1. European Commission: 1 Climate Change and Transport 11 December 2007 Hans Meijer European Commission DG ENV C3

2. European Commission: 2 Presentation Overview l Climate Change introduction l Transport and Climate Change l Fuel Quality l CO 2 and cars l Maritime Transport l Aviation l Conclusions

3. European Commission: 3 Ten warmest years on record 1998200520032002200420062001199719951999 Source UN – International Meteorological Organisation

4. European Commission: 4 Sea level rise l 0.15-0.20 m since 1990 l 0.55 – 1.2m by 2100

5. European Commission: 5 Climate response times

6. European Commission: 6 Winners and losers Changes in Mean Annual Temperature

7. European Commission: 7 EU15 – CO emissions (1990 -2004) EU15 – CO 2 emissions (1990 -2004)

8. European Commission: 8 EU15 Transport GHG Emissions

9. European Commission: 9 EU climate action l EU has agreed a 20% reduction in GHG emissions by 2020 compared to 1990 (30% if other developed countries take similar action) l -60-80% by 2050 (EU Heads of states, March 2007) l Transport currently represents almost 30% of EU GHG emissions. l Transport is the only major EU sector where emissions are increasing.

10. European Commission: 10 Cost of inaction l Costs of inaction: 5-20% of global GDP (Stern Review) l Costs of global action (2030): m Investment costs: 0.5% of global GDP per year m Reduce global GDP growth by 0.19% per year m Reduce global GDP growth by 0.12 % per year (IPCC WG3) l Co-benefits: m Increased energy security m Improved competitiveness through innovation m Health benefits from reduced air pollution m Preparation for post fossil fuels l Does not include avoided climate change costs

11. European Commission: 11 27 Gt of emission reductions possibilities below € 40 per ton CO 2

12. European Commission: 12 What needs to be done? l Possibilities m m Reduce demand for transport m m Increase energy efficiency of transport m m Reduce the greenhouse gas intensity of energy used in transport l Probably need to do all l Reducing fuel GHG intensity cannot be done without assessing fuel life cycle emissions

13. European Commission: 13 Reducing GHG emissions from road transport fuel (Low Carbon fuel standard)

14. European Commission: 14 How did EU LCFS come about? Low Carbon Fuel Standard Review of Directive 98/70 New fossil fuels Biofuel policy 20% GHG reduction target CO2 and cars policy

15. European Commission: 15 Why a LCFS is important l Increasing diversity of transport energy supply l Focus on the type of fuel is no longer sufficient (all biofuel is not the same) l To make users pay for the cost of decarbonising fuel l To provide incentive to develop better low-carbon fuel technologies l To ensure lowest cost approach to fuel decarbonisation. l Technology neutral – no picking winners

16. European Commission: 16 Political steps l Commission adopted proposal for modification of Directive 98/70 in Jan 2007 l Proposal contains a political objective of 10% decarbonisation of transport fuel between 2010 and 2020 l European Parliament supportive of the proposed approach, Plenary vote January 2008 l Member States in the Council have generally welcomed the goal. 25 Out of 27 MS support proposal (October 30) l Commission working hard to develop detailed methodology that will be needed to calculate GHG savings

17. European Commission: 17 CO 2 and cars

18. European Commission: 18 Revised CO 2 and cars strategy Communication February 2007 (proposal end 2007): 120 g delivered in 2012 through an “integrated approach” 120 g delivered in 2012 through an “integrated approach” a) 130 g (46.4mpg) on the vehicle side (fleet average); b) 10 g through additional measures on car components (tyres, airco etc.) and increased use of biofuels. Review in 2010 to assess potential for progress beyond 120g/2012 Review in 2010 to assess potential for progress beyond 120g/2012 Estimated cumulated savings 2010-2020: > 800 Mt CO2eq Estimated cumulated savings 2010-2020: > 800 Mt CO2eq

19. European Commission: 19 l The automotive value chain remains at the heart of the new strategy… rVehicle technology improvements (engine, transmission, hybridisation, vehicle body etc.) rEfficiency requirements for air-conditioning systems rTyre pressure monitoring systems rLow rolling resistance tyres rGear shift indicators rMandatory fuel efficiency targets for light- commercial vehicles Revised CO 2 and cars strategy (2)

20. European Commission: 20 Example of a label: Netherlands

21. European Commission: 21 Heavy duty vehicles l Commission has recently been studying the degree of which road haulage sector takes up potential GHG reducing measures l Report not finalized but clear that there remain significant opportunities to reduce GHG emissions l Commission will need to decide what further action to take when final report is ready

22. European Commission: 22 International Maritime Transport

23. European Commission: 23 Progress in IMO / UNFCCC l Kyoto Protocol – obliges parties to work through IMO l IMO first addressed issue in 1997 l Pilot study on CO 2 indexing – will report in 2008 l Commitment to ‘consider…methods for dealing’ with GHG emissions 2008/2009 l No view on binding reduction measures yet l Post 2012 negotiations to conclude in 2008! l EU aims to include emissions shipping here

24. European Commission: 24 IMO CO 2 Index

25. European Commission: 25 EU Policy Options EU Policy Options l Actively examining options for EU action m Option 1 - Include shipping in EU ETS m Option 2 - Variation in harbour dues m Option 3 - Mandatory CO 2 index limit m Others…..

26. European Commission: 26 Aviation

27. European Commission: 27 Aviation & EU ETS l Commission proposal for to include aviation activities in EU ETS adopted end 2006 (COM(2006)818) l CO2 emissions only, details not finalized l Intra-EU flights in 2011, expanded to all flights arriving in or departing from the EU from 2012 l Not apply to flights arriving from 3 rd country that has comparable measures in place l Still discussions on percentage of allowances to be auctioned and allowances to be allocated for free on basis of a benchmark l Aircraft operators can buy allowances from other trading sectors and use CDM credits

28. European Commission: 28 Aviation & EU ETS: ICAO l International aviation emissions not included in Kyoto targets, Annex I Parties to “…pursue limitation or reduction of [GHG emissions of from aviation], working through the ICAO” l ICAO discussions on market-based measures since 1991 and emissions trading since 1998 l 2001 ICAO Assembly: m Endorsed development open emissions trading for international aviation; m Requested ICAO Council to develop guidelines as a matter of priority l 2007 ICAO Assembly: m Opposition to application of ETS without mutual consent m Strong difference in opinion resulting in formal reserve on ICAO resolution by 42 Member States of the European Civil Aviation Conference (including 27 EU Member States)

29. European Commission: 29 Next steps l European Parliament Nov 2007: m Start for incoming & outgoing in 2011 m Cap at 90% of average 2004-6 emissions m 25% auctioning, increased to max level other sectors after 2012 m Multiplier of 2 to reflect NOx emissions m CDM/JI cap includes access to ETS m Weight threshold increase for companies in offset schemes m New entrants reserve l Council 1 st reading by end of 2007 l Adoption in the course of 2008

30. European Commission: 30 Conclusions l Debate is needed on contribution transport to meeting EU GHG emission targets l Time frame about 30 years: about the lifetime of ships, planes, locomotives which are bought now! l Attention to side effects: cost of acting now vs cost of inaction; reduce GHG can go along with low air pollution and low noise  better quality of life l At this moment: dependency on transport still increasing  Better planning offices/factories/shopping centres! l The larger reductions of energy intensity are, the lower need to reduce transport itself l Transport costs likely to increase but at the moment small percentage of cost final product.

31. European Commission: 31 Relevant links l Life + (strategic Priorities: Climate Change, Noise, Urban Areas, Air Quality) http://ec.europa.eu/environment/life/funding/lifeplus.htm l Research to quantify the climate impact of the global and European transport systems for the present situation and for different scenarios of future development http://ip-quantify.eu/ l European Assessment of Transport Impacts on Climate Change and Ozone Depletion http://www.ssa-attica.eu http://ec.europa.eu/environment/air/transport.htm

32. European Commission: 32 Own role