Enforcing the Kyoto Protocol: sanctions and strategic behavior

After having defined the general rules for the European liberalised energy market, new actions are needed to improve the energy system. In the rising common framework, the environmental policies and particularly the cost-internalising actions are being empowered, in order to favour improvements in conversion efficiencies and to promote low environmental impact technologies. The emerging EU policy for the promotion of cogeneration and trigeneration plants that fixes the eligibility criteria for high conversion efficiency plants is here discussed. On the basis of thermodynamic remarks and of a comparative analysis of the evaluation criteria applied to most industrialised countries, the new EU directive is critically examined. The approaches that are not thermodynamically appropriate and could affect the EU provisions concerning the internal competition without ensuring benefits in terms of energy saving are also underlined in this report. Where available, information about the expected or stated impacts of the different evaluation criteria are also discussed.