emissions of NEC pollutants and the significant contribution ship emissions make to exceedances of critical loads in many Member States. However, prior to any further consideration of the potential inclusion of international shipping within the NECD, it would be necessary to: consider updated environmental impact modelling of ship emissions considering the impact of planned policies on ship emissions in the future; consider any planned international level policy development on ship emissions, particularly through the IMO; identify a satisfactory way of allocating ship emissions to individual Member States; and h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

106 86 determine whether a significant proportion of overall ship emissions in EU waters could be controlled by Member States if international shipping was included within the NECD. An alternative approach would be a sector specific emission ceiling, which could incorporate market based approaches as identified by NERA (2004), but could also take account of shipspecific optimal areas of control Aviation Article 12, Paragraph 2 extent to which emissions from aircraft beyond the landing and take-off cycle contribute to acidification, eutrophication and the formation of ground-level ozone within the Community Article 12, Paragraph 3 specify a programme of actions which could be taken at international and Community level as appropriate to reduce emissions from the sector concerned Emissions from aviation There are a number of available emission inventories with aviation emission data. The EC 5 th Framework Programme project AERO2K, has developed a new and improved global inventory of aviation fuel usage and gridded emissions for 2002 and a forecast of emissions for the year 2025, covering both civil and military aviation 26. Emission calculations are based on aircraft movements, aircraft fuel usage data and predictions, and engine emissions data. The 5 th Framework Research project TRADEOFF also calculated emission data for 2000 using the FAST inventory and scenario model that utilises the ANCAT/EC2 methodology. Historical improvements in fuel efficiency, constant NO X emissions and the shortest possible flying distances following a great circle were assumed (NMI et al., 2004a). In Table 27, total anthropogenic emissions are compared with total aircraft emissions, over the European area for 2000a. Emissions of NO X are considered to be the most important with regard to impacts on acidification, eutrophication and ground level ozone (NMI et al., 2004a). Table 27 Comparison of total European anthropogenic emissions with aircraft emissions over the European area. European anthropogenic emission values reported to UNECE/EMEP for year 2000 (NMI et al., 2004a) SO 2 (kt) NO X (kt) VOC 1 (kt) Aircraft emissions Land emissions Percentage of aviation emissions compared with land based emissions 0.1% 1.7% 0.35% Notes: 26 h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

107 87 1. In this case only NMVOC were considered. 2. Aircraft emissions based on IPCC (1999) and recent information from AERO2K/TRADEOFF and EDGAR for year European anthropogenic emission values based on those reported to UNECE/EMEP for year 2000 (Vestreng, 2003) For most compounds, emissions in the non-lto phase dominate, constituting over 90% of total aircraft emissions (NMI et al., 2004a). The exceptions are carbon monoxide and VOCs, where the non-lto contribution is around 40% of total aircraft emissions. The non-lto contribution may increase in the future if average trip lengths are lengthened (BBC, 2005). Impact of aviation emissions on acidification, eutrophication and ozone The TRADEOFF inventory with aviation emission data for 2000 was used within the study on air quality impacts of non-lto emissions from aviation (NMI et al., 2004a). Only NO X emissions were modelled, since SO 2 and NMVOC emissions were considered to be less significant. The Eulerian EMEP model was used together with the global chemistry transport model OsloCTM2. The calculations assumed that aircraft emissions over the European area constitute only a 15% of the global aviation emissions. Deposition of oxidised nitrogen contributes to the acidification and eutrophication of ecosystems. Figure 49 shows the percentage increase in deposition of oxidised nitrogen due to non-lto aircraft emissions (NMI et al, 2004a). Global non-lto aircraft emissions European non-lto aircraft emissions Figure 49 The percentage increase (%) of wet NO X deposition values for year 2000 due to the effect of non-lto aircraft emissions (NMI et al, 2004a). The accumulated ozone exposure from non-lto aircraft emissions are shown in Figure 50 and Figure 51. In relative terms, the impact seems largest over Southwest and Southeast Europe (NMI et al, 2004). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

108 88 Global non-lto aircraft emissions European non-lto aircraft emissions Figure 50 The increase in AOT40f for forests (ppbv hours) in Europe caused by non-lto aircraft emissions (NMI et al, 2004a). Global non-lto aircraft emissions European non-lto aircraft emissions Figure 51 The increase in AOT60 (indicating health exposure - ppbv hours) in Europe caused by European LTO aircraft emissions (NMI et al, 2004a). Non-LTO emissions of NO X affect regional air quality at the surface significantly more than LTO emissions 27. This is a consequence of: the predominance of non-lto NO X emissions (95%) over LTO NO X emissions; the atmospheric vertical exchange between the surface and the free troposphere; and the high efficiency of NO X ozone production at free tropospheric levels (NMI et al, 2004a). Global non-lto emissions of NO X affect surface air quality in Europe by 2-3% for nitrogen deposition, and 1% for air concentrations of NO 2 and O 3. The contribution to these impacts of non-lto emissions over the European area represents around half of the global non-lto 27 This is true for all air quality indicators (nitrogen deposition, ground-level ozone, etc.) except ambient concentrations of NO 2, for which the contribution of LTO emissions is relatively more important than non-lto emissions. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

109 89 emission contribution (Table 28). The NMI study concluded that the share of non-lto emissions is estimated to be small, but comparable to the share of a small European country to depositions and concentrations over Europe (NMI et al, 2004a). Table 28 Overview of the impact of emissions from aviation at regional scale increase on average air quality indicators over Europe (NMI et al, 2004a) Air quality indicator Non-LTO global NO X emissions (2000) Non-LTO NO X emissions over the European area (2000) LTO NO X emissions over the European area (2000) Deposition of oxidised nitrogen 2-3% 0.5-1% Negligible (<0.05%) AOT40 forests AOT ppbv hours (5-10% increase) Typically 100 ppb hours in south/central Europe <400 ppbv hours Neglibible (<50 ppbv hours) <100 ppb hours Neglibible The effect of the non-lto NO X emissions becomes more significant when taking into account their marginal impact on exceedances of critical loads and levels. Thus, the non-lto NO X emissions have been estimated to increase the indicators for environmental impact on forest (AOT40) by 5-10% and increase the indicator for health impact (AOT 60) by up to 30%. Furthermore, non-lto emissions of NO X have an indirect effect on climate change, by affecting atmospheric levels of ozone and methane. Potential measures for the reduction of emissions from aviation Emissions of NO X can be reduced through improved engine design, e.g. using lean-burn and staged combustion. However, this may involve a trade off between fuel efficiency and noise (Royal Commission on Environmental Pollution, 2003). A new engine design (the contrarotating fan) could provide further improvements, but would have to be mounted above the wing. It could be incorporated into a new design concept (the blended wing-body), which is predicted to reduce fuel usage by up to 30%. However, this design is at a very early stage in development and would be expected to contribute only to long-haul transport, without addressing the impacts of relatively short-distance flights (Liebeck, 2002). Using hydrogen as an alternative fuel could reduce NO X emissions. In the shorter-term, improvements could arise from higher passenger load factors. Reductions in impacts of around 10% are considered feasible by reducing delays in landing and allowing aircraft to fly on more optimal routes (IPCC, 1999). However, in Europe, the fracturing of air space between national air traffic control systems and the use of different technologies are seen as a barrier to harmonising operational procedures (Arthur D. Little Ltd., 2000). The NMI (2004b) has investigated the interlinkages between different options to reduce NO X emissions from aviation. There are several studies that consider the use of emission charges and allowance trading but according to an assessment by ECON, these should be concentrated on CO 2 emissions and not NO X emissions that are in most cases not easy to regulate through fiscal instruments (ECON, 2003). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

110 90 Policy context At the international level emissions regulations are agreed at CAEP (Committee on Aviation Environmental Protection) under ICAO (International Civil Aviation Organization). In 2004, CAEP recommended new NO X standards, 12% more stringent than levels agreed to in The proposed Standards are part of a two-step approach whereby manufacturers and the research community (public and private) would make every effort to pursue the development of technology that would provide a significant reduction in emissions, especially NO X for consideration by the CAEP in However, these reductions focus primarily on LTO emissions, as they are based on LTO certification values. Furthermore, this certification scale is relative, whereby engines with higher overall pressure ratio (OPR) can emit more. Increasing OPR results in higher thermal efficiency. If recent trends towards higher OPRs continue, in addition to projected increases in air traffic, absolute emissions from the sector are likely to increase. Some airports in Member States have implemented or are planning to implement NO X - differentiated charges. The scheme in Sweden is the longest in place and was implemented in Take-off and landing charges are based on emissions of NO X and hydrocarbons during the aircraft s take-off and landing cycle. The scheme is neutral in terms of income (Swedish Ministry of the Environment, 2003). Whilst such charging schemes are again based on LTO certification values, there may be positive impacts on cruise emissions. Such charges are applied to all carriers regardless of their country of registration. The Commission has previously recommended the long-term introduction of emission trading within international aviation for CO 2 (EC, 1999c). This is currently under discussion at the ICAO. With regard to the design of such a scheme, the impact on other emissions must be incorporated, to avoid engines being optimised solely in respect of CO 2, which can lead to increases in NO X. As such, an emission trading scheme for CO 2, should be accompanied by other measures, such as limit values for NO X emissions (Öko-Institut e.v., 2004). Summary points on the potential inclusion of aviation within the scope of the NECD Emissions from aviation beyond the landing and take-off cycle are not currently included within the NECD (Article 2). The following table briefly summarises some key points for and against the potential inclusion of this sector within the NECD. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

111 91 Table 29 Advantages and limitations of the inclusion of non-lto aviation emissions within the NECD Advantages Disadvantages and limitations Emissions from aviation have a small but not insignificant impact on acidification, eutrophication and ground level ozone in Europe. As highlighted in the EIATNE study (2003), any additional deposition of oxidised nitrogen across large parts of Northern Europe has negative consequences as the critical loads for acidification and eutrophication are already exceeded. The CAEP has recommended new NO X standards in 2004 which are 12% more stringent than levels agreed to in However, these reductions focus primarily on LTO emissions, as they are based on LTO certification values. Furthermore, this certification scale is relative, whereby engines with higher overall pressure ratio (OPR) can emit more. If recent trends towards higher OPRs continue, in addition to projected increases in air traffic, absolute emissions from the sector are likely to increase. Including non-lto aviation emissions within the NECD would therefore focus attention on the absolute emissions from the sector, rather than on emission limits from specific aircraft. Establishing a methodology for allocating emissions to individual Member States would be a complex issue, and any methodology would need to be robust, transparent, practicable and effective. This is a potentially challenging aspect, for which further research would be required. However, in principle, allocation methodologies could be applied and agreed. A proportion of aviation emissions across the EU arise from aeroplanes which are not owned / registered in the EU, and over which Member States may have limited control. Non-LTO emissions of NO X have an indirect effect on climate change, by affecting atmospheric levels of ozone and methane. This is not currently included within the Kyoto Protocol. As such, reductions in overall non-lto NO X emissions would reduce the climate change impacts of aviation. Overall, emissions from aviation have a small but not insignificant impact on acidification, eutrophication and ground level ozone in Europe. International policy development through CAEP / ICAO has recently recommended a reduction in NO X emission standards and further reductions in NO X emissions are being sought through this committee. However, these standards are focussed on LTO emissions of particular engine types and trends for increased overall pressure ratio (OPR) and increased air traffic indicate that emissions from the sector as a whole are likely to increase. Establishing a methodology for allocating emissions to individual Member States would be a complex issue, and any methodology would need to be robust, transparent, practicable and effective. Developments in the ICAO to reduce emissions of CO 2 and NO X from international aviation should be followed closely. If necessary, after the effects of these measures have been taken into account, further policy measures to reduce emissions from aviation should be considered. These policy measures could comprise the inclusion of aviation emissions beyond the landing and take-off cycle within the NECD. However, more detailed research and reflection on current developments would be required before this recommendation could be made Geographical exclusions The current NECD does not apply to the Spanish Canary Islands, French overseas departments (Guadeloupe, Martinique, French Guiana and La Réunion) or the Portuguese Islands of Madeira h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

112 92 and the Azores. Article 299(2) of the Treaty of Amsterdam constituted the legal basis for the concept of these most remote regions : taking account of the structural social and economic situation of the French overseas departments, the Azores, Madeira and the Canary Islands, which is compounded by their remoteness, insularity, small size, difficult topography and climate, economic dependence on a few products, the permanence and combination of which severely restrain their development, the Council, acting by a qualified majority on a proposal from the Commission and after consulting the European Parliament, shall adopt specific measures aimed, in particular, at laying down the conditions of application of the present Treaty to those regions, including common policies. Table 30 Socio-economic characteristics of the remote regions (EC, 2004e) Azores Canary Islands Guadeloupe French Guiana Madeira Martinique Réunion Location Atlantic Ocean Atlantic Ocean Caribbean Sea South America Atlantic Ocean Caribbean Sea Indian Ocean Surface area km² km² km² km² 795 km² km² km² Population Per capita GDP index (Note 1) Unemployment (Note 2) Notes: ,5 % 11,1 % 26,0 % 24,4 % 2,5 % 22,9% 29,3% , in standard of purchasing power (EUR-15 = 100) In general, other European environmental directives would apply in the remote regions, although for some directives, special provisions apply in these areas, allowing less stringent requirements in certain specified situations. Directives with special provisions for these areas include: i) large combustion plant (LCPD 2001/80/EC) 28 ; ii) the sulphur content of liquid fuels (SCLFD 1999/32/EC) 29 ; and iii) directives relating to the quality of petrol and diesel fuels (2003/17/EC) Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants into the air from large combustion plants special provisions are listed for the outermost regions. 29 Council Directive 1999/32/EC of 26 April 1999 relating to a reduction in the sulphur content of certain liquid fuels and amending Directive 93/12/EEC. h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

113 93 Available information on emissions varies across the remote regions. As such, the capacity for building emission inventories would have to be improved to be equivalent to those submitted by Member States. The distance at which the remote regions are located from Europe, coupled with the apparent relatively low emissions of NECD pollutants, indicates that these areas do not have a significant impact on acidification, eutrophication and ground level ozone in Europe. Furthermore, emissions from the remote regions are already controlled by a number of EU directives. The benefits arising from potential additional emission reductions by including these areas within the NECD are therefore expected to be relatively limited. It is also possible that, given the special status afforded by the European Union to these regions 31 and their geographical location beside emerging regional and sub-regional blocs, the imposition of additional emission reduction requirements may create local market distortions for the outermost regions depending on which other countries they mainly trade with. Nevertheless, as indicated by the EC (2000), it will be important to consider the environmental impacts of emissions on the geographical regions in which these areas are located, in view of their natural fragility and importance to living conditions in these generally densely populated regions, and also because the environment is the essential physical basis for tourism, which constitutes one of the pillars for the development of the outermost regions. However, as the objectives of the NECD are to reduce transboundary pollution, these issues may be best deal with at a national level, in collaboration with France, Spain and Portugal or through regional agreements within their localities. Such considerations should be incorporated within a sustainable development strategy, managing emission reductions where necessary, but taking account of the socio-economic circumstances of the regions. 6.3 Harmonised Community measures Article 10, Paragraph 4 examine further the need to develop harmonised Community measures, for the most relevant economic sectors and products contributing to acidification, eutrophication and formation of ground-level ozone The projected problem remaining in 2010 and 2020 In developing harmonised Community measures to reduce the impacts on acidification, eutrophication and formation of ground-level ozone, two factors will be important: (i) changes in relative sectoral contributions to total emissions of pollutants; and 30 Directive 2003/17/EC of the European Parliament and of the Council of 3 March 2003 amending Directive 98/70/EC relating to the quality of petrol and diesel fuels special provisions are listed for the outermost regions. 31 which have previously been the subject of measures designed to reduce the costs for energy production and transport to avoid hampering their competitiveness h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

114 94 (ii) changes in relative contributions of pollutants to environmental impacts as presented in Figure 37 and Figure 38. The RAINS review (SERI, 2004: 7) warns that as EU legislation within the transport and energy sectors has become very strict in comparison with un-controlled emissions [t]he degrees of freedom for national decisions will become more and more limited. RAINS projections (CP_CLE, August 04 baseline) show how by 2020, the relevance of different sources will change for SO 2 (Figure 52), NO X (Figure 53) and VOCs (Figure 54), as current legislation reduces emissions in selected sectors. By 2020, in addition to shipping, the dominant sectors will include industrial processes, off-road vehicles, diesel road vehicles (which are significant for both NO X and particulate emissions), solvents and small combustion (wood burning). Agriculture will continue to be important for NH 3, and whilst cattle numbers are expected to decrease under CAP reforms (potentially reducing NH 3 emissions), the milk productivity per animal is expected to increase (potentially increasing NH 3 emissions) (Ballaman, 2004). Figure 52 SO 2 emissions With climate measures scenario, EU-25 (Amann et al., 2004e) h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3

115 95 Figure 53 NO X emissions With climate measures scenario, EU-25 (Amann et al., 2004e) Figure 54 VOC emissions With climate measures scenario, EU-25 (Amann et al., 2004e) Geographical scales of control Optimal areas The problem areas beyond 2020 have been identified by Amann et al. (2004e). It is evident that different problems affect different areas, but all of the European Union is impacted by at least one environmental effect (Figure 55). h:\projects\em-260\13000 projects\ ec necd review\reports sent to ec\05 amended final report (20th may 05)\task 3\ amended final report - task 3