POTENTIAL AMENDMENT C1: THRESHOLDS FOR COMBUSTION INSTALLATIONS

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1 POTENTIAL AMENDMENT C1: THRESHOLDS FOR COMBUSTION INSTALLATIONS 1. Issue Aim of the study: The present work intends to identify the issues related to the potential lowering of the threshold for combustion installations in energy industries from 50 MW to a lower thermal input. The present work is based on background literature survey and some responses to the questionnaire and the interim report by the advisory group members. Background: At the moment, Annex I of the IPPC Directive explicitly covers combustion installations with a thermal input exceeding 50 MW. Some installations that have an output of less than 50 MW are also covered by the IPPC Directive given the definition of "installation". The IPPC Directive defines an installation as a stationary technical unit where one or more activities listed in Annex I are carried out, and any other directly associated activities which have a technical connection with the activities carried out on that site and which could have an effect on emissions and pollution. In other words, a certain number of the MW (and indeed smaller) combustion units are regulated either as directly associated activities with a technical connection" or as combustion installations in their own right where two or more single units have an aggregated capacity of more than 50 MW (see the aggregation rule in note 2 at the start of Annex I of the Directive). Many other sectors, such as the food, chemical, and refinery industries, use installations in the MW range, and they utilise a wide range of fuels, such as solid fuels and biomass, natural gas, and liquid fuels. The diversity of sectors is even larger if we consider installations below 20 MW. Issue summary The European legislation regulates emissions from combustion plants primarily through the Large Combustion Plants (LCP) Directive 2001/80/EC and the IPPC Directive. While the LCP Directive targets a reduction in emissions by setting Emission Limit Values (ELVs) for installations with a thermal capacity exceeding 50 MW (allowing the possible use of a national plan as an alternative in respect of existing installations), the IPPC Directive requires implementation of permit conditions based on BAT. Another important policy link is the EU Emissions Trading Scheme (ETS) established by Directive 2003/87/EC, which makes all installations carrying out energy activities with a net thermal capacity greater than 20 MW subject to greenhouse gas emissions trading. Hence, reducing the threshold from 50 to 20 MW (or lower) will bring more installations and sectors under IPPC, and the potential for reduction of emissions might be significant. Institute for European Environmental Policy (IEEP) together with BIO, and VITO 1

2 Nomenclature The input capacity of these small combustion installations used in this document is thermal equivalent and MW / kw represents MWth / kwth. The information available for combustion installations <50 MW is not homogeneous as the capacity range used in the legislation varies among MS. Also, some documents (e.g. EU-ETS 1 related) use MW range. In the present document, the term small combustion installations is used for all the installations below 50 MW. Where the discussion or data relate to a specific capacity range, for example MW, this is explicitly mentioned. 2. Current Practice 2.1 Scope of the Sector The small combustion installations can be found in a wide variety of activities: from industrial, district heating, commercial and institutional (schools, hospitals, etc.) facilities to residential and agricultural. These activities can be further sub-divided considering the combustion techniques used: combined heat and power generation (CHP), medium sized boilers (<50 MW) with manual feeding (indicative capacity <1 MW) or automatic feeding (1-50 MW), fireplaces, stoves and small boilers (indicative capacity <50 kw). The scope of this potential amendment is limited to industrial small combustion installations. IPPC Directive is not applicable to residential small combustion installations, and hence all related issues are not of much relevance. Some of the data sources referred to below nevertheless appear to mix information relating to residential and industrial installations. In the industrial sector, next to the energy industries, many other sectors use combustion installations in the MW capacity range, such as the food, chemical, refinery, and wood industry (especially the particle board and fibre board industry). They utilise a wide range of fuels, such as solid fuels and biomass, natural gas, and liquid fuels. The diversity of sectors is even larger if we consider installations below 20 MW. Some of such installations are used in cogeneration facilities. Consideration of combustion plants less than 20 MW will affect even the very small combustion units. Some MS (e.g. France, the UK and Norway) already restrict the emissions from such units through their national legislation, while studies are in progress in others (e.g. Italy) to understand the magnitude of the problem. Further, such units may belong to non-industrial type of installations (hospitals, buildings, etc.). Nevertheless, a clear de minimis is needed for combustion activities to avoid having numerous small combustion units from aggregating up to the threshold. This would vastly reduce the number of regulated combustion units without excluding significant emission sources. 1 European Union Greenhouse Gas Emission Trading Scheme Institute for European Environmental Policy (IEEP) together with BIO, and VITO 2

3 2.2 Number of Installations The number of installations in each MS is required in order to calculate the magnitude of the environmental impact from such installations. Presently, a detailed inventory on the number of installations and their related emissions has not been developed in many MS. In the absence of such data, the number of installations was estimated using the following sources of information: Responses to the questionnaires sent out to the advisory group members, however, not all the members were able to provide the information on the number of installations different capacity ranges. The declared National Allocation Plans (NAP) of the MS under the EU-ETS Directive. Data available from other sources such as IIASA 2 and EGTEI 3. Other published reports, notably, AEAT (2004) Costs and environmental effectiveness of options for reducing air pollution from small-scale combustion installations, a report produced for European Commission DG Environment in the context of the CAFE programme. An estimated number of industrial installations in the MW range are shown in the figure below and presented in Annex A. It should be noted that these numbers are probably very uncertain (e.g. the number for Sweden would be higher according to the Swedish EPA). Concerning the installations <20 MW, the estimates are not yet available, though in some MS (Italy and France) an inventory development is in progress. 2 International Institute for Applied Systems Analysis, conducts various analyses on transboundary air pollution using RAINS and also provides inputs to the CAFÉ programme. 3 EGTEI is a UNECE / CLRTAP Expert Group which aims at improving knowledge on emission reduction costs through a database that has been established particularly for the purpose of producing cost data as a modelling input. Institute for European Environmental Policy (IEEP) together with BIO, and VITO 3

4 Number of combustion installations in MW range for EU-23 (excluding Cyprus and Estonia) Number of installations Germany UK Poland France Italy Denmark Belgium Finland Czech Repuplic Slovakia Hungary Sweden Netherlands Ireland Austria Portugal Latvia Lithuania Slovenia Spain Greece Luxembourg Malta The data for 23 MS amount to installations roughly one-third of the total number of combustion installations in EU-25. The precise number of installations out of these which are already covered by the IPPC Directive could not be identified. However, EEA 4 states that these installations (as listed in Annex A) are covered by the ETS Directive but not by the IPPC Directive if they are pure heat and/or electricity producers and hence a significant number of these installations are still not covered directly by the IPPC Directive except the ones covered as "directly associated activities". To assess the extent by which the IPPC directive already covers combustion installations below 50 MW, the UK data serve as a good example (AEAT, 2004). Installation-specific data from the EU Emissions Trading Scheme (ETS) application and permitting process in the UK provide an estimation of installations (844 in total) which already have environmental permits. On average, about 66% of the installations participating in the EU-ETS carbon trading in the UK are not regulated through IPPC Directive while about half of the installations in the energy sector are excluded from the scope of IPPC. Hence, number of installations that can be brought under IPPC by reducing the threshold are significant. However it should be noted that the associated potential environmental benefits are not necessarily proportional to this number of installations not yet under IPPC. As the pollution from small combustion plants has an influence on local environment, many MS regulate them already by national legislation, prepare reduction programmes, even apply BAT in some cases (albeit without any EU BAT benchmark, as further detailed in the following sections. Therefore there is a risk of overestimating benefits for bringing them under IPPC. 4 EEA (2006) Application of the emissions trading directive by EU member States Institute for European Environmental Policy (IEEP) together with BIO, and VITO 4

5 Summary of key elements about the size and structure of the sector useful for this exercise About industrial combustion installations in the MW capacity range exist in EU-25; they represent about one third of the total European combustion installations covered by EU-ETS Directive. Such combustion installations exist in all MS (except 1 or 2) but more than 65% of them are concentrated in 6 MS (Germany 23%; UK 15%; France 12%; Italy 9%; Denmark 8%), the other MS having less than 150 installations each. Regarding the extent by which the IPPC directive already covers combustion installations below 50 MW, the UK data serve as a good example: about 66% of the 450 combustion installations in the MW range are assessed not being covered by the IPPC directive yet. These installations are however captured under domestic arrangements that implement BAT as assessed in the UK for emissions to air through a permitting regime. One must then be careful not to overestimate the potential environmental benefits for bringing them under IPPC. It should be noted that for NAP, the MS often provide the information at an aggregated level or in the terms of kt of carbon traded and sometimes the installed capacity of the installations (in MW) is not available. Thus the estimation of about installations should be taken with caution. 2.3 Fuels and Technologies Emissions from small combustion installations depend on the fuel and combustion technologies used as well as on operational practices and maintenance. An important aspect valid for the whole range of small combustion installations is that a wide variety of fuels are used in them (sometimes even the process residue gases and wastes are reused as fuels) and emission limit values (ELVs) used in different MS depend on the fuel type. In other words, a fuel quality restriction may indirectly limit emissions from these installations. Further, a wide variety of combustion technologies are used in such installations. For the combustion of liquid and gaseous fuels, technologies used are similar to those used in large combustion plants, with the exception of the simple design of smaller installations. On the contrary, the technologies for solid fuels (including biomass) vary widely due to different fuel properties and technical possibilities. Small combustion installations employ mainly fixed bed combustion technology i.e. gratefiring combustion (GF) of solid fuels. Solid fuels as well as a mixture of coal and biomass solid fuels, with grain size from a few mm to 80 mm, can be used. The fluidised bed combustion technology can be also applied in small combustion installations. A description of different technologies used in this sector is given in Annex B. Institute for European Environmental Policy (IEEP) together with BIO, and VITO 5

6 For solid fuels, generally the emissions due to incomplete combustion are many times greater in small appliances than in bigger plants. This is particularly valid for manually fed appliances and poorly controlled automatic installations. For both gaseous and liquid fuels, the emissions of pollutants are not significantly higher due to the quality of fuels and design of burners and boilers, except for gaseous and liquid fuelled fireplaces and stoves because of their simple organisation of combustion process. Emissions caused by incomplete combustion are mainly a result of insufficient mixing of combustion air and fuel in the combustion chamber (local fuel-rich combustion zone), an overall lack of available oxygen, too low temperature, short residence times and too high radical concentrations. The following components are emitted to the atmosphere as a result of incomplete combustion in small combustion installations: carbon monoxide (CO), particulate matter (PM), volatile organic compounds (NMVOCs), polycyclic aromatic hydrocarbons (PAHs), and dioxins/furans (PCDD/F). The emission contribution of small combustion installations in the future will depend strongly from the assumptions about fuel switching (coal to gas) that has been happening in the last decade, a trend that is expected to continue and eventually lead to lower emissions of particulate matter but possibly at a cost of increased emissions of other pollutants, for example NOx. At the same time biomass becomes a more and more popular fuel; its use is strongly encouraged in some countries and is seen as a part of the strategy to achieve reductions of CO 2, however installations burning biomass are often characterised by higher emissions of particulates. Summary of key elements about the fuels and technologies of the sector useful for this exercise Fuel and combustion techniques used in small combustion installations influence greatly the emissions generated and hence they provide effective means to reduce environmental impacts from such installations. Good operational practices and maintenance are also very important to limit these emissions. The emission contribution of small combustion installations in the future will depend strongly on the fuel regulations and switching of fuels (e.g. from coal to gas) that has been happening in the last decade, a trend that is expected to continue and eventually lead to lower emissions. Institute for European Environmental Policy (IEEP) together with BIO, and VITO 6

7 2.4 Environmental Impacts Air Emissions The main environmental impact from the combustion installations is air pollution and major air pollutants from small combustion installations are SO 2, NOx, CO, NMVOC, particulate matter, heavy metals, PAH and PCDD/F. The contribution of emissions from small combustion installations to the total emissions depends on pollutants type and varies from one MS to another. The estimated contribution of some emissions released from small combustion installations (residential + industrial, <50 MW) to the total European emissions is presented in following table. Pollutant Year Oxides of nitrogen 4.5% 5% 7% Sulphur dioxide 11% 8% 7% Ammonia About 0.5% - 1% NMVOC (1) 7% 7% 7% PM 2.5 (2) PM 10 (2) (Source: IIASA, 2004) 25% 25% 19% 22% 20% 15% (1) Contributions vary widely from country to country, e.g. 1% - 3% in the Netherlands or Italy, 10%- 15% in Austria and 25%-30% in Sweden (2) Contributions vary widely from country to country, e.g. 2%-4% in the Netherlands and 40%-50% in Austria and Sweden Small installations represent one of the strongest sources of particulate matter and even in the future they might remain an important contributor and their share might even increase for some pollutants and for some scenarios. It is also worthwhile to note that there are significant regional differences, e.g., in the EU-15, the share of this sector in particulate emissions has been typically below 20 % and is expected to decline further to about 12 and 17 % for PM10 and PM2.5, respectively. Annex C aims to quantify the emissions for different pollutants from the MW 5 combustion installations in EU-25 and they are summarised in the following table. CO 2 (t) SO 2 (t) NOx (t) PM2.5 (t) PM10 (t) PCDD PCDF (g teq) PCB (kg) HCB (kg) EU fc annual estimations based on PAH (t) 5 Annex C aims to quantify emissions for the installations in the 20-50MW range (but data for installations <50MW are used by default when not available for 20-50MW) Hg (kg) Institute for European Environmental Policy (IEEP) together with BIO, and VITO 7

8 year Estimates of MW combustion plants emissions Cyprus, Poland and Estonia excluded (no data) 2 Malta excluded (no data) 3 This estimate is based on the MW combustion installations covered by EU ETS and thus underestimates the emissions of the installations in MW range. 4 This estimate covers the installations with a capacity less than 50 MW and thus overestimates the true emissions of the installations in MW range. 5 This estimate is computed with a 30% ratio from the emission of all the combustion installations (> or < 50MW - see Annex C for further details) CO 2 The annual CO 2 emissions from industrial combustion plants with a thermal capacity between 20 and 50 MW are approximately 47 Mt per year (see Annex C1) which represents less than 1% of the total CO 2 emissions of EU-25 (i.e Mt for the year 2004). However, looking only at EU-15 data, MW installations are responsible for 8% of the CO 2 emissions of the entire energy sector 6. Cyprus, Estonia and Poland contribution to these emissions was not available. However, it can be seen that main contributors to the CO 2 emissions are Germany, France and United Kingdom whose contribution represents 54% of the total CO 2 emissions for the installations in MW range. SO 2, NOx, and Particulate Matter (PM) Regarding the availability of the data, Annex C2 provides the emissions of pollutants for small combustion installations with a capacity below 50MW. The emission estimates for SO 2 (778 kt/yr), NOx (417 kt/yr), PM 2.5 (63 kt/yr), and PM 10 (86 kt/yr) in 0-50 MW industrial combustion installations are presented in Annex C2. They represent about 11%, 11%, and 18% of total industrial combustion emissions of SO 2, NOx and PM 10 respectively in EU-25. As an indication, SOx emissions from LCP reach about 3.8 Mt/yr 7. It should be noted that, for PM in particular, figures are very rough estimates as a precise calculation is possible only by taking into account the fuel and technology used in such installations. It can be observed that contribution to industrial combustion emission totals (and thus to total emissions all sectors together) seems to vary significantly between different countries (for example, for SO 2, from 1% for the Netherlands to 90% for Austria), although the majority of countries have a percentage contribution of less than 20%. 6 for the computation of this percentage, only the countries with data for both contribution to energy sector emissions and MW combustion installations are taken into account 7 EPER data (EU-25, 2004) Institute for European Environmental Policy (IEEP) together with BIO, and VITO 8

9 For instance, Austria, Latvia, Norway and Switzerland show very high contributions from small combustion installations, particularly of SO 2 (60-90%), while Slovakia and Sweden show a very low contribution (3 to 5% for SO 2 ). Please note that these numbers are just used to illustrate the relative situation and they should not be considered as absolute. Many countries using coal (but also biomass) in small combustion installations have serious air pollution problems, one such example is Poland; the total suspended particulate (TSP) emissions from small combustion sources is 35% of the national total emissions, and up to 90% of the total TSP emissions from combustion activities (Olendrzynski et al., 2002). Particulate matter in flue gases from combustion of fuels (in particular of solid fuels and biomass) might be defined as carbon, smoke, soot, stack solid or fly ash. Persistent Organic Pollutants (POPs) The emissions of POPs (PAH and PCDD/F) from small industrial combustion installations are significant. For instance, use of solid fuels and biomass accounts for about half of the emissions of PAH (COM(2003) 423 final) and one third of dioxin emissions in the EU (Quass U., et al., 2000). It was reported that the main source of PCDD/F (68% of national total) and PAH emissions (87%) in Poland are small combustion plants (however, this includes emissions from residential sources (Olendrzynski et. al., 2002). Emissions of PAH result from incomplete (intermediate) conversion of fuels and depend on the organisation of the combustion process, particularly on the temperature (too low temperature favourably increases their emission), the residence time in the reaction zone and the availability of oxygen. Carbon, chlorine, a catalyst and oxygen excess are necessary for the formation of PCDD/F. They are found to be consequence of the de-novo synthesis in the temperature interval between 180 C and 500 C. Coal fired stoves in particular are reported to release very high levels of PCDD/F when using certain kinds of coal (Quass U., et al., 2000). The emission of PCDD/F is significantly increased when plastic waste is co-combusted or when contaminated/treated wood is used. Emission estimates 8 for following persistent organic pollutants (POP) due to MW combustion plants are provided in Annex C3: PCDD: Polychlorinated Dibenzodioxins PCDF: Polychlorinated Dibenzofurans (~105 gteq/y) PAH: Polycyclic Aromatic Hydrocarbons (~11 t/y) HCB: Hexachlorobenzene (~6 kg/y) PCB: Polychlorinated Biphenyls (~450 kg/y) These numbers should be seen with care and they are provided just to give an indication of the problem size. It was assumed that for the power production, about 30% of these emissions are from combustion installations in the MW range. 8 EC (2006) Identification, assessment and prioritisation of EU measures to reduce releases of unintentionally produced/released Persistent Organic Pollutants. Institute for European Environmental Policy (IEEP) together with BIO, and VITO 9

10 Mercury Small-scale industrial combustion installations (<50 MW) have been identified as a significant source-pathway for mercury pollution, particularly those that use coal. Mercury emissions from such installations in the EU24 9 are estimated at 12 t/y and thus to account for approximately 16% of total EU emissions 10. MS wise mercury emissions from the small combustion installations are presented in Annex C Environmental Impacts Indicators Quantification of Environmental impacts To illustrate the magnitude of the environmental impacts of small industrial combustion installations, their impact on key environmental indicators is calculated (see Annex D) and presented in the table below. Impact Unit Estimate of the annual impact caused by small industrial combustion installations Capacity range concerned 1112 Global warming Mt CO 2 eq MW Human toxicity Mt 1,4-DB eq MW Fresh water aquatic ecotoxicity Mt 1,4-DB eq MW Freshwater sedimental ecotoxicity Mt 1,4-DB eq MW Terrestrial ecotoxicity Mt 1,4-DB eq MW Photochemical oxidation Mt C 2 H 4 eq MW Acidification Mt SO 2 eq MW Eutrophication Mt PO 4 eq MW Environmental impacts and comparison with Europe activity As these indicators use different measurement units, a comparison has been made with European per capita contribution to a specific impact 14 in order to attribute relative importance to these indicators. This comparison cannot be made for toxicity 9 Excluding Malta 10 EC (2005) Costs and environmental effectiveness of options for reducing mercury emissions to air from small-scale combustion installations 11 All the emissions used to quantify those impacts are for installations in the 20-50MW range excepted for SO 2, NOx, mercury and particular matters, which are quantified for installations with a capacity in the 0-50MW range, by default. 12 The major contributor to the environmental impact quantified determines the capacity range that this impact concerns. See Annex D for more details. 13 1,4-DB=1,4-Dicholoro benzene 14 European equivalent is the total EU-25 activity for one year divided by the European population (population in 2004: Source: Eurostat) Institute for European Environmental Policy (IEEP) together with BIO, and VITO 10

11 impacts (human toxicity, freshwater toxicity ) because polycyclic aromatic hydrocarbons and dioxin raws were not precisely quantified in the IPP Study. For Eu25 Unit Impacts of 0-50 MW combustion installations* Average impacts of one European citizen equivalent 15 Number of European citizen equivalents Impacts of 0-50 MW combustion installations compared to EU-25 impacts (%)* a b a/b a / (b x Million inhabitants) Global warming Mt CO 2 eq Photochemical oxidation Mt C 2 H 4 eq E Acidification Mt SO 2 eq E Eutrophication Mt PO 4 eq E *Except for global warming, which concerns combustion installations in the 20-50MW range Note: See Annex D for detailed calculation for the numbers presented in the table. Comment [hc1]: Valeurs modifiées Such a comparison (see table above) clearly shows that two major environmental issues (among those quantified above) may be due to the combustion installations in 0-50 MW range: photochemical oxidation (due to emissions of NOx) and acidification (due to emissions of NOx, and SO 2 ). Actually, potential photochemical oxidation caused by 0-50 MW combustion installations corresponds to about 29 millions of European equivalent contribution to photochemical oxidation which represent about 6.3% of the EU-25 activity contribution to photochemical oxidation. Also, the potential acidification impact is significant amounting to 25 million European equivalent or about 5.5% of the EU-25 activity impact on acidification. Environmental impacts and comparison with total Europe emissions As explained above, human toxicity, freshwater ecotoxicities (sedimental and aquatic) and terrestrial ecotoxicity cannot be compared to the Europe activity. However, a comparison can be made with the total Europe emissions for each raw contributing to these impacts (POP, PM, mercury). Emissions PM2.5 (t) PM10 (t) PCDD PCDF(g teq) PCB (kg) HCB (kg) PAH (t) Hg (kg) Installations concerned (range of capacilty) 50MW 50MW 50MW 50MW 50MW 50MW 50MW Annual EU-25 estimations % of total EU-25 n.a n.a.: not applicable 15 European equivalent is the total EU-25 activity for one year (as assessed by BIO IS in the IPP Study for DG ENV - divided by the Eu25 population ( inhabitants in 2004 Source: Eurostat) 16 Source: EC (2005) Costs and environmental effectiveness of options for reducing mercury emissions to air from small-scale combustion installations Institute for European Environmental Policy (IEEP) together with BIO, and VITO 11

12 Such a comparison (see table above) clearly shows that the major chemicals contributing to environmental impacts are particulate matters (18% of total emissions) and mercury (16% of total emissions) External Costs and Potential Benefits Externalities (or external costs) are the costs imposed on society and the environment that are not accounted for by the producers and consumers, i.e. which are not included in market prices. They include damage to the natural and built environment, such as effects of air pollution on health, buildings, crops, forests and global warming; occupational disease and accidents; and reduced amenity from visual intrusion of plant or emissions of noise. It gives a picture of the approximate financial implications of environmental impacts linked to product or process life cycles. The external costs associated to the potential environmental impacts (global warming, human toxicity, photochemical oxidation, acidification and eutrophication) of EU-25 industrial combustion installations (20-50 MW) 17 would amount to billion Euros per year, i.e. less than 1% of total European annual activity external cost (see Annex E for calculations). These calculations should be seen as an indication in order to understand the relative magnitude of the problem and the absolute values may evolve with time as the data used in such calculations is being updated regularly on the basis of research. One such example is cost of human life, which was assumed about 150,000 Euros during the IPP study compared to few millions of Euros in recent CAFÉ estimates. Comment [hc2]: add footnote to explain Summary of key elements about the environmental impacts of the sector useful for this exercise The contribution of small combustion installations (0-50 MW) to the air pollution impacts is estimated to be significant. The emission estimates for SO 2, NOx and PM 10 represent about 11%, 11% and 18% of total industrial combustion emissions of SO 2, NOx and PM 10 respectively in EU-25. The impacts for POPs and heavy metals emissions are important too. For instance, mercury emissions account for approximately 16% of total EU emissions. Looking at the environmental impact indicators, the photochemical oxidation and acidification impacts of installations in the 0-50MW range are significant amounting to 29 and 25 million European equivalent respectively or about 6% of the EU-25 activity impacts. The external costs associated to the potential environmental impacts (global warming, human toxicity, photochemical oxidation, acidification and eutrophication) of EU-25 combustion installations (20-50 MW) are estimated to be less than 1% of total EU annual activity external costs. 17 Human toxicity and global warming are the major contributors to the total external cost for the small combustion installations. As these impacts are quantified for installations in the MW range, the total external cost can be considered relating to installations in the 20-50MW range. Institute for European Environmental Policy (IEEP) together with BIO, and VITO 12

13 2.5 Techniques for Prevention or Reduction of Environmental Impacts Reduction of pollutant emissions from combustion installations can be achieved by either avoiding formation of such substances (primary measures) or by removal of pollutants from exhaust gases (secondary measures) Primary Measures These actions, preventing or reducing emission can be following: replacing of coal by upgraded solid derived fuel, biomass, oil, gas modification of fuels composition and improvement of their quality; preparation and improvement of quality of solid fuels, in particular of coal (in reference to S, Cl, ash contents, and fine sub-fraction contents); modification of the fuels granulation by means of compacting - briquetting, pelletising; precleaning washing; selection of grain size in relation to the requirements of the heating appliances (stove, boilers) and supervision of its distribution; partial replacement of coal with biomass (implementation of co-combustion technologies enabling reduction of SO 2 and NOx); application of combustion modifier; catalytic and S-sorbent additives (limestone, dolomite); reduction and modification of the moisture contents in the fuel, especially in the case of solid biomass fuels selection of the combustion appliances type: replacement of less effective heating appliances with newly designed appliances and supervision of their distribution by obligatory certification system improved construction of the combustion appliances; implementation of advanced technologies in boilers construction control optimisation of combustion process, mainly in very small combustion installations capacity above 1 MW Secondary Emission Reduction Measures For small combustion installations a secondary measure can be applied to remove emissions, in particular PM. In this way emissions of pollutants linked with the PM, such as heavy metals, PAHs and PCDD/F, can also be significantly reduced due to their removal together with particulate matter. For particulate matter the following options can be considered indicating their limitations as well: settling chambers; gravity separation where the low collection efficiency (about 35% of fine dust, which contains 90% PM below 75 µm) is the main disadvantage, cyclone separators; main disadvantage is again the low collection efficiency - their efficiency for fine particles is 78-85% - when compared to other filtration options, such as electrostatic precipitators or fabric filters, also tar substances may condense inside the apparatus, for higher effectiveness (94-99%) units with multiple cyclones (cyclone batteries) and multi-cyclones for increased gas flow rates can be used, Institute for European Environmental Policy (IEEP) together with BIO, and VITO 13

14 electrostatic precipitators (their efficiency is between 99,5% to 99,9%) or fabric filters (with efficiency about 99,9%) but their only disadvantage are higher costs. Fabric filters, which are relatively cheaper, also have the added constraint of operating temperatures below 200ºC and high-pressure drop. Wood combustion appliances, stoves in particular, can be equipped with a catalytic converter in order to reduce emissions caused by incomplete combustion. The catalytic converter (a cellular or honeycomb, heat ceramic monolith covered with a very small amount of platinum, rhodium, or combination of these) is usually placed inside the flue gas channel beyond the main combustion chamber. When the flue gas passes through catalytic combustor, some pollutants are oxidised. The catalyst efficiency of emission reduction depends on the catalyst material, its construction active surface, the conditions of flue gases flow inside converter (temperature, flow pattern, residence time, homogeneity, type of pollutants). However, the catalysts need frequent inspection and cleaning. The lifetime of a catalyst in a wood stove with proper maintenance is usually about 10,000 hours Abatement Rates and Costs It is important to assess the cost-effectiveness of the technologies applicable for the small combustion installations. This means that the costs of regulation to industry (of compliance) and the regulator (administration and enforcement) need to be balanced against the benefits in terms of emission reductions. This will have a direct influence on the competitiveness of SMEs (especially because of the BAT constraints imposed by IPPC) as this is the industry group where a large proportion of such plants could be found. In the framework of this preliminary assessment with limited resources, it was not possible to perform an extensive cost-efficiency analysis. Only some indications are given below, extracted from available literature. The following abatement rates can be reached with different technologies. Indications about potential costs and cost-efficiency are also given. Example of preventive measures Pre-treatment of coal (e.g. coal washing) Pre-treatment of solid fuels (e.g. carbonisation of coal) to produce smokeless fuels such as coke Expected reduction efficiency Ash content: from 35% to around 7% VOC: from around 35% to around 2% Potential cost Source Very high (1) Very high (1) Example of end-ofpipe technologies Expected reduction efficiency Potential cost Cost-efficiency Source Institute for European Environmental Policy (IEEP) together with BIO, and VITO 14

15 Settling chambers Particles: about 35% (1) Cyclone separators Particles: 78-85% Medium (1) Multiple cyclones Particles: 94-99% Fabric filters Particles: 99,7-99.9% Electrostatic precipitators (ESP) Oxidation catalysts Primary techniques (recycling of combustion gases, gradual injection of the fuel and/or the combustion air, etc.) Non catalytic reduction Particles: 96% for fine particles to 99.9% for coarse particles CO: 70-90% (for wood stove) PAHs: 43-80% (for wood stove) NOx: 20-60% NOx: 50-80% Catalytic reduction NOx: 50-90% Medium (1) Investment: 4.6 Euros / kw th (4) High (but limited in their range of application to small combustion plants) (1) Investment: 18 Euros / kw th (4) Very high (3) Investment: 14 Euros / kw th (4) 4660 Euros / mg of PM 2,5 **** Euros / mg of PM 2,5 *** 250 to 7400 Euros / mg of PM 2,5 ** (4) (4) (4) Medium (1) 3 to 5 times less expensive than catalytic and non catalytic reduction >2000 Euros / t of NOx avoided * ~5500 to 8500 Euros / t of NOx avoided * (3) (2) (2) * Caveats: cost data given here were assessed for municipal waste incineration plants; they have to be considered as rough orders of magnitude; further research would be necessary to judge their relevance for small combustion plants ** for 1 stage ESP; this range covers solid fuel / heavy fuel oil power plants and industrial boilers 5-50 MW *** this range covers solid power plants and industrial boilers 5-50 MW **** for heavy fuel oil power plants and industrial boilers 5-50 MW (1) AEAT (2004), Costs and environmental effectiveness of options for reducing air pollution from small-scale combustion installations, A report produced for European Commission DG Environment, Harwell, Oxon, UK (2) BIO Intelligence Service & Ingévalor (2004), Economic and environmental analysis of different options to reduce NOx emissions from municipal waste incinerators. A report produced for the French Institute for European Environmental Policy (IEEP) together with BIO, and VITO 15

16 Environment Agency Ademe, in the framework of Incineration BREF preparation. Peer-reviewed by TNO. (3) CITEPA ( (4) Finnish Environment Institute (2006), Fine Particles Emissions, Emission Reduction Potential and Reduction Costs in Finland in 2020 ( Institute for European Environmental Policy (IEEP) together with BIO, and VITO 16

17 Further, a recent publication of DEFRA (UK) 18 suggests that regulating combustion plants within range 20 to 50 MW in the UK to have a 50% reduction of NOx and SOx emissions could lead to cost beneficial reductions in air pollution. The 50% NOx reduction are assumed to be obtained by combustion modifications. The 50% SOx reduction are assumed to be reached by the use of low sulphur fuels. The benefit analysis is calculated on the assumption of a 100 year sustained pollution reduction, both for NOx and SOx. This results in the estimate of saving about life years across the UK and about 186 million Euros 19 benefits per annum (net of costs: benefits monetised minus additional capital and operating costs). Summary of key elements about the abatement technology useful for this exercise Various technologies are available for emission prevention and reduction from small combustion installations. Further, new and better technologies are being developed. Hence the concept of BAT is very well applicable to this sector where the permits can target additional environmental improvement when a better technology is available. The existing BREF (for large combustion plants >50 MW) needs to be updated for BAT for <50 MW combustion installations so that they can be used for such small combustion installations already covered by the IPPC Directive. Building on the experience from current Member States that currently apply similar permitting regimes to such plants will certainly be useful. 2.6 Current Legislation The European legislation regulates emissions from combustion plants with a capacity over 50 MW (and the small ones through aggregated capacity or connected activity clause of the IPPC). However, a number of MS have specific regulations for installations below the 50 MW capacity European Legislation At the European level, three key legislative instruments are the primary basis for environmental regulation of combustion plants Air Pollution from Industrial Plants (84/360/EEC) on the combating of air pollution from industrial plants (a framework directive, which will be replaced by the IPPC Directive in 2007), the Large Combustion Plant Directive (LCPD, 2001/80/EC as a revision of the original 1988 Directive) and the Integrated Pollution Prevention and Control Directive (IPPCD, 96/61/EC). The Waste Incineration Directive (2000/76/EC) also has a bearing upon the regulation of any combustion plant, regardless of its capacity, which burns waste, although IPPC requirements take precedence for those plants to which it applies. Further, EU-ETS Directive covers all installations with a net thermal capacity greater than 20 MW millions Institute for European Environmental Policy (IEEP) together with BIO, and VITO 17

18 Although the costs and effectiveness of this scheme will differ between countries, it is clear that this instrument is likely to have an impact on emissions of air pollutants from the combustion installations in MW range. Streamlining EU legislation Harmonisation among different EU initiatives targeting small combustion installations may make it maybe simpler to have a common threshold value (for example, with EU-ETS where the threshold is 20 MW for emissions trading) in order to find a synergy during the implementation of these directives. From this perspective, a synergy with the EU-ETS directive can be achieved by reducing the threshold of IPPC Directive. However, the revision of EU-ETS Directive is considering raising this threshold to 50 MW. Further, with growing awareness of the interaction between SO 2, NOx and particulates in relation to aerosol formation and other aspects of global warming physical chemistry, provide a strong argument for aligning the threshold for EU-wide controls on combustion plant. Some MS (Sweden, Slovenia, and Spain) advocate in favour in harmonising as much as possible all the European legislation, mainly regarding thresholds and definitions, and support the option of lowering the current threshold from 50 MW to 20 MW. UNICE, on the other hand, taking an example of the EPER threshold issue for CO 2, argues that benefits to be gained by lowering the threshold from 50 to 20 MW will be low compared to the burdens and this may become even worse in the case of 20 to 5 MW. Austria and Poland also foresee higher costs for much lesser benefits and suggest more detailed analysis before considering any such potential amendment. Austria has suggested discussing a sector specific directive with minimum standards for combustion installations below 50 MW National Legislation Many MS have already introduced emission limit requirements specifically for installations below 50 MW, some going down to a threshold of 1 MW or even lower. These countries regulate emissions from these installations either on the basis of obligatory emission limit values (e.g. France, Belgium, Austria, and Czech Republic) or using a BAT-based approach (e.g. UK, Finland, and Norway). An overview of examples of such legislation is presented in the following table and details are available in Annex F of this document. Country Permit Emission Limit Values (mg/nm 3 ) Required Threshold Threshold SO2 NOx PM CO influencing factor Belgium date of construction Flemish Czech Rep combustion place France fuel type, capacity Finland* required Fuel type, capacity Italy > fuel type Latvia required capacity, fuel type Norway required > fuel type, capacity Poland required >5 (coal) >10 (oil) >15 (gas) Portugal < Slovenia >1 (solid fuel) >5 (liquid fuel) >10 (gaseous fuel) UK fuel type Institute for European Environmental Policy (IEEP) together with BIO, and VITO 18

19 *guiding values based on BAT and used to obtain the permit It can be observed that a large disparity exists among MS for regulating the small combustion installations. Their coverage under IPPC therefore will act as a level playing. Summary of key elements about the legislation of the sector useful for this exercise At the EU level, combustion installations are targeted by different legislative actions (LCPD, IPPC, ETS, etc.), however, the installations < 50 MW still remain out of scope except for ETS where only CO2 emissions are considered. Harmonisation among different EU initiatives targeting small combustion installations may make it simpler to have a common threshold value in order to find a synergy during the implementation of these directives. At the MS level, a large disparity exists for regulating the small combustion installations. Their coverage under IPPC therefore will act as a level playing. Further, even the MS issuing permits do not base their ELVs on BAT (except Finland and the UK); IPPC Directive will provide means to integrate BAT in permits and continuous improvement of the environment. 3 Options Option 1A: Business as usual i.e. non-action Pros: The scope is well defined and understood. Therefore, not changing the threshold would avoid disturbing the Directive No legal or administrative changes and hence burdens, and no additional requirements for those installations that are not currently covered. Cons: Bringing not yet covered installations under IPPC would have level playing field benefits, and on a cost/benefit basis per installation, it might be justified. No action could therefore be a missed opportunity. Not all combustion installations are regulated under the IPPC Directive or national/sub-national legislation based on BAT and hence potentially useful (socially advantageous and cost-effective) reductions of emissions from these plants can be missed. Option 1B: No change in IPPC threshold but suggestions to update the BREFs or guidance document to include BAT for the combustion installations less than 50 MW Pros (in addition to 1A): Institute for European Environmental Policy (IEEP) together with BIO, and VITO 19

20 more specific guidance on BAT and associated emission levels will be provided to support emission reduction at the small combustion units already regulated under IPPC. Cons: same as 1A Option 2: Lowering the threshold of the IPPC Directive from 50 to 20 MW Pros: More installations would need to apply BAT and hence potentially useful additional reductions of emissions could be achieved, with due environmental and health benefits. Consistency with EU ETS, where a 20 MW threshold is used. Cons: Where different BAT options exist for small installations, then potentially additional costs for defining BAT and developing BREFs. Possible additional monitoring and reporting costs for installations coming newly under IPPC; for some sectors this would represent a larger change than others (e.g. hospitals) and potentially with relatively higher administrative cost for small IPPC installations. Some SMEs might experience a significant impact on their competitiveness because of the additional costs for BAT implementation. Additional costs for authorities - permits, inspections and enforcement. Option 3: Lowering the threshold of the IPPC Directive from 50 to a threshold lower than 20 MW (to be determined) Pros: More installations would apply BAT, and the number of combustion units below 20 MW is large and hence environmental benefits potentially substantial. More sectors would newly come under regulatory control of IPPC (e.g. dry cleaning, depending on the threshold selected) allowing some easy improvements (low hanging fruit) to be achieved. For installations new to the IPPC Directive, this option could encourage costeffective investment, some of which might not have taken place otherwise (owners adopting a better technology only for their core activities e.g. bakeries, but giving less importance while selecting the technology for their combustion unit). Inclusion of smaller combustion plants could contribute to levelling the Institute for European Environmental Policy (IEEP) together with BIO, and VITO 20

21 Cons: playing field between different size firms and hence contribute to competitiveness objectives. Defining industrial and hence the limits of clear coverage could be difficult. If the threshold for coverage were set too low, a great many installations may be involved, in a variety of sectors. This would have implications for the identification of relevant plants, the identification of BAT, and costs of administration and enforcement. In some cases, there may be lower cost-effectiveness for lower output plant A summary of preferences for specific option(s) provided by some advisory group members and stakeholders is summarised in the table in Appendix G. 4 Analysis of options A qualitative approach is adopted for the analysis of the options proposed in section 3. For each of the issue, the relative advantages and disadvantages of the options are evaluated. The impact assessment matrix shown below the summary of the results of the analysis and the through process behind the rating is explained in the following sub-sections. In each cell a qualitative score of Y/N or +, 0 or - has been given. A + signifies beneficial impact with respect to the criterion in question; - a negative impact; and 0 no impact. Increased magnitude of the impacts will be indicated using the notation ++ or --. In some cases, when there are other external influencing factors, a range is used, for example 0 to or even + to -. Institute for European Environmental Policy (IEEP) together with BIO, and VITO 21