European Environment Agency (EEA)

Application of the EU Emissions Trading Directive


Courtesy of European Environment Agency (EEA)

Synthesising Member State reporting on the ETS

The European Union (EU) emissions trading system (ETS) is one of the key climate policy instruments implemented in the EU to achieve its emission reductions objectives in a cost‑effective manner. The EU Emissions Trading Directive (EU, 2003, referred to hereafter as the 'EU ETS Directive'), and in particular Article 21 of the Directive, requires EU Member States to report every year to the Commission on the application of the directive. The Commission Implementing Decision (EU 2014a) sets out a detailed questionnaire to be addressed by the Member States in their annual reports to the Commission under Article 21 of the Directive. This report provides a synthesis of the countries' annual reports concerning the implementation of the EU ETS in 2014. Data included are for the year 2013 unless indicated otherwise.

The EU ETS covers more than 12 000 energy‑using installations, consisting of power stations and other combustion plants with ≥ 20MW thermal (1) rated input (except hazardous or municipal waste installations). It also covers oil refineries; coke ovens; iron and steel production facilities; and installations involved in the production of cement clinker, glass, lime, bricks, ceramics, pulp, paper and board, aluminium, petrochemicals, ammonia, nitric acid, adipic acid and glyoxylic acid. In addition, the EU ETS covers facilities involved in CO2 capture, CO2 transport in pipelines, and geological storage of CO2. The ETS also covers aviation, but the coverage is limited to flights within the European Economic Area until 2016. In total, the EU ETS covers around 45% of EU greenhouse gas emissions (EEA, 2015). The EU ETS covers 28 EU Member States, as well as Norway, Iceland, and Liechtenstein (which are part of the broader European Economic Area).

Evaluating the implementation of the ETS

The Article 21 questionnaire covers topics concerned with the national (or regional) administrative implementation of the EU ETS Directive, and also includes data collated from detailed reports from installations and aircraft operators. This report evaluates the implementation of the ETS Directive, based on countries' replies to the questionnaire, and also presents some analysis of the fuel consumption and emissions data reported.

This report is the first to be released since a revised Article 21 questionnaire was published in 2014 (EU, 2014a). The deadline for national responses to this questionnaire was 30 June 2014, but not all countries were able to report by that date. This report is based on countries' replies to the Article 21 questionnaire submitted by 31 October 2014. The 2014 questionnaire related to 2013 data. Nineteen countries submitted their responses to the questionnaire (EU, 2014a) by 30 June. A further seven countries reported by the end of August. Three countries submitted after August (Greece, Norway and Spain), but could still be included in this report. France and Italy did not report in time for inclusion in this report. All figures and calculations in this report thus exclude Italy and France. Out of the 29 country responses considered, only 20 countries completed 100% of the mandatory questions. A further 7 countries completed more than 90% of mandatory questions, but less than 100%; while 2 countries completed between 80% and 90% of the mandatory questions.

The analysis of country responses provides a better understanding of the detailed implementation of the EU ETS Directive in areas where certain 'flexibilities' are included in the Directive (such as permitting a more simplified monitoring regime for small emitters, and excluding some installations). This report has identified areas of good application of the EU ETS Directive. In addition, this report has also identified areas where the application of the directive could be improved and areas where better data are required to enable a more complete understanding of implementation. It also includes a detailed presentation of the responsibilities of countries' authorities (termed 'competent authorities') for specific areas of implementation of the EU ETS (see Table A3.2 in Appendix 3 of this report). The competent authorities are the national authorities responsible for the implementation of the EU ETS Directive in their country.

Summary of reported emissions and fuel consumption data

Country information submitted in 2014 included total fuel consumption and greenhouse gas emission data aggregated from the 2013 emissions reports of installations. As this was the first reporting period based on a new questionnaire, some data issues were found. The quality of this information is expected to improve over the coming years, as more data become available, as the EEA performs more data quality checks, and as country submissions become more complete and coherent.

Figure ES.1 presents fuel consumption and emissions in the EU ETS split by fuel type (excluding France and Italy, neither of which reported in time for inclusion in this report, and also excluding Denmark (2)). The most significant fuel consumed by installations covered by the EU ETS in 2013 was natural gas (3) (5 898 710 TJ). Hard coal was the fuel with the largest emissions (439 846 kilo tonnes (kt) CO2) in the EU ETS in 2013.

Figure ES.2 presents reported fuel consumption and emissions in the EU ETS split by country (excluding France and Italy, neither of which reported in time, and excluding Denmark which did not respond to this question). Germany reported the highest fuel consumption (4 853 271 TJ), followed by the United Kingdom (2 576 483 TJ). The most significant emitters are Germany (422 703 kt CO2), the United Kingdom (203 365 kt CO2), and Poland (189 030 kt CO2).

Twenty seven countries reported data on the quantity of CO2 emissions from waste that is used as fuel or input material within installations. Figure ES.3 provides the aggregated emissions from waste for each country in 2013.

Implied emission factor analysis

Implied emission factors (fuel emissions divided by fuel consumption) were calculated as an additional analysis of the Article 21 questionnaire data. This was not an analysis of EU ETS implementation, but rather a supplementary EEA analysis of the data provided.

The range in implied emission factors among countries varies with fuel type. The analysis and comparison of implied emission factors for specific fuels can help identify potential issues with either the reported fuel consumption or emission data if implied emission factors are outside expected ranges (IPCC default emission factors (4)) or if they diverge strongly from implied emission factors of other countries. It is to be welcomed that the implied emission factors for hard coal are all within the range of the IPCC default emissions factors, as this fuel is the largest single emissions source. For blast furnace gas and coke oven gas the implied emission factors were also within the expected range.

For coke, natural gas, peat, and lignite, a few countries reported significantly different implied emission factors, but most countries explained the origin of these differences. Fuel oil and liquefied petroleum gas (LPG) showed the largest number of outliers compared to the range of IPCC emission factors. However, the difference to the IPCC emission factors was mostly rather small.

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