Brussels, 22/10/2014 (Agence Europe) - The time has come for EU heads of state and/or government, at their meeting on Thursday 23 and Friday 24 October, to adopt the final decision on the action framework for climate and energy policies till 2030, as they pledged in March to do. They will have to agree on a framework that is ambitious, realistic and with sufficient flexibility so that the EU can successfully make the transition to a low carbon economy while ensuring the necessary adaptability, fairness and solidarity among the member states and contribute to the success of the international climate negotiations by submitting the EU's offer by the end of March at the latest (see EUROPE 11179).
As in any negotiations nearing the end, there will be no agreement on anything until there is agreement on everything. This will be the first point on the agenda, late in the afternoon on Thursday, and talks will continue over dinner. In his letter of invitation to the summit - the last he will chair - Herman Van Rompuy highlights the importance of the decision he hopes to reach and he calls on all of the heads of state and/or government to put their shoulders to the wheel.
“The major decision awaiting us is on the 2030 climate and energy policy framework. This is a challenging theme requiring efforts on the parts of all delegations. It is very important that the European Union shows leadership ahead of next year's international climate negotiations and that we adopt a framework that creates the necessary predictability for economic actors”, he states.
The countries of the extended Visegrad group (Poland, Czech Republic, Hungary, Slovakia plus Romania and Bulgaria) are determined to win as many guarantees as possible on fair burden sharing among the member states and proper access to financial mechanisms to support climate and energy investment. Otherwise, it will be difficult for them to agree to the binding target of a 40% reduction in greenhouse gases compared with 1990 (43% for ETS sectors and 30% for non-ETS sectors compared with 2005).
“Intensive preparatory work has been done. There is no agreement at this stage but there remain only a few issues outstanding, to be settled by the heads of state on Thursday”, a European diplomatic source said on Wednesday (see EUROPE 11181). The outstanding points are:
Reduction in greenhouse gas emissions. The latest draft conclusions document sets a greenhouse gas (GHG) reduction target of 40% that will allow an ambitious stance to be argued in international negotiations, particularly at the Paris conference (COP 21, in December 2015) at which it is hoped a global, legally binding agreement will be reached, to come into force in 2020.
Effort-sharing will be determined by fairness and viability (in terms of return on investment) and by financial support for the low-revenue countries (those whose GDP per inhabitant is less than 60% of the European average).
ETS. In addition to the creation of a stability reserve from 2021 (with an annual reduction in the emissions cap from 1.74% to 2.2%) to improve the operation of the European carbon market, a compensation fund will be put in place to support modernisation of electricity plants in low-revenue countries and to allow them to guarantee their citizens safe, clean and affordable energy. Made up of 1-2% of allocated quotas, this fund will be managed by the European Investment Bank.
For non-ETS sectors (transport, buildings, agriculture) a new paradigm will be put in place to enable the shift to a genuine emissions trading scheme. “We will set the rules and the methodology and build in the principle of adjustment in relation to cost effectiveness. We are moving towards flexibility.” The efforts to be made by each member state will only be decided later.
Carbon leakage. The continuation of free quota allocations after 2020 to maintain the competitiveness of the electro-intensive industries exposed to the risk of carbon leakage, while taking account of direct and indirect carbon costs, is still on the table. “Arrangements still have to be negotiated so that it will allow modernisation of power plants while avoiding competition distortion. The EIB will be involved in European monitoring of the allocations redistributed to certain countries, but that does not mean it will select the projects”, said the same source.
Energy savings. Several countries remain opposed to the indicative 30% objective which is still the target. “Some feel that 25% would be better to take account of cost effectiveness. We'll manage to find a figure that represents good cost effectiveness”, assured a high-ranking EU official.
Renewables. Everyone is able to accept a binding EU target of at least 27% but some more ambitious countries would like a comparative evaluation of the member states. (AN)