France puts climate, energy talks on EU summit table

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With the Ukraine crisis expected to dominate the agenda at this week's EU summit, France and the UK are among the few countries prepared to discuss climate and energy issues. reports.

The 20-21 March summit was scheduled almost a year ago, and was intended to focus on the EU's 2030 objectives on energy and climate change, which the European Commission presented in January.

>> Read: EU sets out ‘walk now, sprint later’ 2030 clean energy vision

However, the recent events in Ukraine may change the original focus of the meeting. European Commission President José Manuel Barroso sent a letter to the member states, in which he outlined topics of importance for the meeting, specifically financial issues, and the situation in Ukraine.

Energy and climate change “are not priority issues for Barroso and Van Rompuy’s final Council," regretted a French diplomat, who was speaking ahead of this week's summit meeting.

France, the UK and the Scandinavian countries are alone in pushing this issue to the fore, whilst Poland has managed to convince the majority of other states that it can wait. One of the EU largest emitters of CO2 per capita, Poland is opposed to binding greenhouse gas emission reduction targets at the EU level.

Fortunately for Warsaw, the Ukrainian crisis comes at exactly the right time, to divert attention.

Germany is no longer at the forefront of the clean energy movement, as rising demand for coal, and the planned closure of nuclear power plants, have pushed up its CO2 emissions. Angela Merkel did not address the subject when in Warsaw last week, which would have been key to shaping Poland's position ahead of the EU summit.

Not much is expected on the international front either, with the EU-USA summit on 26 March steering clear of concrete discussions on climate and energy.

Calendar over climate   

At European level, discussions have only just begun. The Commission's proposed objective to reduce European CO2 emissions by 40% by 2030 has not yet been discussed among heads of states and government.

“Member states have still not adopted the Commission’s proposals on the EU's climate and energy policy to 2030 set out in January, which complicates matters," remarks a climate policy expert.

If a debate does take place among EU leaders this week, it will probably focus on the timetable. France wants to bring the climate discussion to the table for the next EU summit in June, and hopes to secure a quick agreement at the European level, in order to increase the chances of success at the 2015 UN Climate Summit.

In essence, France's proposals are ready. French economist Jean-Michel Charpin handed out a report in February, providing the analysis informing France’s position, outlining steps to reform the EU's carbon market.

>> Read : France launches probe into EU carbon market reform plan

The report is made up of four parts. The first analyses the reasons behind the low carbon prices, currently at €7 per ton – a level too low to prevent a resurgence of coal in energy production.

For carbon market experts, the reasons are linked to low economic activity and a rise of renewable energy, which has had questionable effect on the price of carbon. Carbon credits issued to developing countries and purchasable from Europe are also being questioned.

The second part analyses the European Commission's proposed energy and climate proposals for 2030, which are heavily debated within the EU executive.

Carbon market reform at stake

The third part of the report focuses on France’s main concern: reforming the EU’s Emissions Trading Scheme. A proposal for a stability reserve to set aside CO2 emission allowances and control carbon prices is at the heart of the report, but governance of the scheme is unresolved. Should market stabilisers be allowed to function automatically? Or, should a 'central carbon bank' be established to control the release of quotas on the market?

France seems to support an intermediate position between the automated management of surplus quotas and, as proposed by the Commission, the establishment of a central bank for carbon allowances.

The final part of the report concentrates on carbon leakage – or the relocation of industries outside Europe – and how to limit it. A number of countries, (for example Poland), believe that they should be compensated for risking the de-localisation of industrial activity which may be triggered by the planned carbon constraint.

For France, the timetable will be key to secure an agreement at the European level. “We will try to advance on two points – setting out the course on the main reform options for the existing mechanisms, and the extent of intended reductions in greenhouse gas emissions, in order to reach a comprehensive agreement on a European level by the end of 2014,” according to a source at the Elysée.

Strong sentiments could also be heard at the French Ministry of Finance. France was the among the first EU countries to spell out its position regarding the carbon market reform in 2011. The finance ministry was able to set the agenda by promoting the auctioning system for carbon allowances, which is now in place.

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.

  • 20-21 March: European Summit in Brussels

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