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No Country is an Energy Island: Securing Investment for the EU's Future - European Union Committee Contents


APPENDIX 6: EU ENERGY LEGISLATION AND PROPOSALS


Existing EU energy legislation

Large Combustion Plant Directive (2001)[365]

The revised Large Combustion Plant Directive (LCPD) applies to combustion plants with a thermal output of 50 megawatts (MW) or more. The LCPD aims to reduce acidification, ground level ozone and particles throughout Europe by controlling emissions of sulphur dioxide and nitrogen oxides and dust (particulate matter) from large combustion plants in power stations, petroleum refineries, steelworks and other industrial processes running on solid, liquid or gaseous fuel.

Combustion plants must meet at least the emission limit values given in the LCPD. An exemption was allowed for those not operated for more than 20,000 hours starting from 1 January 2008 and ending no later than 31 December 2015. Once plants have operated those hours, they must either cease operation or comply with the Directive. The Directive will be superseded by the Industrial Emissions Directive (IED) on 1 January 2016.

EU Emissions Trading System (2003)[366]

A 'cap and trade' system, whereby a 'cap' or limit (which is reduced over time) is set on the total amount of certain greenhouse gases that can be emitted by factories, power plants and other installations in the system. Within the cap, companies receive or buy emission allowances which they can trade with one another as needed. They can also buy limited amounts of international credits from emission-saving projects around the world. The limit on the total number of allowances available ensures that they have a value. After each year a company must surrender enough allowances to cover all its emissions, otherwise heavy fines are imposed.

Security of Supply Directive (2005)[367]

The 2005 Security of Supply Directive created measures aimed at safeguarding security of electricity supply so as to ensure the proper functioning of the EU internal market for electricity, an adequate level of interconnection between Member States, an adequate level of generation capacity and balance between supply and demand.

Climate and Energy Package (2008)[368]

The 2008 climate and energy package set three key targets (known as the "20-20-20 targets") by 2020: a 20% reduction in EU greenhouse gas emissions from 1990 levels, to be strengthened to 30% in the event of an adequate international climate change deal; a 20% improvement in the EU's energy efficiency; and for 20% of EU energy consumption to be derived from renewables. The package comprised four pieces of legislation intended to deliver these targets, and included: (1) reform of the EU Emissions Trading System (EU ETS); (2) national targets for non-EU ETS emissions; (3) national renewable energy targets; and (4) a legal framework for the use of carbon capture and storage (CCS).

Third Internal Energy Market Package (2009)[369]

The third internal energy market package was adopted in 2009, and includes key provisions for the proper functioning of the gas and electricity energy markets, including new rules on unbundling of networks, rules strengthening the independence and the powers of national regulators and rules on the development of the functioning of retail markets to the benefit of consumers. The internal energy market is scheduled to be completed by 2014.

Industrial Emissions Directive (2010)[370]

The Industrial Emissions Directive (IED) involved the coalescing of seven existing directives into one:

  • the LCPD,[371] including strengthened ELVs for such plants and a limited life time derogation until 2023 exempting plants from meeting the ELVs on certain grounds, one of which is non application of the similar exemption provided under the LCPD;
  • the Integrated Pollution Prevention and Control Directive;
  • the Waste Incineration Directive;
  • the Solvent Emissions Directive; and
  • the three existing directives on Titanium dioxide on (i) disposal, (ii) monitoring and surveillance and (iii) programmes for the reduction of pollution.

With the exception of the LCPD, the above Directives will be replaced on 7 January 2014.

Energy Efficiency Directive (2012)[372]

The Energy Efficiency Directive was adopted in October 2012 and established a framework of measures for the promotion of energy efficiency within the EU in order to achieve the 20% energy efficiency target by 2020.

EU energy legislation proposals

Connecting Europe Facility[373]

The Connecting Europe Facility (CEF), which was proposed by the European Commission for the next multi-annual financial framework 2014-2020, would provide €30 billion to boost energy, transport and digital networks, aimed at filling in the missing links in the EU's Single Market. Of that €30 billion, €5.1 billion would be spent on the energy sector.[374] The CEF would develop the internal energy market through better interconnection, and support Projects of Common Interest to help ensure that no Member State is isolated or dependent on a single energy source, enhance security of supply and contribute to sustainable development.

EU Emissions Trading System-Backloading Amendment[375]

In Phase III of the ETS (2013-2020), approximately 40% of these allowances will be given out for free to EU ETS installations, whilst the rest will be auctioned with the revenues going to Member States. In November 2012, the Commission proposed an amendment to the ETS to introduce 'backloading'. The amendment would postpone the auctioning of 900 million allowances from 2013-2015 to later in Phase III of the ETS, which ends in 2020. The backloading does not affect the overall volume of allowances to be auctioned in Phase III, only the distribution of auction volumes over the eight-year period (the 'auction time profile').

Note: This proposal was rejected by the European Parliament on 16 April 2013 and will be reconsidered by the European Parliament and Member States.

Trans-European Energy Infrastructure Regulation[376]

The trans-European Energy Infrastructure Regulation proposal sets out new guidelines for trans-European energy networks. It lists and ranks these networks according to the objectives and priorities laid down, projects eligible for EU assistance, and introduces the concept of 'project of European interest'. The guidelines also aim to strengthen project coordination and fully incorporate new Member States.


365   Directive 2001/80 Back

366   Directive 2003/87 Back

367   Directive 2005/89 Back

368   Directives 2009/28, 2009/29 and 2009/31; Decision 406/2009 Back

369   Directives 2009/72 and 2009/73; Regulations 714/2003 and 715/2003 Back

370   Directive 2010/75 Back

371   Note: The LCPD and IED do not concern themselves with carbon emissions Back

372   Directive 2012/27 Back

373   COM(2011) 665 Back

374   Amounts agreed at the European Council of 8-9 February 2013, but yet to be finalised Back

375   Draft Commission Regulation (EU) No .../.. of XXX amending Regulation (EU) No 1031/2010 in particular to determine the volumes of greenhouse gas emission allowances to be auctioned in 2013-2020 Back

376   COM(2011) 658 Back


 
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