Expected Fuels by 2012

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4. 4 Reused Effluent; Israel and World ???? ???? ????????? ?? ???????? ???? ????????? ?? ????

5. 5 New Water resources Shortage of Natural Resources New Water Resources Desalinated Seawater 2007 � 130 Mcm/year 2015 � 500 Mcm/year Desalinated Saline water 2007 � 25 Mcm/year 2015 � 75 Mcm/year Wastewater Reuse 2007 � 370 Mcm/year 2015 � 570 Mcm/year

6. 6 WaterPollution PreventionC(74)221 Standards Regulations imposed to reduce salinity, restrict heavy metals and set pH levels for industrial effluents & sewage sludge Stricter regulations on 36 pollutants in effluents awaiting approval Regulations to restrict approx 50 priority organic contaminants in preparation Constraints on pollution sources Interministerial guidelines to reduce pollution from farming Legislation on pollution prevention from oil storage tanks and soil remediation in preparation

7. 7 EnergyFuels and Efficiency C(85)102, C(77)109, C(85)101, C(76)162, C(79)117 Electricity production Currently (2009) 65% coal, 32% natural gas (will increase to 40-50% from offshore fields, LNG); generating capacity 10,000 MW, expected to double by 2020 if BAU 3% energy demand saved through domestic solar water heating 10% renewables target by 2020 (Government issued tender for 250MW thermo-solar) Electricity Authority sets prices, including incentive for renewables based on pollution prevented Efficiency Energy efficiency target 20% reduction by 2020 compared to BAU Mandatory energy efficiency regulations on new appliances Voluntary energy efficiency building standard (mandatory in future) Government established research fund: $100million over 5 years to promote RE+EE

8. 8 Expected Fuels by 2012 As of December 2007, 69% of our electricity generation was produced by Coal, 20% by Natural Gas, 7% by Diesel Oil, 3% by Fuel Oil and only 0.6% was purchased from IPPs. The Company purchases all the coal it requires through the National Coal Supply Company, which is a fully owned subsidiary of the Company. The Coal Company imports the coal from different countries all over the world, such as South-Africa, Colombia, Russia, Indonesia and Australia. The Company began using natural gas in February 2004. In 2007 IEC consumed about 2.7 billion cubic meters (1,835,000 of tons). As the Company sites are being connected to the natural gas grid, consumption will gradually increase to 3-4 billion cubic meters annually. Today the natural gas is supplied by the Yam Thetis Group, which holds reservoir offshore Israel. In August 2005 IEC signed on agreement with the EMG company for the supply of natural gas from Egypt. The supply of the Egyptian gas commenced on July 2008. As you can see, in 2012 it is expected that 48% of our electricity generation will be produced by coal, 47% by natural gas, 2% by Diesel oil, 3% by Fuel oil and only 0.5% will be produced by IPPs. The increase use of Natural Gas is driven by the need to diversify IEC�s fuel mix, increase its generation capacity while maintaining a low cost structure and limited pollution level. Effectively the fuel prices and their update are embedded in the electricity rates which are being charged to the company�s customers. As of December 2007, 69% of our electricity generation was produced by Coal, 20% by Natural Gas, 7% by Diesel Oil, 3% by Fuel Oil and only 0.6% was purchased from IPPs.

9. 9 EnergyPollution Prevention Pollution controls Business license - operational conditions on power stations Clean Air Act - emission permits (2011) Abatement of Nuisances Regulations � reductions of SO2, NOX and particulates in line with EU directive (6 years - need reserve capacity to enable retrofit) Low sulfur coal, high stacks for dispersion, scrubbers on 2 units and will be fitted on others, electrostatic precipitators on stacks, monitoring networks Integration of environment and energy Integration through NBPB masterplan for power stations, including EIA

10. 10 IPPCC(90)164 Already implemented Adopted 2006 to be applied to 150 installations through Business Licenses Implementation in process in industrial hotspots: Ramat Hovav, Haifa Bay, in future - Ashdod Separate permits required for marine discharge, hazardous materials, air emissions (2011) BAT and monitoring required Enforcement by Ministry of EP EIA on major plants and industrial areas Roadmap for full implementation of IPPC 2009: consultant 2010: preparation 2011: implementation by sectors

11. 11 Noise C(85)103, C(78)73 Transport noise No manufacture of vehicles Adopted EU vehicle noise standards Aircraft require noise certificates National masterplans include noise regulations around airports, along flight paths and along surface transportation, Surface transportation (road and rail) standards adopted by government decision Other noise sources Regulations on products and their use Abatement regulations: noise in residential areas construction noise

12. 12 TransportC(74)218, C(2004)80 Planning NBPB national masterplan 35 supports urban development, reduction of sprawl and efficient public transport National masterplan for integrated surface transport in preparation Ministry of Transport allocated major investment to public transport, including interurban rail and electrification of rail (6.4 billion �) Ministry of Transport revised project appraisal to improve consideration of noise, air pollution and landscape protection EIA of transportation projects includes evaluation of alternatives Pollution control Traffic Ordinance - vehicle emission standards equivalent to EU 2009 green taxation imposed on vehicles and fuels according to level of emissions 2009 tender issued for scrapping old vehicles

13. 13 Tourism C(79)115 Planning NBPB national masterplan for tourism Planning constraints on building in attractive, sensitive areas - coasts, landscape value Natural and cultural values protected by relevant statutory authorities Strategy for sustainable tourism, including ecotourism, submitted by Ministry of Tourism Greening tourism Ministry of Tourism allocates grants for tourist use of historic buildings, stream reclamation Promotion of green building/green management in tourism by Ministries of Tourism and EP Hotels distribute information to visitors to encourage water conservation

14. 14 Coastal Zone ManagementC(76)161, C(92)114 Planning Coastal protection included in legislation on land use planning, land management, nature protection and protection of antiquities NBPB directive for national masterplan 1970, approved 1983 included 100m setback, restraints on development, designation of protected areas NBPB masterplan for ports included sand bypassing Prevention of damage and pollution 2004 coastal law integrated coastal and marine management and added public access, liability for damage to coastal resources and enforcement Marine pollution prevention strictly enforced in accordance with Barcelona Convention

15. 15 Biodiversity  C(2004)81 Regulatory control Stringent controls through legislation on nature protection National biodiversity strategic action plan to be submitted to government 2010 Planning authorities impose biodiversity conservation conditions on infrastructure plans Economic instruments Specific cases of compensation to farmers for losses and to encourage ecotourism 2009 new Landscape Fund in Lands Authority for change of land use

16. 16 Material Flows and Resource Productivity C(2004)79, C(2008)40 Natural resources Few natural resources, mineral or biomass Phosphates, Dead Sea minerals, aggregates Indicators Information on material flows and stocks not currently available Industry willing to participate in indicators and resource accounting Ministry of EP and CBS recognize need for data on tracking stocks and flows, aware of gaps, will participate in OECD activities

17. 17 Polluter Pays PrincipleC(72)128, C(74)223, C(89)881 No major barriers Environment not a non tariff barrier No subsidy on energy, no tax on coal Increasing implementation Polluter pays Law 2008 imposes fines 1993 Hazardous Substances Law � differentiated fee for permit based on risk Fines on illegal marine discharge Increased fines for emissions - Clean Air Act (2011)

18. 18 Economic InstrumentsC(90)177 Instruments for waste disposal Landfill levy Deposit refund on beverage containers Levy of PET drink containers EPR on manufacturers and importers of tyres Green taxation Differential taxation on fuels and vehicles in relation to emissions Environmental funds Levy on extraction to Quarry Reclamation Fund Fee on ships to Marine Pollution Prevention Fund Economic incentives Premiums and feed-in tariffs for renewable energy Promotion of green building Instruments in process Liability for contaminated land � legislation to be submitted by end 2010 Levies on permitted air emissions from 2011 Incorporation of environmental risks as financial risks by financial regulators

19. 19 Public Environmental Expenditure C(2006)84 Ministerial budgets and work programmes - according to PMO guidelines for results accountability and available to public Preparing measurable indicators (2011) Targeted funds exist for Marine Pollution, Cleanliness, Animal Protection, Quarry Reclamation Review of practice in relation to annex will be undertaken (2010/11)

20. 20 Greening public procurement C(2002)3 2008 amendment to mandatory tenders law - preference to purchase products accredited by international or Israeli authority or practice Workplan to accredit at least 10 items a year, commonly purchased by Ministries Environmental criteria are incorporated into government tenders, eg. desalination Government purchasing preference to recycled, trade-in products and hybrid vehicles

21. 21 Environmental Impact Assessment C(79)116, C(74)216 Statutory planning requirement EIA (including EIS document) required under planning legislation 1982, revised 2003 Includes project guidelines, consideration of alternatives, review Required on public and private development Database EIA available to public on Ministry of EP website, EIS open to public when plan deposited EIA not necessarily required where planning permit not required or where decision taken prior to planning

22. 22 Environmental Performance of Government C(96)39 EIA required on public development Ministerial Sustainable Development strategies Public Companies annual report on environmental performance to their directorates Government decision requiring reduction of paper, water and electricity in government expected 2010 NBPB acts as important coordinating mechanism

23. 23 Environmental InformationC(98)67, C(79)114, C(90)165 Availability of Information Available to public on Ministry of EP and CBS websites, including 15 metrics of sustainable development No integrated database available on pressures, conditions, responses to show changes/monitor policy Ministry of EP initiating programme to provide information infrastructure: 2009: update 15 metrics 2010: identify gaps, submit 1st SOE to government 2011: environmental outlook, EPR to government Access to Information 2009 regulations under Freedom of Information Law specify 22 clauses for public access to environmental information Financial regulators require environmental risk disclosure by public companies, banks, investments

24. 24 Transfrontier PollutionC(78)77, C(77)28, C(74)224, C(76)55, C(81)32 Declaration: Currently, Israel does not share a common frontier with any OECD member country Multilateral 22 MEA�s signed and ratified, 7 awaiting ratification CP to Barcelona Convention for Mediterranean and applies same to Eilat Bay LBS discharge to marine area according to permits, tighter restrictions, levy by end 2010 Bilateral 18 bilateral agreements Environment in Peace Accord with Jordan Environment in Interim Agreement with PA

25. 25 Development CooperationC(89)2, C(86)26, C(85)104 Assistance Given Capacity building and training in agriculture, water, medical emergency, environment Major infrastructure projects not funded Training on sustainable development, marine pollution prevention, pest management Checklist Will establish framework for environmental assessment according to the checklist (2010)

26. 26 Declarations C(85)11, C(79)121, C/M(74)26, C/MIN(2009)5/ADD1, C/MIN(2009)5/ADD1, C(2006)94 Environmental governance 1973 government decision established environmental protection service EIA since 1982, revised 2003 1988 Ministry of EQ established (later EP) Local environmental units established for implementation Civil Society involvement expanded through representation on planning and other committees, and rights of objection Green growth: 2006: government decision - water tech 21.8m � 2008: government decision - renewables 72.7m � 2009: government decision - waste 5.4m � Proposed government decision to promote environmental technologies Development cooperation Through capacity building with emphasis on water conservation and combating desertification

27. 27 Multilateral Environmental Agreements Marine and Coastal Barcelona Convention for the Mediterranean MARPOL OPRC Fishing and conservation of living resources of high seas Agreement on conservation and management of straddling fish stocks and highly migratory fish stocks Nature protection Convention for Biological Diversity Conservation of migratory species of wild animals International trade in endangered species Wetlands important as waterfowl habitats Protection of new varieties of plants Whaling Other Climate change � Kyoto protocol Combating desertification Protection of world cultural and natural heritage

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29. 29 McKinsey preliminary cost curve

30. 30 McKinsey preliminary cost curve

31. 31 Factors limiting emissions reduction Current policy prevent use of Nuclear Power No option of Hydroelectric Power Limited capacity for Wind Power No current possibility of Carbon Capture and Storage Limited area for Thermo-Solar (2 hectares for 1 installed MW)

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33. 33 Energy Availability

34. 34 Government commitments to EE and RE 10% RE by 2020 20% reduction in demand by EE by 2020 $100 million research fund 220 MW thermo solar + 50MW PV

35. 35 Israel�s Statement on Climate Change Active implementation of UNFCCC Establishment of ambitious long-term comprehensive low emissions strategy Energy management policy Nationally appropriate GHG mitigation actions Active participation in OECD discussions 2nd national communication by mid 2010 - non annex 1 Future national communications - annex 1 as appropriate Participation in COP 15 in Copenhagen Efforts made to join negotiating group

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