energy and climate policy screening in comparison to the eu

Energy and climate policy screening in comparison to the EU Methodology

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Chamber of Commerce 30161191

Energy and climate policy screening in comparison to the EU Draft Methodology

By: Erika de Visser, Julia Larkin, Yvonne de Bie, Niklas Höhne

Date: May 2013

Project number: DESNL12697

© Ecofys 2013 by order of: European Copper Institute


Chamber of Commerce 30161191

Table of contents

1 Introduction 1

2 Methodology 3

2.1 Elements of the evaluation 3

2.2 Organising the evaluation 3

2.2.1 Sectors 4

2.2.2 Policy areas 4

2.3 Mitigation potential 5

2.4 Policy evaluation 8

2.4.1 Policy packages 8

2.4.2 Indicators 9

2.4.3 Scoring System 9

2.5 EU policies 10

2.5.1 EU-directives relevant to the copper industry 10

2.5.2 Flexibility of EU directives 12

2.5.3 Member State policies 12

2.6 Data collection on energy and climate policies 13

2.6.1 Desk research 13

2.6.2 Country expert involvement 14

Appendix A 15

Appendix B 19

DESNL12697 1

1 Introduction

Background

Around the world, countries are taking steps for a transition to a sustainable energy supply.

Increasingly also less developed countries are start to take actions to scaling up the implementation

of renewable energy and energy efficiency. In order to convey this, these countries need to define

renewable energy and energy efficiency targets and corresponding promotion policies to reach these

targets.

These countries do not have to start from zero with developing policies but can learn from countries

that have already gained experience with the design and implementation of energy and climate

policies. The European Union and its Member States has been a front-runner in designing and

implementing climate and energy policies and has set an example for other countries to learn from.

The assignment

The primary goal of this project is to evaluate climate and energy policies in countries outside the EU

and to provide recommendations for policy opportunities for the transition to a sustainable energy

supply in the respective country. However, the learning opportunity also goes the other way around,

namely that European Member States might learn from countries outside the EU.

The project is divided in two phases:

1. The first phase is to develop a methodology to evaluate energy and climate policies in non EU

countries. This method should be robust enough to address a wide range of energy and

climate policies and should be detailed enough to provide the reader with a good

understanding of the effectiveness of a countries’ policies and eventual policy gaps.

2. The second phase is to use the methodology for evaluating the energy and climate policies in

two non-European countries, namely Morocco and Ukraine. Based on these country

assessments, recommendations will be provided for policy opportunities for the transition to a

sustainable energy supply in the respective countries.

The outcome

This paper provides the framework and basis for assessing policies in non-EU countries against the

technical mitigation potential and against the policies of the EU.

Our analyses (phase 2) will reveal policy opportunities to drive the implementation of renewable

energy and energy efficiency in non-EU countries. The results will be relevant to the European Copper

Institute and its members, because they should be aware of the most effective policies to drive the

growth of renewable energy technologies. Also policy makers are part of the target audience of our

analysis, because they can learn what policy gaps exist and what policies have proven to be

successful in other countries.

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For developing the methodology we will build upon the successful methodology of the “EU Climate

Policy Tracker” (http://www.climatepolicytracker.eu) and already adapted to a non-European context

through the “Climate Action Tracker” in-depth country analyses (www.climateactiontracker.org). This

paper presents the methodology to qualitatively evaluate policy packages at their ability to unlock the

technical mitigation potential. The methodology involves a detailed examination whether a country

has appropriate, sufficiently ambitious and effective policies in place.

The methodology presented in this paper forms the basis for the individual country assessments (at

this stage Morocco and Ukraine), which will be reported on separately.

http://www.climatepolicytracker.eu/

http://www.climateactiontracker.org/

DESNL12697 3

2 Methodology

2.1 Elements of the evaluation

As stated in chapter 1, the main objective of this project is to evaluate climate and energy policies in

countries outside the EU and to provide recommendations for policy opportunities for the transition to

a sustainable energy supply in the respective country. In this chapter we describe the major

elements that together constitute the methodology:

The organisation of the evaluation in segments (sectors and policy areas) (section 2.2);

The technical mitigation potential as benchmark (section 2.3);

The questions that address both positive and negative aspects of a policy, i.e. those that

support the transition to a sustainable energy supply and those that are barriers and need to

be removed (section 0)

2.2 Organising the evaluation

There are many different ways to look at a policy. The angle from which one looks at a measure can

determine the outcome of an evaluation, the flexibility of analysis and the comparability to other

policies or countries.

In this evaluation, we categorise the analysis along key economic sectors and policy areas in a matrix

format, which together determine the individual segments of the analysis. The economic sectors most

relevant to the copper industry and major policy areas are defined below in Table 1 and Table 2.

We will examine activity addressing each of these key economic sectors, as well as activity in the

major policy areas that effect one or more sectors. Results can be aggregated for different economic

sectors and policy areas and can be compared between different countries.

The method is to assess if, ideally, a country is implementing a comprehensive and economy-wide

integrated set of instruments that facilitate the transition to a sustainable energy supply. In other

words, the policy packages need to form a coherent and consistent strategy to unlock the technical

potential, eliminate barriers to implementation and enhance incentives for stakeholders and sectors

to ultimately make an economy-wide transition.

DESNL12697 4

2.2.1 Sectors

Generally, a policy will be regarded successful if it is comprehensive and covering all relevant sectors.

The sectors are the key economic sectors for the copper industry are defined in the table below.

Table 1 Definition of sectors

General climate strategy This ‘sector’ groups cross-sectoral elements covered by comprehensive

(long-term) climate and energy strategies.

Electricity and heat supply

All central/public electricity and heat/cooling production and supply,

including grids and onsite generation. It includes electricity generation for

own use by industry and electricity generated by buildings, e.g. PV on

roofs.

Industry All industry sectors, including refineries and the waste sector. It excludes

electricity generation for own use.

Buildings

All energy consumed in residential, commercial and public buildings;

energy use, fuel and electricity. Excludes electricity generated by

buildings, e.g. PV on roofs

Transport All energy used in transport, including all modes.

2.2.2 Policy areas

Ultimately, a policy will be regarded successful if it reduces greenhouse gas emissions. Policy areas,

such as ‘renewable energy’, are defined to indicate the parameters of the GHG emissions that are

influenced by the policy.

Policies can target individual elements or multiple elements at the same time. Our analyses will focus

on three major policy areas relevant for this project, which are also fundamental for the transition to

a sustainable energy supply: energy efficiency, renewable energy and nuclear/CCS/fuel switch (see

Table 2).

Table 2 Definition of policy areas

Energy efficiency Policies that target energy use per input of activity.

Low carbon

energy supply

Renewable

energy

Policies that aim to reduce the CO2 emissions from energy use and

therefore are crucial to the analysis. We analyse the support for

renewable energy across all relevant sectors.

Nuclear, CCS,

fuel switch

Policies that aim to influence the carbon intensity of the fuel mix except

renewables, i.e. the shares of fossil fuels, carbon capture and storage

and nuclear power.

DESNL12697 5

Combining the sectors and policy areas gives a matrix that defines individual segments (see Table

3). We organize our analyses along these segments. This way of working allows for comparing results

between countries and between sectors and policy areas.

For the grey segment we do not actively collect data. The reason for this is that the policy area

‘nuclear, CCS and fuel switch has limited potential for the building sector. The potential is limited to

fuel switch from oil to natural gas or to other low carbon technologies.

Table 3 Definition of segments

Energy efficiency

Low carbon energy supply

Renewables Nuclear, CCS, fuel

switch

General climate strategy

Electricity (heat) supply

Industry

Buildings

Transport

2.3 Mitigation potential

The relevance of describing the changes required for achieving a low carbon economy, as

documented by the IPCC Fourth Assessment Report, is to reduce global emissions so as to hold the

increase in global temperature below 2 degrees Celsius.

Many studies confirm the conclusion of the IPCC Fourth Assessment Report that it is in principle

possible to achieve significant reductions in most areas with known technology. Continuous

improvement of technologies and the reduction of cost over time through economies of scale promote

the adoption of low carbon technology. The challenge is how to make sure that all technologies are

deployed at the necessary scale. The development of completely new technologies and materials will

help to achieve this.

In most policy areas there is a general consensus on how a low-carbon economy can be achieved.

Common major features of the scenarios are as follows:

Ambitious energy efficiency improvements: A fully sustainable low-carbon future is only

possible if all energy efficiency potentials are fully implemented in a very ambitious way.

100% carbon free energy supply by 2050: The scenarios show that 100% carbon free

energy supply is technically possible and economically feasible. A 100% renewable energy

supply is technically possible and economically feasible. In this case significant adjustments

to the electricity grid are necessary. Alternatively, also carbon capture and storage as well as

nuclear energy can be used as low carbon technologies.

DESNL12697 6

Wide application of zero emission buildings: Buildings need to be retrofitted to very high

energy efficiency standards at least twice as fast as current practice. These renovated

buildings and all new buildings need to be zero-emission buildings.

Paradigm shift in industrial production: Not only energy efficiency is necessary; also

material efficiency has to be significantly improved. Industrial production has to be redefined

to move away from material-intensive products to long-lasting, almost 100% recyclable

products.

Almost fully decarbonized mobility: Provided a massive shift away from individual

energy-based mobility, the remaining passenger car fleet must meet ambitious requirements

both regarding efficiency and fuels used. Sustainably produced biomass will be used in areas

where there are no technological alternatives, e.g. trucks, aviation and shipping. Hence,

passenger cars have to use alternative technologies, e.g. run on electricity with suitable

batteries or other storage options.

To make this happen fundamental changes in all sectors are needed. Policies need to be evaluated

against how far they are able to trigger these fundamental changes. No single instrument can achieve

this. It is essential to combine single policy measures into a coherent package both within each policy

area, as well as between the different areas.

In our study we will assess to what extent policy packages are able to exploit the technical mitigation

potential. The technical mitigation potential is defined as the amount of greenhouse mitigation that is

technically feasible to achieve. This is informed by the various sectoral studies on mitigation

potential.

The matrix presented below gives the policies needed to unlock the technical mitigation potential. Per

segment we identified the policy elements (in bold) that should be covered by a countries’ policies to

reach the intended target (in italic) while being neutral on the type of instrument that is used. This

matrix defines the benchmark for the scoring of policy packages in a next step (section 2.4.3).

DESNL12697 7

Table 4 Mitigation potential matrix (adapted from Climate Action Tracker, 2011)

Energy efficiency Low carbon energy supply:

Renewables Nuclear, CCS, fuels switch

Clim

ate

Str

ate

gy

Ambitious binding greenhouse gas reduction target, consistent with major effort sharing approaches

Comprehensive and consistent long term strategy beyond 2020

Ele

ctr

icit

y a

nd

heat

su

pp

ly

Efficiency of fossil fuel power

plants leading to average efficiency of

45% (coal) and 60% (natural gas) in

2030 or inventive is > 100 US$/tCO2)

Combined heat and power (CHP)

leading to 10% additional share of

electricity production in 10 years

Reduction of distribution losses

leading to 4% distribution losses in

2030

General incentives for the

production of electricity

from renewable energy

sources

supporting at least 10%

points increase in share in 10

years

Support different

technologies

including sufficient support

for 1-2 high price technologies

(PV, geothermal power,

biogas …)

Support for adapted

electricity grids

Sustainability standards

for biomass use National

and imported

Removal of administrative

and grid barriers

Policies that influence fuel

choice taxes, emissions

trading, emission performance

standards in the order of

100US$/tCO2e

Support for biomass CCS

demonstration scale plants are

supported

Support for coal CCS

support for substantial increase

in capacity

Support for increase of

nuclear capacity

In

du

str

y

General incentives such as taxes,

subsidies, ETS

Incentives such as taxes, subsidies

leading to 0.5% additional annual

increase in energy efficiency

General incentives

Incentives such as taxes,

subsidies, ETS, overall leading

to additional 5% in 10 years

Support for coal and gas CCS

10% in 2030

Support for CCS on biomass

and process emissions

10% in 2030

Bu

ild

ing

s

Efficiency standards for new

buildings

zero energy by 2020

Support to increase energy

efficient retrofit rate

3% per year

Incentives for efficient electrical

appliances

leading to 1-2% less electricity use

per year

General incentives to the end use of

energy (besides building related

Support for renewables in

new and existing buildings

increase in share of 10% in 10

years

General incentives taxes in

the order of 100% of the

energy price

Support for fossil fuel

switching (to gas) and other

low carbon technologies

DESNL12697 8

Energy efficiency Low carbon energy supply:

Renewables Nuclear, CCS, fuels switch

measures) to continue the reduction of

energy use

Removal of barriers, e.g. subsidies

Tran

sp

ort

Incentives for efficiency in light

vehicles

trajectory to reach 95g/km in 2020 for

new cars

Incentives for efficiency in freight

transport

reduce specific emissions by 20% by

2020

General incentives e.g. tax of the

order of 100% of energy price

Incentives for renewables

in transport additional share

of 10% by 2020

Support for fossil fuel

switching (to gas) and other

low carbon technologies

Support for electro mobility

(cars and infrastructure)

5% electric cars by 2020

2.4 Policy evaluation

2.4.1 Policy packages

In order to effectively evaluate policies for their overall mitigation potential it is essential to combine

single policy measures into a coherent package both within each policy area, as well as between the

different areas. This is, in part, because there are wide variations in individual policies and a policy-

by-policy approach would miss overlapping or synergistic effects. Therefore, we evaluate the policy

packages per segment rather than single policies.

The values in Table 4 are designed to reflect the desired effect of policy instruments. We do not

prescribe the use of specific policy instruments. E.g. renewable energy in the electricity sector can be

incentivized by a feed in tariff or by a renewables obligation. Both can achieve the same effect. Some

policies will also have effect on a range of segments, like tax incentives or carbon trading

mechanisms.

We evaluate the impact of policies that have been adopted, i.e. the proven and future expected

effects of measures that are fully implemented. Where policies have already been in place for some

time we evaluate both the past effectiveness and the expected effects of the policy. Policies that have

just recently been implemented are evaluated on the basis of their design and potential effectiveness.

DESNL12697 9

2.4.2 Indicators

The policy packages in each country need to form a coherent and consistent strategy to achieve a

long-term low-carbon future, to eliminate barriers to implementation and to enhance incentives for

stakeholders and sectors to ultimately make an economy-wide transition. We, therefore, look at both

positive and negative aspects of policy packages, i.e. those that provide incentives to renewable

energy and energy efficiency and those that form barriers and need to be removed.

We evaluate the policy packages per segment along indicators. For each segment (see

Table 3 above) we have defined appropriate indicators that allow us to measure the effectiveness of

the policy package (e.g. level of support for renewable electricity generation). These indicators guide

the data and information collection for the country assessments. Appendix A presents the indicators

defined for the relevant segments. Also indicators for which no active data collection will be done are

included (in grey) and will be removed when no information is found.

2.4.3 Scoring System

For each segment, which is a combination of policy area and economic sector as shown in Table 3, we

identify which policies are in place. We analyse the indicators of each segment and develop a

segment score on a scale of 0 – 4 to assess the effectiveness or distance of the policy package from

the mitigation potential. For the positive incentives: 0 is ‘segment not addressed’ and 4 is ‘fully

effective at capturing mitigation potential in that segment’. We also score barriers on a negative 4-

point scale where 0 is ‘little or no barriers’ and 4 is ‘prevents policies from achieving reductions for

this segment as much as positive incentives could support them’. This allows broadly comparing the

ratings of the incentives and barriers. For example, the policy package in the building sector in

Morocco is sufficient incentive for high retrofit rates for all types of existing buildings (for complete

retrofit, i.e. full building envelope & upgrade supply system), while on the other hand a severe land

lord tenant problem prevents the policy package to be effective, the incentive is rated 4 and the

barrier -4.

In the end, all segments get one positive score for the incentives and one negative score for the

barriers without summing these up (see Figure 1).

Figure 1 Scales for evaluating incentives and barriers

Barriers

-4 -3 -2 -1 0

Incentives

0 1 2 3 4

DESNL12697 10

2.5 EU policies

In this study we assess the effectiveness of energy and climate policies of non-European countries

against the (technical) mitigation potential. We will also compare this assessment of non-European

countries to the policies at the EU level. This step provides for mutual learning for both non-EU and

EU countries.

Past efforts have shown that the EU policies, while promising, do not yet capture the full mitigation

potential. Nevertheless, comparing EU policies to policies in non-EU countries gives insight in the

policy opportunities present and provides additional context when assessing the non-EU countries.

This assessment will give both the ECI, the EU and non-EU countries the opportunity to learn from

best practices.

Hereto, we made a quick-scan of EU policies (EU Directives and Member States’ policies and

instruments) and score these policies according to the evaluation method presented in section 0. As

we do for non-European countries we also express the EU policy around a score on a scale of 0 to 4.

We will take advantage of existing Ecofys monitoring efforts, chiefly the EU Climate Policy Tracker

and RE-Shaping country profiles and other studies.

When analysing the EU Member States we examine what national policies result from the EU

Directives as well as which Member States have most progressive policies in place. We will ensure

that all relevant EU policy activity since the prior analysis is incorporated as well, such as the EU

Energy Efficiency Directive.

2.5.1 EU-directives relevant to the copper industry

Table 5 gives an overview of EU directives per segment. In Appendix A we elaborated for each

Directive a short description, the latest updates, the ambition level, defined national action, flexibility

to Member States and most progressive policies. Relevant EU Directives per segment. This overview

forms the basis for scoring the EU policies per segment.

DESNL12697 11

Table 6 EU directives per segment

Energy efficiency


Renewables Nuclear, CCS, fuel switch

Gen

eral

cli

mate

str

ate

gy

Ele

ctr

icit

y an

d h

eat

su

pp

ly

Energy Efficiency Directive

(2012/../EU)

Effort Sharing Decision

(2009/406/EC)

European Emissions Trading

System (ETS) (2009/29/EC)

Energy Taxation Directive

(2003/96/EC)

Renewable Energy

Directive (2009/28/EC)

Internal electricity market


Security of electricity

supply and infrastructure

investment Directive

(2005/89/EC)


(2009/406/EC)

Carbon Capture and

Storage (CCS)

Directive

(2011/92/EU)

In

du

str

y

Eco-design Directive

(2009/125/EC)

Energy Labelling Directive

(2010/30/EU)


(2012/../EU)

European Emissions Trading



(2003/96/EC)

• Renewable Energy


Carbon Capture and

Storage (CCS)

Directive

(2009/31/EC)

Industrial Emissions

Directive (IED)

(2010/75/EU)

Landfill Directive

(1999/31/EC)

Bu

ild

ing

s

• Energy Performance of

Buildings Directive (EPBD)

(2010/31/EU)

• Energy Efficiency Directive

(2012/../EU)

• Eco-design Directive

(2009/125/EC)

• Energy Labeling Directive

(2010/30/EU)

• Energy Taxation Directive

(2003/96/EC)



Tran

sp

ort

• Regulation on Energy

Efficiency for passenger cars

(443/2009)

• European Emissions Trading


• Energy Taxation Directive

(2003/96/EC)



DESNL12697 12

2.5.2 Flexibility of EU directives

EU legal provisions take different forms, ranging from very flexible approaches such as guidelines,

declarations and communications which are not binding but can still have significant impact in

practice in member states, to approaches such as directives which are legally binding but leave

member states flexibility in the implementation; to standards and decisions which are legally binding

and entirely and directly applicable in member states, without flexibility.

The following categories are used in Appendix B to indicate the flexibility of EU-directives for member

states:

Process: Policies that prescribe to member states a process of (non-binding) target setting,

planning, implementation and monitoring of national policies and measures.

Binding targets: Policies that impose a binding target on member states and prescribe a

process of planning, implementation and monitoring of national policies and measures.

Harmonised rules: Policies that provide common EU-wide rules, which have to be

implemented by member states to prevent differentiated national legislation.

Standards: Policies that are entirely and directly applicable in all member states.

Table 7 Flexibility of EU Directives

Flexibility EU-directives

Process


Internal electricity market Directive Security of electricity supply and infrastructure

investment Directive

Carbon Capture and Storage (CCS) Directive Energy Performance of Buildings Directive

Binding targets

Renewable Energy Directive


Industrial Emissions Directive

Landfill Directive

Harmonised rules

European Emissions Trading System


Eco-design Directive

Standards Energy Labelling Directive

Regulation on Energy Efficiency for passenger cars

2.5.3 Member State policies

This paragraph describes which Member States have most progressive policies in place. This gives

both the ECI and its members and policy makers the opportunity to learn from best practices.

DESNL12697 13

Table 8 provides an overview of the best scoring countries in each policy area.

Table 8 Overview of EU MS with most progressive policies in place

2.6 Data collection on energy and climate policies

The evaluation of a country’s energy and climate policies requires a careful process including desk

research and the involvement of national and international expertise.

2.6.1 Desk research

The country screening starts with desk analysis of available information and data sources. In this first

data collection round, the team will identify the policy papers, studies and other research to get a

good overview of the relevant policies in the country under study. The information and data gathering

is organized along the segments as presented in Table 3 and guided by the indicators formulated as

questions in Appendix A. This step results in an overview of a country’s policy packages and per

segment one score for the incentives and one for the barriers.

Energy efficiency


Renewables

General Climate Strategy

Electricity and heat supply Ireland Denmark

Germany

Industry

Denmark

Estonia

Lithuania

Slovenia

Sweden

Buildings Germany

Czech Republic

Denmark

Germany

Transport France Austria

Germany

DESNL12697 14

Table 9 gives an example of the template that will be used to present the scoring of policies.

Table 9 Example of scoring renewable energy policies in industry, Ukraine

RENEWABLE ENERGY

Assessment

Score

Ukraine

ENERGY

SUPPLY

In

cen

tives

• Ukraine has a feed-in tariff system in place providing differentiated

and relatively high support for solar, wind, small hydro and some

forms of biomass. Electricity production from animal waste, biogas

and landfill gas is not eligible for feed-in tariffs.

• In addition, some fiscal incentives apply to renewables, such as tax

exemptions on import and sales of equipment for generating

renewable energy and production and sales of electricity or heat from

renewables.

Barrie

rs

• The system operator has no obligation to provide priority dispatch for

generation from renewable sources. Besides there is no strategy for

integration of renewables in the grid.

• Moreover procedures for getting licenses and permits to build and

operate renewable energy facilities are complex and time consuming.

• Investors face significant risks, because they can only obtain the feed

in tariffs after the plant is constructed.

2.6.2 Country expert involvement

After a first data collection round of Ecofys consultants, country experts are involved to support

Ecofys in the data collection phase. This is particularly important when up to date and precise

information on policies is hard to find for non-natives. In particular it is sometimes difficult to discern

if a policy is really implemented after it is adopted. In order to ensure independent assessment of the

policy packages in place, the country experts have no role in reviewing or contributing to the policy

evaluation itself.

The support of a country expert specifically consists of:

Providing up to date insight into the country’s relevant policies and developments;

Supporting the Ecofys team in identifying relevant information sources, additional to the ones

already found;

Directing the team to additional information sources and eventually translating important

sources;

Establishing contacts with key local stakeholders.

DESNL12697 15

Appendix A

Table 10 Indicators for policy evaluation

ID Sector Indicators for

policy evaluation

General 1 General national strategy

1 General Does the country have a stringent and nationally binding GHG target or budget

until 2050?

2 General Does the country have an ambitious and comprehensive climate strategy towards

a low carbon economy also beyond 2020?

3 General Does an integrated long term innovation strategy tailored towards a low carbon

development exist, with sufficient resources for research and development?

4 General Is there a stringent framework for sustainable biomass import?

Electricity 2 Electricity and heat supply

Electricity 2.1 Energy efficiency

Electricity Incentives

5 Electricity Incentive to increase efficiency of fossil fuel power plants (e.g. performance

standards, energy and CO2 taxes, emissions trading …)

6 Electricity Level of support for CHP sufficient for an increased share of CHP

7 Electricity Policies to reduce distribution losses

Electricity Barriers

8 Electricity Subsidies applicable in the electricity sector

Electricity 2.2 Renewables


9 Electricity Level of support for RES-E either direct or through energy and CO2 taxes,

emissions trading

10 Electricity Support for different technologies

Electricity Barriers

11 Electricity Administrative environment

12 Electricity Stability of support (policy environment and length of financial support)

13 Electricity Preferential grid access and congestion management for renewable electricity

14 Electricity Investment & implementation strategy for RE oriented grid structures

DESNL12697 16


policy evaluation

Electricity 2.3 Low carbon energy supply


15 Electricity Policies that influence fuel choice (taxes, emissions trading, emission performance

standards)

16 Electricity Incentives for biomass CCS

17 Electricity Incentives for coal CCS

18 Electricity Active support for nuclear energy

Industry 3 Industry

Industry 3.1 Energy efficiency

Industry Incentives

19 Industry Policies that support the redesign of products to be less material intensive, long

lasting, 100% recyclable

20 Industry

Schemes that lead to sufficient additional improvements in energy efficiency in

industry (e.g. support schemes, voluntary agreements, white certificates,

emissions trading, energy and/or CO2 taxes)

21 Industry Policies that support the demonstration of breakthrough technologies

Industry Barriers

22 Industry Subsidies, tax exemptions for energy intensive industry for conventional fuel

supply and consumption (direct and indirect)

Industry 3.2 Renewables

Industry Incentives

23 Industry

Are policies in place that effectively lead to increasing the use of renewable energy

in industry (support schemes, voluntary agreements, white certificates, emissions

trading, energy and/or CO2 taxes)

Industry Barriers

24 Industry Subsidies, tax exemptions for energy intensive industry for conventional fuel

supply and consumption (direct and indirect)

Industry 3.3 Low carbon energy supply

25 Industry Incentives for coal / gas CCS development in industry

26 Industry Incentives for biomass and process emission CCS development in industry

Buildings 4 Buildings

Buildings 4.1 Energy efficiency

Buildings Incentives (electricity)

27 Buildings Sufficient incentive (regulation, support and information) for use of efficient

appliances, including air conditioning

DESNL12697 17


policy evaluation

28 Buildings Level of energy and/or CO2 taxes (applicable to electricity users in buildings)

Buildings Incentives (fuels)

29 Buildings Ambitious efficiency standards for all types of new buildings

30 Buildings Sufficient incentive for high retrofit rates for all types of existing buildings (for

complete retrofit, i.e. full building envelope & upgrade supply system)

31 Buildings Policy for efficiency improvement for other than heating fuel uses (cooking, hot

water use)

32 Buildings Level of energy and/or CO2 taxes (applicable to fuel users in buildings)

Buildings Barriers (electricity)

33 Buildings Subsidies, tax exemptions for electricity use in buildings (direct and indirect)

Buildings Barriers (fuels)

34 Buildings Subsidies, tax exemptions for fuel use in buildings (direct and indirect)

35 Buildings Solutions to the landlord tenant problem. E.g. regulation that allows costs for

retrofitting of buildings to be included in the rent or be covered in contracting

36 Buildings Proper implementation and enforcement of new buildings standards

Buildings 4.2 Renewables

Buildings Incentives

37 Buildings Policy instrument on use of sustainable renewable heating/cooling in new buildings

and existing buildings in place for all types of buildings,

38 Buildings Cooking and hot water supply with sustainable renewable fuels

39 Buildings Level of energy and/or CO2 taxes (applicable to fuel users in buildings)

Buildings Barriers

40 Buildings Solutions to the landlord tenant problem. E.g. regulation that allows costs for

retrofitting of buildings to be included in the rent or be covered in contracting.

41 Buildings Subsidies, tax exemptions for electricity or fuel use in buildings

Buildings 4.3 Low carbon energy supply

42 Buildings Support for switching from oil/coal to gas as heating/cooking/hot water use fuel

Transport 5 Transport

Transport 5.1 Energy efficiency

Transport Incentives

43 Transport Incentives to reduce light vehicle emissions per kilometer

44 Transport Incentives to reduce heavy vehicle emissions per kilometer

DESNL12697 18


policy evaluation

45 Transport Level of energy and/or CO2 taxes for transport fuels

Transport Barriers

46 Transport Fiscal (including tax exceptions and subsidies) or other incentives which promote

higher fuel use in transport

Transport 5.2 Renewables

Transport Incentives

47 Transport Sufficient incentives to increase renewable energy sources in transport (biofuels)

Transport Barriers

48 Transport Subsidies, tax exemptions for fuel use in transport

Transport 5.3 Low carbon energy supply

49 Transport Support for fuel switch from oil to natural gas or other low carbon technologies

50 Transport Incentives for electric mobility

51 Transport Strategies for modal shift to low carbon transport modes (public transport, freight

rail, freight ships)

52 Transport Strategies to avoid traffic and to move to non-motorized transport

DESNL12697 19

Appendix B

In this appendix we elaborate for each directive a short description, the latest updates, the ambition

level and the flexibility to Member States.

1 Energy Efficiency Directive

Short description The directive establishes a common framework of measures for the promotion

of energy efficiency within the EU in order to achieve its 2020 20% headline

target on energy efficiency and to pave the way for further energy efficiency

improvements beyond that date.

Latest update 2012/../EU. The Energy Efficiency Directive (EED) replaces both the CHP

Directive (EC 2004) and the Energy Service Directive (ESD) (2011c).

Ambition level 20% energy efficiency in 2020.

National action Electricity and heat supply: Each member state will be obliged to set an

indicative national energy efficiency target, based on either primary or final

energy consumption, primary or final energy savings or energy intensity.

Furthermore, each member state will set up an energy efficiency obligation

scheme ensuring that energy distributors and/or retail energy sales

companies will achieve by the end of 2020 a cumulative end-use energy

savings target of 1.5 % of the annual energy sales to final consumers.

Industry: All large enterprises will be required to undergo an energy audit.

These audits will need to start within three years of the directive's entry into

force and should be carried out every four years by qualified and accredited

experts. Small and medium-sized enterprises (SMEs) will be excluded from

this obligation.

Flexibility Process

Most progressive Policies to support combined heat and power are relatively advanced in

Ireland, Germany and Spain.

DESNL12697 20

2 Renewable Energy Directive

Short description The directive sets binding targets for the share of renewable energy by 2020.

The Directive also regulates some detailed issues regarding for example grid

priority or sustainability criteria.

Latest update 2009/28/EC

Ambition level The expectation is that these targets translate to 15-20% higher renewable

electricity share in 2020.

National action Electricity and heat supply: Each Member State has to produce a National

Renewable Energy Action Plan (NREAP) providing, among other things,

projections of how to reach these targets.

Buildings: Each Member State have to set minimum standards for the use of

renewable energy sources in new buildings and in existing buildings that are

subject to major renovation.

Transport: Each Member States has to ensure that the share of energy from

renewable energy sources in all forms of transport in 2020 is at least 10% of

their final energy consumption. The blending of biofuels is one of the methods

available for Member States to meet this target, and is expected to be the

main contributor.

Flexibility Binding targets. The renewable targets do not specify the sector, so it is up to

member states how much of it they would want to achieve in the electricity

sector.

Most progressive Electricity and heat supply: Germany and Denmark have stable support

systems for electricity generation from renewable energy. Both have operated

feed-in tariffs for over a decade.

Industry: Policy in the industry sector is generally insufficient. Among the

few highlights is Sweden because of its widespread use of biomass as a heat

source in industry. It is due to high availability of biomass and partly due to

policies. All other countries are well below half way to achieving full potential

in supporting renewables in industry.

Buildings: Support for renewables in buildings is quite advanced. The Czech

Republic and Denmark score well because they increased the share of

renewables in buildings substantially with financial incentives and through

combined heat and power from renewables. Germany scores well because it

introduced a comprehensive renewable heat law with an obligation to use

renewables. Cyprus and Greece reach high scores due to the obligatory

introduction of solar water heaters.

Transport: Good scores compared to others are obtained for introducing

biofuels in the past (Germany, Austria). Support for electric mobility combined

with support for renewable electricity is missing.

DESNL12697 21

3 Internal electricity market Directive

Short description This directive is aimed at introducing common rules for the generation,

transmission, distribution and supply of electricity. It also lays down universal

service obligations and consumer rights and clarifies competition

requirements. The rules for the organisation of the sector are aimed at

developing a competitive, secure and environmentally sustainable market in

electricity and to ensure the long-term ability and timely extension of grids.


Ambition level Contribution towards the Commission’s “20-20-20” objectives

National action Electricity and heat supply: Member States shall ensure that all customers

have the right to choose their electricity supplier and to change supplier

easily, with the operator’s assistance, within three weeks; must unbundle

transmission systems and transmission system operators; shall designate a

regulatory authority at national level. It is mainly responsible for fixing

transmission or distribution tariffs, cooperating in regard to cross-border

issues, monitoring investment plans of the transmission system operators and

ensuring access to customer consumption data; shall organise a system of

third party access to transmission and distribution systems. The tariffs based

on that system shall be published; shall define criteria for the construction of

generating capacity in their territory taking account of aspects such as the

security and safety of electricity networks and the protection of health and

public safety; shall put in place an independent mechanism (energy

ombudsman or consumer body) to manage complaints or disputes efficiently.

Flexibility Process

Most progressive Not identified

4 Security of electricity supply and infrastructure investment Directive

Short description This directive is strongly related to the aforementioned directive on the

internal market of electricity. Whereas the latter focuses on the different rules

and roles of the different players, this directive was introduced to safeguard

Europe’s security of supply and a proper operation the internal electricity

market. It aims to ensure an adequate level of transmission capacity,

generation capacity and balance between supply and demand.


Ambition level Contribution to the overall objective of EU energy policy: sustainable,

competitive and secure internal energy market

National action Electricity and heat supply: The directive states that Member State should

define policies that guarantee security of electricity supply and is conducive to

investments in generation capacity and demand management techniques.

Flexibility Process


DESNL12697 22

5 European Emissions Trading System (ETS)

Short description The EU ETS works on a 'cap and trade' principle for reducing industrial

greenhouse gas emissions cost-effectively. In 2013 the third trading period

will start. At the same time a series of important changes to the way the EU

ETS works will take effect in order to strengthen the system. Airlines will join

the scheme in 2012.


Ambition level In 2020 emissions will be 21% lower than in 2005.

National action Industry: Member States shall ensure that operators

hold a greenhouse gas emissions permit and that they monitor and report

their emissions of greenhouse gases. Furthermore Member States

shall ensure that operators submit to the relevant competent authority duly

substantiated and independently verified emissions data in order for them to

be taken into account for the adjustment of the Community-wide quantity of

allowances to be issued.

Flexibility Harmonisation rules


6 Effort Sharing Decision

Short description The Effort Sharing Decision establishes binding annual greenhouse gas

emission targets for Member States for the period 2013–2020. These targets

concern emissions from most sectors not included in the EU Emissions Trading

System (EU ETS), such as transport (except aviation), buildings, agriculture

and waste.


Ambition level By 2020, the national targets will collectively deliver a reduction of around

10% in total EU emissions from the sectors covered compared with 2005

levels.

National action Buildings, Transport: In contrast to sectors in the EU ETS, which are

regulated at EU level, it is the responsibility of Member States to define and

implement national policies and measures to limit emissions from the sectors

covered by the Effort Sharing Decision. Examples of potential policies and

measures include a shift from transport based on fossil fuels, promotion of

public transport, ambitious energy performance standards for buildings, more

efficient heating systems, renewable energy for heating, more efficient

farming practices, and conversion of animal waste to biogas.

Flexibility Binding targets


DESNL12697 23

7 Carbon Capture and Storage (CCS) Directive

Short description The CCS Directive establishes a legal framework for CCS and requires that the

feasibility of CCS is assessed for installations with more than 300 MW

electrical capacity.

Latest update 2011/92/EU

Ambition level Commercialisation of CCS by 2020

National action Electricity and heat supply: Whether to use carbon capture and storage

(CCS) or not is still a matter for independent decision by each MS. For MS's

that wish to do so, the directive sets the framework and conditions for use of

CCS technology in Europe. It introduces requirements for the separation and

capture of CO2, and for its transport by pipeline. It explains the procedure for

the identification and safe use of storage sites in rock deep underground. All

new power plants should be built as 'capture-ready', capable of being

equipped with CCS facilities during their operational lifetimes. The

Commission will review draft storage permits and draft decisions on closure

prepared by national authorities before their final approval.

The legislation provides for a private operator to monitor storage sites and

report to Member State's authorities, both while storing carbon dioxide and

after the closure of sites and the cessation of storage activities. Responsibility

for a site reverts to a public authority when sufficient proof is obtained that

the carbon dioxide will be completely and permanently contained.

Flexibility Process

Most progressive1 Whilst some CCS projects across Europe have faced difficulties recently, the

UK remains in a very strong position, contributing half of the total 10 CCS

projects that have been put forward by Member States.

8 Energy Taxation Directive

Short description The directive prescribes minimum level taxes for all energy products including

coal, natural gas and electricity. In April 2012 EP has voted against the

revision of the directive to restructure the way energy products are taxed to

remove current imbalances and take into account both their CO2 emissions

and energy content. Existing energy taxes would be split into two components

that, taken together, would determine the overall score at which a product is

taxed.


Ambition level Contributing to the headline target of 20% CO2 reduction in 2020

National action The levels of taxation which Member States shall apply to the energy products

and electricity listed in Article 2 may not be less than the minimum levels of

taxation prescribed by this directive.

Flexibility Harmonisation rules giving minimum tariffs


1 Capturing attention - building an EU & UK CCS industry, Feature Articles, Sep 16 2012 (Carbon Capture Journal)

DESNL12697 24

9 Eco-design Directive

Short description The efficiency of appliances in industry is regulated by the Eco-design

Directive. The directive requires that producers make the reduction of energy

use and other environmental impacts an integral part of the design of

electrical appliances. At present 11 product groups, covering 40% of electrical

consumption in the EU are regulated. The electricity savings achieved by

these standards are around half of what could be saved by applying only the

most energy efficient appliances.


Ambition level Contributing to the headline target of 20% energy efficiency

National action Industry: Before being placed on the market, all products must undergo

conformity assessment concerning all of the ecodesign requirements. If the

product does not fulfil ecodesign requirements, Member States must take

suitable measures which may go as far as the prohibition of the placing on the

market of the product. In this case, the Member State in question shall inform

the European Commission of its intentions if non-compliance.

Flexibility Harmonisation rules

Most progressive Energy efficiency in industry is not well covered. Significant action, for

example, large scale, ambitious renewables and energy efficiency

programmes are missing across the board. Allocation in the ETS is not

ambitious enough to induce these developments. Restructuring industry

towards high material efficiency is a blank area for all countries. A material

efficiency agency (Germany) is one of the very few measures in this area.

DESNL12697 25

10 Energy Labelling Directive

Short description The directive ensures the provision of accurate, relevant and comparable

information on the specific energy consumption of energy-related products

aiming to influence the end-user’s choice in favour of those products which

consume or indirectly result in consuming less energy and other essential

resources during use, thus prompting manufacturers to take steps to reduce

the consumption of energy and other essential resources of the products

which they manufacture.

The recast Energy Labelling Directive extends the energy label to energy-

related products in the commercial and industrial sectors. The extension of

the scope from energy-using to energy-related products (including

construction products) means that the directive covers any good having an

impact on energy consumption during use. These products do not consume

energy but have a significant direct or indirect impact on energy savings.


Ambition level Contributing to the headline target of 20% energy efficiency.

National action Industry: Member States shall ensure that all suppliers and dealers

established in their territory fulfil the obligations; shall ensure that information

relating to the consumption of electric energy, other forms of energy and

where relevant other essential resources during use, and supplementary

information is brought to the attention of end-users by means of a fiche and a

label related to products offered for sale, hire, hire-purchase or displayed to

end-users directly or indirectly; should endeavour to purchase the highest

grade of energy-labelled products.

Flexibility Standard


DESNL12697 26

11 Industrial Emissions Directive (IED)

Short description The main purpose is to reduce and constrain pollution from various industrial

sources throughout the European Union. The IED is based on five principles,

namely (1) an integrated approach, (2) best available techniques, (3)

flexibility, (4) inspections and (5) public participation.

Latest update 2010/75/EU. The IED entered into force on 6 January 2011 and has to be

transposed into national legislation by Member States by 7 January 2013. The

IED replaces the IPPC Directive and the sectoral directives as of 7 January

2014, with the exemption of the LCP Directive, which will be repealed with

effect from 1 January 2016.

Ambition level Emission limit values (ELVs) based on the Best Available Techniques (BAT)

National action Industry: Industrial installations operating activities covered by Annex I of

the IED are required to obtain an integrated permit from the authorities in the

EU countries. Member States should be able to set requirements for certain

categories of installations in general binding rules. Liability regarding the

environmental consequences of accidents and incidents is a matter for

relevant national law and, where applicable, other relevant Union law.



12 Landfill Directive

Short description The objective of the directive is to prevent or reduce as far as possible

negative effects on the environment from the landfilling of waste, by

introducing stringent technical requirements for waste and landfills.


Ambition level Decrease biodegradable waste that can be land filled with a reduction target

of 75% in 2010 compared to 1995. As a result methane emission were

reduced.

National action Member States must ensure that existing landfill sites may not continue to

operate unless they comply with the provisions of the directive as soon as

possible. Furthermore Member States must report to the Commission every

three years on the implementation of the Directive.


Most progressive2 Germany and the Flemish region in Belgium have effective policies such as the

national waste plan, voluntary agreements with municipalities, communication

activities (especially on separate collection, recycling and home composting),

a rising landfill tax and a ban on landfill and incineration of certain waste

streams such as unsorted household waste.

2 Diverting waste from landfill, Effectiveness of waste‑management policies in the European Union, EEA Report No 7/2009

DESNL12697 27

13 Energy Performance of Buildings Directive (EPBD)

Short description The directive lays down concrete actions with a view to achieving the great

unrealised potential for energy savings in buildings and reducing the large

differences between Member States’ results in this sector.


Ambition level All new buildings need to comply with a ‘nearly zero energy standards’ by

around 2020 and after 31 December 2018, new buildings occupied and owned

by public authorities are nearly zero-energy buildings.

National action Buildings: The recast EPBD obliges countries to ensure minimum energy

performance requirements for existing and new buildings at cost-optimal

levels, certification of their energy performance and regular inspection of

boilers and air conditioning systems in buildings.

Flexibility Process

Most progressive Action on efficiency in buildings is generally low. The quick introduction of

zero emission standards is missing and there are also insufficient incentives

for energy optimised renovation. Germany has a package of many measures,

but is still not ambitious enough for its size.

14 Regulation on Energy Efficiency for passenger cars

Short description The Regulation on Energy Efficiency for passenger cars regulates the CO2

performance of new cars registered in the EU.

Latest update 443/2009

Ambition level 130 g CO2/km for the new passenger car fleet entering the market phased in

between 2012 to 2015 and indicative medium-term target of 95 g-CO2/km

National action Transport: Member States have to designate a competent authority for the

collection and communication of the monitoring data in accordance with this

Regulation.

Flexibility Standard

Most progressive Incentives for energy efficiency are insufficient. France, with its bonus/malus

system for new cars, ranked top, although this is still not sufficient to induce

the necessary change. Tight emission standards and monetary incentives can

increase ambition. The overarching issue of traffic avoidance and modal shift

is under represented. Portugal ranks higher compared to other countries

because it has already implemented a strategy to move freight transport from

road to sea.

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