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IEACCC/121

European legislation (revised LCPD and EU ETS) and coal

AUTHOR: Hermine Nalbandian
DATE: March 2007
PAGES: 68

ABSTRACT:
The revised (2001) Large Combustion Plants Directive (LCPD) is a legislative tool that mandates further reduction of SO2, NOx and particulate matter emissions compared to those required in the first LCPD (adopted in 1988) from all combustion plants >50 MWth. The EU Emissions Trading Scheme (ETS), a key instrument in the drive to reduce greenhouse gas emissions (GHGs) – mainly CO2 – was launched in the European Union (EU) in January 2005 and encompassed all facilities >20 MWth. Both these legislative instruments have affected the operation of existing as well as new coal-fired power plants and will continue to do so. The directive and the scheme are phased to allow continued monitoring, reduction and control of all emissions involved. The revised LCPD necessitates the installation of technologies, in phases, to achieve the required emissions otherwise forces a reduction in operational hours and then the shutting-down of some facilities by a specified time.

The EU ETS should, theoretically, ensure that emission reduction takes place at the lowest cost thus minimising the overall expense of combatting climate change. The ETS allows governments to regulate the amount of emissions produced in aggregate by setting the overall cap for the scheme. It also allows utilities the flexibility of determining how and where the emissions reductions are achieved. This review examines the potential medium- to long-term impacts of the revised LCPD and the EU ETS on coal’s contribution to the EU power sector energy mix and the implications for EU energy security of supply.