Work
06.June 2006 - 00:00
Possible emissions trading in nitrogen oxides (NOx)
On the basis of the EU's strategy on air quality, the CAFE programme, emissions ceilings are to be laid down for certain substances for the year 2020. The substances include sulphur dioxide (SO2), nitrogen oxides (NOx) and fine dust (PM 2.5). It is intended that the modelling work for the emission ceilings should be carried out before the end of this year. It already seems likely that the emission ceilings will be set so low that many Member States will have great difficulty in complying with them. It has also been suggested that the emission ceiling for nitrogen oxides will be the most challenging.
According to my information, the Commission is currently investigating the possibility of launching emissions trading at least for nitrogen oxides — of all the possible choices — but its investigations are still at a very early stage.
Some people believe that the impact of nitrogen oxide emissions trading on the electricity market would be much the same as that of carbon dioxide emissions trading at present.
However, the existing emissions trading has been found to adversely affect the EU's competitiveness. According to feedback, the EU's emissions trading system distorts energy markets and disrupts national climate strategies, as well as unnecessarily raising the price of electricity. The price rise has a particularly serious impact on the competitiveness of the EU's energy-intensive industries and also affects other electricity users.
Does the Commission consider that, in order to attain the new emission reductions which are currently aspired to, there may be other options rather than a fresh emissions trading scheme, thus avoiding the corresponding adverse impacts on the electricity market? Has the Commission investigated the possible impact on the market of the use of the instrument currently planned in general terms and not just by looking at the minimum cost of the actual emission reduction investments and how they could be achieved?
E-1528/06EN
Answer given by Mr Dimas
on behalf of the Commission
(6.6.2006)
According to the Thematic Strategy on Air Pollution, the benefits associated with the interim health and environmental objectives of improved air pollution are significant. The health benefits alone have been shown to be between six and twenty times higher than the associated costs. Implementation of the strategy will require further reductions in the emissions of sulphur dioxide (SO2), nitrogen oxides (NOx), volatile hydrocarbons, ammonia and primary particulate matter by 2020.
The Commission is currently investigating a range of instruments to bring about the necessary emissions reductions. There is a role for measures at both the Community and national levels in accordance with the principle of subsidiarity. Measures being investigated by the Commission include market based instruments, such as trading or taxing SO2 or NOx, and regulation such as emission standards for stationary and mobile sources. The details of these investigations will be part of impact assessments of any future proposals from the Commission.
The Commission does not share the view of the Honourable Member that emission trading would, in itself, adversely affect the competitiveness of European industry. It should be noted that all environmental regulation will entail some costs. The instrument of emissions trading for carbon dioxide was chosen in order to minimise such costs. In the United States, emission trading in NOx and SO2 has been used extensively for almost 20 years without it having been considered to have had a negative consequence on the competitiveness of US industry. On the contrary, emission trading is considered as a highly cost-effective environmental instrument that balances the interests of industrial competitiveness and high environmental standards.
Finally, it should be noted that many Member States already use economic instruments, including emission trading, to control NOx and SO2 emissions at a national level. The Commission is analysing the full set of possible instruments to improve air quality and will, based upon such analyses, put forward concrete proposals at EU level to cut emissions of air pollutants.
On the basis of the EU's strategy on air quality, the CAFE programme, emissions ceilings are to be laid down for certain substances for the year 2020. The substances include sulphur dioxide (SO2), nitrogen oxides (NOx) and fine dust (PM 2.5). It is intended that the modelling work for the emission ceilings should be carried out before the end of this year. It already seems likely that the emission ceilings will be set so low that many Member States will have great difficulty in complying with them. It has also been suggested that the emission ceiling for nitrogen oxides will be the most challenging.
According to my information, the Commission is currently investigating the possibility of launching emissions trading at least for nitrogen oxides — of all the possible choices — but its investigations are still at a very early stage.
Some people believe that the impact of nitrogen oxide emissions trading on the electricity market would be much the same as that of carbon dioxide emissions trading at present.
However, the existing emissions trading has been found to adversely affect the EU's competitiveness. According to feedback, the EU's emissions trading system distorts energy markets and disrupts national climate strategies, as well as unnecessarily raising the price of electricity. The price rise has a particularly serious impact on the competitiveness of the EU's energy-intensive industries and also affects other electricity users.
Does the Commission consider that, in order to attain the new emission reductions which are currently aspired to, there may be other options rather than a fresh emissions trading scheme, thus avoiding the corresponding adverse impacts on the electricity market? Has the Commission investigated the possible impact on the market of the use of the instrument currently planned in general terms and not just by looking at the minimum cost of the actual emission reduction investments and how they could be achieved?
E-1528/06EN
Answer given by Mr Dimas
on behalf of the Commission
(6.6.2006)
According to the Thematic Strategy on Air Pollution, the benefits associated with the interim health and environmental objectives of improved air pollution are significant. The health benefits alone have been shown to be between six and twenty times higher than the associated costs. Implementation of the strategy will require further reductions in the emissions of sulphur dioxide (SO2), nitrogen oxides (NOx), volatile hydrocarbons, ammonia and primary particulate matter by 2020.
The Commission is currently investigating a range of instruments to bring about the necessary emissions reductions. There is a role for measures at both the Community and national levels in accordance with the principle of subsidiarity. Measures being investigated by the Commission include market based instruments, such as trading or taxing SO2 or NOx, and regulation such as emission standards for stationary and mobile sources. The details of these investigations will be part of impact assessments of any future proposals from the Commission.
The Commission does not share the view of the Honourable Member that emission trading would, in itself, adversely affect the competitiveness of European industry. It should be noted that all environmental regulation will entail some costs. The instrument of emissions trading for carbon dioxide was chosen in order to minimise such costs. In the United States, emission trading in NOx and SO2 has been used extensively for almost 20 years without it having been considered to have had a negative consequence on the competitiveness of US industry. On the contrary, emission trading is considered as a highly cost-effective environmental instrument that balances the interests of industrial competitiveness and high environmental standards.
Finally, it should be noted that many Member States already use economic instruments, including emission trading, to control NOx and SO2 emissions at a national level. The Commission is analysing the full set of possible instruments to improve air quality and will, based upon such analyses, put forward concrete proposals at EU level to cut emissions of air pollutants.