The new legislation is intended to meet the EU's 2020 climate goals to reduce greenhouse-gas emissions by 20% below 1990 levels and boost the share of renewables in the total energy mix to 20% by the same date.
The 'package' is composed of six measures. The revision of the EU's flagship emissions trading scheme will enter into force in 2013, obliging power installations to buy all their emissions allowances at auction to correct the deficiencies of the previous scheme, in which free allocations resulted in massive windfall profits (see EurActiv LinksDossier).
For other ETS sectors, auctioning will be gradually phased in, with 20% of emissions permits bought at auction by 2013 and 70% by 2020. Full auctioning will not kick in before 2027. Moreover, member states with significant coal-based production negotiated substantial derogations to their industries that are deemed to be at risk of 'carbon leakage', that is, reallocation to third countries where environmental protection laws are less strict (EurActiv 21/11/08).
For the sectors outside of the ETS, such as transport and agriculture, the package contains an "effort-sharing" decision, which sets out binding emission-reduction targets for each member state, in line with their ability to pay, in order to reach an overall cut of 10% by 2020.
The package also establishes a regulatory framework for the capture and underground storage of CO2 to help support this new technology before it becomes commercially viable (see EurActiv LinksDossier).
Another of its major policy developments is a directive for the promotion of energy from renewable sources (see EurActiv LinksDossier). It sets out individual targets for the proportion of renewables in member states' final energy consumption, to reach 20% EU-wide.
In addition, the directive stipulates that each country should reach a 10% renewables share in its transport sector, and establishes criteria for the sustainable use of biofuels.
The two remaining measures set CO2 emission limits for new passenger cars (EurActiv 02/12/08) and standards for fuel quality.
The EU has pledged to raise its emission-reduction target to 30% by 2020 if other industrialised countries, notably the US, commit to comparable goals in ongoing global climate negotiations. But as December draws closer, with the culmination of the talks in Copenhagen expected to produce a deal on a successor to the Kyoto Protocol, it seems unlikely that the US will bring out a national climate bill that would satisfy the EU.
The draft bill that came out of the House of Representatives last week proposed to cut US greenhouse emissions by 20% (2005 levels) by 2020, which would only signal a 5-6% cut compared to 1990 levels. Moreover, the US faces opposition to emissions trading from coal-intensive Midwestern states, similar to that from the new EU members to the Union's scheme (EurActiv 27/03/09).