enienv

enienv
Environmental issue report
Energy and environment
in the European Union
No 31
1
Environmental issue report
Energy and environment in the European Union
Prepared by:
AEA Technology Environment, partner to
European Topic Centre on Air and Climate Change,
Aphrodite Mourelatou and Ian Smith,
European Environment Agency
Project manager:
Aphrodite Mourelatou
European Environment Agency
No 31
2
Energy and environment in the European Union
Cover: EEA
Layout: Folkmann Design A/S
Note
The contents of this report do not necessarily reflect the official opinion of the European
Commission or other European Communities institutions. Neither the European
Environment Agency nor any person or company acting on behalf of the Agency is
responsible for the use that may be made of the information contained in this report.
A great deal of information on the European Union is available on the Internet. It can be
accessed through the Europa server (http://europa.eu.int).
Cataloguing data can be found at the end of this publication.
Luxembourg: Office for Official Publications of the European Communities, 2002
ISBN 92-9167-468-0
© EEA, Copenhagen 2002
Printed in Denmark
European Environment Agency
Kongens Nytorv 6
DK-1050 Copenhagen K
Denmark
Tel.: (+45) 33 36 71 00
Fax: (+45) 33 36 71 99
E-mail: [email protected]
Internet: http://www.eea.eu.int
3
Contents
Foreword
................................................................................................................. 7
Summary
................................................................................................................. 9
Introduction .................................................................................................................. 9
1.
Is the use of energy having less impact on the environment? ........................... 11
1.a. Greenhouse gas emissions .......................................................................... 11
1.b. Air pollution ................................................................................................. 12
1.c. Other energy-related pressures ................................................................... 13
2.
Are we using less energy? .................................................................................. 14
3.
How rapidly is energy efficiency being increased? ............................................ 15
4.
Are we switching to less-polluting fuels? ........................................................... 16
5.
How rapidly are renewable energy technologies being implemented? ............ 17
6.
Are we moving towards a pricing system
that better incorporates environmental costs? .................................................. 18
Introduction ..................................................................................................................... 19
1. Is the use of energy having less impact on the environment? ............................. 23
1.1. Greenhouse gas emissions .................................................................................. 24
1.2. Air pollution ......................................................................................................... 28
1.3. Other energy-related pressures........................................................................... 30
2. Are we using less energy? .................................................................................... 36
3. How rapidly is energy efficiency being increased? .............................................. 39
3.1 Efficiency in energy supply ................................................................................... 40
3.2 Efficiency in energy consumption ......................................................................... 44
4. Are we switching to less-polluting fuels? ............................................................. 47
5. How rapidly are renewable energy technologies being implemented? .............. 51
6. Are we moving towards a pricing system
that better incorporates environmental costs? .................................................... 54
Annex
............................................................................................................... 61
References
............................................................................................................... 62
Acronyms and abbreviations ...................................................................................... 67
4
Energy and environment in the European Union
Figures and boxes
Summary figures
•
Change in energy-related greenhouse gas emissions by
economic sector, 1990–99 ............................................................................................ 11
•
Performance in reducing total and energy-related greenhouse gas
emissions to meet Kyoto Protocol targets, 1999 ......................................................... 11
•
Change in total and energy-related emissions of nitrogen oxides, 1990–99 .............. 12
•
Explanations for the reduction of emissions of sulphur dioxide in the
electricity sector, 1990–99 ............................................................................................ 12
•
Marine environment oil pollution from refineries and offshore
installations, and from accidental oil tanker spills (above 7 tonnes per spill) .............. 13
•
Annual quantities of spent nuclear fuel from nuclear power plant .............................. 13
•
Final energy consumption and electricity consumption growth, 1990–99 ................... 14
•
Final energy consumption ............................................................................................. 14
•
Share of gross electricity production from combined heat and power plant,
1994 and 1998 .............................................................................................................. 15
•
Annual change in final energy intensity, 1990–99 ........................................................ 15
•
Total energy consumption by source ............................................................................ 16
•
Electricity production by source ................................................................................... 16
•
Share of total energy consumption provided by renewable energy sources ............... 17
•
Share of electricity consumption met by renewable energy sources, 1999 ................. 17
Report figures
Figure 1.
Examples of the environmental pressures imposed at different
stages of the energy supply and demand chain ........................................... 20
Figure 2.
Greenhouse gas emissions ............................................................................. 24
Figure 3.
Change in total and energy-related greenhouse gas emissions .................... 26
Figure 4.
Energy-related greenhouse gas emissions ..................................................... 27
Figure 5.
Change in total and energy-related sulphur dioxide emissions ..................... 28
Figure 6.
Change in total and energy-related emissions of nitrogen oxides ................ 30
Figure 7.
Change in total and energy-related NMVOC emissions ................................ 31
5
Figure 8.
Energy-related primary and secondary particulate emissions ....................... 33
Figure 9.
Marine environment oil pollution ................................................................... 34
Figure 10. Annual quantities of spent nuclear fuel from nuclear power plant ................ 35
Figure 11. Final energy consumption .............................................................................. 37
Figure 12. Growth in final energy consumption and electricity
consumption, 1990–99 ................................................................................... 38
Figure 13. Ratio of final to total energy consumption .................................................... 40
Figure 14. Improvement in fossil fuel electricity production efficiency ........................... 42
Figure 15. Share of gross electricity production from combined heat
and power plant ............................................................................................ 43
Figure 16. Final energy consumption, gross domestic product and
final energy intensity ...................................................................................... 44
Figure 17. Annual change in final energy intensity, 1990–99 .......................................... 44
Figure 18. Annual change in sectoral energy intensities and related drivers,
1990–99 .......................................................................................................... 45
Figure 19. Total energy consumption by source ............................................................. 48
Figure 20. Electricity production by source ..................................................................... 49
Figure 21. Share of total energy consumption provided by renewable
energy sources ................................................................................................ 52
Figure 22. Share of electricity consumption met by renewable energy
sources, 1999 .................................................................................................. 53
Figure 23. Proportion of tax in final energy prices .......................................................... 56
Figure 24. Change in the absolute value of taxation applied to fuels, 1985–2001 ........ 56
Figure 25. Estimated distribution of direct energy subsidies (1990–1995 average) ....... 59
Figure 26. Energy research and development expenditure ............................................ 60
Boxes
Box 1.
Relationship between environmental pressures and the
drivers for energy demand ............................................................................. 21
Box 2.
The DPSIR assessment framework ................................................................. 21
Box 3.
Kyoto mechanisms .......................................................................................... 24
Box 4.
How have reductions in nitrogen oxides and sulphur dioxide
been achieved in the electricity sector? ......................................................... 29
6
Energy and environment in the European Union
Figures:
Explanations for the reduction of emissions of nitrogen
oxides in the electricity sector ....................................................................... 29
Explanations for the reduction of emissions of sulphur dioxide in the
electricity sector ............................................................................................. 29
Box 5.
What further improvements can be anticipated in emissions of
nitrogenoxides and non-methane volatile organic compounds
from energy-related activities? ....................................................................... 32
Figures:
Emissions of non-methane volatile organic compounds ................................ 32
Emissions of nitrogen oxides .......................................................................... 32
Current and future vehicle emission standards for non-methane
volatile organic compounds ........................................................................... 32
Current and future vehicle emission standards for nitrogen oxides .............. 32
Box 6.
Why is overall EU energy conversion efficiency not improving? .................... 41
Figures:
Schematic illustration of the opposing effects of increased
electricity demand and improved electricity production efficiency
on the ratio of final to total energy consumption .......................................... 41
Components of total and final energy consumption ..................................... 41
Box 7.
How to measure the efficiency of energy consumption ................................. 46
Box 8.
How has fuel switching affected carbon dioxide emissions from
the electricity production sector? ................................................................... 50
Figure:
Explanations for the reduction of emissions of carbon
dioxide in the electricity sector ...................................................................... 50
Box 9.
The relationship between energy prices, energy consumption and
energy related environmental pressures ........................................................ 57
7
Foreword
Sustainable development is about improving the quality of life while reducing the use of
natural resources and pressures on the environment. Our quality of life is greatly enhanced
by energy and the services it provides. The main question is how to make use of available
energy resources sustainably without precluding the needs of future generations.
Sustainable development and integrating environmental considerations into Community
policies are EU goals (Articles 2 and 6 of the EU Treaty). The process of achieving these
goals was initiated in 1998 at the Cardiff Summit, where the Energy and several other
Councils were asked to establish environmental integration and sustainable development
strategies, identify indicators and monitor progress.
A main tool for ensuring the proper development and implementation of environmental
integration and sustainable energy policy is the regular assessment of progress. This should
cover not only the current situation, which may not change much from year to year — for
example whether environmental pressures and impacts have been reduced or increased and
whether there has been progress towards agreed quantitative or qualitative targets — but also
trends and prospects, and most importantly the conditions for change that are needed to
progress towards a more sustainable energy policy and more environmentally-friendly energy
use. Such an assessment should help to identify the measures required to achieve these goals.
Assessing progress is the purpose of this report. It is part of the European Environment
Agency’s general mandate to carry out integrated assessments of the state of the
environment and the pressures placed on it, and to provide information of direct use for
shaping and implementing environmental and sustainable-development policies.
The assessment work undertaken by the Agency is complementary to work undertaken in
this area by other Community organisations. The independence of the Agency guarantees a
balanced assessment and its work underpins the good-governance principles of openness,
participation, effectiveness, coherence and, particularly, accountability.
We see it as entirely natural to extend the regular reporting we have already established on
transport and environment under the transport and environment reporting mechanism
(TERM) to energy and, over time, to other sectors. This was requested in 1998 by a joint
Environment-Transport Council and is undertaken in full cooperation with the Commission
services. The Agency is currently working on its third TERM report and has also started work
on preparing a similar report on agriculture and environment — in cooperation with and
financially supported by the Commission.
The aim of this introduction is to really make the case for the Agency’s role and contribution
in producing this report on energy and environment in the European Union as the need for
it is not yet clearly recognised amongst all partners. It is my personal conviction that this
report will prove its added-value for the governance of energy policy.
The report follows the TERM model. It has been designed to provide policy makers with the
information they need to assess how effectively environmental policies and concerns are
being integrated with energy policies. This is achieved with the help of selected indicators
measuring the extent of progress.
So what does the report show?
In most of the areas of environmental integration covered, there have been some successes
but overall progress has been insufficient.
Curiously enough, we see that energy and environmental goals are often complementary.
Security of supply is a main goal of energy policy, and its significance has been highlighted
8
Energy and environment in the European Union
again recently by fluctuations in crude-oil prices as a result of restrictive output policies by
oil producers and fears over the vulnerability of nuclear power stations. Increased use of
renewable energies and improved energy efficiency benefit security of supply while reducing
the pressure on the environment.
Similarly, stricter environmental controls on energy production and consumption reduce
environmental pressures and externalities, thus providing for fairer competition and more
sustainable competitiveness, another main energy policy goal. Energy market liberalisation
benefits competitiveness through reduced costs. However, unless appropriate policy
measures, such as fiscal measures, are taken to internalise external costs and improve energy
demand management, these lower costs may bring price reductions that are likely to act as a
disincentive to energy saving and even encourage greater energy consumption. Such
developments run counter to the environmental and security-of-supply goals of energy policy.
This report shows clearly that ‘where there is a will, there is a way’. Many countries have
shown the way forward by improving the energy efficiency of their economies. However,
others have become more inefficient and consequently have a worse environmental record;
in particular, their lack of progress towards meeting their greenhouse gas emission targets
under the Kyoto Protocol is a source of great concern. This strengthens the case for
improved energy demand management, and for fiscal measures to improve it.
Another finding is that good progress has been achieved where effective and efficient
policies have been implemented. This is particularly the case with emissions of air pollution
from industry, energy production and even from households and transport. However,
progress in these last two sectors has been partly offset by increases in the number of
households and cars.
The report also points to some key ‘vital signs,’ such as strong growth in renewables,
particularly wind and solar energy. These could show even higher growth if they were
provided with more favourable market conditions, such as the internalisation of
environmental costs, and not neutralised by unsustainable growth in overall energy demand.
I hope that both the highlighted successes and failures provide a useful input to move the
integration and sustainability processes forward at the EU level, thus making the case for
Community policies, for example in the area of taxation, to steer the liberalisation of energy
markets towards sustainability. I also hope that the information on successes and failures will
be useful not only to EU countries but also to all EEA member countries and that it will serve
as an initial input for country benchmarking.
This report is intended to be part of the accountability mechanism of EU energy policy but
should also be accountable in its own terms. It should be relevant to policy-making and the
public participation process, and it should serve information needs. The Agency is keen on
feedback so that we can move from providing BAI, or ‘best available information’, to BNI, or
‘best needed information’ or ‘badly needed information’. I invite readers (including critics!)
to comment on this first report on energy and environment so that we can improve future
editions.
Lastly, I would like to thank all those who have already contributed input to this report
through the review process, and Eurostat for providing most of the data used.
Domingo Jiménez-Beltrán
Executive Director
9
Summary
Introduction
This is the first indicator-based report produced by the European Environment Agency on
energy and the environment. It covers the European Union (EU), and is designed to
provide policy-makers with the information necessary for assessing how effectively
environmental policies and concerns are being integrated with energy policies, in line with
the environmental integration process initiated by the European Council’s Cardiff Summit
in 1998. The report aims to support the EU sixth environmental action programme and in
this way to provide input, from an environmental perspective, to sustainable development in
the EU.
Energy is central to social and economic well-being. It provides personal comfort and
mobility, and is essential to most industrial and commercial wealth generation. However,
energy production and consumption place considerable pressures on the environment,
including contributing to climate change, damaging natural ecosystems, tarnishing the built
environment and causing adverse effects to human health.
EU energy policy reflects these wide-ranging issues and has three main goals:
• security of supply
• competitiveness
• environmental protection.
While these areas may be considered separately, they are strongly interrelated. For example,
improvements in energy efficiency both benefit security of supply by reducing the amount of
energy consumed and reduce emissions of greenhouse gases and pollutants by reducing the
consumption of fossil fuels. On the other hand, energy market liberalisation and more price
competition benefit competitiveness through reduced costs, but unless external costs are
fully internalised and energy demand management improves, the reduction of costs may
bring price reductions that are likely to act as a disincentive to energy saving and even
encourage energy consumption.
In line with the energy policy goals, the specific environmental objectives of EU energy policy
on environmental integration (as detailed in the European Commission communication on
environmental integration within Community energy policy, 1998) are to:
• reduce the environmental impact of energy production and use
• promote energy saving and energy efficiency
• increase the share of production and use of cleaner energy.
This report provides an assessment, based on indicators, of progress by the energy sector
towards environmental integration. These examine performance in the EU as a whole, as
well as in individual Member States, and are supported, where possible, by an analysis of
progress towards quantitative targets. Factors that have affected change are examined and
quantitative analysis is provided where feasible. The indicators examine trends over the
period 1990–99 and compare these with baseline projections to 2010, which originate from
European Commission studies and assume both a continuation of policies adopted by 1998,
and that the EU voluntary agreement with the car industry on reducing carbon dioxide
emissions from new passenger cars will be honoured.
In line with the sectoral reporting strategy adopted by the Agency, the report addresses six
policy questions to provide a systematic evaluation of all aspects of the environmental
integration of the energy sector.
10
Energy and environment in the European Union
1.
2.
3.
4.
5.
6.
Is the use of energy having less impact on the environment?
Are we using less energy?
How rapidly is energy efficiency being increased?
Are we switching to less-polluting fuels?
How rapidly are renewable energy technologies being implemented?
Are we moving towards a pricing system that better incorporates environmental costs?
Overall, while there have been some successes, there has been insufficient progress in most
of the areas of environmental integration covered by this report. In relation to the above six
questions, the following conclusions can be drawn:
1. (a) Emissions of greenhouse gases in the EU fell between 1990 and 2000, but without
additional measures are unlikely to fall further to 2010 and beyond because of
increased energy-related emissions. Ongoing successful initiatives in some Member
States appear to point the way forward.
(b) Measures taken to reduce atmospheric pollution from energy use are proving
successful, with a number of Member States on track to meet the reduction
targets set for 2010.
(c) Oil pollution from coastal refineries, offshore installations and maritime transport
has been reduced, but still places significant pressures on the marine environment.
2. Energy consumption is increasing, mainly because of growth in transport but also in
the household and services sectors. However, the rate of increase is expected to slow by
2010 as fuel efficiency improvements in transport are realised.
3. Improvements in energy efficiency have been slow, but improvements in some Member
States are showing the potential benefits of good practices and strategies.
4. The EU is switching from coal to the relatively cleaner natural gas, but after
2010 no further switching is expected. Furthermore, some nuclear installations
will retire and, if these are replaced by fossil fuel plants, increases in carbon dioxide
emissions are likely. This underlines the need to further strengthen support for
renewable energy sources.
5. Renewable energy targets are unlikely to be met under current trends, but experience in
some Member States suggests that growth could be accelerated by appropriate support
measures.
6. Despite increases in energy taxation, most energy prices in the EU have fallen, as a
result mainly of falling international fossil fuel prices but also of the liberalisation of
energy markets. In the absence of appropriate policies to internalise the external
costs of energy and improve energy demand management, reduced prices are
likely to act as a disincentive to energy saving and may encourage energy consumption.
The following sections provide an assessment of each of the key energy and environment
policy questions.
11
1. Is the use of energy having less impact on the environment?
1.a. Greenhouse gas emissions
Greenhouse gas emissions in the EU related to the use of energy fell proportionately less
than total greenhouse gas emissions between 1990 and 2000, increasing their share of the
total to 82 %. The reduction in energy-related emissions can be partly attributed to one-off
reductions in Germany and the UK. Nevertheless, the EU achieved its commitment to
stabilise carbon dioxide emissions in 2000 at 1990 levels.
However, it will be difficult for the EU to meet its Kyoto Protocol target of reducing total greenhouse gas emissions by 8 % from 1990 levels by 2010. Without additional measures, total emissions in 2010 are likely to be about the same as in 1990, with a further fall in non-energy related
emissions being offset by a rise in energy-related emissions, driven mainly by the transport sector.
Assuming that the Kyoto Protocol target will be met using only domestic measures, the
majority of Member States have not made sufficient progress to ensure meeting their targets
under the EU burden-sharing agreement. Distance-to-targets analysis performed on the basis
of 1999 data shows that Finland, France, Germany, Luxembourg, Sweden and the UK
reduced total emissions at least enough to be on track to achieve their 2010 targets.
However, in all Member States, with the exception of Sweden, energy-related emissions
between 1990 and 1999 either fell less than or increased more than total emissions.
Beyond 2010 energy consumption levels are expected to continue to increase, at least to
2020. Meeting the European Commission’s proposed EU total emission reduction target of 1 %
per year from 1990 levels up to 2020 would require long-term changes in energy production
and consumption patterns (power plants, buildings, transport, etc.). These patterns will be
determined by decisions taken imminently, so reducing future energy-related emissions
requires policy action now.
A number of initiatives to pave the way for long-term greenhouse gas emission reductions
from energy use are ongoing in Member States. For example, seven Member States have
already introduced carbon taxes.
Total EU greenhouse gas emissions fell between 1990 and 2000, but energyrelated emissions, by far the largest component, fell considerably less, making
significant reductions in total emissions in coming decades unlikely.
Most Member States have failed to reduce greenhouse gas emissions in line with their
share of the EU commitment under the Kyoto Protocol.
The reduction in energy-relatedgreenhouse gas emissions over the last decade was
achieved through considerable reductions by the manufacturing and energy supply
sectors, mostly offset by growth in transport.
Change in energy-related greenhouse gas
emissions by economic sector, 1990–99
Performance in reducing total and energy-related
greenhouse gas emissions to meet Kyoto Protocol
targets, 1999
EU 15
Luxembourg
Germany
United Kingdom
Finland
France
Sweden
Greece
Italy
Austria
Netherlands
Belgium
Portugal
Denmark
Ireland
Spain
Energy supply
Industry
Energy-related
greenhouse gas
emissions
Households and services
Total greenhouse
gas emissions
Transport
-15
-10
-5
0
5
10
% change
15
20
25
-35
-25
-15
-5
5
15
25
Distance in 1999 to linear target path (index points)
Source: EEA.
35
Note: The diagram indicates
whether a Member State
was on track in 1999 to meet
its shared Kyoto Protocol
target. A negative value
suggests an overachievement and a positive
value an under-achievement
against the linear target
path from 1990 to 2010. For
the purpose of this analysis
it is arbitrarily assumed that
energy-related emissions will
be reduced proportionately
with total emissions.
Source: EEA.
12
Energy and environment in the European Union
1.b. Air pollution
Energy use is a major source of atmospheric pollutants. It contributes just over 90 % of EU
sulphur dioxide emissions, almost all emissions of nitrogen oxides, about half the non-methane
volatile organic compound emissions and around 85 % of particulates.
Measures taken to reduce atmospheric pollution from the use of energy have been
successful. These include the introduction of catalytic converters, the use of pollution
abatement technologies encouraged by the large combustion plant directive and the use of
best avaiable techniques required by the integrated pollution prevention and control
directive. Fuel switching from coal and oil to natural gas has also made an important
contribution to the reduction of atmospheric pollution.
In the electricity sector, more than half of the reductions in emissions of sulphur dioxide
and nitrogen oxides resulted from the introduction of emission-specific abatement meaures,
about a quarter from changes in the fossil fuel mix, and the rest from improved efficiency of
fossil-fuelled electricity production and increased shares of nuclear and renewables.
Target reductions for total (energy and non-energy related) emissions of sulphur dioxide,
nitrogen oxides and non-methane volatile organic compounds for 2010, relative to 1990, have
been set in the national emissions ceilings directive. Overall, the EU is on course to meet these
targets and is also making good progress in reducing particulate emissions. The energy-related
emissions of all these pollutants have been reduced more quickly than total emissions.
Most Member States have contributed to all these reductions but Greece, Ireland,
Portugal and Spain need to take further action to ensure that they meet their targets.
Energy-related sulphur dioxide emissions fell considerably between 1990 and 1999.
This is the main reason that the EU and most Member States are expected to achieve
their 2010 targets for reducing total sulphur dioxide emissions, as set in the national
emission ceilings directive.
Energy-related emissions of nitrogen oxides also fell, placing the EU and some
Member States on track to achieve their 2010 reduction targets for total nitrogen
oxide emissions, as set in the same directive.
The reduction in energy-related emissions of non-methane volatile organic
compounds (NMVOCs) has greatly helped to put the EU and some Member States
on course to achieve their 2010 targets for reducing total NMVOC emissions, as set
in the national emission ceilings directive.
Energy-related emissions of particulates fell by 37 % between 1990 and 1999, mainly
as a result of reductions from power plant and road transport.
Change in total and energy-related emissions of
nitrogen oxides, 1990–99
United Kingdom
Germany
Sweden
Luxembourg
Netherlands
Explanations for the reduction of emissions of
sulphur dioxide in the electricity sector, 1990–99
Million tonnes
12
Excluding the increased
share of nuclear and
renewable energy
10
8
Excluding efficiency
improvements
6
Excluding fossil
fuel switching
Italy
Denmark
France
Ireland
Spain
Portugal
Target
1990–2010
Excluding flue gas
desulphurisation and the
use of low sulphur fuels
2
Actual emissions
0
Greece
EU 15
-60
-40
-20
% change
0
20
Source: EEA.
19
99
Energyrelated NOx
1990–99
Austria
4
19
96
Belgium
19
93
Finland
Total NOx
1990–99
19
90
Note: Target values are for
total emissions.
Source: EEA.
13
1.c. Other energy-related pressures
Other environmental pressures from energy production and consumption include wastes
from mines and nuclear plant, water contamination from mining, oil spills and discharges to
marine waters, soil damage from spills and leakages of liquid fuels, and impacts on
ecosystems from the construction and operation of large dams.
This report provides information on spills and discharges of oil to the marine environment,
and nuclear waste. Trends in these areas warrant monitoring, and data, though not
comprehensive, are of sufficient quality to indicate pressures from marine oil pollution and
radioactive waste production.
Tanker oil spills continue to occur, although both their frequency and the volumes involved
have declined over the past decade. This may reflect the irregular occurrence of such
accidents, but it is encouraging that the apparent improvement has come despite the
increasing maritime transport of oil. Strengthened safety measures, such as the introduction
of double-hulled tankers, have contributed to this. Additionally, oil discharges from offshore
installations and coastal refineries have diminished, despite increased oil production, as a
result of the increased application of cleaning and separation technologies.
Spent nuclear fuel is the most highly radioactive waste, in many cases taking up to several
hundred thousand years to decay. As the amount produced is determined mainly by the
quantity of electricity generated from nuclear plants, the annual quantities of spent fuel are
likely to decrease as nuclear power production starts to decline. Work is ongoing to try to
establish final-disposal methods that alleviate technical and public concerns over the
potential threat that this waste poses to the environment. In the meantime, the wastes
accumulate in stores. The European Commission has proposed more support for research
and development on nuclear waste management in its sustainable development strategy.
Oil pollution from offshore installations and coastal refineries has been reduced, but
major oil tanker spills continue to occur.
Highly radioactive waste from nuclear power production continues to accumulate. A
generally acceptable disposal route is yet to be identified.
Marine environment oil pollution from refineries
and offshore installations, and from accidental oil
tanker spills (above 7 tonnes per spill)
Oil discharge (thousand tonnes)
Tonnes of heavy metal
25
4 500
20
4 000
Offshore installations
Refineries
15
United Kingdom
France
Germany
Sweden
Belgium
Spain
Finland, Netherlands & Italy
3 500
3 000
10
Notes: The vast majority of
highly radioactive waste
consists of spent fuel and
spent fuel reprocessing
wastes. 2000 figures for
Spain, Sweden and the UK
are based on provisional
data. Projected data is taken
from national projections
with the exception of
Sweden for 2010, which is a
projection from the OECD.
Austria, Denmark, Greece,
Ireland, Luxembourg and
Portugal do not have
nuclear power plants. Italy
phased out commercial
nuclear power in 1987. The
projected increase
attributed to Finland, Italy
and the Netherlands is due
to a projected increase from
Finland only.
Source: OECD.
Annual quantities of spent nuclear
fuel from nuclear power plant
2 500
5
2 000
19
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
0
Oil spilt (thousand tonnes)
1 500
1 000
160
500
140
120
60
40
20
(109
tonnes)
(250
tonnes)
(171
tonnes)
Sources: Eurostat, OSPAR, CONCAWE, DHI, ITOPF.
0
20
0
99
19
8
19
9
19
97
96
19
94
19
95
19
19
93
92
19
19
91
19
9
0
0
10
05
20
20
00
20
95
19
19
85
19
80
90
0
100
Energy and environment in the European Union
2. Are we using less energy?
One of the aims of the EU strategy for integrating environmental considerations into energy
policy is to increase energy saving. Cost-effective energy saving has many benefits: it
decreases pressure on the environment, improves competitiveness and allows countries to be
less dependent on energy imports.
Energy consumption by final energy users increased between 1990 and 1999 in all but one
sector, with the fastest growth coming from transport. Manufacturing industry’s small
decline in energy consumption reflects some improvements in energy efficiency but mainly
reveals the effect of structural changes, including a shift towards low energy-intensive
industries, relocation of energy-intensive industries away from EU countries, and the postunification restructuring of German industry.
Baseline projections to 2010 indicate continued growth in energy consumption, but at a
lower rate than between 1990 and 1999, mainly because of a slower rate of increase in
energy consumption by the transport sector. This is due to expected improvements in road
vehicle fuel efficiency as a result of the voluntary agreement between the car industry and
the EU, rather than a slowdown in road transport growth.
Electricity continues to take an increasing share of final energy consumption in all EU
countries, both as a result of more electrical appliances in the services and household sectors,
and a greater use of electrically based production processes in industry. Electricity is produced
from other fuels and the consumption of each unit of electrical energy requires the
consumption of two to three units of another energy source. Growth in electricity consumption will therefore result in a disproportionately greater increase in environmental pressures,
especially in carbon dioxide emissions, unless it comes from high-efficiency, low-emission
technologies that reduce sufficiently the environmental consequences of electricity production.
The use of electrical energy for heating is a particularly inefficient use of the original energy
resource. In Denmark, the Electricity Saving Fund, financed by a levy on domestic electricity
consumption, enables the government to grant subsidies for the conversion of electrically heated
dwellings to district heating or natural gas. Also, natural gas companies encourage customers to
choose gas rather than electricity for cooking, with each new installation being supported by a
government subsidy.
Energy consumption in the EU continued to grow between 1990 and 1999;
this trend is expected to continue.
Electricity consumption in the EU grew faster than final energy consumption between
1990 and 1999; this trend is expected to continue.
Final energy consumption and electricity
consumption growth, 1990–99
Final energy consumption
Million tonnes of oil equivalent
United Kingdom
Sweden
1 200
Spain
Portugal
1 000
Netherlands
Services
Luxembourg
800
Italy
Households
Ireland
Greece
600
Final energy
consumption:
total
Germany
France
Industry
400
Final energy
consumption:
electricity
Finland
Denmark
Transport
200
Belgium
Austria
Source: Eurostat.
5
6
Source: Eurostat.
10
2
3
4
Average annual % growth rate
20
1
99
0
19
-1
90
0
EU15
19
14
15
3. How rapidly is energy efficiency being increased?
The EU as a whole has an indicative target to decrease the energy intensity of final
consumption (energy consumption per unit of gross domestic product) by an average of 1 %
per year, between 1998 and 2010, above ‘that which would have otherwise been attained’. The
energy intensity of the EU economy decreased by 0.9 % per year during 1990–99, with little
apparent influence from policies on energy efficiency and energy saving. The slow pace with
which energy intensity decreased is due to a combination of a generally low priority for such
policies, abundant energy supplies and low fossil fuel prices. Only the substantial reduction in
Germany, helped by energy efficiency improvements, prevented an increase in overall energy
intensity. There were impressive reductions in Luxembourg due to one-off changes (the
closure of a steel plant) and in Ireland due to high growth in low energy-intensive industries
and the services sector. The implementation of energy efficiency policies in Denmark and the
Netherlands played an important role in the reductions in these countries.
The overall efficiency of conversion of primary to usable energy did not improve between
1990 and 1999 because efficiency gains in conversion processes were offset by a larger share
of converted fuels (e.g. electricity, petroleum products) in final energy consumption, a trend
that is expected to continue.
Combined heat and power (CHP) avoids much of the waste-heat loss associated with electricity
production as it produces both heat and electricity as useful outputs. The EU has an indicative
target to derive 18 % of all electricity production from CHP by 2010. This target may not be
reached because CHP investment across the EU, and in particular in Germany, the
Netherlands and the UK, has been hindered by increasing natural gas prices (the preferred
fuel for new CHP), falling electricity prices and uncertainty over the evolution of electricity
markets as liberalisation is extended. The German CHP law, passed in early 2002, provides an
example of how to alleviate this situation through a number of support mechanisms, including
agreed electricity purchase prices for existing CHP installations and for new, small-scale units.
Economic growth is requiring less additional energy consumption, but energy
consumption is still increasing.
With the exception of industry, no EU economic sector has decoupled economic/
social development from energy consumption sufficiently to stop growth of its energy
consumption.
The efficiency of electricity production from fossil fuels improved between 1990 and
1999, but electricity consumption from fossil fuels grew more rapidly, outweighing the
benefits to the environment from these improvements.
The share of electricity from combined heat and power (CHP) increased across the
EU between 1994 and 1998, but faster growth is needed to meet the EU target.
Share of gross electricity production from
combined heat and power plant, 1994 and 1998
Annual change in final energy intensity, 1990–99
%
Portugal
Spain
Italy
Greece
Belgium
Finland
France
Sweden
Austria
United Kingdom
Netherlands
Denmark
Germany
Ireland
Luxembourg
EU 15
80
70
18 % target by 2010
60
50
40
30
1994
20
1998
10
Source: Eurostat.
U
Be K
lg
iu
m
Fr
an
c
G e
re
ec
e
Ire
la
nd
EU
D 15
en
N
et ma
he rk
rla
nd
Fi s
nl
an
A d
Lu us
xe tri
a
m
bo
ur
g
Ita
ly
Sp
Po ain
rtu
G gal
er
m
a
Sw ny
ed
en
0
-4
-3
-2
-1
0
Average annual change (%)
Source: Eurostat.
1
2
Energy and environment in the European Union
4. Are we switching to less-polluting fuels?
The European Commission strategy to strengthen environmental integration within energy
policy stresses the need to increase the share of cleaner energy production and use. This is
reflected in the sixth environmental action programme which, as part of the climate change
priority actions, encourages the use of renewable and low-carbon fossil fuels for power
generation.
The share of fossil fuels in total energy consumption declined only slightly between 1990 and
1999. However the environment benefited from a major change in the fossil fuel mix, with
coal and lignite losing about one third of their market share and being replaced by relatively
cleaner natural gas, resulting in reduced emissions of greenhouse gases and acidifying
substances. This was due mainly to fuel switching in power generation, encouraged by the
high efficiency and low capital cost of combined-cycle gas plants, the liberalisation of
electricity markets, low gas prices in the early 1990s and the implementation of the EU large
combustion plant directive. Oil retained its share of the energy market, reflecting its
continued dominance in the ever-growing road and air transport sectors.
Baseline projections suggest only limited changes in the energy mix of total energy consumption
by 2010, highlighting the need to strengthen support for renewable energy (see next section).
The projections also indicate that fossil fuels will take a larger share of increasing electricity
production while the switch to gas-fired electricity production is expected to continue.
The switch from coal to natural gas is not expected to continue beyond 2010. Increased
electricity production from fossil fuels, slow growth of electricity production from renewable
sources and the decrease in nuclear-powered electricity production as nuclear plants start to
be decommissioned, are then likely to lead to increased carbon dioxide emissions.
Fossil fuels continue to dominate energy use, but environmental pressures have been
limited by switching from coal and lignite to relatively cleaner natural gas.
Fossil fuels and nuclear power continue to dominate electricity production, but the
environment has benefited from the switch from coal and lignite to natural gas.
Carbon dioxide emissions from electricity production fell by 8 % between 1990 and
1999 despite a 16 % increase in the amount of electricity produced.
Total energy consumption by source
Electricity production by source
Million tonnes of oil equivalent
1 600
3 500
TWh
Renewables
1 400
Nuclear energy
1 200
3 000
Renewables
2 500
Natural gas
1 000
2 000
800
Coal, lignite and
derivatives
600
Fossil
1 500
1 000
400
Crude oil and
products
0
0
20
10
500
19
99
200
19
90
16
Note: Fuels other than those listed in the legend have been
included in the diagram but their share is too small to be
visible.
Source: Eurostat, NTUA.
Nuclear
90
19
Source: Eurostat, NTUA.
99
19
10
20
17
5. How rapidly are renewable energy technologies being
implemented?
Meeting the renewable energy targets will be challenging. Taking account of the projected
increase in energy consumption, the growth rate of renewable energy (both electricity and
heat) will have to more than double compared with that between 1990 and 1999 if the EU’s
indicative target of a 12 % share of renewable energy sources in total energy consumption by
2010 is to be met. Similarly the growth rate in electricity from renewable energy sources will
have to increase roughly twofold to meet the EU indicative target of 22.1 % of gross
electricity consumption from renewable energy sources by 2010.
Financial, fiscal and administrative barriers, the low economic competitiveness of some
renewables and the lack of information and confidence amongst investors all hinder the
development of renewable energies.
There are, however, encouraging signs that growth in renewable energy can be considerably
accelerated with the right mix of support measures. For example the rapid expansion of EU
wind and solar electricity was driven by Denmark (wind only), Germany and Spain and resulted
from support measures such as ‘feed in’ arrangements that guaranteed a fixed favourable price.
Similarly, Austria, Germany and Greece contributed 80 % of new solar thermal installations in
the EU between 1990 and 1999. Solar thermal developments in Austria and Germany benefited
from proactive government policy coupled with subsidy schemes and communication strategies,
while in Greece the developments were helped by government subsidies.
Renewable energy contributes very little to the growing consumption of the transport sector.
The draft EU directive on the promotion of the use of biofuels for transport would require
almost 6 % of gasoline and diesel sold for transport purposes to come from biofuels by 2010.
However, the production of these fuels is energy intensive and may compete with other
energy crops for growing land. There is also some concern over the level of nitrogen oxides
emissions and particulates from biofuels.
The share of total energy consumption met by renewable energy grew only slightly
between 1990 and 1999. Projections of future energy demand imply that the growth
rate of energy from renewable sources needs to more than double to attain the EU
indicative target of 12 % by 2010.
The share of renewable energy in EU electricity consumption grew slightly between 1990
and 1999. Projections of future electricity demand imply that the rate of growth of electricity from renewable sources needs to double to attain the EU indicative target of 22.1 % by 2010.
Share of total energy consumption provided by
renewable energy sources
Share of electricity consumption met
by renewable energy sources, 1999
%
%
90
12
EU indicative
target (12 %)
6
Solar and wind
Geothermal
5
Hydro
4
80
70
Indicative targets
Large hydropower
All other renewables (excluding IMW)
Industrial and municipal waste
60
50
3
40
2
Biomass and waste
30
20
1
10
Note: Biomass/wastes include wood, wood wastes, other
biodegradable solid wastes, industrial and municipal waste
(of which only part is biodegradable), biofuels and biogas.
Source: Eurostat, NTUA.
0
EU
1
Au 5
st
Sw ria
ed
e
Fi n
nl
a
Po nd
rtu
ga
l
Ita
ly
Fr
a
D nce
en
m
ar
k
Sp
a
G in
re
G ece
er
m
an
y
N Irela
et
he nd
rla
nd
s
Lu
xe
UK
m
bo
u
Be rg
lg
iu
m
20
10
99
19
19
90
0
Notes: Industrial and
municipal waste (IMW)
includes electricity from
both biodegradable and
non-biodegradable energy
sources, as there are no
separate data available for
the biodegradable part. The
EU 22.1 % target for the
contribution of electricity
from renewable sources to
gross electricity
consumption by 2010 only
classifies biodegradable
waste as renewable. The
share of renewable
electricity in gross electricity
consumption is therefore
overestimated by an amount
equivalent to the electricity
produced from nonbiodegradable IMW.
National targets shown here
are reference values that
Member States agreed to
take into account when
setting their targets by
October 2002, according to
the renewable electricity EU
directive.
Source: Eurostat.
18
Energy and environment in the European Union
6. Are we moving towards a pricing system that better
incorporates environmental costs?
Energy prices currently do not always reflect the full costs to society, because prices often do
not totally take account of the impacts of energy production and consumption on human
health and the environment. Estimates of these external costs for electricity, for example, are
about 1–2 % of EU gross domestic product and reflect the dominance of environmentallypolluting fossil fuels in its production.
The sixth environmental action programme stresses the need to internalise these external
environmental costs. It suggests a blend of instruments that include the promotion of fiscal
measures, such as environment-related taxes and incentives, and the undertaking of a review
of subsidies that counter the efficient and sustainable use of energy, with a view to gradually
phasing them out.
Energy subsidies between 1990 and 1995 remained focused on the support of fossil fuels and
nuclear power, despite the environmental impacts and risks associated with these fuels.
Energy research and development expenditure by Member State governments fell between
1990 and 1998 but still concentrated on nuclear power. The share of the research and
development budget devoted to renewable energy sources and energy conservation
increased, but diminished in absolute terms. More recent data are needed to see whether
these energy subsidy patterns have continued.
With the exceptions of diesel and unleaded gasoline for transport, energy prices fell between
1985 and 2001. This reflected trends in international fossil fuel prices and the move towards
liberalised gas and electricity markets which stimulated greater price competition. The
reductions occurred despite increases in energy taxation — other than that for industrial
electricity where the energy tax fell.
In the absence of an appropriate policy framework that aims at the full internalisation of
external costs to the environment, and at improved management of energy demand, the
reduction of energy prices is likely to act as a disincentive to energy-saving investments and
may encourage energy consumption.
Energy prices generally fell between 1985 and 2001, offering little incentive for energy
saving.
Despite increases in taxation from 1985 to 2001, energy prices for most fuels dropped
and the overall demand for energy increased.
With fossil fuels supplying more than half the EU’s electricity, price levels would need
to be increased to include the estimated external costs of electricity production.
Subsidies continue to distort the energy market in favour of fossil fuels despite the
pressures these fuels place on the environment.
EU energy research and development expenditure has been reduced at a time when
innovation is needed to develop less-polluting technologies.
19
Introduction
This is the European Environment Agency’s
first indicator-based report on energy and
the environment.
Energy is central to social and economic
wellbeing. It provides comfort and warmth in
our homes, mobility for work and recreation,
and services that are essential to most
industrial and commercial wealth generation.
Energy supply itself is a major source of wealth
and employment in the EU. But all phases of
the energy production and consumption chain
place pressures on the environment (Figure 1).
Many of these are leading to exceedances of
tolerable levels of some pollutants and
contributing to climate change and lasting
damage to natural ecosystems, the built
environment, agriculture and human health.
The report covers the European Union (EU)
and is designed to provide policy-makers
with the information needed for assessing
how effectively environmental policies and
concerns are being integrated with energy
policies, in line with the environmental
integration process initiated by the
European Council Cardiff Summit1 in 1998.
It aims to support the EU sixth
environmental action programme
(European Commission, 2001a) and provide
input, from an environmental perspective, to
EU sustainable development (European
Council, 2001).
The three main goals of EU energy policy
(Council of the European Union, 1995) —
security of supply, competitiveness and
environmental protection — are strongly
interrelated. For example, improvements in
energy efficiency should benefit security of
supply, by reducing the amount of energy
consumed, and abate emissions of
greenhouse gases and other pollutants, by
reducing the consumption of fossil fuels.
Market liberalisation and more price
competition will benefit competitiveness
through reduced prices, but may act as a
disincentive to energy saving and encourage
consumption unless external costs are fully
1
internalised and energy demand is better
managed.
In line with the three main energy policy
goals, the specific environmental objectives
of EU energy policy in the area of
environmental integration (European
Commission, 1998a) are to:
• Reduce the environmental impact of the
production and use of energy
• Promote energy saving and energy
efficiency
• Increase the use of cleaner energy and its
share of total production.
A key challenge for economic, energy and
environmental policy is to develop
instruments and measures to encourage
further economic development, while
reducing and ultimately breaking the
linkage between the use of energy (both
production and consumption) and
environmental pressures.
The link between environmental pressures
and the drivers for energy demand can be
represented by the following relationship
(see Box 1 for a detailed explanation).
For a systematic evaluation of all aspects of
the environmental integration of the energy
sector, the report addresses six policy
questions drawing on this relationship. It
provides its assessment with the help of
indicators (Table 1) that are based on the
system established by the EEA for reporting
on environmental issues: the DPSIR
assessment framework (Box 2).
The report builds on statistics contained in
the Eurostat publication Integration —
indicators for energy. Data 1985–98 (Eurostat,
2001) and on projections used in the report
‘Economic evaluation of sectoral emission
reduction objectives for climate change’,
The Cardiff Summit invited all relevant formations of the Council to establish their own strategies for giving
effect to environmental integration and sustainable development within their respective policy areas. The
Summit requested that the relevant formations of the Council should identify indicators and monitor
progress, taking account of the Commission’s suggested guidelines, and invited the Transport, Energy and
Agriculture Councils to start this process (European Council, 1998).
20
Energy and environment in the European Union
• Is the use of energy having less impact on the environment, i.e. is the pressure being
reduced? (Section 1)
• Are we using less energy, i.e. are the driver and energy intensity (energy/driver)being
reduced? (Section 2)
• How rapidly is energy efficiency being increased, i.e. is the energy intensity being
reduced? (Section 3)
• Are we switching to less-polluting fuels, i.e. is the pressure intensity (pressure/
energy) being reduced? (Section 4)
• How rapidly are renewable energy technologies being implemented, i.e. to what extent
are we taking up these options for reducing the pressure intensity? (Section 5)
• Are we moving towards a pricing system that better incorporates environmental
costs, i.e. are economic decisions taking account of the pressures that energy-related
activities place on the environment? (Section 6)
2
New updated baseline
projections will be released
by the European
Commission in the second
half of 2002.
Figure 1
produced by Ecofys, AEAT and NTUA on
behalf of the European Commission’s
Environment Directorate General (Ecofys,
2001)2. Information is also drawn from
working documents, in the form of detailed
indicator fact sheets, prepared by the EEA
and its European topic centres and
reviewed by the European Environment
Information Observation Network
(EIONET), and a number of EEA reports on
greenhouse gas emissions (EEA 2001a and
2002a), atmospheric pollutants (EEA,
2002b), and transport and environment
(EEA, 2001b).
Special attention has been paid to public
electricity production, because of its growing
share of energy use, and because it is a key
option for introducing less-polluting energy
sources. The transport sector, which also has
a growing share of energy use, is dealt with
in detail in the European Environment
Agency’s report TERM 2001 — Indicators
tracking transport and environment integration in
the European Union (EEA, 2001b). It will also
be the theme of the upcoming EEA TERM
2002 report on transport and environment
indicators in accession
countries.
Examples of the environmental pressures imposed at different
stages of the energy supply and demand chain
Energy supply
Energy demand
Extraction of primary
energy sources
Transportation of
primary energy sources
Energy conversion
Energy transmission and
distribution
Energy consumption
• Methane from coal
mining, natural gas
and oil extraction
• Methane from pipeline
leakage
• Greenhouse gas and
air pollutant
emissions, and oil
discharges from oil
refineries
• Methane emissions
from natural gas
transmission and
distribution
• Greenhouse gas and
air pollutant emissions
from fuel combustion
• Oil spills
• Solid wastes from
mining
• Groundwater
contamination from
mining
• Radon from uranium
extraction
• Oil discharges
• Air pollution from
flaring
• Emissions of
greenhouse gases and
air pollutants from
energy consumption in
transportation
• Solid and nuclear
waste from power
production
• Noise and visual
intrusion from
renewable energy
plant
• Spills and leakage of
liquid fuels
• Emissions of
greenhouse gases and
air pollutants from
energy consumed in
transportation
21
Relationship between environmental pressures and the drivers for energy demand
The pressure placed on the environment
by any activity using energy will depend on:
• driver - the volume of activity that
generates demand for an energy-related
service (e.g. gross domestic product,
industrial value added, demand for road
freight delivery or passenger
transportation)
• energy intensity - the amount of energy
required per unit of driver
• pressure intensity - the pressure on the
environment (emissions, discharges,
wastes) per unit of energy use.
This points to a set of options for reducing
the environmental pressures associated
with the use of energy (energy production
and consumption):
• Reduce the driver by adopting
alternative social or economic practices
(e.g. a modal switch from private to
public transport).
• Reduce the linkage between the driver
and the use of energy (i.e. the energy
intensity) through more efficient energy
use and the use of less energy-intensive
processes.
• Reduce the environmental pressure
generated by the use of energy (i.e. the
pressure intensity), for example by:
– less dependence on the more
polluing fuels through the development
of alternative energy sources;
– deployment of advanced conversion
and end-use technologies that are less
polluting.
The DPSIR assessment framework
As shown in the figure, the DPSIR (Driving
forces, Pressures, State, Impact, Responses)
assessment framework recognises the
connections between the causes of
environmental problems, their impacts
and society’s responses to them.
• Drivers are the causes underlying the
problem.
DRIVERS
e.g. growth,
population, transport,
industry
RESPONSES
e.g. more efficient energy
use, policy targets,
renewable energies,
research, taxation
PRESSURES
e.g. air emissions,
discharges, wastes,
depletion of resources
IMPACT
e.g. climate change, loss
of biodiversity, ill health,
external costs
• Pressures are the pollutant releases into
the environment.
• State is the condition of the
environment.
• Impact is the effects of environmental
degradation.
• Responses are the measures taken to
reduce the drivers and pressures on the
environment or to mitigate their Impact
and effect on the state of the
environment.
The report provides an indicator-based
assessment based on the DPSIR frame-
Box 1
STATE
e.g. greenhouse gas
concentration levels, water
and soil quality
work. It assesses the factors affecting
energy use (driving forces), the emissions
and waste resulting from energy
production and consumption (pressures),
impacts on the environment and human
health (impacts) and the contribution of
policy measures designed to mitigate
environmental impacts (responses).
Box 2
22
Energy and environment in the European Union
Table 1
Indicators of environmental integration of the energy sector
Policy questions
Is the use of
energy having
less impact
on the
environment?
Indicators
Greenhouse gas Energy and non-energy related
emissions
greenhouse gas emissions
Position
in
DPSIR
Page
P
24
Change in energy and non-energy related
greenhouse gas emissions (by Member State)
P
26
Energy-related greenhouse
gas emissions by economic sector
P
27
Energy and non-energy related emissions of
sulphur dioxide (by Member State)
P
28
Energy and non-energy related emissions of
nitrogen oxides (by Member State)
P
30
Energy and non-energy related emissions of
non-methane volatile organic compounds
(by Member State)
P
31
Energy-related emissions of particulate matter
P
33
P
34
Spent nuclear fuel (by Member State)
P/S
35
Final energy consumption by economic sector
D
37
Growth in final energy consumption
and electricity consumption
D
38
Ratio of final energy consumption
to total energy consumption
R
40
Efficiency of electricity supplied by fossil fuels
R
42
Electricity from combined heat and power
R
43
Energy intensity (by Member State)
R/D
44
Energy intensity by economic sector
R/D
45
Are we switching
to less-polluting
fuels?
Total energy consumption by source
D/R
48
Electricity production by source
D/R
49
How rapidly are
renewable energy
technologies
being
implemented?
Total energy consumption from
renewable sources
R
52
Consumption of electricity from
renewable sources
R
53
Are we moving
towards a pricing
system that better
incorporates
environmental
costs?
Final energy prices
D/R
55
Energy taxes
R
56
External costs of electricity production
I
58
Energy subsidies
D/R
59
Energy-related research and
development expenditure
R
60
Air pollution
Other energyOil discharged to the marine
related pressures environment from coastal refineries,
offshore installations and oil tankers
Are we using
less energy?
How rapidly is
energy efficiency
being increased?
Efficiency of
energy supply
Efficiency of
energy
consumption
D = Driver, P = Pressure, S = State, I = Impact, R = Response
23
1. Is the use of energy having less
impact on the environment?
X
PRESSURE
ENERGY
Some pollutants can be responsible for more
than one effect. For example methane is
both a greenhouse gas and an ozone
precursor, and sulphur dioxide contributes
both to air pollution (directly and also
indirectly by forming fine particulates) and
to acidification. The reduction of one
pollutant may therefore yield benefits in
Not all pollution from energy-related
activities arises from the combustion of fossil
fuels. Some combustion-related emissions,
such as nitrogen oxides, arise from the use
of biomass and waste as fuels. Also, while
nuclear power generation produces
negligible emissions during normal
operation, it is accumulating substantial
quantities of long-lived and highly
radioactive waste for which no generally
acceptable disposal route has yet been
developed.
ENERGY
DRIVER
Options for reducing these pressures can be
broadly classified into improved
management and maintenance, end-of-pipe
clean-up, the use of new, less-polluting
technologies and switching to cleaner fuels,
and, indirectly, more efficient energy use
and the use of less energy-intensive
processes.
relation to more than one impact. Policies
and measures to reduce greenhouse gas
emissions (e.g. switching from coal to
natural gas) also often lead to a reduction of
emissions of air pollutants. In contrast,
however, in some exceptional cases actions
to reduce one pollutant may cause an
increase in another. For example the use of
three-way catalysts has reduced emissions of
carbon monoxide, nitrogen oxides (NOX)
and non-methane volatile organic
compounds from petrol cars, but with an
increase in nitrous oxide emissions. The
development of an air pollution strategy has
addressed this inter-linkage between
pollutants by shifting to a multi-pollutant,
multi-effect approach.
X
The production and consumption of energy
places a broad range of pressures on both
the natural and the built environment, as
well as on human health. Because fossil fuels
(i.e. coal, lignite, oil and natural gas)
account for the bulk of energy supplies in
the European Union (EU) (80 % in 1999)
most attention in this section focuses on the
environmental pressures arising from their
use, namely: greenhouse gas emissions, air
pollution from acidifying substances, ozone
precursors and particulate matter, and
oil discharges.
DRIVER
Oil pollution from coastal refineries, offshore installations and maritime transport
has been reduced, but still places significant pressures on the marine environment.
=
Measures taken to reduce atmospheric pollution from energy use sector are
proving successful, with a number of Member States on track to meet the
reduction targets set for 2010.
PRESSURE
Emissions of greenhouse gases in the EU fell between 1990 and 2000, but without
additional measures are unlikely to fall further to 2010 and beyond because of
increased energy-related emissions. Ongoing successful initiatives in some
Member States appear to point the way forward.
24
Energy and environment in the European Union
Total EU greenhouse gas emissions fell between 1990 and 2000, but
energy-related emissions, by far the largest component, fell considerably less,
making significant reductions in total emissions in coming decades unlikely.
Figure 2
Greenhouse gas emissions
Million tonnes of CO2 equivalent
EU Kyoto target
4 500
N2O (energy use)
4 000
3 500
levels. These early successes might suggest
that the EU is on track to achieve its Kyoto
Protocol target and to achieve more ambitious emission reductions in the longer term.
This is far from being the case3, for three
reasons.
CH4 (energy use)
3 000
2 500
2 000
CO2 (energy use)
1 500
1 000
Non-energy related
500
0
99
90
19
19
Notes: The Kyoto target is
for total emissions of carbon
dioxide, methane, nitrous
oxides and fluorinated
gases.The baseline
projections for 2010 are
taken from the report
Economic evaluation of
sectoral emission reduction
objectives for climate
change produced by Ecofys
— Energy and Environment,
AEA Technology and NTUA
on behalf of the European
Commission’s Directorate
General Environment
(Ecofys, 2001). See Annex 1
for an outline of the scenario
assumptions underlying
these projections.
Greenhouse gas emissions
for 1990 to 1999 are taken
from the EEA European
Community and Member
States greenhouse gas
emission trends 1990–1999
(EEA, 2001a) and the
underlying EU greenhouse
gas inventory maintained by
EEA, assisted by the
European Topic Centre on
Air and Climate Change
(ETC-ACC).
Source: EEA, Ecofys.
10
20
1.1.Greenhouse gas emissions
Concern over greenhouse gas (GHG)
emissions and climate change is set to remain a
priority in EU policy. The EU is committed to
taking a lead in reducing global emissions, and
the first step is to meet its target, set under the
Kyoto Protocol, for an 8 % reduction in total
emissions by 2008–12 compared with the 1990
level. Although challenging, this should be
regarded as only a first step, since it is
estimated that global emissions will need to be
reduced by about 70 % in the long term if the
atmospheric GHG concentration is to be
stabilised at an acceptable level (IPCC, 2001).
The European Commission has acknowledged
this by proposing an EU target to reduce
atmospheric emissions by an average of 1 %
per year up to 2020, with a global target of
20–40 % reduction by 2020, both from 1990
levels (European Commission, 2001a and
2001b).
Total EU GHG emissions (i.e. carbon dioxide,
methane, nitrous oxide and fluorinated gases)
fell by 3.9 % between 1990 and 1999 (EEA,
2001a). According to data just released for
2000 (EEA, 2002a) the EU achieved its
original commitment to stabilise carbon
dioxide (CO2) emissions in 2000 at 1990
3
Firstly, the reduction in emissions came mainly
from a non-energy related reduction of 13.9 %.
Energy-related emissions fell by only 1.9 %.
Since non-energy sources accounted for only
18 % of emissions (in 1999) a bigger contribution to reductions will have to come from
energy production and consumption if future
abatement targets are to be met. The new 2000
data show that we are moving in the opposite
direction. Total emissions increased by 0.3 %
from 1999 to 2000 as a result of increased
energy-related emissions (EEA, 2002a).
Secondly, about half the stabilisation of CO2
emissions at 1990 levels by 2000 resulted
from one-off reductions in Germany and the
UK (Fraunhofer, 2001). From 1999 to 2000,
carbon dioxide emissions stopped falling in
Germany and increased by 1.2 % in the UK
(EEA, 2002a).
Thirdly, baseline projections (see Annex 1),
made for the European Commission (Ecofys,
2001), suggest that total EU GHG emissions
in 2010 will be about the same as in 1990.
Underlying this trend is an increase in
energy-related emissions, partially offset by a
further reduction in non-energy emissions.
The fact that energy-related GHG emissions are
proving particularly difficult to reduce suggests
little progress with the fundamental restructuring of energy production and consumption that
is vital if more ambitious long-term reduction
targets are to be attained. The nature of most
energy production and consumption patterns
for the next 30 to 50 years (power plants,
buildings, transport modes, etc.) will be
determined by imminent decisions; reducing
energy-related emissions in the long run
therefore requires policy action now.
This statement is based on the assumption, for the purpose of this report, that the EU will meet its Kyoto
Protocol target by using only domestic policies and measures (including emissions trading within the EU).
At the seventh Conference of the Parties to the UN Framework Convention on Climate Change (Marrakesh,
November 2001) the Parties agreed to the rules for the use of both the flexible mechanisms (joint
implementation, clean development mechanism, international emissions trading) and the sinks for meeting
the Kyoto targets (see Box 3) (UN 2001a, UN 2001b). After ratification (expected in 2002), the European
Community and the EU Member States could therefore also use these options to meet their targets,
although it is not yet known to what extent this will take place.
25
Kyoto mechanisms
In addition to domestic action by
industrialised countries, the Kyoto
Protocol provides three ways in which
action taken abroad can help countries to
meet their own targets for reductions in
emissions of greenhouse gases. The three
‘Kyoto mechanisms’ comprise two projectbased mechanisms (joint implementation
and the clean development mechanism)
and international emissions trading.
Joint implementation
Joint implementation (JI) is provided for
under Article 6 of the Kyoto Protocol. It
enables industrialised countries to work
together to meet their emission targets. A
country with an emissions reduction target
can meet part of that target through a
project aimed at reducing emissions in any
sector of another industrialised country’s
economy. Any such projects need to have
the approval of the countries involved and
must result in emission reductions that
would not have occurred in the absence of
the JI project. The use of carbon sinks
(e.g. forestry projects) is also permitted
under joint implementation.
Clean development mechanism
Article 12 of the Kyoto Protocol sets out a
clean development mechanism (CDM).
This is similar to JI, but project activities
must be hosted by a developing country.
As with JI, CDM projects must result in
reductions that are additional to those
that would have been achieved in the
absence of the project. They also have the
additional aim of promoting sustainable
development in the host developing
country. The CDM is supervised by an
executive board, which approves projects.
CDM projects have been able to generate
credits since January 2000 and these can
be banked for use during the first
commitment period (2008–12). The rules
governing CDM projects allow only certain
types of sinks projects (afforestation and
reforestation) and countries will not be
able to use credits generated by nuclear
power projects towards meeting their
Kyoto targets. To encourage small-scale
projects, special fast-track procedures are
being developed.
Emissions trading
Article 17 of the Kyoto Protocol allows
countries that have achieved emissions
reductions over and above those required
by their Kyoto targets to sell the excess to
countries finding it more difficult or
expensive to meet their commitments. In
this way, it seeks to lower the costs of
compliance for all concerned.
Box 3
26
Energy and environment in the European Union
Most Member States have failed to reduce greenhouse gas emissions in line
with their share of the EU commitment under the Kyoto Protocol.
driving these changes for Germany and the
UK were one-off.
Change in total and energy-related
greenhouse gas emissions
Figure 3
Luxembourg
Germany
United Kingdom
Finland
France
Sweden
Austria
Denmark
Italy
Belgium
Netherlands
-50
Total greenhouse gases 1990–99
Greece
Energy-related
greenhouse gases 1990–99
Ireland
Kyoto Protocol target
1990–2010
Spain
-40
-30
-20
Notes: Target values are for
total emissions. The targets
for France and Finland are
zero (i.e. no change on
1990). For Denmark,
estimates that reflect
adjustments for electricity
trading (import and export)
in 1990 give a reduction in
total greenhouse gas
emissions of 4.6 % between
1990 and 1999 compared
with the increase of 4 %
shown in Figure 3. This
methodology is used by
Denmark to monitor
progress towards its national
target under the EU burdensharing agreement.
Source: EEA.
Portugal
EU 15
-10
0
10
% change
20
30
40
The EU Kyoto Protocol target has been
shared amongst Member States in a way that
allows for their different economic
development patterns.
Finland, France, Germany, Luxembourg,
Sweden and the UK limited their total GHG
emissions between 1990 and 1999 by at least
enough to be in line with their targets for
2008–12 under the EU burden-sharing
agreement4. The notable improvement in
Luxembourg is due to the closure of a
primary steel plant (i.e. steel-making from
iron ore) with partial transfer of production
to electric steel-making using steel scrap.
Germany has also made substantial
reductions against a challenging target and,
because it is the largest emitter, this,
together with the UK reduction, has been
responsible for the overall reduction
achieved by the EU. However, as shown in
the indicator that follows, some of the factors
4
A number of Member States are finding it
increasingly difficult to control their GHG
emissions. Some, notably the Netherlands,
are beginning to pursue joint
implementation and clean development
mechanism projects under the Kyoto
Protocol flexible mechanisms (see Box 3)
to supplement domestic (including EU)
abatement measures. It is not yet known to
what extent Member States will use the
flexible mechanisms. The analysis in this
report therefore assumes that only domestic
policies and measures will be used to meet
the Kyoto targets.
For all Member States, with the exception
of Sweden, the performance is worse for
energy-related than for total emissions. The
large proportion of total emissions that are
energy-related (79 % in 1990, rising to 82 %
in 1999) means that further progress
towards the Kyoto burden-sharing targets,
and even more for later and bigger
reduction targets, will require additional
cuts in emissions from energy production
and consumption.
A number of initiatives in Member States and
the EU are paving the way for long-term
reductions of emission from energy use. For
example seven Member States have already
introduced a CO2 tax and the UK launched
the first national emissions trading scheme in
early 2002. At the EU level, the European
Commission proposed a directive on an
internal EU-wide trading scheme to start in
2005 which would have the dual benefit of
limiting the cost of meeting emission
reduction targets while giving the EU an early
experience in emissions trading before a
global trading scheme possibly gets off the
ground in 2008, as part of the Kyoto flexible
mechanisms (European Commission, 2001j).
Following sections provide further examples
of successful Member State and EU initiatives.
This conclusion is based on a ‘distance-to-target’ assessment which measured how far emissions in 1999
were from a linear emission reduction target path from 1990 to 2010, and assessed whether a Member
State was on track to meet its target. For a graphical illustration of the results of this ‘distance-totarget’ analysis see related graph in the Summary.
27
The reduction in energy-related greenhouse gas emissions over the last
decade was achieved through considerable reductions by the manufacturing
and energy supply sectors, mostly offset by growth in transport.
Transport5 is the main area for growth in
energy-related GHG emissions, having
increased by 19.5 % across the EU between
1990 and 1999, reflecting the growing demand
for personal and freight transport. Road
transport dominates the sector, accounting for
84 % of emissions in 1998. The bulk of transport emissions is of carbon dioxide (97 %), but
transport is also a growing source of nitrous
oxide (up from 1.7 % to 2.9 % of transport
emissions between 1990 and 1999). This gas is
produced in the vehicle exhaust catalysts used
to reduce nitrogen oxides and carbon
monoxide emissions from passenger cars, but
the effect should be reduced as new catalysts
that emit fewer nitrous oxides (while giving a
greater reduction in emissions of nitrogen
oxides) become available.
GHG emissions from industry6 fell by 8.8 %
between 1990 and 1999. The main contributor
was Germany as a result of closures of old plant
fuelled with coal and lignite, and structural
changes towards less energy-intensive
manufactured products, particularly in the
New Länder, combined with investment in
energy efficiency measures. Without Germany,
EU manufacturing industry emissions would
have been on a rising trajectory by 1999.
Between 1990 and 1999, GHG emissions from
the energy supply sector7 fell by 9 % despite an
increase in energy demand of 23 %. The main
contribution to this was an 8 % cut in CO2
emissions from electricity production. This is
linked to switching from coal and lignite to
natural gas, increased efficiency in fossilfuelled power plant and an expansion of
electricity production from nuclear and
renewable sources. Much of the reduction was
achieved in Germany, mainly from the closure
of low-efficiency lignite power plant, in
particular in the New Länder, and energy
efficiency improvements, and in the UK mainly
from fuel switching from coal to natural gas.
Looking ahead, baseline projections (Ecofys,
5
6
7
Figure 4
Energy-related greenhouse gas emissions
Million tonnes of CO2 equivalent
4 000
3 500
3 000
Transport
2 500
2 000
Household and
services
1 500
Industry
1 000
Energy supply
500
0
90
19
99
19
2001) expect total energy-related GHG
emissions to grow between 2000 and 2010.
This is driven mainly by continued growth of
emissions from transport, although this
should be less than that experienced
between 1990 and 1999 because of the
voluntary agreement between the EU and
car manufacturers to reduce average carbon
dioxide emissions from the new passenger
car fleet by an average of 25 % by 2008 (the
ACEA Agreement). The growth in emissions
from transport is partially offset by a
continued fall from industry, driven by
further structural change and increased
investment in energy efficiency. Emissions
from the energy supply sector are expected
to stay about level between 2000 and 2010 as
the demand for energy continues to grow,
but is offset by efficiency improvements and
further switching to less carbon-intensive
fuels, particularly natural gas.
Looking beyond 2010, there is an added
potential for growth in energy-related
emissions with the rundown of nuclear
power production should this be replaced by
fossil-fuelled power stations.
Transport emissions exclude emissions from international transport in accordance with reporting
requirements of the EU greenhouse gas monitoring mechanism (and also the United Nations
Framework Convention on Climate Change (UNFCCC)).
Industry emissions are those from all manufacturing industries, including construction. Industry emissions
also include emissions from electricity and heat production by the industry.
Energy supply sector emissions include those from coal mining, oil and gas exploration and extraction,
public electricity and heat production, oil refining and other industries engaged in converting primary
energy into energy products. It also includes fugitive emissions from the exploration, production,
storage and transport of fuels.
10
20
Source: EEA, Ecofys.
28
Energy and environment in the European Union
Energy-related sulphur dioxide emissions fell considerably between 1990 and
1999; this is the main reason that the EU and most Member States are
expected to achieve their 2010 targets for reducing total sulphur dioxide
emissions, as set in the national emission ceilings directive.
Change in total and energy-related
sulphur dioxide emissions
Figure 5
Germany
Luxembourg
Denmark
United Kingdom
Finland
Austria
Sweden
Netherlands
Belgium
Total SO2
1990–99
France
Italy
Energyrelated SO2
1990–99
Spain
Ireland
Target
1990–2010
Portugal
Greece
EU 15
-100
-80
-60
-40
-20
0
10
% change
Note: Target values are for
total emissions.
Source: EEA.
1.2. Air pollution
Sulphur dioxide (SO2) is produced by the
oxidation of sulphur present mainly in coal,
lignite and oil fuels. Together with nitrogen
oxides it is the main energy-related cause of
acid deposition8 resulting in damage to soil
and water quality, crops and other vegetation
and terrestrial and aquatic ecosystems. Acid
deposition also damages buildings, and is
linked to adverse health effects, both directly
and through particulate formation. SO2 itself
also causes direct adverse effects on human
health.
Action to reduce SO2 emissions have been
taken at the EU level through measures that
include targets for reducing total SO2
emissions for the EU and each Member State
set in the national emission ceilings directive
(NECD) (European Parliament and Council,
2001c)9.
8
Energy production and consumption
accounted for over 90 % of emissions in
1999 (see Table 2), with 51 % of this coming
from power production. Total emissions
have been reduced by 59 % between 1990
and 1999, putting the EU on track to achieve
the 77 % reduction by 2010 (relative to
1990) set in the NECD.
With regard to total emissions, most Member
States are on track to achieve their NECD
targets. Exceptions are Greece, Ireland,
Portugal and Spain10. The same is true for
energy-related emissions, although Spain’s
rate of improvement was marginally better
for these.
All energy activities have contributed to the
reduction. Energy supply cut emissions by
59 % between 1990 and 1999, encouraged by
the requirements of the directive on large
combustion plant (European Parliament and
Council, 2001a), but this remains the main
source, accounting for 61 % of the total.
More than half of the decrease can be
attributed to the introduction of flue gas
desulphurisation (FGD) and the use of lowsulphur coal and oil. The remainder is due
mainly to changes in electricity production
including fuel switching (mainly from coal
and lignite to natural gas) and improved
efficiency, with a small element due to
growth in production from nuclear and
renewable sources (see Box 4).
The fall in energy-related emissions from
households and services (72 % in total) was
due mainly to fuel switching to gas. Industry
reduced energy-related emissions by 59 % by
greater use of gas in place of coal, lignite
and oil for space and process heating, fitting
flue gas desulphurisation and as a result of
structural change. The fall in transport
(43 %) was achieved mainly through the
reduced sulphur content of diesel fuel in
response to the 1993 directive on the
sulphur content of liquid transport fuels
(European Parliament and Council, 1993a).
Ammonia emissions are also an important source of acid deposition but energy-related activities only
accounted for 2.4 % of total EU ammonia emissions in 1999.
9 NECD targets were set in absolute terms, but for comparative purposes they are presented here as
percentages. Consequently, should the 1990 emissions inventories be revised, this would result in a change
in the percentage targets used here.
10 This conclusion is based on a ‘distance-to-target’ assessment which measured how far emissions in 1999
were from a linear emission reduction target path from 1990 to 2010, and assessed whether a Member
State was on track to meet its target.
29
Table 2
SO2 emissions by source (ktonnes)
1990
1999
10 104
4 132
828
469
Industrial energy use
3 023
1 221
Other energy use
1 596
445
811
463
16 362
6 730
Energy supply
Transport
Non-energy sources
Total
Note: ‘Other energy use’
includes households and
services.
Source: EEA.
Box 4
How have reductions in nitrogen oxides and sulphur dioxide been achieved in the electricity sector?
NOXand SO2 emissions from electricity
production have fallen by 44 % and 60 %
respectively over the period 1990 to 1999,
despite a 16 % increase in the amount of
electricity produced.
If the electricity production industry had
remained unchanged (in terms of the
type of power plant used and the fuel
mix) from 1990, emissions of NOX and
SO2 would each have increased by 16 % by
1999, in line with the increase in
electricity output. In fact, annual
emissions of NOX fell by 44 %, and SO2 by
60 %, as a result of a number of changes
during the period.
Explanations for the reduction of emissions of
nitrogen oxides in the electricity sector
Million tonnes
3.0
Excluding the increased
share of nuclear and
renewable energy
2.5
2.0
Excluding efficiency
improvements
1.5
Excluding fossil fuel
switching
1.0
Excluding combustion
modification & flue
gas treatment
0.5
Actual emissions
99
19
96
19
93
19
19
Explanations for the reduction of emissions of
sulphur dioxide in the electricity sector
Million tonnes
12
Excluding the increased
share of nuclear and
renewable energy
10
8
Excluding efficiency
improvements
6
Excluding fossil
fuel switching
4
Excluding flue gas
desulphurisation and the
use of low sulphur fuels
2
Actual emissions
19
99
96
19
19
93
0
0
Most of the remaining decrease, for both
NOX and SO2, was due to changes in the
fossil fuel mix (20–25 %), improved
efficiency of fossil-fuelled electricity
production (about 10 %) and an
increased share of nuclear and renewables
(about 10 %).
Note: Data and analysis presented here are preliminary
results of ongoing work to refine and improve associated
statistics and methodology.
Source: EEA.
19
9
For both NOX and SO2, around 60 % of
the decrease was due to the introduction
of emission-specific abatement measures.
For NOX the most important were the
introduction of flue gas treatment and the
use of low NOX burners. For SO2 emissions
they were the introduction of flue gas
desulphurisation (FGD) and the use of
lower-sulphur coal and fuel oil.
90
0
Note: Data and analysis presented here are preliminary
results of ongoing work to refine and improve associated
statistics and methodology.
Source: EEA.
30
Energy and environment in the European Union
Energy-related emissions of nitrogen oxides fell, placing the EU and some
Member States on track to achieve their 2010 reduction targets for total
nitrogen oxide emissions, as set in the national emission ceilings directive.
Change in total and energy-related
emissions of nitrogen oxides
Figure 6
United Kingdom
national emission ceilings directive (NECD)
target for an EU-level cut of total
emissions by 51 % (relative to 1990) should
be attained by 2010.
Germany
Sweden
Luxembourg
Netherlands
Italy
Denmark
France
Finland
Total NOx
1990–99
Belgium
Energyrelated NOx
1990–99
Ireland
Austria
Spain
Portugal
Target
1990–2010
Greece
EU 15
-60
-40
Note: Target values are for
total emissions.
Source: EEA.
-20
% change
0
20
Acidifying nitrogen oxides (NOX) are
produced by the oxidation of nitrogen
present in coal and lignite and in
combustion air. They have similar impacts
on the environment as sulphur dioxide. In
addition NOX is an important precursor for
the formation of ground-level ozone, which
can have adverse effects on human health
and can damage crops and other vegetation.
Energy use accounted for nearly all (97 %)
of NOX emissions in 1999, with over half of
this coming from transport (65 %) (see
Box 5). Total emissions fell by 25 % between
1990 and 1999, which falls short of the 30 %
reduction by 2000 targeted in the fifth EU
environment action plan. However, if the
rate of improvement is sustained, the
The NECD sets targets at Member State
level as well as for the EU overall. Germany,
Italy, Luxembourg, the Netherlands,
Sweden and the UK are currently on track
to attain their targets11. Other countries
need to accelerate the reduction rates
achieved between 1990 and 1999, while
Greece, Ireland, Portugal and Spain need
to reverse their growing emission trends.
Across the EU the greatest absolute
reduction came from transport, due mainly
to the introduction of catalytic converters
on motor vehicles. However, some of the
environmental benefit from implementing
this technology has been cancelled by the
growth in road transport. The energy
supply and industry sectors also
considerably reduced their energy-related
emissions, by 43 % and 23 % respectively.
This was achieved through a combination
of measures, encouraged by the
requirements of the large combustion plant
directive (European Parliament and
Council, 2001a), including the use of
pollution abatement technologies (e.g. low
NOX burners, flue gas treatment and
selective catalytic converters) and fuel
switching from coal and lignite to natural
gas, and by the requirements of the
integrated pollution prevention and
control directive (European Parliament
and Council, 1996a) on the use of best
available technology. The reduction in
emissions from manufacturing industry was
also linked to some structural changes away
from energy-intensive industries.
11 This conclusion is based on a ‘distance-to-target’ assessment which measured how far emissions in 1999
were from a linear emission reduction target path from 1990 to 2010, and assessed whether a Member
State was on track to meet its target.
31
The reduction in energy-related emissions of non-methane volatile organic
compounds (NMVOCs) has greatly helped to put the EU and some Member
States on course to achieve their 2010 targets for reducing total NMVOC
emissions, as set in the national emission ceilings directive.
Non-methane volatile organic compounds
(NMVOCs) in the atmosphere react with
nitrogen oxides in the presence of sunlight
to form ozone. Ozone formed by such
processes can build up at ground level,
particularly in urban areas, having an
adverse effect on human health as well as
damaging crops and other vegetation.
Change in total and
energy-related NMVOC emissions
Figure 7
Germany
Netherlands
United Kingdom
Austria
Luxembourg
Energy use accounts for about half of
NMVOC emissions, with the bulk of this
coming from transport (see Box 1). Total EU
emissions were reduced by 28 % between
1990 and 1999, which falls short of the 30 %
reduction target for 1999 set in the fifth EU
environment action plan. However, energyrelated emissions were reduced by 35 %. The
national emission ceilings directive (NECD)
has set a target for a 60 % cut in total
emissions, to be attained by 2010, and the
EU overall is on course to attain this target12.
Most Member States, led by Germany, the
Netherlands and the UK, have shared in the
reduction. Portugal and Greece increased
emissions over the 1990 to 1999 period.
France
Total
NMVOCs
1990–99
Denmark
Energyrelated
NMVOCs
1990–99
Belgium
Italy
Sweden
Finland
Ireland
Spain
Target
1990–2010
Greece
Portugal
EU 15
-80
-60
-40
-20
% change
0
The greatest absolute reduction came from
transport (38 %), due mainly to the
introduction of catalytic converters and
other exhaust gas treatments on road
vehicles, driven by stricter EU standards for
both passenger and commercial vehicle
emissions (see Box 5). Nonetheless transport
remains the largest source, accounting for 74
% of all energy-related emissions in 1999.
Emissions from the energy supply sector
were also reduced (37 %), mainly through a
cut in fugitive emissions from the storage
and distribution of petrol, driven by
implementation of the EU directive on the
control of volatile organic compound (VOC)
emissions from petrol (European Parliament
and Council, 1994).
12 This conclusion is based on a ‘distance-to-target’ assessment which measured how far emissions in 1999
were from a linear emission reduction target path from 1990 to 2010, and assessed whether a Member
State was on track to meet its target.
20
40
Note: Target values are for
total emissions.
Source: EEA.
32
Energy and environment in the European Union
What further improvements can be anticipated in emissions of nitrogen oxides and non-methane volatile
organic compounds from energy-related activities?
Box 5
Despite significant improvements between
1990 and 1999, transport remains by far the
largest source of NOX (> 60 % of total
emissions) and the main energy-related
source of NMVOCs (37 % of total emissions).
The downward trend in road transport
emissions should be maintained in the
future through the increasingly stringent
standards for vehicle exhaust emissions set in
the Euro I, II, III and IV standards for cars,
goods vehicles and heavy-duty vehicles
(European Parliament and Council 1991,
1993b, 1998a and 1999). Non-road transport
emissions arise mainly from off-road vehicles
and shipping.
Emissions of non-methane volatile organic compounds
The actual rate of reduction will be
determined by the rate of replacement of
the EU vehicle fleet and the rate of growth
in demand for mobility. Car lifetimes are
of the order of 10 to 15 years, so the full
benefit of these improved standards will
not be gained for some time. Moreover,
there are uncertainties over the long-term
performance of exhaust catalysts under
actual operating conditions. However, in
the long term the reduction will be
substantial in view of the large
improvements in emission standards
required for 2000 and 2005 vehicles.
Emissions of nitrogen oxides
Million tonnes
16
Million tonnes
14
14
12
12
10
10
Non-energy
Other energy
8
8
Industry
Non-energy
Other energy
6
Road transport
Industry
4
Other transport
2
Road transport
4
Energy supply
2
Energy supply
0
0
1990
Other transport
6
1990
1999
Source: EEA.
1999
Source: EEA.
Current and future vehicle emission standards
for non-methane volatile organic compounds
Current and future vehicle emission standards
for nitrogen oxides
Relative emission standard
1.0
Petrol cars
Petrol cars
Source: EEA.
20
05
00
-9
92
20
20
20
19
-9
92
19
Note: The relative emission standard shows how the standard has been
tightened relative to the first that was set. For example the emission
standard for NVMOCs from petrol cars in 2008 is only 16 % of the 199293 standard and therefore has a relative emission standard of 0.16.
Source: EEA.
20
0.0
08
0.0
05
0.2
00
0.2
96
0.4
3
0.4
96
0.6
19
0.6
Heavy-duty vehicles
19
Heavy-duty
vehicles
Diesel cars
0.8
3
Diesel cars
0.8
08
1.0
20
Relative emission standard
33
Energy-related emissions of particulates fell by 37 % between 1990 and 1999,
mainly as a result of reductions from power plant and road transport.
Breathing in fine particulate matter can have
an adverse effect on human health. The
impact is predominantly associated with PM10
(particulate matter with a diameter of
10 µm or less). Inhalation of such particles
can increase the frequency and severity of
respiratory symptoms and the risk of
premature death.
Energy-related primary and
secondary particulate emissions
Million tonnes
Other transport
25
20
PM10 results from direct emissions (primary
PM10) and from precursors, such as
nitrogen oxides, sulphur dioxide and
ammonia, which are partly transformed into
particles by chemical reactions in the
atmosphere (secondary PM10). Energyrelated particulate emissions accounted for
87 % of total EU emissions in 1990, falling to
83 % in 1999. Of these, about 14 % came
from primary sources, 61 % from NOX and
24 % from SO2. However, these estimates are
less accurate than for other pollutants
because of uncertainties in emissions of
other particulate species, such as organic
and inorganic carbon compounds.
Total energy-related PM10 emissions are
estimated to have fallen by 37 % between
1990 and 1999, with most of the reduction
coming from the NOX (13 %) and SO2
(23 %) precursors. Energy supply, road
transport and industry contributed most to
this reduction through fuel switching to
lower-sulphur fuels, end-of-pipe
treatments in industry and power supply, and
increased penetration of catalytic converters
in road vehicles.
There are no emission limits or targets for
PM10 within the EU, although the area
Figure 8
Road transport
SO2
Other energy
NOX
Industry
Primary PM10
Energy supply
15
10
5
0
1990 Sector
1999 Sector
1990 Pollutant
benefits from limits to the precursors under
the national emission ceiling directive. Air
quality concentration limit values are set
under the ambient air quality directive
(European Parliament and Council, 1996c).
Despite the improvements described above,
the Auto-Oil II programme (European
Commission, 2000c) has estimated that these
air quality standards are likely to be
exceeded in urban locations, mainly as a
result of the continued growth of road
transport.
1999 Pollutant
Notes: PM10 arising from
NH3 is included in the totals
but it is not visible in the
graph because it is such a
small fraction. Estimates for
particulates are much more
uncertain than for other air
pollutants.
Source: EEA.
34
Energy and environment in the European Union
Oil pollution from offshore installations and coastal refineries has been
reduced, but major oil tanker spills continue to occur.
Figure 9
1.3. Other energy-related
pressures
Marine environment oil pollution
From refineries and offshore installations
Oil discharge (thousand tonnes)
25
20
Offshore installations
Refineries
15
10
5
19
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
90
0
Oil discharges from offshore installations
and refineries were reduced by about 40 %
between 1990 and 1999. Refineries reduced
their discharges by 68 % and offshore
installations by 35 %. These reductions were
achieved through the increased application
of cleaning and separation technologies and
despite increasing production.
From accidental oil tanker spills (above 7 tonnes per spill)
Oil spilt (thousand tonnes)
160
140
120
100
80
60
40
20
(109
tonnes)
(250
tonnes)
(171
tonnes)
00
20
99
19
98
19
97
19
96
19
95
19
94
19
93
19
92
19
91
19
19
90
0
Sources: Eurostat, OSPAR, CONCAWE, DHI, ITOPF.
Oil pollution from coastal refineries, offshore installations and maritime transport
place significant pressures on the marine
environment. Refinery emissions have been
controlled under national integrated
pollution control regulations and are now
also subject to the EU directive on integrated
pollution prevention and control, which
requires the application of the best available
technology to new and refurbished plant.
Discharges from offshore installations are
regulated by the dangerous substances
directive (European Parliament and
Council, 1976) and the OSPAR Convention
for the Protection of the Marine
Environment of the North East Atlantic.
Tanker oil spills continue, although both the
frequency and amounts involved have
declined over the past decade. This may
reflect the erratic occurrence of such
accidents, but it is encouraging that the
improvement has come despite increasing
maritime transport of oil. Increased safety
measures, such as the introduction of
double-hulled tankers, have contributed to
this improvement. However, the data do not
include spills and discharges below 7 tonnes,
and therefore underestimate oil pollution
from maritime transport.
35
Highly radioactive waste from nuclear power production continues to
accumulate: a generally acceptable disposal route is yet to be identified.
LLW and some ILW is routinely disposed of
at surface or near-surface burial sites. Plans
for the disposal of ILW not suitable for nearsurface disposal and all HLW generally
involve deep burial, but at present most
waste of this type is held in engineered stores
awaiting agreement on the location and
design of deep repositories. Progress in
identifying suitable sites for deep burial is
slow because of a lack of scientific consensus
on the methods to be used and public
concerns over safety aspects (European
Commission, 1998b).
The quantity of spent fuel produced
provides a ‘reliable representation of the
radioactive waste disposal situation and its
Figure 10
Tonnes of heavy metal
4 500
United Kingdom
France
Germany
Sweden
Belgium
Spain
Finland, Netherlands & Italy
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
evolution over time’ (OECD, 1993). Nuclear
waste data other than for spent fuel are not
comprehensive or up-to-date. The total
amount of spent fuel discharged from
nuclear power plant, measured in tonnes of
heavy metal, increased by more than 48 500
tonnes between 1985 and 2000, reflecting
the total amount of nuclear power produced
over that period (OECD, 1999). With only
limited potential for increasing the efficiency
with which nuclear heat is converted into
electricity in existing power stations or
getting more energy out of each tonne of
fuel (increased burn-up), a quite similar rate
of nuclear fuel discharge can be expected
over the next decade for all countries except
the UK, reflecting similar rates of nuclear
power production. Discharges in the UK are
expected to decline from 2000 to 2010 as
some plants are retired.
The European Commission has proposed
more support for research and development
on nuclear waste management in its
sustainable development strategy (European
Commission, 2001b).
10
20
05
20
00
20
95
19
19
90
0
85
• Low-level waste (LLW) — slightly radioactive materials, such as safety clothing;
• Intermediate-level waste (ILW) — more
radioactive materials such as sludge from
water clean-up and some reprocessing and
decommissioning wastes;
• High-level waste (HLW) — initially this
waste is predominantly spent nuclear fuel
(the fuel removed from nuclear power
plant after most of its energy has been
used up). Some spent fuel is reprocessed
to separate plutonium and uranium for
reuse as nuclear fuel. The liquid rafinate
left over from this process is stored for
some years and then vitrified into a solid
form, which constitutes the second
important source of HLW. Spent fuel and
vitrified HLW is the most highly
radioactive waste, in many cases taking
several hundred thousand years to decay.
Annual quantities of spent
nuclear fuel from nuclear power plant
19
Nuclear power is responsible for a steady
accumulation of radioactive waste that poses
a potential threat to the environment. The
release of radioactivity to the environment
can result in acute or chronic impacts that,
in extreme cases, can cause loss of biota in
the short term and genetic mutation in the
longer term, both of which may result in
unknown or fatal effects. Increased levels of
radioactivity can also be passed up through
the food chain and affect human food
resources. Radioactive waste consists of three
categories:
Note: The vast majority of
highly radioactive waste
consists of spent fuel and
spent-fuel reprocessing
wastes. 2000 figures for
Spain, Sweden and the UK
are based on provisional
data. Projected data are
taken from national
projections with the
exception of Sweden for
2010, which is an OECD
projection. Austria,
Denmark, Greece, Ireland,
Luxembourg and Portugal
do not have nuclear power
plant. Italy phased out
commercial nuclear power in
1987. The projected
increase attributed to
Finland, Italy and the
Netherlands is due to a
projected increase from
Finland only.
Source: OECD.
36
Energy and environment in the European Union
2. Are we using less energy?
PRESSURE
Energy consumption is increasing, mainly because of growth in transport but also
in the household and services sectors. However, the rate of increase is expected
to slow by 2010 as fuel efficiency improvements in transport are realised.
=
DRIVER
One of the aims of the EU strategy for integrating environmental considerations into energy
policy is to increase energy saving (European Commission, 1998a). All things being equal,
an increase in energy use will result in a corresponding increase in environmental pressures.
Therefore one way of reducing such pressures is to use less energy, by reducing energy
demand (e.g. for heat, light, personal mobility, freight delivery), by using more energyefficient devices (thereby using less energy per unit of demand), or by a combination of the
two. This section looks at the overall pattern of energy consumption while section 3
examines whether we are finding ways of improving energy efficiency.
X
ENERGY
DRIVER
X
PRESSURE
ENERGY
37
Energy consumption in the EU continued to grow between 1990 and 1999;
this trend is expected to continue.
Million tonnes of oil equivalent
1 200
1 000
Services
800
Households
600
Industry
400
Transport
200
Within this demand pattern, important
changes are occurring in the mix of energy
sources. Consumption of coal and lignite
(outside electricity production) halved
between 1990 and 1999, and is expected to
decline further. Coal and lignite are major
sources of energy-related acidifying gases
and particulate emissions, as well as
releasing more carbon dioxide per unit of
energy consumed than other fuels. As
shown in the previous section, the
environment has already benefited from
the trend away from these fuels. In contrast
electricity continues to take an increasing
share of the market and, if it is produced
Percentage shares of energy
sources in final energy demand
1990
1999
8%
4%
Oil
44 %
46 %
Natural gas
18 %
21 %
Electricity
18 %
20 %
Other
12 %
9%
Coal and lignite
Note: Other energy sources are publicly supplied
heat and direct use of renewable energy sources such
as solar heat and biomass.
13 Final energy consumption is the consumption of the transport, industrial, household and services sectors. It
includes the consumption of converted energy (electricity, publicly supplied heat, refined oil products,
coke, etc.) and the direct use of primary fuels such as natural gas or renewables (e.g. solar heat or biomass).
14 See Annex 1 for information on the baseline projections.
20
99
19
with the current fuel mix, the pressure on
the environment could increase. Oil-derived
fuel consumption (mainly for transport) also
grew between 1990 and 1999, and this is
expected to continue in absolute terms,
although it may take a slightly smaller share
of a growing total market by 2010. This
reflects the dominance of oil-based fuels in
transport, with alternative fuels that could
place less pressure on the environment at
only an early stage of commercial
development.
10
0
19
Baseline projections developed for the
European Commission14 (NTUA, 2000a)
expect continued growth in consumption
from 2000 to 2010, but at a lower rate.
Consumption is expected to increase in all
sectors. The rate of increase in the
transport sector is expected to be less than
for 1990 to 1999. This is due to expected
improvements in road vehicle fuel
efficiencies, stemming from the voluntary
agreement between car manufacturers and
the EU (the ACEA agreement), rather than
to a slowdown in the growth of demand for
mobility.
Figure 11
Final energy consumption
90
EU final energy consumption13 grew by an
average of 1.1 % per year between 1990
and 1999, compared with average gross
domestic product (GDP) growth of 2.1 %
per year. It increased in absolute terms in
all sectors except manufacturing industry,
which had recovered to roughly its 1990
level by 1999. The relative decline in
industry’s consumption reflects some
efficiency improvements but mainly
structural changes, including a shift
towards less energy-intensive industries, a
shift in the location of energy-intensive
industries away from industrialised EU
countries, and post-unification
restructuring of German industry. The
fastest growth in demand was for transport,
which increased its share from 29.4 % to
32 % over the period. The services sector
also had faster-than-average growth,
increasing its share from 13.3 % to 14.0 %.
Source: Eurostat.
Table 3
Source: Eurostat.
38
Energy and environment in the European Union
Electricity consumption in the EU grew faster than final energy consumption
between 1990 and 1999; this trend is expected to continue.
Growth in final energy consumption and electricity
consumption, 1990–99
Figure 12
United Kingdom
Sweden
Spain
Portugal
Netherlands
provide better economies of scale for
pollution abatement measures.
• There is a strong drive for innovation in
electricity production to produce cheaper,
cleaner and more efficient technologies.
• Combined heat and power offers
substantial energy efficiency gains.
• Electricity offers a route for developing
and exploiting non-fossil energy sources.
Luxembourg
Consequently an increase in electricity
consumption is not necessarily bad for the
environment, providing this comes from
high-efficiency, low-emission technologies that
reduce sufficiently the environmental
consequences of electricity production.
Italy
Ireland
Greece
Final energy
consumption:
total
Germany
France
Final energy
consumption:
electricity
Finland
Denmark
Belgium
Austria
EU15
-1
Source: Eurostat.
0
1
2
3
4
Average annual % growth rate
5
6
Electricity is particularly important to the
interaction between energy consumption and
the environment for a number of reasons:
• Its flexibility of use and the importance
placed by consumers on the energy services
it provides mean that demand is growing
significantly faster than for total final energy.
• Demand is also being affected by
electricity market liberalisation that is
tending to drive down prices.
• Because electricity is produced from other
fuels with a conversion efficiency of typically 30–50 %, consumption of one unit of
electrical energy results in the consumption of two to three units of another energy source. Since most electricity is produced from fossil fuels, growth in electricity
consumption without other changes would
result in a dispropor tionate increase in
environmental pres sures, in particular in
carbon dioxide emissions.
• A large proportion of electricity is
produced in large centralised plants that
Table 4
Electricity consumption by sector (TWh/year)
1990
1999
Household
45
54
2.2
Industry
69
77
1.2
Services
38
49
2.8
Transport
Source: Eurostat.
Total
Annual growth in
demand 1990–99 (%)
4
5
2.2
156
185
1.9
Electricity consumption across the EU grew at
an average annual rate of 1.9 % between 1990
and 1999. This compares with a GDP growth
rate of 2.1 % per year and overall final energy
growth of 1.1 % per year, which shows that the
linkage between electricity consumption and
economic growth remains stronger than for
overall final energy consumption. Growth in
electricity consumption was particularly strong
in the services sector followed by the household sector. In both cases this was linked to
additional energy demand rather than the
substitution of electricity for another fuel.
The use of electrical energy for heating is a
particularly inefficient use of the original
energy resource, since the vast majority of
electrical energy is produced from heat.
Member States are finding ways to address this
issue. In Denmark, the Electricity Saving
Fund, financed by a levy on domestic
electricity consumption, enables the
government to grant subsidies for the
conversion of electrically heated dwellings to
district heating or natural gas. The fund is
expected to facilitate the conversion of
around 50 000 electrically heated dwellings by
2006. Also, natural gas companies encourage
customers to choose gas rather than electricity
for cooking. Each new installation is
supported by a subsidy from the government.
Electricity consumption across the EU is
projected to continue to grow to 2010 at an
annual average rate similar to that between
1990 and 1999 (NTUA, 2000a). Once again
growth in consumption is expected to be
strongest in the economically buoyant services
area. Transport-related electricity consumption is also expected to grow significantly,
driven by further electrification of the rail
network, but this will be from a very low base.
39
3. How rapidly is energy efficiency
being increased?
X
ENERGY
DRIVER
Efficiency in the energy supply industries
(e.g. electricity production, oil refining) is
the ratio of energy input to energy output
and thus comparatively easy to measure.
Energy intensities are used in this report to
measure trends in energy consumption
efficiency. Energy intensities measure the
energy needed to support economic activity
(e.g. energy per unit of gross domestic
product (GDP) or value added) or to
provide social needs (e.g. energy per capita).
They therefore indicate trends in energy
efficiency and measure changes arising from
both structural and technological change
(see Box 7).
DRIVER
X
Energy efficiency is concerned with
minimising the energy needed to meet the
demands for energy-related services that
originate from economic and social drivers
(e.g. economic growth, demand for freight
transport, personal mobility, warmth and
comfort in the home). Cost-effective
improvements in the way we use energy
contribute to all three main goals of energy
policy: security of supply, competitiveness
and environmental protection.
Energy efficiency applies both to the
production and the consumption of energy.
=
The EU sixth environment action
programme identifies the promotion of
energy efficiency as a priority action
(Council of the European Union, 2002).
The Barcelona European Council, March
2002, stressed the need to show substantial
progress in energy efficiency by 2010
(European Council, 2002).
PRESSURE
Improvements in energy efficiency have been slow, but improvements in some
Member States are showing the potential benefits of good practices and
strategies.
PRESSURE
ENERGY
40
Energy and environment in the European Union
The overall efficiency with which energy is converted for final consumption did
not improve between 1990 and 1999.
The overall efficiency of conversion of
primary into usable or final energy is the
ratio of final energy consumption15 to total
energy consumption16. The difference
between these is the energy used in
conversion processes such as electricity
generation and oil refining, the energy
supply industry’s own consumption, and
losses in distribution and delivery.
%
100
80
60
40
20
19
99
19
96
0
19
93
Source: Eurostat.
3.1. Efficiency in energy supply
Ratio of final to total energy consumption
19
90
Figure 13
The ratio remained fairly constant at about
65 % between 1990 and 1999. Efficiency
gains in conversion processes were offset
by converted fuels (e.g. electricity, refined
petroleum products) taking a larger share
of final energy consumption (see Box 6).
15 Final energy consumption is the energy consumption of the transport, industry, household, agriculture and
services sectors. It includes the consumption of converted energy (i.e. electricity, publicly supplied heat,
refined oil products, coke, etc.) and the direct use of primary fuels such as natural gas or renewables (e.g.
solar heat or biomass).
16 Total energy consumption is also known as gross inland energy consumption (GIEC). It is a measure of the
energy inputs to an economy and can be calculated by adding total indigenous energy production, energy
imports minus exports and net withdrawals from existing stocks.
41
Box 6
Why is overall EU energy conversion efficiency not improving?
ALMOST CANCELLED OUT BY
Decrease in energy consumption
due to increased electricity
production efficiency
1990
Final energy consumption
Total energy consumption
Final energy
consumption
Total energy consumption
Increase in final energy demand due
to growth in electricity consumption
1999
Million tonnes of oil equivalent
1 800
Consumption by other
energy supply industries
1 600
1 400
1 200
Consumption for
electricity production
1 000
Other
800
600
400
200
0
1990
Final energy consumption
Increase in energy consumption
due to increased demand for
electricity
Components of total and final energy consumption
Total energy consumption
Schematic illustration of the opposing effects of
increased electricity demand and improved
electricity production efficiency on the ratio of
final to total energy consumption
In addition to the changes in electricity
production, the efficiency of oil refining fell
by about 1 % between 1990 and 1999,
reflecting the additional energy needed to
produce higher-specification fuels (i.e. low
sulphur, unleaded). This on its own would
have decreased the ratio of final to total
energy. However, less energy was consumed
by other energy supply industries, due to
factors such as the rundown of coal mining,
which on its own would have increased the
ratio. Overall these trends again effectively
cancelled each other out.
Final energy consumption
• The overall efficiency of electricity
supply (including own use and
distribution) improved by about 5 %
between 1990 and 1999, so the
electricity industry consumed by about
5 % less energy than it would otherwise
have consumed. On its own, this would
have increased the ratio of final to total
energy consumption (i.e. less total
energy would be needed to satisfy the
demand from final consumers).
• The share of electricity in final
consumption increased by 2 % between
1990 and 1999. This increased the
amount of energy consumed in electric-
ity production in 1999 by 2 % divided
by the overall efficiency of electricity
production in 1999 (i.e. about 36 %),
which is about 6 % in total. On its own,
this would have decreased the ratio of
final to total energy consumption (i.e.
more total energy would be needed to
satisfy the demand from final consumers).
Total energy consumption
The ratio of final to total energy consumption remained almost constant at about 65 %
over the period 1990-99 mainly as result of
two approximately equal but opposing
effects, illustrated in the diagram below.
They are:
1999
Notes: 1. ‘Consumption of other energy supply industries’
includes oil refineries, fossil fuel extraction, heat production
by public producers, heat and electricity production by
autogenerators and the production of other processed fuels
such a smokeless solid fuel.
2. The ‘Other’ category in final energy consumption includes
heat and biomass/waste.
Source: Eurostat.
Electricity
Gas
Oil
Coal and Lignite
42
Energy and environment in the European Union
The efficiency of electricity production from fossil fuels improved between
1990 and 1999, but electricity consumption from fossil fuels grew more
rapidly, outweighing the benefits to the environment from these improvements.
Table 5
Index (1990 = 100)
106
104
102
100
98
99
19
96
19
19
93
96
90
Notes: The calculation of
the efficiency of electricity
production from fossil fuels
includes fuel inputs for both
electricity and heat
production from public
combined heat and power
plant, and only electricity
output from combined heat
and power plant. The fuel
input and output data
include biomass/waste which
accounted for 3 % of
electricity production in
1999.
Source: Eurostat.
Improvement in fossil fuel
electricity production efficiency
19
Figure 14
Percentage of fossil-fuelled electricity
production capacity by technology
1990
1993
1996
1999
91 %
88 %
82 %
78 %
Gas turbines
(single cycle)
7%
7%
8%
8%
Gas turbines
(combined cycle)
1%
4%
8%
12 %
Oil and
gas engines
1%
1%
2%
2%
Steam
turbines
With electricity taking an increasing share of
EU energy consumption, it is important for
electricity production to operate with
maximum efficiency. This is doubly
important for fossil-fuelled plant, a major
source of greenhouse gases and air
pollutants. The share of electricity produced
by such plant remained steady at a little over
50 % over the period 1990–99. Some
improvement in efficiency can be gained by
better operational management, but major
improvements come from the retirement of
old, inefficient facilities when they reach the
end of their design lives (typically 25 to 40
years). Imminent investment decisions on
new plant will affect the environmental
performance of electricity production for
several decades.
Although electricity production from fossilfuelled plant has remained steady, there
have been significant changes to the mix of
fuels used (see later indicator) and in the
mix of technologies in operation (Table 5).
The most important are the switch to gas
firing, which increased from 14 % of
production in 1990 to 33 % in 1999, and
investment in gas-turbine combined-cycle
(GTCC) plant. Such plants can achieve
conversion efficiencies of the order of
50–60 %, with the prospect of even higher
efficiencies in future plant, compared with
36–38 % for the steam turbine plant used
with coal and lignite (European Commission,
2002). This made a significant contribution
to the overall improvement in the efficiency
of electricity production from fossil fuels
recorded between 1990 and 1999.
43
The share of electricity from combined heat and power (CHP) increased across
the EU between 1994 and 1998, but faster growth is needed to meet the EU
target; preliminary information suggests that the share of electricity produced
by CHP declined between 1998 and 2001.
Combined heat and power (CHP)
technology uses fossil fuels, biomass or waste
to generate a mix of heat and electricity. In
so doing it avoids much of the waste heat
losses associated with normal electricity
production, thereby utilising more than
80 % of the energy in the fuel rather than
the average of about 36 % in current plant
producing only electricity. An expansion of
CHP could make an appreciable contribution
to energy efficiency and consequently to the
environmental performance of electricity
and heat production. The EU has set an
indicative target to derive 18 % of all
electricity production from CHP by 2010
(European Commission, 1997a).
Share of gross electricity production from
combined heat and power plant
Figure 15
%
80
70
18 % target by 2010
60
50
40
30
20
1994
1998
10
Be
lg
UK
iu
m
Fr
an
c
G e
re
ec
e
Ire
la
nd
0
EU
D 15
e
N nm
et
he ark
rla
nd
Fi s
nl
an
A d
Lu us
xe tri
a
m
bo
ur
g
Ita
ly
Sp
a
Po in
rtu
G gal
er
m
a
Sw ny
ed
en
CHP increased its share of electricity
production from 9 % to almost 11 %
between 1994 and 1998, although this rate of
expansion is not sufficient to achieve the EU
target.
Source: Eurostat.
Growth was strongest in Member States that
have ambitious programmes and targets for
the technology such as Finland, Denmark,
Italy, the Netherlands and Spain. However,
progress in other countries with ambitious
targets, such as Germany (20 % of power by
2010) and the UK (increase capacity from 3
to 10 GW, 1994–2010) was less.
Concern is raised by preliminary
information for 2001, which suggests that
the CHP share of production has declined
since 1998 (COGEN Europe, 2001). This
reverse is spread across the EU, but most
severe indications were noted in Germany,
the Netherlands and the UK.
This decline has been caused by a
combination of factors.
• Increasing natural gas prices (gas is the
preferred fuel for new CHP) have
reduced the cost-competitiveness of CHP.
• Falling electricity prices, resulting from
market liberalisation and increased
competition, have also hit the
cost-competitiveness of CHP.
• Uncertainty over the evolution of
electricity markets as liberalisation is
progressively extended is making
companies reluctant to invest in CHP.
• Aggressive pricing has been used by
electricity utilities to protect their market.
Clearly further measures are needed across
the EU to achieve the target of producing
18 % of electricity from CHP, against a
background of growing electricity demand
and increasing liberalisation of electricity
markets. The German CHP law, passed in
early 2002, provides an example of how to
alleviate this situation through a number of
support mechanisms, including agreed
electricity purchase prices fro existing CHP
installations and for new, small-scale units.
44
Energy and environment in the European Union
Economic growth is requiring less additional energy consumption, but energy
consumption is still increasing.
Final energy consumption, gross domestic
product and final energy intensity
Figure 16
Index (1990 = 100)
and 1999. However, this was not sufficient to
prevent an increase in final energy
consumption because average GDP growth
was higher at 2.1 % per year.
130
120
Gross domestic product
(constant 1990 prices)
110
Final energy
consumption: total
100
Final energy
consumption: intensity
90
The European Commission proposed, and the
Council supported, an EU indicative target of
reducing final energy intensity by 1 % per year
above ‘that which would have otherwise been
attained’ for the period 1998–2010 (Council of
the European Union, 1998; European
Commission, 2000e). However, ‘that which
would have otherwise been attained’ has not
yet been defined, so it is not clear how such a
target can be measured and monitored.
Source: Eurostat.
99
19
96
19
19
19
90
93
80
3.2. Efficiency in energy
consumption
Overall performance in improving energy
efficiency can be measured by the final energy
intensity indicator (i.e. final energy
consumption per unit of GDP) — see Box 7.
Final energy intensity in the EU fell by an
average of 0.9 % per annum between 1990
Figure 17
Annual change in final energy intensity, 1990–99
Portugal
Spain
Italy
Greece
Belgium
Finland
France
Sweden
Austria
United Kingdom
Netherlands
Denmark
Germany
Ireland
Luxembourg
EU 15
-4
-3
-2
-1
0
Average annual change (%)
1
2
Source: Eurostat.
Table 6
Average annual rates of change of final energy intensity
Change in final energy intensity (%/year)
Source: Eurostat.
1973-90
- 1.9
1990-99
- 0.9
The final energy intensity of Member States
in 1999 varied by more than a factor of two,
reflecting differences in their state of
development, the structure of their
economies, climate variations and the
success of energy efficiency measures. There
were impressive reductions between 1990
and 1999 in Luxembourg due to one-off
changes and in Ireland due to high growth
in low energy-intensive industries and the
services sector. The overall intensity for the
EU would have increased if it were not for
the substantial reduction in Germany helped
by energy efficiency improvements. The
implementation of energy efficiency policies
in Denmark and the Netherlands played an
important role in the reductions in these
countries.
The rate of improvement in final energy
intensity between 1990 and 1999 was less than
for earlier years. During the 1973 and 1990
period the EU achieved an average annual
reduction of 1.9 %. This was driven by the oil
price rises of the 1970s and early 1980s, which
prompted energy-saving measures that
persisted after oil prices fell again. However,
in the 1990s the combination of abundant
energy supplies, low fossil fuel prices and a
generally low priority for energy saving has
resulted in a slower rate of improvement.
EU GDP is expected to grow by an average of
2.3 % per year between 2000 and 2010
(European Commission, 1999a). If final
energy intensity continues to improve between
2000 and 2010 at the rate recorded from 1990
to 1999, this rate of economic growth would
result in a further energy consumption
increase between 2000 and 2010.
45
With the exception of industry, no EU economic sector has decoupled
economic/social development from energy consumption sufficiently to stop
growth of its energy consumption.
The linkage between the growth and the
energy consumption of a sector can only be
broken if the rate of reduction of its energy
intensity at least equals its rate of growth.
Annual change in sectoral energy intensities
and related drivers, 1990–99
Figure 18
Energy intensity
Industry
The industry sector has shown a sustained
improvement in energy intensity, averaging 1 %
per year between 1990 and 1999, which was
sufficient to offset the rate of growth in the
sector measured in terms of value added.
Many factors contributed to this, including
structural changes in favour of higher valueadded products, changes in some industries
to less energy-intensive processes, direct
improvements in energy efficiency, and
import substitution. There is still a large
potential for energy saving in this sector
which the EU and national governments are
seeking to achieve through voluntary
agreements with individual production
sectors and the promotion of combined heat
and power (European Commission 1997a
and 2000d).
The services sector has also shown a
reduction in energy intensity, averaging 0.2 %
per year between 1990 and 1999. About 84 %
of energy consumption in the sector is
associated with installed devices such as
space heating/cooling, water heating and
lighting (European Commission, 2001d)
with the remaining 16 % made up mainly of
office equipment. Energy saving in these
areas will benefit from the proposed
directive on the energy performance of
buildings, which has suggested that a 22 %
reduction on present consumption by
installed devices in the service sector and
domestic buildings can be achieved by 2010
(European Commission, 2001d). The sector
is also leading the growth in electricity
demand, particularly for office equipment
and lighting. This trend is being addressed
through the EU’s plans to strengthen the
energy-efficiency labelling scheme for office
equipment (Council of the European
Union, 2001), and the requirement to assess
the economic potential for combined heat
and power in new buildings and major
refurbishments (European Commission,
2001d).
Decoupling transport growth from economic
growth is an important objective of the
revised Common Transport Policy (European
Commission, 2001e) and the EU strategy for
Driver (value added)
Energy intensity
Services
Driver (value added)
Energy intensity
Transport
Driver (GDP)
Energy intenstiy
Households
Driver (population)
-1
0
1
2
Average annual change (%)
sustainable development (European Council,
2001). Overall the energy intensity of the
transport sector stayed fairly constant
between 1990 and 1999. In 1998, 85 %17 of
transport energy use was associated with
roads. Technical developments with
passenger cars may have yielded some
improvement in fuel efficiency between 1990
and 1999 although this was partly offset by
the use of heavier and more powerful
vehicles and devices that increase comfort
and safety. Passenger car fuel efficiencies
should improve further in the next 10 years
through the voluntary agreement between
the EU and the car manufacturers (the
ACEA agreement). This aims to reduce the
average carbon dioxide emission of new cars
to 140 g CO2/km by 2008–09 (equivalent to
a 25 % fuel efficiency improvement on 1995
vehicles). However, these technical
developments alone are not sufficient to
yield an improvement in road transport
energy intensity (ADEME, 1999). This is
because energy consumption also depends
on other factors including driver behaviour,
congestion, journey types, choice of vehicle,
vehicle maintenance and rate of replacement of old cars. Taking account of these
factors, and of the expected growth of
demand for both passenger and freight
transport, energy consumption in the
transport sector is expected to continue to
increase. More detailed analysis is given in
the TERM 2001 indicators report (EEA,
2001b).
3
Notes: Energy intensities for
the industry and services
sectors have been calculated
as the ratio of final energy
demand to value added.
Energy intensity in transport
is the ratio of final energy
demand to gross domestic
product, while for
households it is final energy
demand per capita. The
energy intensities are not
directly comparable and are
shown on the graph for
illustrative purposes only.
Source: Eurostat.
17
This figure excludes
fuels for
international
shipping from total
transport energy use.
Including fuels for
international
shipping changes
this figure to 74 %.
46
Energy and environment in the European Union
The energy intensity of the household sector,
measured as household energy use per
capita, increased between 1990 and 1990.
This is because improvements in house
insulation and the efficiency of appliances
were offset by an increase in the number of
dwellings (up by 10 % between 1990 and
1999) and their average size, increased
comfort levels (e.g. home heating) as living
standards improve, and growth in the
purchase and use of appliances including
televisions, computers, freezers and air
conditioning. The potential for energy savings
in the household sector is high (~ 22 %), and
will be encouraged by the proposed directive
on the energy performance of buildings,
which includes minimum standards for new
buildings and for certain existing buildings
when they are renovated, and the
requirement for all buildings to have energy
Box 7
performance certificates (European
Commission, 2001d). The sector should also
benefit from the EU’s appliance labelling
scheme (European Parliament and Council,
1992). Schemes that call for energy
efficiency standards may help to further
decrease energy intensity. For example, in
the UK energy utilities are obliged to
encourage or assist domestic customers to
take up energy-saving opportunities such as
fitting insulation or converting to more
efficient domestic appliances. A small fee is
collected from all domestic customers which
is pooled and used to fund, partly fund or
promote the uptake of more energy-efficient
goods and services. By the year 2000, about
3 million households had benefited from the
scheme, saving an average of approximately
EUR 200 since the scheme began in 1994.
How to measure the efficiency of energy consumption
Assessing the efficiency of energy
consumption is not simple because there is
more than one way to consider and
measure energy efficiency. There are two
basic sets of indicators for energy
efficiency:
• Economic and social: these are energyintensity indicators and measure the
energy needed to support economic
activity (e.g. energy per unit of gross
domestic product or value added) or to
provide social needs (e.g. energy per
capita). They measure changes in energy
efficiency arising from both structural
and technological change.
• Technical: these are specific energy
consumption indicators and measure
the energy needed to produce a unit of
physical output (e.g. one tonne of steel
production). They measure changes in
energy efficiency arising from
technological changes alone.
The economic and social indicators are
more broadly based since they measure
both technological improvements and
those stemming from structural and social
change. For example individual citizens
could reduce their energy consumption by
using public transport in preference to a
car, living in smaller, better-insulated
houses, or using more efficient appliances.
Similarly businesses could use less energy
per unit of value added by cutting their
energy consumption, or switching
production to products that require no
more energy but yield a higher added
value.
The economic and social indicators
measure energy efficiency improvements
stemming from deliberate energy-saving
actions and policy measures together with
improvements driven by factors not related
to energy efficiency considerations, such as
product development and the impact of
foreign competition.
In this report the energy intensity
indicators (i.e. economic and social) are
used to measure trends in energy
consumption efficiency. These indicators
are used partly because both EU and
Member State policies aim to reduce the
environmental pressures associated with
energy consumption while maintaining
economic development and the prosperity
of EU citizens (European Commission,
2001b). At present there are insufficient
data to support a comprehensive
assessment of technical energy efficiency
improvements. Eurostat is currently
working to collect such data sets.
47
4. Are we switching to less-polluting
fuels to meet our energy needs?
ENERGY
DRIVER
X
PRESSURE
ENERGY
Nuclear power also produces little pollution
under normal operations. However, there is
a risk of accidental radioactive releases, and
highly radioactive wastes are accumulating
for which no generally acceptable disposal
route has yet been established. It is also of
concern that nuclear energy, which currently
accounts for more than 15 % of total energy
consumption in the EU, is expected to begin
to run down production beyond 2010, and
this will result in further growth of emissions,
especially carbon dioxide, if it is replaced by
fossil fuels.
X
Coal and lignite are generally the most
polluting fuels, followed by oil, with natural
gas being the cleanest of the fossil fuels. This
merit order also applies in relation to
greenhouse gas emissions, with natural gas
Renewable sources such as biomass, wind
energy and hydro-power produce
comparatively little air pollution or
greenhouse gas emissions. Therefore their
deployment would have an even greater
benefit in reducing pollution than a switch
to natural gas, although they can have some
adverse impacts on the environment such as
loss of natural amenities, loss of habitat,
visual intrusion and noise. The EU and most
Member States have taken action to support
these technologies as discussed in detail in
Section 5 of this report.
DRIVER
The main source of environmental pressures
from the production and consumption of
energy is from fossil fuels that release
gaseous, liquid and solid-phase pollutants.
The magnitude of these pressures can be
reduced by adopting advanced technologies
that limit such releases, either by cleaner
combustion techniques or with end-of-pipe
treatments. An additional, or in some cases
alternative approach, is to use cleaner fuels.
This section and section 5 examine this
second option.
typically producing only 63 % and oil 80 %
of the emissions of coal per unit of energy.
=
The European Commission strategy to
strengthen environmental integration within
energy policy stresses the need to increase
the share of production and use of cleaner
energy sources (European Commission,
1998a). This is reflected in the sixth
environment action programme which
encourages renewable and low-carbon fossil
fuels for power production, as part of the
climate change priority actions (Council of
the European Union, 2002).
PRESSURE
The EU is switching from coal to the relatively cleaner natural gas, but after 2010
no further switching is expected. Furthermore, some nuclear installations will
retire and, if these are replaced by fossil fuel plants, increases in carbon dioxide
emissions are likely. This underlines the need to further strengthen support for
renewable energy sources.
48
Energy and environment in the European Union
Fossil fuels continue to dominate energy use, but environmental pressures
have been limited by switching from coal and lignite to relatively cleaner
natural gas.
Figure 19
Total energy consumption by source
Million tonnes of oil equivalent
1 600
Renewables
1 400
Nuclear energy
1 200
Natural gas
1 000
800
Coal, lignite and
derivatives
600
400
Crude oil and
products
200
Note: Fuels other than those
listed in the legend have
been included in the
diagram but their share is
too small to be visible.
Source: Eurostat, NTUA.
10
20
99
19
19
90
0
EU total energy consumption continued to
increase between 1990 and 1999 at an
average of 1 % per year. Moreover, the share
taken by fossil fuels declined only slightly,
from 81 % in 1990 to 79 % in 1999. This
small loss was taken up by increases in
nuclear and renewable energy. Although
small in terms of market share, there was a
29 % growth in renewable energy over the
period (see renewable energy indicator,
Figure 21).
Within the share of total energy
consumption supplied by fossil fuels, there
was a major change in fuel mix, with coal
and lignite loosing about one third of their
market, and being replaced by natural gas.
This was due mainly to fuel switching in
power production. Oil retained its share of
the energy market, reflecting its continued
dominance in road and air transport. This
growing dependence on oil and gas, with a
substantial share of both being met by
imports, resulted in EU dependence on
imported fossil fuels increasing between
1990 and 1999.
The baseline projections for the European
Commission (NTUA, 2000a) indicate total
energy consumption continuing to increase
to 2010, but at a reduced rate. Natural gas is
expected to continue to replace coal and
lignite, but not so rapidly as in the 1990-99
period, while oil products continue to
dominate road transport. Renewable energy
is also expected to increase, but the rate of
growth is not sufficient to increase its share
of total consumption.
The baseline projections are based on
policies and measures adopted by 1998
(including the ACEA Agreement). The fact
that they suggest only limited changes in the
energy mix by 2010 underlines the need to
strengthen support for renewable energy
sources.
49
Fossil fuels and nuclear power continue to dominate electricity production, but
the environment has benefited from the switch from coal and lignite to natural
gas.
• The high efficiency and low capital cost of
gas combined-cycle plant;
• Liberalisation of the electricity supply
market bringing in new generators, ready
to invest in low capital cost gas plant;
• Low gas prices in the early 1990s;
• The EU large combustion plant directive
that sets emissions limits that are more
easily attained with modern and cleaner
natural gas technologies.
Nuclear power increased its output by an
average of 2.1 % per year between 1990 and
1999 through a combination of commissioning of new plant and improved performance
of existing facilities. The other major
contributor to electricity production was
renewable sources, which increased their
market share from 14.7 % in 1990 to 15.5 %
in 199918. Hydro was by far the largest
renewable source accounting for 85 % of
renewable electricity production. However,
this figure hides remarkable growth in the
production from some ‘new renewable’
sources, discussed in the next section.
Baseline projections (NTUA, 2000b)
anticipate fossil fuels taking an increasing
share of a market that continues to grow at a
TWh
3 500
3 000
Renewables
2 500
2 000
Fossil
1 500
1 000
500
Nuclear
similar rate to 2010. This is because the
projections are based on the policies and
measures in place in 1998, (see Annex 1),
and neither nuclear power nor renewable
energy sources are expected to expand
significantly under these policies. The trend
to switch from coal and lignite to natural gas
is also expected to continue, although this
projection is particularly sensitive to future
fossil fuel prices. The switch to natural gas
will clearly bring environmental benefits in
terms of reduced emissions of carbon
dioxide, acidifying gases and particulates.
However, looking beyond 2010 the trend for
increased electricity production from fossil
fuels, and in particular the slow growth of
renewable electricity production, is a matter
for concern. After 2010 the switch from coal
and lignite to natural gas is not expected to
continue and nuclear plant will start to be
decommissioned. If nuclear capacity is
replaced by fossil plant it seems inevitable
that there will be a growth in emissions,
especially carbon dioxide emissions. Once
again this highlights the importance of
policies and measures to stimulate the
development and deployment of renewable
energy technologies.
18 Note that electricity production is equal to electricity consumption less imports plus exports and so the
share of renewables in electricity production stated here is not equal to the share of renewables in
electricity consumption in Figure 22.
10
20
19
99
0
90
Between 1990 and 1999 electricity
production grew at an annual rate of 2.3 %,
and fossil fuels maintained their share of
output at a little over 50 %. However, major
changes occurred in the mix of fossil fuels
used, with coal and lignite, and to a lesser
extent oil, being replaced by natural gas.
This has yielded environmental benefits, as
discussed previously, in terms of reduced
emissions of carbon dioxide, acidifying gases
and particulates. This trend has been driven
by a combination of factors:
Figure 20
Electricity production by source
19
Electricity production remains a major source
of pollution emissions. However, because of
the limited number of facilities involved, the
rapid rate of technological advance, and
opportunities for switching to less-polluting
fuels such as natural gas and renewables, it is
a key area to achieve improvements in
environmental performance.
Source: Eurostat, NTUA.
Energy and environment in the European Union
How has fuel switching affected carbon dioxide emissions from the electricity production sector?
1 200
Excluding the increase
in share of nuclear and
renewable energy
1 000
800
Excluding efficiency
improvements
600
Excluding fossil fuel
switching
400
Actual emissions
200
99
0
19
Changes in the fossil fuel mix from coal
and lignite to natural gas accounts for 46
% of the reduction. A further 20 % came
from an increase in the efficiency of fossilfuelled electricity production and much of
this is also linked to the switch to highefficiency gas-turbine combined-cycle
technology. The remaining 34 % of the
reduction is attributable to the increased
share of nuclear power and renewable
energy sources.
Million tonnes
96
If the structure of electricity production
had remained unchanged from 1990, then
by 1999 emissions of CO2 would have
increased in line with electricity output by
16 %. In fact, there were a number of
changes in the electricity industry in the
EU that caused annual emissions of CO2 to
fall by 8 %.
Explanations for the reduction of emissions of carbon
dioxide in the electricity sector
19
Carbon dioxide emissions from electricity
production fell by 8 % over the period
1990–99, despite a 16 % increase in the
amount of electricity produced; 80 % of
the decrease is due to fuel switching.
19
93
Box 8
19
90
50
Note: Data and analysis
presented here are
preliminary results of
ongoing work to refine
and improve associated
statistics and
methodology.
Source: EEA.
51
5. How rapidly are renewable energy
technologies being implemented?
DRIVER
X
ENERGY
DRIVER
the promotion of electricity from renewable
energy sources (European Parliament and
Council, 2001b) sets an indicative target to
derive 22.1 % of EU electricity consumption
from renewable sources by 2010. The
Commission has also proposed a directive on
the promotion of biofuels for transport
(European Commission, 2001g). However,
the promotion of renewable energy is also a
matter for Member States since the
resources vary between countries as do the
infrastructures and market conditions into
which they need to fit.
=
Renewable energy sources are an important
option for reducing the pressures on the
environment from energy use. They can also
contribute to energy security by replacing
imported fossil fuels. The significance of
renewable energy has been recognised in a
number of EU policy documents concerned
with accelerating its deployment, notably the
renewable energies White Paper (European
Commission, 1997b), which sets an
indicative target to derive 12 % of the EU
total energy consumption from renewable
sources by 2010. Similarly the directive on
PRESSURE
Renewable energy targets are unlikely to be met under current trends, but
experience in some Member States suggests that growth could be accelerated by
appropriate support measures.
X
PRESSURE
ENERGY
52
Energy and environment in the European Union
The share of total energy consumption met by renewable energy grew only
slightly between 1990 and 1999; projections of future energy demand imply that
the growth rate of energy from renewable sources needs to more than double to
attain the EU indicative target of 12 % by 2010.
Figure 21
Share of total energy consumption
provided by renewable energy sources
%
12
EU indicative
target (12 %)
6
Solar and wind
Geothermal
5
Hydro
4
3
2
Biomass and waste
1
Note: Biomass/waste
includes wood, wood
wastes, other biodegradable
solid wastes, industrial and
municipal waste (of which
only part is biodegradable),
biofuels and biogas.
Source: Eurostat, NTUA.
10
20
99
19
19
90
0
Over the 1990–99 period, renewable energy
sources were used mainly to supply heat and
electricity, with roughly a 50:50 split. Overall
renewable energy output grew by an average of
2.8 % per year over the period, which increased
its share of total energy consumption from
5.0 % to 5.9 %. Taking account of the projected
expansion in energy consumption, this growth
rate needs to be increased to over 7 % per year
if the EU indicative target to derive 12 % of
total energy consumption from renewable
sources is to be met by 2010. However, the
baseline projections for the European
Commission (NTUA, 2000b) suggest that
renewable energy growth will be much less
than this, and probably will only be sufficient to
maintain current market share to 2010.19
The main sources of renewable energy are
biomass/waste (63.5 %) and hydro-power
(31 %), although wind (1.5 %) and solar energy
(0.5 %) recorded the fastest growth rates
between 1990 and 1999, albeit from low initial
bases. The distribution of renewable energy
production is uneven across Member States,
mainly reflecting their access to biomass/waste
and hydro resources but also the effectiveness
of national support measures (EEA, 2001c).
The development of renewable energies has
been hindered by financial, fiscal and
administrative barriers, the low economic
competitiveness of some renewables, and the
lack of information and confidence amongst
investors. Nevertheless, where the right mix of
policies and measures was set up, renewables
developed successfully. For example Austria,
Germany and Greece contributed about 80 %
of new solar thermal installations over the
1990-99 period. Solar thermal developments in
Austria and Germany benefited from proactive
government policy coupled with subsidy
schemes and communication strategies; in
Greece the developments were helped by
government subsidies. Similarly, Austria and
Sweden dominated the increase in output from
biomass district heating installations. Due to
the high costs of developing heating networks it
is common, in Member States such as Austria,
to provide considerable financial support
towards biomass district heating schemes. In
Sweden, biomass district heating expanded,
without large direct subsidies, as a result of the
introduction of carbon and energy taxes (from
which biomass is exempted) and considerable
research and development support.
Road transport is a major and growing area for
energy consumption and consequently
emissions of carbon dioxide and pollutants.
However, it is an area which is the almost
exclusive preserve of oil-derived fuels, with little
substitution from fuel cells or renewable energy
sources. In 1999 only 0.1 % of energy
consumption by road transport was sourced
from renewable biofuels. The European
Commission has recently proposed a directive
aimed at promoting the use of biofuels in
transport (European Commission, 2001g), with
an indicative target of replacing 2 % of petrol
and diesel consumption with biofuels in 2005,
increasing to almost 6 % by 2010. This action
highlights the pressing need to begin to replace
fossil fuels in road transport; however, there is
some concern over a number of environmental
impacts associated with the production and
consumption of biofuels. This arises because
biofuels are energy intensive in their production, requiring a third to half their energy
content for cultivation, fertilisers, harvesting,
transport, etc. (DTI, 1996). Moreover, there
may be competition for land from other energy
crops that could be used for electricity or heat
production. There is also some concern over
the level of nitrougen oxides and particulate
emissions from biofuel combustion.
19 These baseline projections missed the trend of increased renewable energy production in the second half
of the 1990s. It is likely that the updated, new version of the baseline projections, to be released in the second
half of 2002, will show a slight increase in the contribution of renewables to total energy consumption by 2010.
53
The share of renewable energy in EU electricity consumption grew slightly
between 1990 and 1999; projections of future electricity demand imply that
the rate of growth of electricity from renewable sources needs to double to
attain the EU indicative target of 22.1 % by 2010.
Baseline projections of future electricity
production (NTUA, 2000b), based on the
policy position in 1998 (see Annex 1),
indicate a negligible increase in the share
taken by renewable energy sources20. Clearly
the additional measures contained in the EU
directive, together with measures taken at
Member State level, need to give a stronger
stimulus to the deployment of renewable
electricity technologies for the indicative
target to be reached.
There are encouraging signs that this may be
possible with the right mix of support
Figure 22
%
90
Indicative targets
Large hydropower
All other renewables (excluding IMW)
Industrial and municipal waste
80
70
60
50
40
30
20
10
0
1
Au 5
st
Sw ria
ed
e
Fi n
nl
a
Po nd
rtu
ga
l
Ita
l
Fr y
an
c
D
en e
m
ar
k
Sp
ai
G n
re
G ece
er
m
an
y
I
r
el
N
et an
he d
rla
nd
s
Lu
xe
UK
m
bo
u
Be rg
lg
iu
m
The share of electricity from renewable
sources varies considerably among countries,
reflecting the resources within their
boundaries and the effectiveness of support
measures. In its directive on the promotion
of electricity from renewable sources the EU
proposed indicative targets for Member
States and agreed to an EU overall indicative
target of 22.1 % of gross electricity
consumption from renewable sources by
2010 (European Parliament and Council,
2001b). Taking account of projected growth
rates for electricity consumption to 2010, the
indicative target will require the rate of
growth of renewable electricity supply to
roughly double if the target is to be met.
Share of electricity consumption
met by renewable energy sources, 1999
EU
The share of renewable energy in EU gross
electricity consumption grew from 13.4 % in
1990 to 14 % in 1999. This was achieved
through an average annual growth in output
of 2.8 % per year over the 1990–99 period.
Renewable electricity was dominated by
large hydro-power, which had a 74 % share
of output in 1999, followed by small hydro
(11 %) and biomass/waste (10 %). Large
hydro is an established technology, but its
capacity is not expected to increase
substantially because of concerns linked to
its impact on the environment through the
loss of land and the resultant destruction of
natural habitats and ecosystems. Growth in
renewable electricity will therefore have to
come from sources such as wind energy,
solar power, biomass and small hydro.
measures (EEA, 2001c). For example, the
rapid expansion of wind power (38 % per
year across the EU in the period 1990-99)
was driven by Denmark, Germany and Spain,
and was the result of support measures
including ‘feed-in’ arrangements that
guarantee a fixed favourable price for
renewable electricity producers. Similarly,
the rapid expansion of solar (photovoltaic)
electricity was driven by Germany and Spain,
mainly as a result of a combination of ‘feedin’ arrangements and high subsidies.
Biomass/waste resources have also expanded
rapidly, at a rate over 9 % per year, and have
the added benefit that they can be used in
high-efficiency combined heat and power
plant. Finland and Sweden contributed
about 60 % of new electricity production
from biomass-fuelled power stations. Both
countries provided considerable research
and development support and subsidies to
the biomass power industry. In Sweden, the
introduction of carbon dioxide and energy
taxes from which biomass is exempted also
helped the expansion of biomass power
plants.
20 The baseline projections missed the trend of increased renewable electricity production in the second half
of the 1990s. It is likely that the updated, new version of the baseline projections, to be released in the
second half of 2002, will show a slight increase in the contribution of renewables to electricity consumption
by 2010.
Notes: Industrial and
municipal waste (IMW)
includes electricity from
both biodegradable and
non-biodegradable energy
sources, as there are no
separate data available for
the biodegradable part. The
EU 22.1 % indicative target
for the contribution of
renewable electricity to
gross electricity
consumption by 2010 only
classifies biodegradable
waste as renewable. The
share of renewable
electricity in gross electricity
consumption is therefore
overestimated by an amount
equivalent to the electricity
produced from nonbiodegradable IMW.
National indicative targets
shown here are reference
values that Member States
agreed to take into account
when setting their indicative
targets by October 2002,
according to the EU
renewable electricity
directive.
Source: Eurostat.
54
Energy and environment in the European Union
6. Are we moving towards a pricing
system that better incorporates
environmental costs?
PRESSURE
Despite increases in energy taxation, most energy prices in the EU have fallen, as
a result mainly of falling international fossil fuel prices but also of the
liberalisation of energy markets. In the absence of appropriate policies to
internalise the external costs of energy and improve energy demand
management, reduced prices are likely to act as a disincentive to energy saving
and may encourage energy consumption.
=
DRIVER
The price of energy is an important factor in
the interaction between energy and the
environment. Energy prices can influence
demand, decisions on energy-saving
investments and the choice of energy sources
(see Box 9).
X
ENERGY
DRIVER
X
Other factors remaining unchanged, the
environment would benefit from a reduction
in energy consumption resulting from high
energy prices. However, energy pricing is
also important to other policy areas
concerned with economic and social
development, employment protection and
market liberalisation. Generally these
policies aim for low energy prices, for
example:
PRESSURE
ENERGY
• EU and Member State energy policies
generally aim to ensure secure supplies of
energy at reasonable prices. This is
important both to support industrial
competitiveness (particularly for energyintensive industries) and socially, to
ensure that all EU citizens can afford the
energy services they need.
• Indigenous production of fossil fuels may
be supported to contribute to security of
supply or to maintain employment in
economically depressed areas.
• Market liberalisation aimed at reforming
the structure of energy supply has
increased competitiveness and resulted in
reduced prices to consumers.
Consequently this is an area where
environmental concerns can run counter to
other issues driving energy policy in the
absence of an appropriate policy framework
that aims at full internalisation of external
costs to the environment and better energy
demand management.
Energy prices do not always reflect the full
costs of energy to society because they do
not, or not completely, take account of the
impacts of production and consumption on
non-traded factors such as human health
and the environment. Strictly these external
costs should be included in energy prices to
ensure that decisions on the choice and
volume of energy consumption take account
of all the costs involved. However, there are
significant uncertainties in the evaluation of
external costs, particularly those linked to
environmental impacts, due to factors such
as their diversity, geographical variations and
the difficulty of setting exact values on nontraded goods. In practice governments
therefore seek to introduce external costs
associated with energy in less direct ways
through regulation, taxation, incentives,
tradeable emissions permits, and subsidy
review.
The sixth environment action programme
stresses the need to internalise the external
costs to the environment. It suggests a blend
of instruments that include the promotion of
the use of fiscal measures, such as
environment-related taxes and incentives, a
possible use of tradeable emissions permits
and emissions trading, and the undertaking
of an inventory and review of subsidies that
counteract the efficient and sustainable use
of energy, with a view to gradually phasing
them out.
This section examines the evolution of
energy prices over the 1985–2001 period,
and considers if this is consistent with the
EU’s environmental objectives.
55
Energy prices generally fell between 1985 and 2001, offering little incentive
for energy saving.
The real prices of all fuels, with the
exception of diesel and unleaded gasoline
for transport, fell between 1985 and 2001.
The decrease was greatest in the years
1986–87 when the crash in crude oil prices
had knock-on effects on natural gas, the
price of which tends to be indexed to crude
oil. The slower decline since then was
sustained by continuing low oil prices,
opening-up of additional natural gas
supplies to the EU, and progressive
liberalisation of the gas and electricity
markets leading to greater price
competition. This last factor, which is
continuing, was driven by the EU electricity
and gas directives (European Parliament and
Council, 1996b and 1998b). Oil prices
increased appreciably in 1999–2000
following an agreement within the
Organization of the Petroleum Exporting
Countries (OPEC) to restrict production,
and this contributed to an increase in the
prices of oil products and natural gas in
2000. However, electricity prices were not
affected by the oil price rise. This is due to
three factors: growing competition in
electricity markets, only a small fraction of
electricity being generated from oil, and the
weakening of the linkage between natural
gas and oil prices in a competitive gas
market.
End-user energy prices (euro/GJ at 1995 prices)
Fuel
Table 7
Price
1985
Price
2001
Percentage change in
price 1985–2001
11.2
5.1
- 54 %
8.6
5.1
- 41 %
Electricity: industry
26.2
13.6
- 48 %
Heating oil: households
17.0
11.0
- 35 %
Natural gas: households
16.7
12.2
- 30 %
Electricity: households
43.6
30.8
- 29 %
Diesel: road transport
757
772
2.6 %
Unleaded gasoline:
road transport
699
922
32 %
Heavy fuel oil: industry
Natural gas: industry
Unleaded gasoline was the only fuel to
record a substantial increase in price. This
was due mainly to moves by Member States
to progressively increase taxation on road
transport fuels such that tax on unleaded
gasoline accounted for 72 % of the price in
2001, an increase from 64 % in 1991.
However, much of this tax increase was
absorbed by reductions in the non-tax price
of unleaded gasoline, and most of the price
increase came in 2000, associated with the
increase in crude oil prices in that year.
Notes: Unleaded gasoline
price data are for 1991
instead of 1985. Transport
prices are in euro/1 000 litre.
Prices are those applicable
in January of each year.
Industry prices exclude value
added tax (VAT).
Source: Eurostat.
56
Energy and environment in the European Union
Despite increases in taxation from 1985 to 2001, energy prices for most fuels
dropped and the overall demand for energy increased.
Figure 23
combined with greater price competition in
the electricity and natural gas markets.
Proportion of tax in final energy prices
%
80
70
60
50
1985
40
2001
30
20
10
tra Die
ns se
po l:
rt
El
ho ec
us tri
eh cit
ol y:
ds
N
at
ho ur
us al
eh ga
ol s:
ds
H
ea
ho ti
us ng
eh o
ol il:
ds
El
ec
in tric
du ity
st :
ry
N
at
ur
in al g
du as
st :
ry
Fu
in el
du oi
st l:
ry
Un
ga lea
tra so de
ns lin d
po e:
rt
0
Note: Data for unleaded
gasoline are for 1991
instead of 1985.
Source: Eurostat.
Taxation offers one method for internalising
the external costs of energy consumption
into prices. It also offers a mechanism for
introducing price differentials to encourage
the use of less-polluting fuels.
The pattern of taxation across the EU between
1985 and 2001 has been to increase the
proportion of energy prices accounted for by
tax. This has occurred in part through
increases in the rate of tax, but it is also linked
to a reduction in before-tax energy prices. As
discussed in the previous section, this has
occurred through a decline in fossil fuel prices
Change in the absolute value of
taxation applied to fuels, 1985–2001
Figure 24
Unleaded gasoline: transport
Diesel: transport
Electricity: households
Natural gas: households
Heating oil: households
Electricity: industry
Natural gas: industry
Fuel oil: industry
-20
-10
0
10
20
30
40
Absolute change (%)
Note: Changes for unleaded
gasoline are for the period
1991–2001.
Source: Eurostat.
50
60
Energy taxation has also increased in
absolute terms, but, as shown in the
previous section, not sufficiently to prevent
overall reductions in energy prices for all
but road transport fuels. One important
exception is electricity consumption in
industry for which taxation in absolute
terms has fallen. This is because before-tax
prices have been reduced considerably as a
result of strong competition between
suppliers, and this tax is generally applied
as a percentage of the before-tax price.
The European Commission has proposed a
directive for restructuring the Community
framework for taxing energy products
(European Commission, 1997c), which
includes suggested minimum tax levels for
each fuel. This has not yet been agreed but
it is noteworthy that, on average for the EU
as a whole, actual taxes on transport fuels,
oil-based heating fuels and electricity in
2000 were higher than the proposed
minimum tax levels for 2000. Actual
taxation on natural gas was about equal to
the proposed minimum for the year 2000
for industry and above the minimum for
households.21
The generally modest increases in tax on
industrial energy consumption reflect
concerns over the impact of fuel prices on
national competitiveness, with Member
States seeking to encourage energy
efficiency through alternative schemes such
as voluntary agreements, awareness
campaigns and capital allowances. Some
Member States have adopted a ‘carrot and
stick’ approach with energy taxation,
combined with the option of significant
rebates if energy-efficiency targets are met
(DEFRA, 2000; EEA, 2000). Also studies
have suggested that a combination of
increased energy taxes and reduced
employment taxes could yield the double
dividends of reduced pollution and
increased employment (European
Commission, 2000f).
21 These conclusions hold true at the EU overall level. Different conclusions may be drawn for individual
Member States.
57
Taxation of transport fuels increased
substantially between 1985 and 2001, but the
impact on prices was partially offset by the
effects of falling crude oil prices and market
competition. Tax rates have been highest in
the UK, which from 1993 to 1999 applied a
fuel duty escalator that increased taxes by up
to 6 % per year. The UK government has
estimated that tax increases between 1996
and 1999 will have cut UK transport-related
carbon dioxide emissions by between 1 and
2.5 million tonnes of carbon per year by
2010 (i.e. 2 to 5.5 %) (DETR, 2000).
There is concern that fuel taxation is not the
most equitable way of taking account of
transport impacts. This is because off-peak
and rural travel are taxed at the same rate as
urban rush-hour travel but, due to their
lower volume of activity, do not cause the
same damage to health or the environment.
Consequently additional forms of taxation
may be introduced in future such as road
pricing and differential taxation of vehicles
according to their energy efficiency.
Taxes on the household consumption of
electricity and natural gas have increased
significantly, particularly in the last few years
of the 1990s. This has had the effect of
offsetting price reductions resulting from
energy market liberalisation and the
increased price competition this causes.
The relationship between energy prices, energy consumption and energy-related environmental pressures
The price of energy can have a direct
influence on demand and on the pressures
placed on the environment from energy
consumption. This arises through three
mechanisms.
First, price can affect the volume of demand for some energy-related services (i.e.
the driver).
Second, price can affect the amount of
energy consumed to deliver energy-related
services (i.e. energy/driver) through:
• Adopting alternative methods for
gaining the energy-related service (e.g.
switching between private and public
transport);
• Using more efficient devices for
converting energy into energy-related
services (e.g. more efficient cars, trucks,
boilers, lighting);
• Moving to different manufacturing and
service activities that require less energy
per unit of added value (i.e. structural
change).
Other things being equal, people are likely
to demand less energy-related services,
adopt less energy-intensive lifestyles and
business activities, and invest in more
efficient devices when the energy price is
high.
Third, price may influence the types of
energy we buy (coal, gas, oil, electricity,
etc.). Again, with all other things being
equal, it is logical to select the lowest price
source. Since some fuels are more polluting than others it follows that price can
directly affect the pressures placed on the
environment by energy use (i.e. pressure/
energy).
Nonetheless, price is not the only
determinant of demand for energy or
choice of technologies or fuels. Many other
factors affect the decisions of businesses
and
citizens, in particular the fiscal and
regulatory policy framework. Other factors
that affect decisions include the availability
and reliability of supplies, past experience,
existing infrastructure, capital constraints,
lack of information, fashion preferences,
general affluence and, increasingly,
environmental awareness.
Box 9
58
Energy and environment in the European Union
With fossil fuels supplying more than half the EU’s electricity, price levels
would need to be increased to include the estimated external costs of
electricity production.
Estimation of the external costs of electricity
production (i.e. those associated with impacts on
the environment and human health) is complex
and needs to take account, for example, of:
• Location—specific impacts determined by
factors such as the vulnerability of the
environment and the density of population;
• The exact specification of the fuel being
used (for example the sulphur content of
coal varies appreciably);
• The age of the plant and what emission
reduction devices are fitted.
Notes: Electricity prices
include all taxes and are
those applicable in January
2001. Industrial electricity
prices for Austria, Denmark
and the Netherlands are
those applicable in January
1999.
Source: European
Commission, Eurostat.
The most comprehensive source of external cost
assessments is the European Commission’s
ExternE project (European Commission,
1999b), which considered a range of electricity
generation technologies located across EU
Member States. This assessment examined
external costs related to impacts on human
health, crops, materials, forests and ecosystems,
as well as giving separate consideration to
climate change; it is the source of the data
presented here. The evaluation of climate
change was particularly uncertain because of
inadequate knowledge of the timing and severity
of the impacts, the capacity of systems to adapt,
the valuation of impacts in other world regions
and the discount rate to apply to impacts
occurring well into the future. Mid-range values
are included in the data presented here.
The external cost ranges presented in
Table 8 reflect the above uncertainties and
the differences in the type of location, fuel
specification and age of the technologies
examined. For example, the comparatively
high external cost of coal generation in
Belgium arises because an older plant with
less pollution control was examined.
Nonetheless the data show the graduation in
costs that can be expected, with most lignite
and coal having the highest costs and some
renewable energy sources offering the
lowest. The low nuclear external costs reflect
the small health and environmental impacts
of this technology under normal operation;
however, it is noted that further work is
needed to estimate the costs with sufficient
reliability because of the complexity of the
fuel cycle (European Commission, 1999b).
For the EU, it has been estimated that the
external costs of electricity production amount
to 1–2 % of GDP, excluding the costs of global
warming (European Commission, 2001h).
Comparison of these external costs with the
current prices for electricity show that the
external costs of coal and lignite electricity
production are of the order of 20–120 % of
household electricity prices and 50–240 % of
industrial electricity prices. For gas-fired
electricity production external costs are 7–38 %
for households and 13–73 % for industry.
Clearly the external costs are greatest for coal
and lignite, but they are still significant for gas.
Comparison of estimates of the external costs of electricity production from different
fuels with electricity prices (euro cents/kWh at constant 1995 prices)
Table 8
External costs
Coal and
lignite
Oil
Gas
Nuclear
Biomass
Prices
Hydro
Wind
Price of
industrial
electricity
Price of
household
electricity
EU
–
–
–
–
–
–
–
5.6
11.1
Austria
–
–
1–3
–
2–3
0.1
–
7.8
12.5
12.4
Belgium
4–15
–
1–2
0.5
–
–
–
6.3
Denmark
4–7
–
2–3
–
1
–
0.05
7.6
16.7
Germany
3–6
5–8
1–2
0.2
3
–
0.1–0.2
6.2
13.9
Spain
5–8
–
1–2
–
–
–
0.2
5.7
8.1
Finland
2–4
–
–
–
1
–
–
4.3
6.7
France
7–10
8–11
2–4
0.3
1
1
–
5.5
10.6
Greece
5–8
3–5
1
–
0–1
1
0.2–0.3
4.0
5.1
Ireland
6–8
–
–
–
–
–
–
4.9
6.6
Italy
–
3–6
2–3
–
–
0.3
–
7.0
16.8
Netherlands
3–4
–
1–2
0.7
0.5
–
–
5.4
14.6
Portugal
4–7
–
1–2
–
1–2
0.2
–
4.7
9.1
Sweden
2–4
–
–
–
0.3
0.03
–
3.3
9.0
UK
4–7
3–5
1–2
0.3
1
0–0.7
0.1–0.2
5.9
7.5
59
Subsidies continue to distort the energy market in favour of fossil fuels despite
the pressures these fuels place on the environment.
Subsidies on energy production and/or
consumption change the relative prices of
different energy sources, thereby affecting
decisions on which should be used. They
may also keep prices lower than they would
otherwise be, and consequently may
encourage increased consumption. Both of
these factors affect the pressures of energyrelated activities on the environment.
Governments use a broad range of methods
to provide subsidies including:
Estimated distribution of direct energy
subsidies (1990–95 average)
Figure 25
Note: Electricity subsidies
include support for research
and development on
storage methods, combined
heat and power, and crosscutting factors such as
power conditioning and load
management.
Source: Ruijgrok and
Oosterhuis, 1997.
%
60
50
40
30
20
• Direct financial support to particular
energy supply industries
• State supply quotas or state obligations
to purchase
• Low-cost or underwritten loans
• Limits on the liabilities of particular
energy industries
• Price support
• Preferential tax treatment
• Failure to internalise external costs
• Support for research and development.
production and consumption. It is important
to determine if this distribution has changed
in more recent years.
Consequently it is difficult to develop
reliable estimates of the total value of
subsidies to particular energy industries, let
alone to monitor how these change over
time. The data in Figure 25 show the results
of one estimate covering the 1990–95 period,
which includes only direct subsidies22. This
shows that most subsidies across the EU are
directed at supporting fossil fuels, with much
less support for renewable sources or energy
conservation. Clearly this distribution of
subsidies will not favour the reduction of the
environmental pressures caused by energy
Subsidies are used as a tool to achieve policy
objectives, which in the case of energy may
include security of supply, industrial
competitiveness and social/employment
concerns as well as environmental factors.
The challenge is to get an optimal balance
between these policy drivers. Moreover, the
removal or reduction of subsidies may not
yield environmental benefits in the short
term if the subsidies have encouraged
investment in durable infrastructure and
plant that are only replaced over long
periods (20 to 40 years).
10
ci
tri
ec
El
ab
w
ne
Re
er
ns
ty
s
le
n
va
tio
le
uc
N
Co
Fo
ss
il
fu
el
ar
s
0
22 Direct subsidies include direct payments from public budgets, tax receipts foregone due to tax reductions,
government funded R&D, and payments that reduce the cost of energy production, consumption or
conservation.
60
Energy and environment in the European Union
EU energy research and development expenditure has been reduced at a time
when innovation is needed to develop less-polluting technologies.
Million euro (year 2000 prices
and exchange rates)
3 000
2 500
2 000
1990
1998
1 500
1 000
500
er
R& gy
D
en
holders to deliver short-term profitability,
and therefore needs to be partially
supported by public funds.
Total energy R&D expenditure in the EU fell
by about 30 % between 1990 and 1998 (IEA,
1999; European Commission, 2001i). Within
this overall budget, expenditure on
individual technologies changed less
dramatically, with nuclear fission (34 %) and
fusion (22 %) R&D still taking more than
half the total in 1998. The share of R&D
targeted on renewable energy sources and
energy conservation increased, but in
absolute terms the budgets fell.
al
To
t
N
on
-n
u
en cle
er ar
gy
0
N
uc
fu lea
sio r
n
Note: Data are indicative
and are the result of
combining two data sets
that include different
methodologies and
definitions, covering
Member State expenditure
and EU-level funding
through the R&D European
Community framework
programmes. Framework
programme expenditure has
been estimated as an annual
average over the duration of
the programme. Nonnuclear research includes
renewable energy, energy
conservation, fossil fuel
production, power
production and storage
technologies, and crosscutting research.
Source: IEA and European
Commission.
Energy research and development expenditure
N
uc
fis lea
sio r
n
Figure 26
The environmental problems associated with
energy production and consumption are
unlikely to be solved by fiscal and marketbased measures alone. Innovative
technologies will also be needed to capture
less-polluting energy sources such as
renewable energy and to use energy with
maximum efficiency. This is particularly so in
the longer term when substantial reductions
in greenhouse gas emissions will be needed
to limit climate change to tolerable levels.
The longer-term research and development
(R&D) needed to produce such innovative
technologies is not always attractive to
businesses that are required by their share-
Budgets for fossil fuel R&D have declined,
which may seem reasonable since these are
mature technologies whose future
development should be left to industry.
However, the major reductions in
greenhouse gas emissions needed in the
long term may require advanced fossil plant
with carbon dioxide abatement technologies
at source and carbon dioxide disposal.
There is therefore a need for additional
research into this area including into the
potential environmental pressures associated
with options for carbon dioxide disposal, to
establish whether they offer an acceptable
approach to reducing greenhouse gas
emissions.
61
Annex 1
Background to the baseline energy and greenhouse
gas emissions projections
The baseline projections of energy
consumption and greenhouse gas emissions
used in this report were derived from work
carried out for the European Commission in
producing the report ‘Economic evaluation
of sectoral emission reduction objectives for
climate change’ (Ecofys, 2001).
The energy projections were made with the
PRIMES model, and were an update of an
earlier baseline projection developed in the
shared analysis project (European
Commission, 1999a). This earlier set of
projections was based on 1995 data and
assumed a continuation of 1998 policies over
the full modelling period. In the update
(NTUA, 2000a; NTUA, 2000b) an additional
assumption was made that the EU voluntary
agreement with the European, Japanese and
Korean car makers (the ACEA Agreement),
for a reduction in the average carbon dioxide
emissions for all new cars to 140 g/km by
2008-09, would be honoured. Other key
assumptions in the baseline projections are:
• EU economic growth in the period 2000
to 2010 is in line with historic trends at
around 2.3 % per year.
• The long-established trend of restructuring EU economies towards services and
high value-added products continues.
• Liberalisation and integration of the
electricity and gas markets are fully
developed in the second half of the
2000–10 period.
• Energy taxes remain unchanged in real
terms in all Member States.
• Technological improvements in energy
supply and demand technologies
continue.
• Support continues for renewable energy
and combined heat and power.
• There is continued extension of the
natural gas infrastructure across Member
States.
• Nuclear plant lifetimes are extended to
40 years.
Results from the PRIMES model were also
used to project the carbon dioxide emissions
attributable to energy use (NTUA, 2000a;
NTUA, 2000b). Projections of non-energy
related carbon dioxide emissions, and
emissions of the other five greenhouse gases
covered by the Kyoto Protocol23, to 2010
were made by a ‘bottom-up’ modelling
approach (Ecofys, 2001), based on emission
inventories for either 1990 or 1995, and
assuming a ‘frozen technology’ reference
level to 2010 — i.e. no change in the emission
level per unit of production compared with
the base year, with the following exceptions:
• Industrial emissions of adipic acid take
account of reduction measures taken
between the base year and 2000.
• Waste sector emissions take account of the
effect of abatement measures taken as a
result of the landfill directive after the
base year.
23 The Kyoto ‘basket’ of greenhouse gases consists of carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride.
62
Energy and environment in the European Union
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67
Acronyms and abbreviations
ACEA
BAT
CHP
CO2
CONCAWE
DG
DG ENV
DG TREN
DHI
DPSIR
EEA
EIONET
ETC
ETC-ACC
EU
Eurostat
ExternE
FCCC
FGD
GDP
GIEC
GJ
HFCs
IEA
IPCC
IPPC
ITOPF
JAMA
KAMA
km
ktonnes
kWh
MS
Mt
Mtoe
N2 O
NMVOC
NECD
NOX
NTUA
OECD
OPEC
OSPAR
PFCs
PM
SO2
TERM
toe
TWh
UNFCCC
WHO
European Automobile Manufacturers Association
Best available technology
Combined heat and power
Carbon dioxide
Oil companies’ European organisation for environment, health and safety
Directorate General of the European Commission
Directorate General Environment (of the European Commission)
Directorate General Energy and Transport (of the European Commission)
DHI Water and Environment, Denmark
Driving forces, Pressures, State, Impact and Responses
European Environment Agency
European Information and Observation Network
European Topic Centre
European Topic Centre on Air and Climate Change
European Union
Statistical Office of the European Union
Externalities of fuel cycles project
Framework Convention on Climate Change (UN)
Flue gas desulphurisation
Gross domestic product
Gross inland energy consumption
Gigajoule
Hydrofluorocarbons
International Energy Agency
Intergovernmental Panel on Climate Change
Integrated pollution prevention and control
International Tankers Owners Pollution Federation
Japanese Automobile Manufacturers Association
Korean Automobile Manufacturers Association
Kilometre
Thousand tonnes
Kilowatt hour
Member State (of the European Union)
Million tonnes
Million tonnes of oil equivalent
Nitrous oxide
Non-methane volatile organic compounds
National emission ceiling directive
Nitrogen oxides, including nitric oxide (NO) and nitrogen dioxide (NO2)
National Technical University of Athens
Organisation for Economic Co-operation and Development
Organization of the Petroleum Exporting Countries
Joint Oslo and Paris Commissions
Perfluorocarbons
Particulate matter
Sulphur dioxide
Transport and Environment Reporting Mechanism of the EU
Tonnes of oil equivalent
Terrawatt hour
United Nations Framework Convention on Climate Change
World Health Organization
68
Energy and environment in the European Union
European Environment Agency
Energy and environment in the European Union
Environmental issue report No 31
Luxembourg: Office for Official Publications of the European Communities
2002 — 68 pp. — 21 x 29.7 cm
ISBN 92-9167-468-0
Price (excluding VAT) in Luxembourg: EUR 20,50
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