European Union

Making policy for climate’s sake

Europe is the land where climate policy has been explicit. Seeking to lead the world in terms of climate mitigation policy, it has integrated policy across many, varied states, and its nations have developed and implemented ambitious policies of their own. The challenge in Europe is to continue providing leadership in the face of an economic crisis, while accounting for national differences in outlook and policy.

sectorIndustry

These graphs show the changes in emissions, emissions drivers, and policy in the Industry sector in the EU

 
 
 

Emissions Industrial emissions and production in the EU27


Despite increasing output in the industrial sector, direct emissions fell, while electricity demand rose as the industrial sector shifted fuel consumption towards a less carbon intensive fuel mix.

     
     
     
     

    Emissions Drivers Energy efficiency index (Odex) in industry in the EU27


    Industrial energy efficiency improved across the board since 1990. There were no structural changes in industry that affected emissions intensity.

       
       
       
       

      Policy Emissions targets


      The EU ETS is the world’s first significant carbon market, and has been operating since 2005. Roughly 45% of the EU’s emissions—including industrial sectors—are covered by the market. In addition, the EU has targeted specific technologies through voluntary agreements and minimum energy performance standards (not shown).

         
        • Climate change took a prominent place on the EU political agenda in the 1990s. EU industry saw improved energy efficiency as energy intensive plants in Eastern Europe closed and the EU passed regulation to limit CO₂ and other pollutants from industrial facilities.

          • Policy Barriers

            • Regulation of pollution from industrial facilities increased and instituted
              Large Combustion Plant Directive (88/609/EEC) limits on CO₂, NOx, and SOx from large combustion plants
              1996 Integrated Pollution Prevention and Control (IPPC) Directive (96/61/EC) instituted a comprehensive permitting regime for industrial facilities to cover all types of pollution
          • Underlying changes

            • Change in the make-up of European industry in early 1990s:
              Industry saw energy efficiency improvements and a shift to less energy-intensive activities
              Closure of energy-intensive industries in Eastern Europe (EEA 2011)
              Significant growth in gross value added (GVA) of services and products
            • Low gas prices drove fuel switch from coal to gas in the industry sector (EEA 2011)
        • Regulatory action on CO₂ and other pollutants from the 1990s was in full swing and further refined while Europe’s evolving Emissions Trading System (ETS) commenced mid-decade. Both contended with the economic downturn later in the decade.

          • Policy Barriers

            • Energy Taxation Directive (2003/96/EC) set minimum tax rates for energy products to incentivize energy efficiency
              Member States varied in energy tax rate levels implemented under Directive
            • Emissions Trading System (ETS) commenced in 2005 (2003/87/EC, amended 2009/29/EC), covering a wide-range of industrial sectors
              First Phase (2005-2007)
              Allowance prices crashed in 2006 due to oversupply as allowances were non-transferable to Second Phase
              Second Phase (2008-2012)
              Allowance prices fell and remained low as a response to economic recession driven fall in emissions
              Norway, Iceland, and Liechtenstein joined the ETS
            • Regulation of pollution from industrial facilities continued under the Large Combustion Plant Directive (updated by 2001/80/EC) and the IPPC (updated by 2008/1/EC)
          • Underlying changes

            • Rising share of biomass in industrial power generation
            • Increased reliance by the manufacturing sector on generation from public electricity power plants (EEA 2011)
            • Growth of GVA slowed during the decade, particularly from 2003 to 2007
            • Effciency continued to improve (EEA 2011)