Differentiated targets for EU member states
A proposal for a new EU directive, published on 23 January, mandates each member state to increase its share of renewable energies - such as solar, wind or hydro - in an effort to boost the EU's share from 8.5% today to 20% by 2020.
A separate target to increase biofuels use to 10% of transport fuel consumption is to be achieved by every country as part of the overall EU objective.
To achieve these objectives, every nation in the 27-member bloc is required to increase its share of renewables by 5.5% from 2005 levels, with the remaining increase calculated on the basis of per capita gross domestic product (GDP).
Please see EurActiv's LinksDossier on renewable energy for more information, including a listing of the individual member state interim and final targets.
Biofuels and sustainability
Brussels has come under acute pressure from green politicians, NGOs and the scientific community to provide robust sustainability criteria to ensure that the 10% biofuels target does not lead to ecosystem loss, deforestation, population displacement, food price increases and even higher CO2 output.
The Commission's text includes the following criteria:
- Land use - old forest with no or limited human intervention cannot be used for biofuels cultivation, nor can 'highly biodiverse grasslands', or lands with a 'high carbon stock' like wetlands or 'pristine peatlands';
- CO2 impact - the overall greenhouse gas (GHG) savings from biofuels production must be at least 35% in order for cultivation to be considered sustainable.
The Commission will put forward sustainability criteria for energy use of biomass by the end of 2010.
Paying the bill
Revised state aid guidelines were published along with the renewables proposal, paving the way for an increase in state funds to the renewable energy sector, including for biofuels producers, whereby the Commission's sustainability criteria will be tied in with state aid eligibility.
In order to qualify for state aid, projects must in general have excessively high investment costs, with companies that want to go beyond community environmental requirements being particularly eligible for subsidies.
Much of the state support envisioned by the Commission can be handed out in the form of tax breaks. The new guidelines do not, however, propose a revision of value added tax (VAT) schemes, despite previous calls for new 'green' VAT rules by France and the UK (EurActiv 23/07/07).
The Commission predicts that the energy and climate package as a whole (see also EurActiv's related coverage) will cost less than 0.5% of the EU's GDP. The Commission has also repeatedly cited the 'cost of inaction' made in the Stern report (EurActiv 31/10/06), and argues that rising oil and gas prices mean that gains from promoting renewables will be 'much higher' than current Commission calculations.