Baseline developments for NEC Directie revision

Projections Expert Panel

25 October 2007

Dublin, Ireland

Eduard Dame

DG Environment C5, Energy & Environment

Baselines

2005 CAFE Baseline

2006 NECD Member States baseline

EU-wide baselines based on PRIMES 2005 model no carbon constraint

0 € per ton CO2 in 2020 low carbon constraint / with or without CCS

12 € per ton Co2 in 2012 and 20 € per ton CO2 in 2020

high carbon constraint / with or without CCS 90 € per ton CO2 in 2020

Coherent scenario- 22% CO2 reduction

EU-wide baselines based on PRIMES 2007 model Business as usual baseline Greenhouse gas burden sharing baseline scenario

Cost implications of a more ambitious climate scenario

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20

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60

80

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120

140

National projections Coherent scenario

Bill

ion

€/yr

Indicative costs for changes in the energy system to meet climate and energy targets Costs for further measures to achieve the TSAP targets Costs for implementing current air pollution legislation

GHG emission projections by Member States 2010 -

2020

EU27 2005 GHG emissions: 7.9% below 1990 levels

EU27 2010 GHG emissions: Existing measures: 5.0% below 1990 levels Additional domestic policies and measures

under preparation: 9.5% below 1990 levels Including EU ETS, Kyoto mechanisms and

carbon sinks: 14.2% below 1990 levels EU27 2020 GHG emissions:

5.5% below 1990 levels

New baseline CO2 projections with PRIMES

Primes is a partial-equilibrium energy model market clearing in the energy system taking into account individual behaviour of economic agents

Baseline includes no new policies Assumptions used:

Annual EU27 GDP growth for the period 2005-2020 of 2.4% Annual EU12 GDP growth for the period 2005-2020 of 4.5%

Includes EU ETS with carbon price 2010: 20 €/t CO2

2020: 22 €/t CO2

previous run assumed carbon price of 5 € in EU ETS

Global Energy prices are revised upwards in the new baseline compared to the baseline of 2005!

Annual energy intensity Improved with 1.4% annually between 1990-2005 Projected to improve with 1.8% annually between

2005-2020!

Baseline 2007

Baseline 2005

$ (05)/ boe 2010 2020 2010

2020

Oil 54.5 61.1 44.6 48.1

Gas 41.5 46.0 33.9 37.0

Coal 13.7 14.7 12.5 14.1

New baseline CO2 projections with PRIMES

Result: Carbon intensity energy mix remains flat in

baseline

0

200

400

600

800

1000

1200

1400

1600

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2000

1990 1995 2000 2005 2010 2015 2020

0

20

40

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80

100

renewables

nuclear

natural gas

oil

solids

carbonintensityenergyintensity

C a rb o n a nd E ner g y in te n s ity 1 9 9 0= 1 0 0

m to e

Source : PRIMES

CO2 emission changes in baseline

92%

94%

96%

98%

100%

102%

104%

106%

108%

2005 2010 2020

10

0%

= 1

99

0 C

O2

em

iss

ion

s

2005 Baseline EU 25

2007 Baseline EU 25

2007 Baseline EU 27

Result: CO2 emissions increase again by 2020

Source : PRIMES

Overall GHG baseline projections 2020 without

additional policies

Non-CO2 gases (CH4, N2O and F-gases) from the GAINS model: are estimated using National projections for the NEC

directive that estimate future activity data from sources of non-CO2 gases

CO2 from PRIMES (includes outbound aviation!) Projections 2020 compared to 1990: +5.2 % Projections 2020 compared to 2005: +7.9 %

Non-CO2 from GAINS Projections 2020 compared to 1990: -25.3% Projections 2020 compared to 2005: -5.8%

All GHG from PRIMES-GAINS Projections 2010 compared to 1990: -5.9% Projections 2020 compared to 1990: -1.4% Projections 2020 compared to 2005: +5.4%

Compare different projections

Source : Member States projections, PRIMES-GAINS

0,00

1000,00

2000,00

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4000,00

5000,00

6000,00

19

90

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95

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00

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05

20

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20

20

Year

Mt

CO

2 e

q.

EU-27 emissions

EU-27 existing measures

EU-27 additional measures

EU-27 2020 projection

EU-27 20% target by 2020

EU-27 30% target by 2020

Primes-GAINS baselineprojection

Primes-Gains projections are in line with MS projections for existing measures

Energy consumption EU-272000, National projections and PRIMES baseline 2020

0

5

10

15

20

25

30

Coal Biomass,waste

Heavy fueloil

Diesel Gasoline Natural gas Nuclear Otherrenewables

Exa

jou

le

2000 National projections 2020 PRIMES baseline 2020

Baseline emission projectionsEU-27, Current legislation

0%

20%

40%

60%

80%

100%

2000

2010

2020

2000

2010

2020

2000

2010

2020

2000

2010

2020

2000

2010

2020

SO2 NOx PM2.5 NH3 VOC

Rel

ati

ve t

o 2

000

National projections PRIMES 2007 baseline

Impact indicators for the baseline projections

0%

20%

40%

60%

80%

100%

PM health impacts(YOLLs)

EutrophicationEcosystems area

Acidification Forestarea

Ozone Prematuredeaths

Per

cen

t of

ind

icat

or

in 2

000

National projections (+3% CO2) PRIMES 2007 baseline TSAP policy target

Conclusions

The new PRIMES baseline scenario has been implemented in GAINS.

While for the EU-27 overall CO2 emissions are very similar, there are still discrepancies to national energy and CO2 projections.

In total, air pollution emissions are similar to the national projections, and consequently the (baseline) air pollution impacts too.