Europe’s plan to decarbonise its economy by 2050 could be turned on its head at a summit today (22 May) if EU heads of state and government sign off on measures prioritising industrial competitiveness over climate change in draft conclusions seen by EURACTIV.
The draft text says that EU policy must ensure “competitive” energy prices, and declares it “crucial” that Europe diversify its energy supply and develop “indigenous energy resources” – a reference to renewable energies, but also coal, nuclear power and shale gas.
One high-profile German MEP Holger Krahmer (ALDE), hailed the end of “climate hysteria” in a jubilant press statement.
“For the first time, rising energy costs and the declining competitiveness of the European economy will be rated higher than obviously unenforceable global climate change ambitions,” he said.
“The economic and social consequences of collective hysteria can no longer be ignored, as the governments of the EU member states admit in this paper,” Krahmer added, saying that it was right to give more attention to energy sources such as gas and coal.
The draft summit conclusions also pledge to review the causes and nature of Europe’s energy price costs by the end of the year, and look more closely at industrial competitiveness.
Luxembourg MEP Claude Turmes (Greens) branded the document “appalling” in its entirety and a “dramatic setback” for environmentalists.
The shift in emphasis by European leaders follows the rejection of a proposed reform of the EU's depressed Emissions Trading System (ETS), pushed by the Climate Commissioner Connie Hedegaard, which sought to boost CO2 prices.
The measure had been heavily resisted by energy-intensive industries and the business employers’ federation, BusinessEurope, which argued against artificially raising carbon prices – and therefore energy costs – in a slow economy.
EU officials told EURACTIV at the time that this lobbying had been decisive in the vote and described the issue at stake – withholding allowances to raise prices on the ETS – as a “proxy” for wider issues.
Many of these may be discussed at today’s summit.
Turmes said that a letter sent by Markus Beyrer, the director of BusinessEurope, to Enda Kenny, prime minister of Ireland which currently holds the EU’s rotating presidency, showed that the industry group’s priorities had influenced the summit's agenda.
The BusinessEurope letter concentrates on the advantage that cheap shale gas-fuelled energy prices offer the United States, and blames the cost of climate policies – such as the ETS, renewable energy support schemes, and the structure of electricity markets – for the bloc’s flagging economy.
The leaked letter follows reports that the Commission has asked member states to consider removing tariffs on energy intensive firms, in a plan drawn up for the steel industry.
Turmes said: “This text opens the door for EU's biggest polluters not only to continue a free ride on future climate policies but also to get a zero participation in modernising Europe's ageing energy infrastructure.”
But within the Commission, such views appear increasingly out of favour.
In a press briefing last week, officials from the European Commission’s energy directorate handed out briefing papers with a series of talking-point headlines such as ‘EU gas prices among the highest in the world’, ‘EU electricity prices have risen much more than in the US’ and ‘More than 200,000 [aluminium-based] jobs are in danger of disappearing’.
These dovetail with a ‘re-industrialisation’ agenda articulated in the past months by Energy Commissioner Günther Oettinger. His agenda aims at a goal of a 20% industrial contribution to Europe’s gross domestic product by 2020.
This share sank to 18% in 2010 from around 22% in 2000, Oettinger contended.
But Sanjeev Kumar, the director of Change Partnership, an environmental NGO, told EURACTIV that focusing on cheap North American energy would be self-defeating, as the US had always had an energy price advantage over Europe.
“The EU leaders are having the wrong conversation,” he said. “To get out of the situation that we’re in, we have to spend money on energy efficiency and grid infrastructure. But instead we’re just spending money to stay in the problem, patching things up and prolonging the misery.”
High energy prices here were driven by fossil fuel imports, a situation likely to worsen with economic growth or an EU-US trade deal, Kumar said.