Negotiators from the European Commission, Parliament and Council struck a deal on the energy union governance regulation after an all-night session where they agreed to aim for a net-zero carbon economy “as early as possible,” with a carbon budget and national strategies for 2050.
The talks concluded shortly after 04:30 in the morning after kicking off the evening before at around 21:00.
The Parliament entered the negotiation with a “red line” – an objective to achieve net-zero emissions by 2050, where carbon emissions and removals would balance each other out.
This is in line with the Paris Agreement, which stipulates that global emissions have to reach net-zero in “the second half of this century”.
A net-zero carbon economy “as early as possible”
But Parliament negotiators had to give some ground there, faced with reluctant member states. According to the agreed final wording, the EU will aim for a net-zero carbon economy “as early as possible”.
“The Commission and Council were against mentioning a date,” said Claude Turmes, a Green MEP from Luxembourg who was the lead negotiator for the Parliament.
“It is irresponsible that member states try to shy away from their own homework” on meeting the Paris goals, said Roland Joebstl, from the European Environmental Bureau (EEB), an NGO.
“Any delay in implementing the Paris Agreement creates further liabilities for future generations,” he added.
Miguel Arias Cañete, the EU Commissioner for climate action, seemed happy with the compromise and celebrated on Twitter what he described as “a hat trick” following the agreement on the renewable energy directive last week and energy efficiency yesterday (19 June).
Hat-trick! Another late-night #CleanEnergyEu deal. For the first time we will have a simplified, robust and transparent #EnergyUnion governance to help us meet our 2030 and longer-term energy and climate targets in an integrated way. #ParisAgreement pic.twitter.com/rIAB5IYvU8
— Miguel Arias Cañete (@MAC_europa) June 20, 2018
“For the first time we will have an Energy Union Governance, fixed in the European Union rule book, encompassing all sectors of the energy policy and integrating climate policy in line with the Paris Agreement,” Cañete said in a statement.
National decarbonisation plans for 2050
Under the agreement, the Commission will have to put forward a proposal by 1 April 2019 to design a 2050 EU strategy for greenhouse gas emissions in line with the Paris Agreement, with an analysis taking account of two things:
- The remaining “carbon budget” at global and EU level in order to keep global warming “well below 2°C” and close to 1.5°C; and
- Scenarios for the EU’s contribution towards the objective of achieving net-zero emissions by 2050 and negative emission afterwards.
The Commission analysis will be published after the IPCC issues its special report on how to meet the 1.5°C warming target, which is expected in the Autumn.
The EU executive has already started work on an update of its 2050 low-carbon energy roadmap but uncertainties remained about the scope of the exercise. It is now clear that the net-zero objective will have to be part of that assessment.
Commission officials are expected to work through the summer break to get the strategy completed by the end-of-year climate change conference in Katowice, Poland, in December.
Crucially, Turmes explained, EU member states will have to present long-term decarbonisation strategies for 2050, in parallel with the 2030 plans they have already committed to prepare at national level.
National capitals will have to present National Energy and Climate Plans (NECPs) for 2030 by 31 December 2018. “And by end 2019, governments will have to present both 2030 and 2050 plans,” Turmes told EURACTIV, saying that was something additional that Parliament requested, and obtained.
“There was a major inconsistency in terms of timing and we corrected that,” he said.
“Gap-filler” for renewables and efficiency
The governance regulation also sets a “trajectory” for member states contribution to meeting the EU-wide objective of 32% renewable energy by 2030.
Under the deal, the 28 member states will collectively have to achieve 18% of the EU-wide renewable energy objective by 2022, 43% by 2025, and 65% by 2027 before reaching 100% of the objective in 2030.
“As soon as a country is not on track, the European Commission can intervene” and ask for measures to be adopted at national level, Turmes explained, saying “This will reduce the free-riding effect” where some countries do little on renewables and rely on others to fill the gap.
A similar gap-filler mechanism was agreed for energy efficiency, with the same intermediary reference years as for renewables: 2022, 2025 and 2027.
The big difference there is that the evaluation of the gap is left to the discretion of the European Commission, which will also largely decide on policy initiatives to fill the gap – such as eco-design measures, labelling and CO2 standards in cars or buildings.
“We will able to assess politically whether Europe is on track or not,” Turmes said, adding the gap-filler mechanism for energy efficiency was a victory for the European Parliament, along with the agreed definition of the “Efficiency First” principle, which now has to be included in national plans when making decisions on new infrastructure.
“We have a definition of efficiency first. And in national plans governments have to show how they prioritise energy efficiency in infrastructure investments and networks,” Turmes said.
Tensions over decision-making
At the end of the day, the Luxembourg MEP said Parliament had “won everything” except for the explicit reference to the 2050 date to achieve net-zero carbon emissions.
This, he said, reflects disagreements over who should decide on climate and energy policy at EU level. While Parliament believes it has to be fully integrated in the decision-making process, Turmes said the Council and – surprisingly – the European Commission disagreed.
“I believe that the EU treaties are clear on this,” Turmes told EURACTIV. “Energy and climate objectives are decided by a qualified majority but the Council and Commission believe it should be the member states”.
“One day, the European Court of Justice will have to clarify this,” Turmes suggested, saying he felt the European parliament was being “robbed” of decision-making powers on energy and climate policy that it hods “de facto”.
The European Commission issued a statement welcoming what it called an "ambitious agreement".
"This regulation will ensure that the objectives of the Energy Union, especially the EU's 2030 energy and climate targets – reduction of 40% of greenhouse gas emissions, a minimum of 32 % renewables in the EU energy mix and the 32.5 % goal of energy efficiency savings - are achieved by setting out a political process defining how EU countries and the Commission work together, and how individual countries should cooperate, to achieve the Energy Union's goals," the statement said.
Maroš Šefčovič, the Commission vice-president for the Energy union said the regulation "will simplify monitoring and reporting of obligations under the Energy Union, prioritising quality over quantity. And it will help us deliver on promises in the field of energy, climate and beyond. Now I am looking forward to the Member States' draft energy and climate plans by the end of this year, as they send a strong signal to investors who need clarity and predictability."
Quentin Genard, Senior Policy Advisor at climate and energy think tank E3G, said:
"EU member states just got themselves a brand new rulebook. Negotiators have agreed on measures that should hold member states accountable for delivering their energy targets. But the regulation is only providing tools: the real test will be in the ambition of the national 2030 plans, the long-term 2050 plans and their respective update in five years time.
On climate, the negotiators put the emphasis on net 0 by 2050 at the latest – the only benchmark compatible with the Paris Agreement. This is the next frontier, and everyone should get ready for it."
Kristian Ruby, the secretary general of trade association Eurelectric, said:
“With the deals on energy efficiency and governance, we have gotten some important pieces of the regulatory jigsaw puzzle. This will help provide the clarity that allows businesses to invest. Now we need agreement on the electricity market regulation. And we have to monitor the impact of higher targets on the carbon market. A meaningful carbon price signal is important to ensure decarbonisation - also beyond the power sector”.