Divided EU grapples with energy and climate goals


The EU’s energy and environment ministers will today (3 March) begin two days of talks under the shadow of divisions on greenhouse gas cuts, renewable energy targets and efficiency objectives.

While Germany says it will push for a binding energy savings goal and stronger renewable targets, Poland wants a commitment to an emissions cut made optional and final decisions postponed until next year.

The Council discussions on energy plans for 2030 had been intended to pave the way to an agreement at an EU leaders’ summit on 20-21 March.

Draft guidelines for that meeting seen by EURACTIV, call for a roadmap leading to “an early agreement on an ambitious EU position on emissions reductions up to 2030.”

This was framed in the context of a UN climate summit in September 2014, and the global climate change conference of parties (COP) due to take place in Paris in December 2015.

But Poland is blocking a consensus on a planned 40% cut in CO2 emissions, and says that a May 2013 agreement impels a final decision on objectives to be postponed until 2015.

Diplomatic sources have even floated a notion that the EU’s planned 40% cut in CO2 emissions could be made binding at the EU level alone, leaving member states free to pursue divergent energy policies. This is unlikely to gather a groundswell of support.

The UK, for example, supports an offer of a 50% reduction in Europe’s CO2 emissions being made at the Paris COP, albeit with the extra 10% cut being met with carbon offsets.

London also wants a decision on energy goals taken as quickly as possible, ideally before a June summit of EU leaders, and would prefer to see the EU’s Fuel Quality Directive which regulates transport energies ranging from biofuels to tar sands, amended rather than scrapped

But it will be less sympathetic to proposals from Germany, which wants a planned 27% goal for renewable energies in the EU’s energy mix toted up to an “optimal” 30%, and made binding on member states. 

Efficiency targets

More dramatically, Berlin will push for a binding energy efficiency target, in a challenge to the established orthodoxy in Brussels that such measures should wait until after a review of lagging progress towards the non-binding goal set for 2020.

“We feel that the best way to save energy is not to use it at all,” a diplomat told EURACTIV. “There is also a strong field of green building industry that we need to support. That’s why we need an ambitious binding efficiency target to send the right signals to market and industry.”

This will be resolutely opposed by countries such as the UK, which argues that existing structural EU funds such as Horizon 2020 are sufficient to incentivise continent-wide energy savings.

Eastern European countries too may balk at the suggestion, seeing it as a cost to industry, rather than an opportunity. The gaze of one aspirant regional leader, Poland, remains squarely fixed on a horse trade over ‘burden-sharing’, or the degree of energy transition they must make relative to other EU states.

This will fit into debate on a looser governance structure for implementing energy and climate policy, with Warsaw arguing that its coal-dependent circumstances make clean energy a costly proposition.

Energy costs

Energy costs will also be discussed by the ministers, with a focus on the disconnect between wholesale and retail prices, as well as the disproportionate effect of taxes and levies.

“Prices, and especially costs, have continued to rise overall for both households and industry despite falling or stable consumption,” a draft Council communication seen by EURACTIV says. “This rise in prices is driven mainly by increases in network costs and taxes/levies and wide differences between member states’ policies on these costs and levies.”

A convergence and fall in wholesale electricity prices “has not been transposed into a reduction of the retail prices,” the paper notes.

It proposes debate on subjects including:

  • Completion of the internal market by 2014
  • Further development of energy infrastructure
  • Cost-effective application of taxes and levies
  • Encouraging households and industry to improve their energy efficiency
  • Protecting vulnerable consumers though social policy measures
  • Diversifying energy supplies and routes
  • Ensuring consumer choice of the most advantageous energy supplier

Industrial competitiveness and a recent EU communication on industrial renaissance may well loom large, as Europe's energy intensive industries take an increasingly vocal line in the climate debate.

Industrial renaissance

Speaking in Brussels last week, Dr Brigitta Huckestein, a senior manager for the German chemicals giant BASF said that any EU 2030 climate and energy targets should “depend on what the public is willing to pay for climate action.”

“I do not believe that people are aware of this – that it will cost their money if politicians are going for such a high goal,” she told journalists.

In the end, a timeline to agreement may be the most that ministers can agree this week, leaving Europe’s clean energy industries kicking their heels.

A letter from the European Renewable Energy Council (EREC) to the EU’s heads of state, seen by EURACTIV, notes that the EU’s own impact assessment accompanying the 2030 proposal indicated that a 30% renewables target for 2030 would create 568,000 more jobs and save €260 billion in fossil fuel imports.

“Agreeing on mutually reinforcing targets for GHG emissions reductions, energy efficiency and renewables will enable the development of a European climate-friendly energy mix through dedicated and reliable policies,” says the letter by Rainer Hinrichs-Rahlwes, EREC’s president. “It is now up to you to choose either a growth or a no-growth strategy.”

The EU’s 2030 climate and energy framework package was presented on 22 January 2014 as a successor to the three 20-20-20 targets of 20% greenhouse gas cuts, improvements in energy efficiency and renewable energy market penetration, all by 2020. The energy efficiency goal is non-binding and remains the only one the bloc is not on track to meet.

For 2030, the EU framework has proposed:

  • A 40% greenhouse gas reduction target that is binding at nation state level and may not be met by carbon offsets
  • The use of carbon offsets to meet further emissions reduction commitments made in international climate talks
  • A 27% renewable energy target that is binding at an aggregate European level but voluntary for individual member states
  • No consideration of any new energy efficiency target until after a June 2014 review of the Energy Efficiency Directive  
  • Non-binding shale gas recommendations which could be made binding after a review in 2015
  • A market reserve facility for the Emissions Trading System, with the power to withhold or release up to 100 million allowances
  • An end to the Fuel Quality Directive, which mandates reductions in the greenhouse gas intensity of transport fuels, by 2020

The package was widely received as a compromise reflecting the balance of power between various member states at the European Council. It will now be discussed by MEPs at the European Parliament and EU heads of state at the European Council before a final version is agreed.

  • March 21 2014: EU summit will discuss climate and energy issues
  • May 2014: New EU Parliament to be elected
  • May 2014: EU member states must prepare schemes for their energy companies to deliver annual energy savings of 1.5% as part of the Energy Efficiency Directive
  • June 2014: Review of progress towards meeting the 2020 energy efficiency target
  • June 2014: EU Council will discuss energy and climate issues
  • September 2014: UN change summit 
  • December 2015: Paris COP summit
  • 2020: Deadline for EU states to meet binding targets for 20% cuts in greenhouse gas emissions, improvements in energy efficiency, and market share for renewable energy

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