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30/07/2016

MEPs back ringfencing Juncker Plan money by a single vote

Energy

MEPs back ringfencing Juncker Plan money by a single vote

Kathleen Van Brempt, the rapporteur on the ITRE opinion.

[European Parliament/Flickr]

By a single vote, MEPs today (14 April) passed an amendment ringfencing up to €5 billion of Juncker Plan money for energy efficiency projects.

The unexpected victory on Tuesday means Kathleen Van Brempt, a Belgian Socialist, now has the mandate to negotiate a dedicated efficiency fund with the Council of Ministers.

“It will be a tough battle,” Van Brempt, of the Parliament’s Industry, Research and Energy (ITRE) Committee told EurActiv, “but I am ready to fight for it”.

She is the lead MEP on the ITRE’s report on the European Fund for Strategic Investments (EFSI), which is the legislation putting the Juncker investment package into practice.

The plan foresees €16 billion of EU money and €5 billion of European Investment Bank funds being used as investor risk guarantees, to unlock €315 billion public and private investment over the next three years.

It was widely thought that the push to earmark funds in the European Fund for Strategic Investments (EFSI) would fail. The EFSI is the legislation putting the Juncker Plan into practice.

ITRE has sole competence over article five of the EFSI bill. The amendment to the opinion calling for the dedicated fund is to that article, meaning no other Parliament committee has a say on its inclusion.

That guarantees the dedicated fund will be part of the negotiations with the Council of Ministers to reach agreement on the final text.

The European Commission, which opposes a ringfence, sits in on the talks to help broker a deal. Both Council and Parliament must agree an identical bill before it becomes law.

MEPs also backed amendments safeguarding research funding for programmes like Horizon2020 being used for EFSI-supported projects. The European Commission proposed a cut of €2.7 billion in Horizon2020 from 2015 until 2020.

“Our researchers, our universities around the EU, need this money if we want to keep our future-oriented vision and to enhance the EU’s competitiveness and global strength,” Van Brempt said.

Against ringfencing

The European People’s Party (EPP), the largest group in the Parliament, the Liberals (ALDE), and the European Conservatives and Reformists, were against ringfencing.

That made it unlikely that the amendment, put by Claude Turmes, a Luxembourg Green, Morten Helveg Pederson, a Danish Liberal, Socialist Jeppe Kofod, also from Denmark, and Seán Kelly, an Irish EPP member, would be passed.

>>Read: MEPs’ push to ringfence Juncker money faces defeat

Sources told EurActiv that abstentions from the EPP or ALDE could have swung the narrow vote. How each individual MEP voted was not recorded, only the result.

Germany and France called for the creation of a sub-fund for efficiency projects as part of the Juncker Plan on 31 March, which could also have swayed the tight vote.

A last minute push by campaigners Renovate Europe could have convinced MEPs to back the fund, despite the European Commission’s opposition. The executive will sit in on the triloge negotiations with the Council and Parliament.

Commission Vice-President Jyrki Katainen is in charge of the Juncker Plan. He told EurActiv in March that the private sector should determine which projects get finance, rather than any ring-fencing.

Yesterday, European Investment Bank Vice-President Jonathan Taylor told EurActiv the EIB did not have a formal position on the idea of ringfencing funds. But, in general, it was desirable to have as much flexibility as possible to avoid the risk of funds being stranded if there were not enough high-quality products to invest in.

“In general, it would be better not to fetter the ability of those making the decisions,” he said.

A 25 March report by the Joint Research Centre, the Commission’s in-house science service, has backed the idea of ringfencing funds to get a better idea of how much finance was available for renovation.

Narrow majority

The EPP was against the ringfence, because it felt any major amendment would open the gates for a slew of further changes. That could slow its progress onto the law books. ALDE thought that any ringfence would be too narrow and inflexible to spur investment.

After the vote, Van Brempt told EurActiv she was “a very, very happy woman.”

While she had got a broad majority across the political groups on other changes, the energy efficiency fund faced stiff opposition from the EPP and ALDE.

“I didn’t think that we would get the ringfence through,” she said, “but it goes to show how hard this new Parliament is to predict.”

Van Brempt had tabled an amendment to reserve €4 billon for efficiency projects such as building renovations, but it was defeated.

Instead, MEPs backed the amendment for €5 billion, championed by Claude Turmes. A second similar amendment passed by two votes, but as it is outside article five, may not survive other committees’ scrutiny.

Vote hailed

Turmes hailed the victory as an example of putting efficiency first, which would make European businesses more competitive. The Commission’s Energy Union project calls on EU countries to give energy efficiency “primary consideration” in their national policies.

“With this provision, thermic renovation of buildings throughout Europe will give a significant boost to the European economy, foster growth and jobs creation, reduce our economic and geopolitical dependence to Russian gas imports and tackle energy poverty,” Turmes said.

Renovate Europe argues that energy efficiency projects in buildings boost jobs and growth and are “shovel-ready” investments with a quick-rollout. It says that, thanks to modern technology, buildings’ energy demands can be cut by 80%.

The campaign secured a pledge from 80 MEPs, some who now sit in ITRE, before the May 2014 European election to support building renovation for efficiency.

Director Adrian Joyce said he was delighted with the vote. It was heartening that France and Germany were aligned with the Parliament’s position, he added.

“This is a welcome shift and one that we hope will be strengthened in the coming months as negotiations to agree on the final text of the regulation get underway,” he said.

Environmental think tank E3G also welcomed the vote. Associate director Ingrid Holmes said, “The vote is a clear endorsement of the high value of energy efficiency investments to society.”

Investment needed

The Energy Efficiency Financial Institutions Group (EEFIG) is a platform involving the financial sector, policymakers, the International Energy Agency and other business and efficiency experts.

The group was set up by the Commission and the United Nations Environment Programme Finance Initiative. It has warned that private investment in energy-efficient buildings renovation must increase five-fold by 2030.

>>Read: Energy efficiency investment must increase five-fold, warns report

The EU has committed to cut its energy consumption by 20% by the end of the decade. The Commission had called for an efficiency goal of 30% by 2030. That was reduced to 27% across the EU.

The EU level target is not legally binding at the national level or EU level, and will be reviewed in 2020 “having in mind” a 30% EU-level target, according to the deal struck by EU leaders at a summit last October.

Positions

Markus Trilling, of CEE Bankwatch Network and Friends of the Earth Europe, said, “This is the clearest signal so far from Europe's elected officials that the new investment plan must prioritise green investments such as renewables and energy efficiency projects, and reject dirty energy infrastructure. Now the Council of Ministers and the Commission must play ball as the legislation is negotiated, and member states should follow the foresight outlined in Parliament. Governments committed to a low carbon future need to work with all stakeholders to ensure the modernisation of Europe’s economies.”

Xavier Sol, of Counter Balance, said, “Prioritising sustainable investments is crucial for getting more out of the Juncker plan which so far has been lacking a clear direction. However more democratic oversight and transparency are needed to guarantee the long term sustainability of the recovery plan."

“Securing a part of EFSI for Energy Efficiency is recognizing the strategic importance of the Juncker Package as Energy Efficiency ticks-every-box for the EU, from industrial competitiveness, to jobs, growth, energy security and reduction of CO2 emissions,” said Jan te Bos, Eurima’s director general.

Background

President of the European Commission Jean-Claude Juncker announced an investment plan to mobilise €300 billion in an effort to kick-start the European economy.

Jyrki Katainen, the Commissioner for Jobs, Growth, Investment and Competitiveness, has said that the growth package should include public and private partnerships, increased lending capacity for the EIB and other EU lending bodies, more “future investment” by EU nations in areas such as infrastructure and the completion of the single market.

The Renovate Europe campaign says that, thanks to modern technology, buildings' energy demands can be cut by 80%. But, it adds, in order for that to happen, there needs to be an effective regulatory and legislative framework in place.

Campaigners and policymakers agree that energy efficiency through the renovation of buildings has great potential for reducing emissions, spurring the economy, and bolstering energy security.