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Assessment of impacts of proposed Directive of the European Parliament and of the Council on the limitation of emissions of certain pollutants into the air from medium combustion plants (the MCP Directive)

Solution period: 04/01/2014 - 08/30/2014
Contract authority: Ministry of Industry and Trade of the Czech Republic
Registration number: EČ smlouvy 01/14/31200
Contact: Jan Macháč (machac@ireas.cz) | Ondřej Vojáček (vojacek@ireas.cz)

Among other things, the European clean air policy package introduced a significant lowering of the emission limits. According to the evaluation, the adoption of the directive proposal would lead to costs 10 times higher than those expected by the European Commission's impact analysis.

The project objective was to assess the impacts of potential adoption of the proposal for a "Directive on the limitation of pollution from medium combustion plants with an installed capacity of 1–50 MWt" of December 2013 (hereinafter, the Directive), which is part of the "European clean air policy package". The objective of the proposed Directive is a major reduction to emission limits for particulate matter, SO2 and NOx. The analysis of economic impacts on Member States commissioned by the European Commission mentions costs of CZK 160 million a year for the Czech Republic. IREAS carried out an economic analysis of the impacts of the proposed Directive at the national level in detail, using its SimTool model. The results show that the costs would be ten times higher than what the European Commission’s impact analysis predicts.

The investigation yielded information for 146 pollution sources (40% of the total of 365) in the brown and black coal and liquid fuel categories. We had approached 177 sources (48% of the total of 365). The modelling of the impacts at the corporate level used our own SimTool microeconomic model. The total average annual costs are CZK 1.7 billion, being thus approximately 10 times higher than those assumed by the European Commission's impact analysis. The adoption of the Directive in its analysed form would have the greatest impact on brown coal pollution sources.

Conclusions of the project:

The results were used in negotiations of the Directive in the EU Working Party on the Environment (used when formulating instructions for the WPE negotiations) and in the Parliamentary Committees ENVI and ITRE.

Research team: Ondřej Vojáček, Jan Macháč, Ladislav Sobotka.