Is NOx and SO2 trading smart policy?

On 30 September, BUSINESSEUROPE (the Confederation of European Business, organised a seminar entitled “Is NO_x and SO₂ trading smart policy?”. Interventions by representatives from industry, the European Environment Bureau, the European Parliament and the German Ministry for the Environment made it clear that they do not believe it is.

The European Parliament’s Rapporteur on the Industrial Emissions Directive, Holger Krahmer (EPP, Germany), highlighted that significant reductions in air pollution emissions had been achieved since the 1990’s, indicating that good and successful legislation had been introduced in the Member States. He was thus sceptical about the possibility of achieving further reductions with an NO_x and SO₂ trading scheme, as he doubted such a system would be beneficial to improving air quality, reducing the cost burden on industry or creating a level playing field. In his view, the best way to further reduce air pollution emissions is by correctly implementing existing legislation. Pieter de Pous, from the European Environment Bureau, stressed that as the impact of NO_x emissions was local, they should be dealt with locally. He therefore encouraged publication of the revised NEC directive, revising existing NO_x standards and setting tighter ceilings.

Marianne Wenning, from the European Commission (Head of Unit DG Environment), indicated that ENTEC was currently finalising its second study, with the results due to be published during the week of 4 October. This study takes a broader view, looking at, for example, the benefits and costs for industry of such a trading scheme, as well its impact on jobs, competitiveness and price rises.

CEMBUREAU Chief Executive then provided participants with an overview of the reduction potential in the cement industry, based on the results of an independent study by Ecofys/Emission Care (commissioned by CEMBUREAU). This report concludes that the window of opportunity for the introduction of an ETSⁱ for NO_x and SO₂ is small and therefore risky as the ETS for NO_x and SO₂  would be introduced at a relatively late stage by which emissions will have already been substantially reduced through existing instruments. In addition, CEMBUREAU stressed the fact that indirect costs must also be taken into account, highlighting the increase in electricity prices resulting from the scheme, as well as the costs relating to monitoring and reporting. CEMBUREAU is therefore not in favour of the introduction of legislation that would contribute little to NO_x and SO₂  emission reductions, at a disproportionate cost, compared to the enforcement of existing legislation.

Norbert Salmon, from the German Ministry for the Environment, Nature Conservation and Nuclear Safety (Deputy Director General), shared the view that NO_x and SO₂ emissions have direct and indirect impacts at local and regional level, and thus these local pollutants should not be reduced at European level.

He also added that it is no longer industry which is responsible for the problems in meeting air quality requirements, but rather transport and households. Thus, he did not believe that an NOxⁱ and SO2 trading scheme was the solution.

Karl Falkenberg, Director General of DG Environment, closed the seminar stressing that the European Commission had not yet taken any view on whether or not to establish an NO_x and SO₂  trading system. He indicated that the Commission was awaiting the results of the second ENTEC study before taking any decision on the matter.