Brussels, 03/02/2014 (Agence Europe) - On 4 March, the European energy ministers are examining the draft framework for EU climate and energy policies between now and 2030 and the analysis prepared by the Commission on the prices and costs of energy in Europe.
No formal decisions are expected of this first Energy Council under the Greek Presidency, but the two exchanges of views planned will feed into the debate of the European Council of 20-21 March. The question of industrial competitiveness and strengthening the manufacturing sector of the EU, which will be one of the key themes of the forthcoming meeting of the European leaders, needs to be read through the prisms of an analysis of the prices and costs of energy and of the 2030 political framework for energy and the climate.
Energy/climate framework 2030. Coming shortly after the debate on the same subject in the framework of the Council of Environment Ministers (see other article), it will be the turn of the Energy Council of 4 March to focus on the draft framework for action on climate and energy for 2020-2030, which was tabled by the Commission in January of this year (see EUROPE 11002), as part of the public guideline debate. This draft framework is based, amongst other things, on a binding objective to reduce greenhouse gas emissions by 40% compared to 1990 figures (which can only be achieved through national measures), plus a target of at least 27% of energy from renewables, whilst a new energy efficiency objective contingent will be conditional on the revision of the “energy efficiency” directive in the course of this year. The framework proposed by the Commission also provides for the creation of a permanent reserve of quotas for a sustainable reform of the ETS from 2021 and a new system of governance.
The ministers are called upon to examine this framework from the point of view of the energy policy, in order to ensure that it dovetails with the debate of the environment ministers, and to express their general position on the framework 2030, the new system of governance and the raft of indicators proposed, to ensure a follow-up of the dossier and define any measures to be taken.
Prices and costs of energy. The ministers will hold a public guideline debate on the analysis, which was prepared by request of the European Council of May 2013 and unveiled in January of this year, and also covering the “framework 2030”, the structure of the prices and costs of energy in Europe and the factors which determine these. The objective of this analysis is to help political decision-makers to understand the backdrop of recent price increases, their impact on energy consumers and their political consequences. The document lays emphasis on the prices and costs of gas and electricity, and more particularly on the impact these have on the citizens' access to energy at stable and affordable prices and on the industrial competitiveness of Europe.
The analysis establishes that prices for energy have been on the up in almost all member states since 2008, mainly due to taxes and other deductions, but also due to the increase in network costs. A comparison on an international scale stresses an increase in price gaps between the EU and its main trade partners (gas prices in the EU are three to four times higher than those of the United States, India and Russia, and electricity prices are more than double the prices in force in the US and Russia and are 20% higher than those in place in China), which is harmful to Europe's competitiveness, particularly for its energy-intensive industries. It also shows that although fossil fuels remain a key factor in setting prices for electricity and gas, the carbon price laid down by the ETS has not had a statistical impact on retail electricity prices. On the other hand, subsidies to renewables are a factor in driving energy prices upwards. In conclusion, the Commission stresses that the increase in energy prices can be partly offset by effective energy and climate policies on a level of costs, competitive energy markets, a more integrated single market and measures to improve energy efficiency, such as by using more efficient products.
The Greek Presidency intends to base the debate on questions relating to the gap between wholesale prices, which are falling, and climbing retail prices, the differences between the member states in terms of setting prices and costs and as regards the energy intensity of households and businesses, and on the measures to be taken to bring energy costs down. (EH)