1. Baseline developments for NEC Directie revision Projections Expert Panel 25 October 2007 Dublin, Ireland Eduard Dame DG Environment C5, Energy & Environment

2. Baselines 2005 CAFE Baseline 2006 NECD Member States baseline EU-wide baselines based on PRIMES 2005 model l no carbon constraint 0 € per ton CO2 in 2020 l low carbon constraint / with or without CCS 12 € per ton Co2 in 2012 and 20 € per ton CO2 in 2020 l high carbon constraint / with or without CCS 90 € per ton CO2 in 2020 l Coherent scenario - 22% CO2 reduction EU-wide baselines based on PRIMES 2007 model l Business as usual baseline l Greenhouse gas burden sharing baseline scenario

3. Cost implications of a more ambitious climate scenario

4. GHG emission projections by Member States 2010 -2020 l EU27 2005 GHG emissions: m 7.9% below 1990 levels l EU27 2010 GHG emissions: m Existing measures: 5.0% below 1990 levels m Additional domestic policies and measures under preparation: 9.5% below 1990 levels m Including EU ETS, Kyoto mechanisms and carbon sinks: 14.2% below 1990 levels l EU27 2020 GHG emissions: m 5.5% below 1990 levels

5. New baseline CO 2 projections with PRIMES l Primes is a partial-equilibrium energy model  market clearing in the energy system taking into account individual behaviour of economic agents l Baseline includes no new policies l Assumptions used: m Annual EU27 GDP growth for the period 2005-2020 of 2.4% m Annual EU12 GDP growth for the period 2005-2020 of 4.5% l Includes EU ETS with carbon price m 2010: 20 €/t CO 2 m 2020: 22 €/t CO 2  previous run assumed carbon price of 5 € in EU ETS

6. l Global Energy prices are revised upwards in the new baseline compared to the baseline of 2005! l Annual energy intensity m Improved with 1.4% annually between 1990-2005 m Projected to improve with 1.8% annually between 2005-2020! Baseline 2007Baseline 2005 $ (05)/ boe2010202020102020 Oil54.561.144.648.1 Gas41.546.033.937.0 Coal13.714.712.514.1 New baseline CO 2 projections with PRIMES

7. Result: Carbon intensity energy mix remains flat in baseline Source : PRIMES

8. Result: CO2 emissions increase again by 2020 Source : PRIMES

9. Overall GHG baseline projections 2020 without additional policies l Non-CO 2 gases (CH4, N2O and F-gases) from the GAINS model: m are estimated using National projections for the NEC directive that estimate future activity data from sources of non-CO2 gases l CO 2 from PRIMES (includes outbound aviation!) m Projections 2020 compared to 1990: +5.2 % m Projections 2020 compared to 2005: +7.9 % l Non-CO 2 from GAINS m Projections 2020 compared to 1990: -25.3% m Projections 2020 compared to 2005: -5.8% l All GHG from PRIMES-GAINS m Projections 2010 compared to 1990: -5.9% m Projections 2020 compared to 1990: -1.4% m Projections 2020 compared to 2005: +5.4%

10. Compare different projections Source : Member States projections, PRIMES-GAINS Primes-Gains projections are in line with MS projections for existing measures

11. Energy consumption EU-27 2000, National projections and PRIMES baseline 2020

12. Baseline emission projections EU-27, Current legislation

13. Impact indicators for the baseline projections

14. Conclusions l The new PRIMES baseline scenario has been implemented in GAINS. l While for the EU-27 overall CO 2 emissions are very similar, there are still discrepancies to national energy and CO 2 projections. l In total, air pollution emissions are similar to the national projections, and consequently the (baseline) air pollution impacts too.