EC scrapes together burden sharing deal on greenhouse gases

A "burden sharing" agreement on national allocations of greenhouse gas emissions was reached at the EC Environment Council on 16-17 June. The targets only just add up to the EC's collective target under the Kyoto Protocol. Ministers made little progress in agreeing on what measures will be needed at EC level to help meet the target, though work on some new measures will be initiated by the European Commission. Separately, a Commission paper has proposed that a trading regime for greenhouse gases should be developed at EC level rather than left to Member States to devise themselves.

The burden sharing deal is the EC's first major step in implementing the Kyoto Protocol. Agreed last December, the Protocol requires the EC to reduce its emissions of six greenhouse gases by 8% from 1990 levels by 2008-12 (ENDS Report 275, pp 16-20 ).

The EC went into the Kyoto talks demanding that developed countries reduce their emissions by 15% over this period. Since this was more than other industralised nations were prepared to accept, the EC agreed a provisional internal burden sharing deal in March 1997 in a bid to bolster its credibility in the global talks. The agreement was claimed at the time to amount to a 10% reduction in the EC's emissions of the three main greenhouse gases - carbon dioxide, methane and nitrous oxide - between 1990 and 2010 (ENDS Report 266, pp 47-48 ).

At the Environment Council in June, EC countries needed to agree a final burden sharing deal which will be legally binding - and most proved markedly more reluctant to offer as much as they had done last year.

In the run-up to the Council, the UK Presidency put forward proposals which added up to a cut of about 8.9% in EC emissions of the six gases covered by the Kyoto Protocol. The extra three - HFCs, PFCs and sulphur hexafluoride - account for a small proportion of current emissions (just over 2% in the UK's case) and their inclusion made little difference to the negotiations.

The Council talks, described by Environment Minister Michael Meacher as "protracted and difficult", ended with a share-out which amounts to only an 8% reduction in emissions by 2008-12, eliminating the margin of safety sought by the UK. The European Commission estimates that the EC target is equivalent to 550-600 million tonnes of carbon dioxide, close to the UK's current annual emissions.

Of the eight Member States with emission reductions over the 20-year period, only the UK will have to do more than it agreed last year (see table ). But it was criticised by some delegations for refusing to offer more than a 12.5% reduction in the light of its domestic target to cut CO2 emissions by 20% by 2010.

However, both Austria - which says it remains committed to a 20% cut in CO2 emissions between 1988 and 2005, and Germany, which has promised a 25% reduction in CO2 between 1990 and 2005 - were in a similar position, but demanded and got less stringent targets than those agreed last year.

The four poorest countries will be able to increase emissions above 1990 levels, but by less than agreed provisionally last year.

Deputy Prime Minister John Prescott described the outcome as "one of the key successes" of the UK's Presidency. But at a later House of Commons hearing, Mr Meacher accepted that it was a "disappointing result".

A stumbling-block in the talks was the insistence of the Dutch, Danes and Finns that the targets should be conditional on a firm agreement on the actions which will be needed at EC level - known as "common and co-ordinated policies and measures" (CCPMs). Their demands had more muted support from most northern Member States - but the southern countries are much less keen.

These divisions were papered over in the Council's conclusions, which state that "early and substantial progress" on CCPMs is "essential", but "will need to take account of the differing circumstances of Member States." The Commission was invited to take forward work on several CCPMs. Progress is to be reviewed annually.

The list of measures adds relatively little to initiatives already announced by the Commission, such as work to promote the renewables and combined heat and power, and measures to address CO2 emissions from traffic, promote energy-efficient household appliances, and control methane emissions from landfills and other sources. Ministers also welcomed the continuing negotiations on a harmonised EC energy tax regime, which appear to be nearing a breakthrough after several years.

However, the Commission has been asked to:

  • Propose measures to "reduce/remove" subsidies for fossil fuels and other subsidies, taxes and regulations which act as obstacles to energy efficiency.

  • "Consider" proposals for differentiated taxes on energy-saving products.

  • Identify greenhouse gas emissions from waste management operations other than landfills and propose necessary changes to the EC's waste strategy.

  • Consider ways of reducing nitrous oxide emissions from vehicle catalysts.

  • Develop a framework covering the production and use of the fluorinated gases covered by the Kyoto Protocol. The Council noted "with concern" the projected growth in emissions of these gases, which have high global warming potentials. Member States were also urged to introduce their own control measures, and the Commission was asked to pursue the development of environmentally sound alternatives to the chemicals.

    Ministers merely "noted with interest" a Communication from the Commission setting out its thinking on a post-Kyoto climate change strategy for the EC.

    The strategy will be finalised in the first half of next year, after Member States report to Brussels on their own strategies and the outcome of global talks in November to define rules for the three "flexibility mechanisms" in the Kyoto Protocol is known.

    The Commission's paper does not attempt to define what the EC's role might be in enforcing Member States' compliance with their targets. This will be a tricky issue to resolve later. It does, however, float the idea of indicative emission targets for the main sectors at EC level, though these would be difficult to reconcile with Member States' strategies, which will lead to varying emphases on the contributions expected from different sectors in different countries.

    One of the paper's key proposals is that rules on emissions trading should be set at EC level - not least on internal market grounds, where the Commission's concern is that features such as the initial allocation of emission permits might be a form of disguised state aid and distort competition. Global emissions trading will not begin until 2008, but the Commission suggests that an EC trading system could be set up in 2005, beginning with CO2 and large sources.

    These proposals can be expected to spark a lively debate, as will the suggestion that the EC should have an interim emission target for 2005 to meet the Protocol's requirement that progress towards the 2008-12 targets must be made by that date.

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