European Commission unveils 2030 Climate & Energy Plan, shaped by “economic and political realities”

Global public relations and public affairs firm APCO Worldwide, which has a significant cleantech practiceSubmitted courtesy of WCTA Member APCO Worldwide.  An APCO Briefing Paper.

On  22 January, the European Commission unveiled its new climate and energy policies for 2030. The Commission claims it is more in tune with current “economic and political realities” and congratulates itself for setting a very ambitious 40% target for greenhouse gas (GHG) reductions, alongside an EU-level binding renewables target of 27%. As for energy efficiency, whilst the Commission underlines that this is “to play a vital role”, no specific target has been set at this point. Applauded by some industry groups such as the employers’ confederation Business Europe for its simplicity and cost-effectiveness, most NGOs as well as industry groups with a direct stake in energy efficiency, renewables and low-carbon just call it “disappointing” and see it as a major weakening of existing policy, pointing out that the 27% renewables target is only marginally higher than what the Commission’s own so-called reference scenario has predicted renewables would grow to in any case without any new policies. It is also lower than what the European Commission recommended in its 2013 Green Paper on “A 2030 framework for climate and energy policies.”

A departure from the 20/20/20 policy package

The EU’s current climate and energy objectives were defined as part of the so-called 20/20/20 policy package that was adopted in 2008.  The goals set out here were to reduce its greenhouse gas emissions by 80-95% below 1990 levels by 2050, as well as 3 2020 targets to 1) reduce GHG emissions by 20% below 1990, 2) increase renewable energy to 20%, and 3) achieve energy savings of 20%. The targets for GHG emission as well as renewable energy were binding, whereas that for energy savings was not. So far, while the EU is on track to meet the GHG emission target, is falling behind on renewables, and is more than likely to miss its indicative energy savings target.  Pointing out that the one target that the EU is almost certain to miss is also the only one not to be binding, environmentalists and “green industry” have argued that this indicates the clear need for three binding, ambitious targets for 2030 on GHG, renewables and energy efficiency. This is needed, they say, to stay committed to the 2 degree Celsius target as well as to unlock the huge potential for energy savings, to the benefit of citizens and (European) industry alike.

Member states, European Parliament to drive higher renewable targets

In terms of member states, some, such as the UK, Finland and Poland, who all want greater control of their national energy mix are pleased with the discontinuation of national renewables targets whereas a group of eight other countries, including France, Germany, Italy and  Denmark, are urging the Commission to stick to its initial, more ambitious, recommendation.

As for the European Parliament, the ENVI and ITRE Committees earlier this month adopted, albeit narrowly, a report calling for three binding targets.

European leaders will discuss the energy and climate package at their 20-21 March EU Council meeting. Lively – and heated – discussions in the months ahead are thus ensured.

The concrete proposal put forward by the Commission

The Commission has put forward a new framework that it feels will help spur investment in low-carbon technologies to reduce Europe’s dependence on fossil fuels while at the same time giving member states the flexibility to keep energy costs to a minimum.

It consists of a decarbonisation target of 40% , which implies a CO2 cut of 43% in sectors covered by the EU’s emissions trading scheme (ETS) and of 30% in non-ETS sectors such as transport, relative to 2005 levels. This 40% target should be backed by both member states and MEPs by the end of the year, in time for its submission to the UNFCCC in early 2015, says the Commission.

For renewables, the European Commission has proposed a binding EU renewable energy target of 27% for 2030 that would be met through a new “governance system”. The Commission thus suggests a discontinuation of the current  binding national targets in favour of a target that is only binding at EU-level. There would no longer be a renewable target for transport fuels. “The focus of policy development should be on improving the efficiency of the transport system… as part of a more holistic and integrated approach”, says the Commission.

No decision has yet been made on energy efficiency, one of the EU’s three existing climate and energy targets for 2020. The Commission reiterates it is a key component of the 2030 policy framework and adds the best course of action will be determined following a review of the Energy Efficiency Directive later this year.

The UK perspective

The UK Government has returned from Brussels proclaiming victory with Ed Davey, the Energy and Climate Change Secretary stating that the package was “an important and welcome step in the right direction”. The green lobby and energy investors have been less enthusiastic in embracing the proposals, with particular concern over the watering down of the binding renewables targets in favour of a broader decarbonisation aim. The debate between developing ambitious greenhouse gas targets, which the Government favours as it gives it flexibility to allow for the development of lower carbon nuclear and shale gas, and specific renewable targets, which much of the green lobby advocate for, will continue to rumble.

What is now interesting is how the Government’s flagship energy market reform directive, designed to bring forward £110bn of investment in low-carbon energy infrastructure in the form of the Energy Act 2013 will fit into this latest package. This package gives the Government much needed flexibility within which to implement the Act and with much of the detail still to be fleshed out in the form of regulations and guidance, it is still to be determined exactly what sorts of generating capacity the Act is going to bring about.

Ultimately, politics is going to dictate some of the decisions on the ground. In election year, Ministers will be keen that its energy policy remains as consumer and doorstep friendly as possible with many of the tough decisions likely to be put on hold until after May 2015. It’s all to play for.

Next steps

  • February 2014: European Parliament Plenary will vote on their position on 2030 targets, which conflicts with the Commission’s
  • March 2014: EU Council 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
  • 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

For more information:

Or contact William Wallace in APCO’s Public Affairs team:

William Wallace, associate director, APCO Worldwide, 90 Long Acre, London WC2E 9RA, (t) +44 207 526 3665 (m) +44 7912 206 027 (e) wwallace@apcoworldwide.com

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