The FINANCIAL — On 19 and 20 March, European leaders meeting at a summit in Brussels are expected to endorse the European Commission’s plan for a European energy union.
The plan sets out the Commission’s proposed priorities for EU energy and climate policy over the next two years, according to EU business.
EU leaders are also likely to back the EU’s planned contribution to international efforts to cut carbon emissions in the context of the global climate conference in Paris in November. This emission reduction plan was already endorsed by EU environment ministers on 6 March, and the EU’s climate diplomacy action plan was endorsed by EU foreign ministers on 19 January.
Energy union
The Commission’s plan sets out five “dimensions”, or priority headings, and outlined proposals under each heading. The five dimensions are: energy security, the internal energy market, moderation of energy demand, decarbonisation of the economy, and research and innovation.
Greenpeace recommendations
The energy union should bring much-needed consistency across Europe’s climate and energy strategies. All policies and investments should be in line with Europe’s medium and long-term climate and energy goals.
To hasten a phase-out of coal, the energy union should introduce an emissions or efficiency performance standard (EPS). Alongside a reformed carbon market, an EPS could ensure the closure of Europe’s most polluting power plants.
The EU must set up a robust 2030 governance model that ensures the EU meets and exceeds its minimum target for a 27 per cent share of renewable energy by 2030.
Inconsistencies
The Commission’s vision for an energy union is to move Europe towards a cleaner, more secure and affordable energy system with a strong overarching policy framework to attract necessary investments. While its overarching objectives to tackle climate change and move away from fossil fuels are sound, the Commission also wants to exploit additional supplies of gas and coal.
The International Energy Agency estimates that Europe needs to invest over $2.2 trillion (€2.08 trillion) by 2050 to replace ageing power plants and build new energy generation capacity in its transition to a climate-friendly economy. Policy inconsistencies could ultimately raise the cost of these investments and increase the risk of funding to keep fossil fuels like coal in the power system.
In its plan, the Commission calls for “the fundamental transformation of Europe’s energy system”. It highlights the need to move Europe “away from an economy driven by fossil fuels” and to empower citizens to take ownership of the energy transition by becoming producers as well as consumers of energy.
However, EU leaders are likely to reinforce the inconsistencies of the energy union plan by backing the use of fossil fuels like coal as an important indigenous resource for European energy security.
“The EU can’t achieve its long-term pledges to cut carbon without a phase out of coal and a transition to an efficient energy system powered by renewables. If the EU is serious about pushing for a global climate deal in Paris, then it’s got to send the right signals in its plans for an energy union.” Tara Connolly, Greenpeace EU energy policy adviser
Phasing out coal
EU leaders are also likely to endorse efforts to rapidly reform the EU’s carbon market. While these are likely to raise the carbon price and encourage investments in low-carbon technologies, they are unlikely to provide a sufficient price signal to prevent funding of high carbon infrastructure, such as retrofits for coal-fired power plants that could keep such plants on the power grid for decades to come.
Greenpeace believes the carbon market must be complemented by policies that ensure investments shift away from coal and lignite plants. The introduction of an emissions or efficiency performance standard (EPS) for power plants would provide an additional signal to power companies and trigger the closure of the dirtiest plants.
EU 2030 targets
In addition, EU leaders are set to back a “reliable and transparent” energy governance system, with new legislation that can deliver its renewable energy and energy efficiency targets for 2030. Greenpeace believes the Commission should put forward proposals for a robust governance system that ensures Europe meets (and exceeds) its 2030 targets for renewables and energy efficiency.
Government positions
Several countries, including the UK, want to see a strong emphasis on the development of the internal energy market within the energy union. Other countries, such as Poland, the Czech Republic and Slovakia – all heavily dependent on Russian energy imports – see energy security as the most pressing issue and want the Commission to focus its efforts in this area.
Most countries acknowledge the need to implement 2030 climate and energy targets but have varying opinions on how best to do this. The UK, Poland, the Czech Republic and Slovakia would like to see more flexibility for countries to follow the policies they choose. They want the freedom to promote nuclear power over other forms of energy.
Others, like Germany and Denmark, want strong implementation of agreed 2030 targets with a focus on renewable energy and energy efficiency.
Next steps
On 14-16 April, EU energy ministers will discuss the Commission’s plan in Brussels at an informal gathering hosted by the Latvian Presidency, before formally taking a position at the Luxembourg energy council on 11-12 June. The Commission is then expected to move forward with specific policy proposals.
Paris climate conference
Although the EU can and should do more to promote renewable energy and cut carbon emissions by 2030, it is the first bloc to table a clear and quantifiable emission reduction plan ahead of the Paris conference. Other major economies should follow suit before the agreed deadline at the end of the first quarter of 2015.
The governments of China and the United States are already making progress in reducing emissions. On 26 February, the National Statistics Bureau of China released figures showing that Chinese coal consumption decreased by 2.9 percent in 2014, confirming that China’s coal use has peaked and is now in decline. Meanwhile, United States President Barack Obama has started action to tackle power plant emissions and methane release.
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