EPS Failure

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Updated: 22-Nov-2015. The EC has now ruled-out EU-level EPS. See page 6.

Recently a number of interest groups have called for “emission performance standards” (EPS) to be applied some large combustion plants across Europe with the aim of reducing or limiting the amounts of CO2 pollution that these installations could emit.

Such a move would be via an amendment to one or more of the exiting EU pollution control directives (ETS and/or IED). Typically the stated goal is to prevent new coal-fired power plants from being built and/or ensuring existing ones are closed where they do not use carbon capture and storage (CCS) equipment.

The impacts of any such rule-making would depend in practice on the specific scope (emission level, start date/s, size threshold/s etc.) and an EPS could also be applied to combustion plants using other less-dirty fuels such as ‘natural gas’.

Are these calls a good idea? The short answer is no. My reasoning is as follows.

Any legislative act by the European institutions first requires a legal basis in the EU treaties, the particular choice of which must reflect the primary purpose of the intended action. In the case of environmental protection measures, this means Article 192 TFEU.

However Article 192 contains two main options. Under paragraph 192(1) legislation is adopted using the ordinary legislative procedure in which Parliament and Council both decide and ultimately agree a common text by majority voting in each chamber. This provision is used today for most if not all environmental legislation.

However under paragraph 192(2) legislation is adopted using the special legislative procedure in which Council acts unanimously while Parliament is limited to a non-binding consultation. Given the difficulty of obtaining a unanimous Council decision and especially on contentious issues, Article 192(2) is rarely if ever used.

Nonetheless Article 192(2) lists the three areas where it must be used. These are:
(a) ecological taxation
(b) land-use and water resource planning and
(c) “measures significantly affecting a Member State’s choice between different energy sources and the general structure of its energy supply”.

It is I hope clear that any intention to effectively ban the use of unabated coal in large combustion plants across the Union would fall under paragraph 2. Consequently any single Council delegation wishing to continue using unabated coal within its energy mix could lawfully deploy a veto to prevent any provisions in that area from being adopted. Poland is not the only example of a delegation that, today at least, would not hesitate to use such a veto.

While EU environmental legislation adopted under 192(1) has led to the closure of many sub-standard coal plants, this has only been where the individual operators of those plants have chosen, usually for economic reasons, not to install the required air pollution control equipment that is available to be used. Under the IED regime, carbon capture continues to be regarded as not commercially available (instead it is said to be ‘an emerging technique’). In effect, until CCS is available, EU legislation cannot be require it to be applied.

Given that a single Council delegation could veto a prohibition of new or existing unabated coal plants via an EPS rule-making and that there are several who would do so, so there is practical zero point in attempting such legislation at least at the present time.

Much more important, at least for the next 2-3 years, is the legislative focus on a stronger and longer EU ETS regime and the carbon pollution pricing that flows from that. A proposal on ETS reform is now expected soon (probably 15 July).

EU only

This blog entry only discuss EPS at the European level. It does not discuss potential national measures to limit coal use – e.g. additional taxation, removal of operating permits, or national EPS – for which under EU law there is significant flexibility. Indeed Article 193 TFEU clearly allows member states, should they so wish and subject to certain conditions, to adopt more stringent environmental protection measures.

–oo0oo–

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