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EU energy policy: fact or fiction?

The key agreements from last month’s intensive two-day European Union (EU) summit are nothing if not ambitious. As expected a target of cutting carbon dioxide (CO2) emissions by 20 per cent from 1990 levels by 2020 was set, with a promise to raise it to 30 per cent if other developed and developing countries followed suit. This proposal came as no surprise since it had been muted in the European Commission’s (EC’s) A European Strategy for Sustainable, Competitive and Secure Energy, published back in January.

In contrast, the relative ease with which the 27-member bloc agreed upon a legally binding target to increase the contribution of renewable energy to the EU’s energy mix by 20 per cent by 2020 was unexpected. This represents a trebling of the current level that is less than seven per cent. Furthermore, the mandatory nature of this target means that theoretically countries that do not meet their target could end up in front of the European courts.

In the lead up to the summit concerns were voiced, including Mirek Topolanek, the Czech Republic’s prime minister, who was reported in the UK’s Financial Times as saying that the proposed renewables target was “unreasonable, nonsensical”. Thus, the ability of the German Chancellor Angela Merkel, who currently holds the rotating EU presidency, to get this agreement is nothing short of miraculous, and may reflect her countering any resistance by promising “burden sharing”, where different countries would make different contributions to the overall target of 20 per cent. Clearly this means that many EU countries will need to make significant investments in renewable energy technology, but Jose Manuel Barroso, EC president, also made an effort to allay fears by suggesting that state rules and EU regional grants would be tailored to encourage development in the sector.

The Bloc27 also agreed to establish 12 demonstration clean coal plants by 2015 and to increase funding into carbon capture and sequestration (CCS) projects. The increase in funding for CCS projects although welcome is seen as not going far enough by some. Speculation prior to the summit suggested that all coal fired power stations built in the EU after 2020 could be forced to capture their CO2 emissions.

Speaking to Paul Bulteel, the Secretary-General of Eurelectric, an association that represents the European electricity industry, I asked him if the CO2 and the renewables targets were realistic. He said: The European electricity industry recognizes the need to shift to a low-carbon system by mid-century and we support the deployment of renewable energies as part of a balanced energy mix. Results of our Role of Electricity project, published in March, show that substantial cuts in greenhouse gas emissions are feasible given the right policies. We are concerned however that the 2020 deadline may not square with realistic industrial timelines for mobilizing the necessary investments.

This concern has been echoed by a number of business leaders including Ernest-Antoine Seillere, head of the Business Europe employers federation, who voiced their concern that the EU was moving too fast on climate change, risking a loss of competitiveness.

When asked whether their concerns were unfounded, Bulteel said: “The European electricity industry applauds the EU’s leadership in this area, and given the right policies at EU and governmental level, considerable reductions in the greenhouse gas emissions linked to climate change can be achieved in the medium/long term, at reasonable economic cost, in a manner that also helps to reduce oil/gas import dependency. However, political targets must correspond to realistic industrial time-lines for deployment of the necessary investments. A stable investment climate based on a long term, coherent legal and emissions framework is critical for the electricity industry to deliver a future low-carbon energy system.”

Clearly further discussions will need to take place, but there is no doubting that Europe has taken up the baton with regard to tackling climate change – exactly what Merkel hoped to achieve. It is looking positive that the targets set at this summit (as long as they can be achieved at a reason economic cost) will help pave the way to achieving a global agreement on a post-Kyoto accord. Let us keep our fingers crossed that this can be achieved at the G8 summit this June.

Warmest regards,

Heather Johnstone
Senior Editor