Implementing the Kyoto Protocol

These Communications outline a Community strategy for achieving the targets laid down in the Kyoto Protocol and the Buenos Aires Action Plan.

ACT

Communication of 3 June 1998 from the Commission to the Council and the European Parliament - Climate change - Towards an EU post-Kyoto strategy.

Communication of 19 May 1999 from the Commission to the Council and the European Parliament - Preparing for implementation of the Kyoto Protocol.

SUMMARY

With the signature of the Kyoto Protocol, the EC undertook to achieve an 8% reduction in emissions of greenhouse gases responsible for global warming by 2008-2012. In order to meet this target, a global strategy must be implemented taking account of the participants involved: the Member States and the European Community.

The Member States are responsible for meeting the targets under the Protocol, but as a signatory of, and future party to, the Protocol, the Community must complement and support Member States' actions and ensure that it is they are consistent with the Treaty.

Commitments under the Kyoto Protocol:

• the adoption of legally-binding objectives to reduce the emissions of 6 greenhouse gasses between 2008-2012;
• Member States will meet their commitments jointly by sharing the burden ("EC bubble");
• the provision of "flexible mechanisms";
• reinforced reporting requirements.

The implementation of an effective strategy to reduce greenhouse gases will involve an analysis of the six gases cited in the Kyoto Protocol, namely carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6):

• carbon dioxide emissions are the most important source of global warming: these emissions are mostly linked to energy use and the production of fossil fuels;
• methane is the second most important gas after CO2. The principal sources of emissions are agriculture (livestock digestion processes), waste (landfill) and energy (coal production and natural gas distribution);
• nitrous oxide is an industrial gas derived from nitric and adipic acid production and the use of fertilisers in agriculture;
• hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulphur hexafluoride (SF6) are industrial gases with long atmospheric lifetimes: emissions of HFCs have increased as it was they were developed as an alternative to ozone-depleting chlorofluorocarbons (CFCs) banned under the Montreal Protocol. PFCs are a by-product of aluminium smelting (in particular by incineration plants) and SF6 is used in high voltage equipment and in magnesium production.

The Commission's communication of 3 June 1998 laid the basis for Community action to fulfil the obligations of the Kyoto Protocol, i.e.:

• development of a strategy for all sectors of activity which produce pollution;
• setting an interim target for 2005;
• establishing an external dimension, including the preparation of a common position for the Buenos Aires Conference and the promotion of ongoing dialogue and exchange of information with the parties concerned.

The Buenos Aires Action Plan adopted during the fourth session of the Conference of the Parties provides for a work programme to continue with the implementation of the convention by:

• additional assistance for developing countries through financial mechanisms and the development and transfer of technologies;
• continuing work on key issues in the Protocol, in particular the Kyoto mechanisms, a conformity control system and policies and measures.

Following the request by the Vienna European Council to draw up a Community strategy for meeting the commitments made at Kyoto, the Commission presented a new communication on 19 May 1999.

In this communication, the Commission notes that since 1994 CO2 emissions in the Community and in most individual Member States have been increasing again. If no additional policy measure is taken, total greenhouse gas emissions in the EU are expected to rise by nearly 8% by 2010 compared to 1990 levels.

There are marked differences between relevant economic sectors. In the transport sector, the Commission expects CO2 emissions to rise by 22% between now and the year 2000 and by 39% by 2010 compared to 1990 levels. In the energy sector, emissions should stabilise. For emissions from households and the tertiary sector, levels should increase by 4% in the next few years. In contrast, CO2 emissions from the industrial sector should fall by 15% between 1990 and 2010.

The implementation of policies and measures relating to climate change is taking place mainly at national level, through the introduction of national strategies. However, the Member States have indicated that further action at Community level is essential.

The problem of climate change is one of the clearest examples of the need to integrate environmental issues into other Community policies. CO2 emission reduction involves the adoption of measures relating to energy, transport, agriculture, industry, etc.

The Commission has already presented a series of initiatives, which must be pursued:

• energy: promotion of the use of renewables and rational use of energy;
• transport: measures to reduce emissions from passenger cars, improvement in transport pricing, the completion of the internal market in rail transport and the development of an intermodal transport system;
• agriculture: intensified research under the Fifth Framework Programme, appropriate afforestation measures, promoting renewable energy crops in the framework of voluntary set-aside, improving livestock feeding regimes and reducing the use of fertilisers;
• industry: promoting innovation in the field of clean technology.

Cross-sectoral measures have also been considered by the Commission (for example the proposal for a Council Directive restructuring the Community framework for the taxation of energy products, which enlarges the scope of the Community minimum rate system, previously limited to mineral oils, to cover all energy projects, and will give Member States the option to differentiate national taxes according to CO2 emissions).

The Kyoto Protocol allows for the use of various flexible mechanisms: international emissions trading, Joint Implementation and the Clean Development Mechanism.

International emissions trading allows parties to the Protocol who reduce emissions below their assigned amount to sell part of their emission allowance to other parties. The EU must be careful to ensure that the actions of the Member States do not harm the internal market and thereby prevent any distortion of competition.

The Commission is considering organising a large-scale consultation in 2000 of all the parties concerned, Member States, businesses and NGOs, on the basis of a green paper defining different policy options for the possible establishment of a Community emissions trading system by 2005. The question of how and when a European emissions trading pilot phase could begin may be addressed.

Joint Implementation is a specific form of emissions trading which makes it possible to reduce emissions even further in the context of a particular project at project level. Those reductions can be used to increase the emission allowance of the party financing the project, while the emission allowance of the party where the project is carried out would be reduced.

The Clean Development Mechanism is based on projects which do not have quantified commitments. The emission reductions must therefore be certified by independent agents.

The Clean Development Mechanism may come into existence from 2000 onwards, while Joint Implementation projects can start, but not generate credits, before 2008. Some practical experience has been carried out through the joint actions pilot phase. Financial institutions have an important role to play in this area, in providing favourable lending terms to the private sector for Joint Implementation and Clean Development Mechanism projects.

An effective monitoring mechanism is of crucial importance for assessing progress in meeting the targets of the Kyoto Protocol.

Elements of Community legislation already allow for the monitoring of emissions, such as the monitoring mechanism put into place by Decision No 93/389/EEC and Directive No 96/61/EC concerning integrated pollution prevention and control.

The EU is, however, considering enhancing its monitoring capabilities, notably through information technologies and satellite observation systems. In particular, monitoring systems attuned to changes in carbon sources and sinks need to be developed.

All the countries which joined the EU in 2004 have commitments to emission reduction targets under the Kyoto Protocol. Owing to the restructuring of their economies, the emissions of most of these countries are well below their targets. The Community must take steps to assist these countries in developing the necessary institutional and technical capacity and to raise the profile of this issue with stakeholders and the public in these countries. The Community, in its cooperation programmes and where it is involved with other donors (such as the EBRD, EIB and the World Bank), must also take steps to ensure that this opportunity for economic transformation integrates and complements climate targets.

The World Trade Organisation (WTO) explicitly recognises that trade and economic endeavours must be conducted in accordance with the objective of sustainable development. The Kyoto Protocol does not include trade measures as such. However, according to the Commission, the potential impact of WTO rules on the implementation of the Kyoto Protocol should be further addressed in the international climate negotiations as well as in the broader context of the next round of negotiations.

The Buenos Aires Action Plan is targeted towards preparing the Fifth Conference of the Parties. The Commission considers it important that this conference focuses on a cluster of issues stimulating the active involvement of developing countries, such as technology transfer and the Clean Development Mechanism.

RELATED ACTS

Commission Communication of 9 February 2005 " Winning the battle against global climate change " [COM(2005) 35 - Official Journal C 125 of 21 May 2005]

On the basis of an analysis of the effects of climate change and the costs and benefits of action in this area, the Commission is establishing the bases of a future EU climate change strategy. This strategy would be based on, among other things, implementation of existing policies, the preparation of new measures in coordination with other European policies, more research, greater international cooperation and measures to increase public awareness.

Last updated: 05.09.2006