EU Climate Talks: Does 2030 Looks Promising?

EU leaders agreed on 23 October 2014 the domestic 2030 greenhouse gas reduction target of at least 40% compared to 1990 together with the other main building blocks of the 2030 policy framework for climate and energy, as proposed by the European Commission in January 2014. This 2030 policy framework aims to make the European Union’s economy and energy system more competitive, secure and sustainable and also sets a target of at least 27% for renewable energy and energy savings by 2030. It aims to build a secure energy system that ensures affordable energy for all consumers, increases the security of the EU’s energy supplies, reduces our dependence on energy imports and creates new opportunities for growth and jobs.

The deal was hailed as a triumph by EU Climate Action Commissioner Connie Hedegaard:
“A binding 40 per cent CO2 reduction effort domestically in Europe is not an easy task. It can only be achieved through a major transformation in all parts of the society. That is why the EU leaders’ decision to adopt the Commission’s proposal is an ambitious and important step forward.”
There are 5 important factors and outcomes that were discussed at the talk. However, let us begin with some background:

BACKGROUND

The 2030 framework as proposed by the Commission in January 2014 builds on the experience of, and lessons learnt from, the 2020 climate and energy framework. It also takes into account the longer term perspective set out by the Commission in 2011 in the Roadmap for moving to a competitive low carbon economy in 2050, the Energy Roadmap 2050 and the Transport White Paper. These documents reflect the EU’s goal of reducing greenhouse gas emissions by 80-95% below 1990 levels by 2050 as part of the effort needed from developed countries as a group.

To prepare for the 2030 framework, a Green Paper adopted by the Commission in March 2013 launched a public consultation on what the framework should contain. The public consultation ran until 2 July 2013.

1) REDUCING GREENHOUSE GAS EMISSIONS BY AT LEAST 40%

A centre piece of the framework is the binding target to reduce EU domestic greenhouse gas emissions by at least 40% below the 1990 level by 2030.
This target will ensure that the EU is on the cost-effective track towards meeting its objective of cutting emissions by at least 80% by 2050. By setting its level of climate ambition for 2030, the EU will also be able to engage actively in the negotiations on a new international climate agreement that should take effect in 2020.

To achieve the overall 40% target, the sectors covered by the EU emissions trading system (EU ETS) would have to reduce their emissions by 43% compared to 2005. Emissions from sectors outside the EU ETS would need to be cut by 30% below the 2005 level. This will need to be translated into Member State targets. The European Council has outlined the main principles to achieve this.

“A binding 40 per cent CO2 reduction effort domestically in Europe is not an easy task. It can only be achieved through a major transformation in all parts of the society. That is why the EU leaders’ decision to adopt the Commission’s proposal is an ambitious and important step forward. Important not only to Europe and the Europeans, but also to the rest of the world. We have sent a strong signal to other big economies and all other countries: we have done our homework, now we urge you to follow Europe’s example. This is a very good day for Europe’s climate politics.’ – Connie Hedegaard, EU climate commissioner’

2) INCREASING THE SHARE OF RENEWABLE ENERGY TO AT LEAST 27%

Renewable energy will play a key role in the transition towards a competitive, secure and sustainable energy system. The Commission proposed an objective of increasing the share of renewable energy to at least 27% of the EU’s energy consumption by 2030. The European Council endorsed this target which is binding at EU level.

“The renewables target is a very small step to support the enormous potential that solar and other renewables represent. It is still an important signal of political resolve to overcome the existing market barriers and the adverse national political contexts where some Member States have implemented retroactive measures for renewables.” – Frauke Thies, policy director at the European Photovoltaic Industry Association (EPIA).

3) INCREASING ENERGY EFFICIENCY BY AT LEAST 27%

The European Commission proposed a 30% energy savings target for 2030, following a review of the Energy Efficiency Directive. The proposed target builds on the achievements already reached: new buildings use half the energy they did in the 1980s and industry is about 19% less energy intensive than in 2001. The European Council, however, endorsed an indicative target of 27% to be reviewed in 2020 having in mind a 30% target.

“Today’s announcement by the European Council to set only an indicative energy efficiency target for the next decade of meagre 27 per cent is at best business as usual. It can in no way be seen as a strong political signal that Europe wants to retain its global leadership position in energy efficiency or that the prosperity of European citizens is dealt with in a responsible way. Regrettably, this decision leaves Europe with a huge potential for economically viable energy savings, worth hundreds of billions of euro, untapped.” – Susanne Dyrbøl, public affairs manager at ROCKWOOL International.

4) REFORM OF THE EU EMISSIONS TRADING SYSTEM

The EU ETS will be reformed and strengthened. A 43% greenhouse gas reduction target in 2030 in the ETS translates into a cap declining by 2.2% annually from 2021 onwards, instead of the rate of 1.74% up to 2020.

In January 2014 the Commission proposed to establish a market stability reserve from 2021 onwards. This is to address the surplus of emission allowances in the EU ETS that has built up in recent years and to improve the system’s resilience to major shocks. This will ensure that in the future the EU ETS is more robust and effective in promoting low-carbon investment at least cost to society.

The European Council underlined that a reformed, well-functioning ETS with an instrument to stabilise the market in line with the Commission’s proposal will be the main instrument to achieve greenhouse gas emission reductions.

“The EU now has an emissions target broadly in line with the UK’s own ambitions, helping level the playing field for UK manufacturers and strengthening the market for low-carbon goods and services. EU leaders have signalled that they recognise the importance of protecting carbon-intensive industries threatened by overseas competitors from the full costs of the EU emissions trading system. However, the EU-wide renewables and energy efficiency targets are a fudge that are unlikely to address the current inefficiencies caused by overlapping sets of goals and incentives.” – Gareth Stace, head of climate and environment policy at manufacturers’ organisation EEF.

5) NEW GOVERNANCE SYSTEM

The 2030 framework proposed a new governance framework based on national plans for competitive, secure and sustainable energy as well as a set of key indicators to assess progress over time. The European Council agreed that a reliable and transparent governance system will be developed to help ensure that the EU meets its energy policy goals.

“A governance structure will send a signal that Europe is open for business on renewables and will contribute to the region’s competitiveness, security and position in the global technology race.” – Thomas Becker, chief executive officer of the European Wind Energy Association.

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