Agriculture and horticulture sector

50 environmental protection. The IPPC Directive also lays down that the plants operation must be energy efficient. The Netherlands has transposed the IPPC Directive into the Environmental Management Act. Environmental permits are awarded and assessed by provinces and municipalities. The government issued the underlying Energy in Environmental Permits Guidelines 1999 and the Roads to Prevention at Enterprises Manual 2005 in order to inform local authorities about how to regulate energy savings. Nevertheless, the European Commission formally notified the Netherlands in 2007 that it had not implemented the IPPC Directive adequately. 29 According to the European Commission, too many permits had not been checked against the Directives requirements and revised where necessary. Energy Services Directive The European Energy Services Directive Directive 200632EC, 2006 came into force in 2006. It requires member states to inform end users about their energy consumption. It also requires the end users energy bills to include a comparison with their energy consumption in the previous year. These requirements had to be satisfied by May 2008 at the latest. The Dutch government included the requirements in a Bill obliging every household to fit a smart meter. The Bill was submitted in June 2008 and passed by the House of Representatives in July 2008 but rejected by the Senate in April 2009. The Senate objected to the compulsory fitting of smart meters and the penalties on refusal. The House debated an amended Bill in November 2010. The Bills to transpose the European Directive into Dutch law were passed by the Senate as a formality in February 2011 Electricity Act 1998 and Gas Act 2011 Amending Act; Amendment of the Electricity Act 1998 and Gas Act 2011 Amending Act. The European Commission had sent the Netherlands an official reminder in July 2008 and in January 2009 it sent the Netherlands a reasoned opinion. 30 29 As well as the Netherlands five other member states were summoned to appear before the European Court of Justice. Three others received a final warning. 30 Another 19 countries also received such an opinion. The issuance of a reasoned opi nion is an introductory procedure with no binding legal effect. It can result in legal action at the European Court of Justice. 51 4 The European CO 2 emissions trading system In this chapter we look at the negative interaction between the European CO 2 emissions trading system and the national energy saving policy. We also propose options to mitigate the negative interaction.

4.1 Interaction between CO

2 emissions trade and other policy instruments If several policy instruments are directed at the same goal, they interact with each other. Within energy and climate policy, there is a negative interaction between the European CO 2 emissions trading system and all other policy instruments to reduce the CO 2 emissions or increase the energy efficiency of energy intensive industries. This phenomenon is discussed in several studies Aalbers et al., 2007; Court of Audit, 2007; Daniëls et al., 2010. In an audit of 2007 we pointed out that the introduction of the emissions trading system had weakened the effectiveness of renewable energy policy clean energy and energy savings Netherlands Court of Audit, 2007. Organisation of emissions trading The CO 2 emissions trading system is designed to reduce CO 2 emissions without prescribing when and how companies must do so. The system allows companies to opt for the most cost effective measures for their own business. A company can satisfy the emissions trading requirements in a variety of ways: by buying more emission allowances andor by reducing its own CO 2 emissions. CO 2 emissions can be reduced through energy savings more efficient energy management, by using less energy, by switching to low-emission energy generation renewable energy, by capturing and storing CO 2 , andor through fuel substitution e.g. gas instead of coal. The government has introduced other, usually financial, incentives for nearly all these options.