EU energy sector makes insufficient progress in reducing its environmental impact

NEWS RELEASE

Copenhagen, 30 May 2002

EU energy sector makes insufficient progress in reducing its environmental impact

Energy consumption in the European Union is rising, mainly because of transport growth, energy efficiency is improving only slowly and renewable energies need to expand by at least double the current rate if targets for boosting their market shares by 2010 are to be reached

These are among the main conclusions from the European Environment Agency's first report on energy and the environment in the EU, published today.

Energy is central to social and economic well-being, but its production and consumption put considerable pressures on the environment. These include contributing to potentially dangerous changes in the global climate, damaging natural ecosystems, tarnishing the built environment and harming human health.

"The report shows that, while there have been some successes, overall progress in building environmental protection needs into energy policy has so far been insufficient," said Domingo Jiménez-Beltrán, EEA Executive Director.

He added: "It also demonstrates that some countries and sectors in the EU are doing much better than others. The EU could improve its overall record if those Member States whose performance is below average were to learn from the leaders.

"There is scope for further improvement even in areas where the EU is already ahead of the United States, such as the energy intensity of the economy and emissions of climate-altering greenhouse gases," Mr Jiménez-Beltrán continued.

EU emissions of greenhouse gases fell by 3.5% between 1990 and 2000, but without additional counter-measures they are likely to rise back to around their 1990 level by the year 2010. This is because of a projected increase in energy-related emissions, driven mainly by strong demand for transport fuels.

The EU would consequently be at risk of missing its target, set under the Kyoto climate change Protocol, of cutting greenhouse gas emissions to 8% below their 1990 levels by the 2008-2012 period.

Furthermore, energy consumption levels are expected to continue increasing beyond 2010. This will make greenhouse gas emission cuts difficult to achieve unless policy action is taken now to change long-term patterns of energy production and consumption.

The report uses indicators of progress to assess how effectively environmental policies and concerns are being integrated into energy policies in the EU and its Member States. Integrating the environment into other policies is a stated goal of the EU treaty.

Energy and Environment in the European Union points out that, despite increases in energy taxation, most energy prices in the EU have dropped since 1985.

The report warns that this trend is likely to discourage energy saving efforts and may even encourage energy consumption unless policies are put in place to improve energy demand management and integrate energy's "external" costs - to the environment and human health - into its price.

The external costs of electricity, for example, are estimated at 1-2% of the EU's gross domestic product.

On the brighter side, the report shows that measures to cut air pollution from energy use have been successful and that discharges of oil into the sea have been reduced, although they still put significant pressure on the marine environment.

Manufacturing industry has successfully "decoupled" its energy consumption from its economic growth, but it is the only sector to have done so. Its energy consumption in 1999 was about the same as in 1990.

Another positive element is that several countries have led the way in demonstrating the effectiveness of specific measures in promoting growth in renewable energy and in improving energy efficiency.

Mr Jiménez-Beltrán said:

"I am convinced that this first report on energy and the environment will prove its added value for the governance of energy policy. The successes and failures it highlights should help to make the case for implementing policies, for example in the area of taxation, to steer the liberalisation of energy markets towards sustainability."

The report's main findings include the following:

• Energy prices generally fell between 1985 and 2001 despite increases in taxation. This created little incentive for energy saving, and overall energy demand increased.
• Subsidies continue to distort the energy market in favour of fossil fuels, even though the pressures these impose on the environment are well known.
• While innovation is needed to help develop less-polluting technologies, spending on energy research and development fell by around 30% between 1990 and 1998.
• Energy consumption rose by an average of 1.1% a year between 1990 and 1999, mainly because of growth in transport but also in the household and services sectors. Growth is expected to continue to 2010, though at a lower rate, as an agreement by the car industry to improve vehicle fuel efficiency yields results.
• Improvements in energy efficiency have been slow, but some countries have demonstrated the potential benefits of good strategies and practices. With the exception of manufacturing industry, no sector has "decoupled" its energy consumption from its economic development sufficiently to stop consumption from growing.
• At 1.9% per year, electricity consumption grew faster than final energy consumption between 1990 and 1999. This trend is expected to continue.
• The share of electricity produced from combined heat and power (CHP) increased from 9% in 1994 to almost 11% in 1998, but faster growth is needed to meet the EU's indicative target of an 18% share by 2010. Preliminary information suggests that CHP's share of electricity declined between 1998 and 2001.
• Fossil fuels continue to dominate energy use but environmental pressures have been limited by a switch from coal and lignite to relatively cleaner natural gas. However, no further switching is expected after 2010.
• Renewable energy output grew by an average 2.8% per year between 1990 and 1999 but its share of total energy consumption grew only slightly, from 5.0% to 5.9%, because total consumption also rose. Projections of future energy demand imply that the annual rate of growth in renewable energy needs to more than double, to 7%, if the EU's indicative target of a 12% share by 2010 is to be met. Experience in some Member States suggests that certain support measures can accelerate growth.
• Similarly, the growth rate of electricity produced from renewable energy sources (2.8% per year between 1990 and 1999) needs roughly to double if the indicative target of raising renewables' share of EU electricity consumption to 22.1% by 2010 is to be reached.
• Total EU greenhouse gas emissions fell by 3.5% between 1990 and 2000 but energy-related emissions, by far the largest component, fell by much less. This makes significant reductions in total emissions unlikely in the medium term.
• The fall in energy-related greenhouse gas emissions over the last decade was achieved through considerable reductions by the manufacturing and energy supply sectors, such as the electricity sector. These reductions were mostly offset by growth in transport.
• Measures taken to reduce atmospheric pollution from energy use are proving successful, with a number of Member States on track to meet EU targets for reducing emissions of sulphur dioxide, nitrogen oxides and non-methane volatile organic compounds by 2010.
• The electricity sector significantly reduced its emissions of acidifying pollutants and greenhouse gases, mainly as a result of the switch from coal and lignite to natural gas and the introduction of specific measures to address acidifying emissions. Improved efficiency and an increase in the share of electricity from nuclear energy and renewables also contributed to this development, though in a much smaller way.
• Highly radioactive waste from nuclear power production continues to accumulate, and a generally acceptable disposal route has yet to be identified.
• Oil discharges from coastal refineries, offshore installations and maritime transport have been reduced but still place significant pressures on the marine environment.
  

The report can be downloaded from the EEA web site at http://reports.eea.europa.eu/environmental_issue_report_2002_31.

Notes for Editors

• The 3.5% reduction in EU greenhouse gas emissions between 1990 and 2000 compares with an increase by the United States over the same period of 21%. Neither figure takes account of possible absorbtion of carbon by "sinks" such as forests. The US increase was 14% if account is taken of sinks.
• The greenhouse gases controlled by the Kyoto Protocol are carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O), plus three fluorinated industrial gases: hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6).
• Energy-related emissions are emissions from the combustion of all fuels used for energy.
• Final energy consumption is the energy consumption of the transport, household, agriculture and services sectors. It includes the consumption of converted energy (ie electricity, publicly supplied heat, refined oil products, coke, etc) and the direct use of primary fuels, such as natural gas and certain renewable sources (eg solar heat and biomass).
• Renewable energy can produce both electricity and heat. Renewable energy sources include solar, wind, biomass and waste, hydropower (large and small schemes) and geothermal.
• Combined heat and power plants not only generate electricity but also make use of some of the heat that is produced and would otherwise be lost. This is important for the environment as it results in increased energy efficiency.
• Sulphur dioxide (SO2), emitted when sulphur-containing substances such as coal and oil are burned, contributes to acidification.
• Nitrogen oxides (NOx), emitted when fossil fuels are burned, contribute to both acidification and ground-level ozone pollution.
• Acidification is caused by the deposition of acidifying substances that can damage buildings and environmental media, such as freshwater systems, forests, soil and natural ecosystems, and is also linked to adverse health effects.
• Non-methane volatile organic compounds (NMVOCs), emitted by a wide range of sources in industry, transport, households and agriculture, contribute to ground-level ozone pollution.
  

About the EEA

The European Environment Agency is the main source of information used by the European Union and its Member States in developing environment policies. The Agency aims to support sustainable development and to help achieve significant and measurable improvement in Europe's environment through the provision of timely, targeted, relevant and reliable information to policy-making agents and the public. Established by the EU in 1990 and operational in Copenhagen since 1994, the EEA is the hub of the European environment information and observation network (EIONET), a network of some 300 bodies across Europe through which it both collects and disseminates environment-related data and information.
The Agency, which is open to all nations that share its objectives, currently has 29 member countries. These are the 15 EU Member States; Iceland, Norway and Liechtenstein, which are members of the European Economic Area; and 11 of the 13 countries in central and eastern Europe and the Mediterranean area that are seeking accession to the EU - Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Romania, Slovenia and the Slovak Republic. Their membership makes the EEA the first EU body to take in the candidate countries. It is anticipated that the two remaining candidate countries, Poland and Turkey, will ratify their membership agreements within the next few weeks. This will take the Agency's membership to 31 countries. Negotiations with Switzerland on membership are also under way.