The energy ministers of the EU Member States will focus on the impact of the COVID-19 pandemic on the energy sector and will also address the issue of National Energy and Climate Plans (NECPs) on Tuesday 28 April in an informal meeting via videoconference.
Impact of COVID-19. The discussion on the first topic will take place in two parts: a first exchange about the impact of COVID-19 on the security of the European Union’s energy supply (resilience of the European energy sector, storage capacities, etc.) and a second exchange on preparing for the economic recovery, in particular in connection with the European Green Deal.
During this second exchange, some Member States are expected to raise concerns that falling fossil fuel prices will make the transition to renewables more difficult by making them less competitive than before.
French authorities, who are concerned about this issue, also sent a document to the other Member States stating that “extremely low fossil fuel prices [...] pose a major risk to our energy transition policies”.
France considers that a reflection must therefore be undertaken “to identify the most relevant methods to ensure that the environmental costs of fossil fuels are duly taken into account, beyond their sole market price, through a carbon price floor”.
The paper then suggests three avenues: (1) the forthcoming revision of the EU Taxation Directive on energy; (2) a strengthening of the Emissions Trading Scheme (ETS); (3) a combination of these two options.
Other Member States may also speak along these lines, such as the Netherlands, for example, which has already taken a position in favour of introducing a floor price for carbon under the ETS (https://bit.ly/2KD3IgH ).
Like Poland, however, some countries are opposed to a strengthening of the ETS.
French authorities also consider that the ETS’ ‘market stability reserve’ must be strengthened without delay in order to deal with the risk of a resurgence of a large surplus in emission allowances, which would hamper investments in decarbonisation.
Other topics. In addition, the European Commission will brief ministers about the progress of work on national energy/climate plans and long-term renovation strategies. To date, four Member States have still not submitted their NECPs to the Commission (Germany, Ireland, Luxembourg and Romania - see EUROPE 12470/25).
Finally, following a request from four countries (Germany, the Netherlands, Austria, and Denmark), the ministers may also discuss ‘smart sector integration’. The presentation of the Commission’s strategy in this area is scheduled for 24 June, but could be postponed due to the coronavirus.
To consult the document from the French authorities: https://bit.ly/3aCEVnv (Original version in French by Damien Genicot)