Brussels, 18/01/2008 (Agence Europe) - As we pointed out in our edition of 17 January (EUROPE 9581), the package of measures on energy and climate for implementing commitments taken by the European Council last March on combating global warming gave rise to bitter discussion between the 27 member states and the European Commission, which is to set out proposals on 23 January. In addition to the wrangling over the distribution of effort to be made between member states in order to achieve the 20% reduction target in greenhouse gas emissions in the EU compared to the 1990 level, which implies recasting the greenhouse gas emissions trading system, the European capitals are conducting intensive talks with the Commission to minimise the effort that each country has to make in order to reach this target in the EU energy mix (primary energy consumption). The Commission plans to set compulsory national targets for each member state to foster renewable energy use in three sectors - electricity generation, heating/cooling and transport - bearing in mind for the latter that each country has a minimum 10% target for biofuel use slapped upon them. Although the proposal for a directive on the promotion and use of renewables fixes a series of gradual global targets for 2012, 2014, 2016 and 2018 (not for biofuels), it will be up to the discretion of the EU27 how efforts between the three sectors should be divided at national level.
Taking into account the situation in each member state and their respective potential, the Commission suggests that, for each capital, there should be a goal set using a mathematical formula which divides the effort of renewables promotion into two parts. Increasing the 8.5% share of the energy mix in 2005 to 20% in 2020 for the EU as a whole requires an increase of 5.75 percentage points for all member states, to which should be added a 5.75 percentage point rise divided according to GDP per capita in each member state in 2005. The burden would therefore be largely borne by the richer member states. Generally speaking, the large member states will be compelled to increase the share of renewables in their energy mix by 13 points by 2020 compared to 2005, the increase being limited to a little over 10 points for the less wealthy economies.
Sweden, which is one of the countries that will be called upon to provide the greatest effort, is invited to achieve a target of 55% of its energy mix in renewables by 2020. This is not greatly appreciated by Stockholm as it represents a 14-point rise compared to 2007 (41%), i.e. the equivalent of the current production from hydro-electric power stations in Sweden. Other member states such as Denmark, Luxembourg and Austria will also have to do what they can with ambitious targets. Vienna, in particular, may have to reach a target of 34%. France considers the burden-sharing formula should not exceed a threshold of 23% in 2020, compared to a little over 10% today. Like Sweden, but also Belgium and Lithuania, which should be attributed targets of 10.8% and 23% respectively, France is opposed to such developments. During an informal meeting with Commissioners Andris Piebalgs (Energy) and Stavros Dimas (Environment), on 12 January, the French minister for the environment, Jean-Louis Borloo, pointed out that Paris did not wish to exceed 20%. In a letter addressed to the president of the Commission, José Manuel Barroso, on 11 January, French President Nicolas Sarkozy said the Commission's proposal was “neither effective, nor equitable, not economically sustainable”. Since debates began on the first energy and climate package of 10 January 2007, on the basis of which the European Council has taken commitments to combat climate change, Paris calls for the nuclear option to be taken into account, France being the main producer of nuclear power in Europe and given the fact that this method has the advantage of not emitting greenhouse gases. This point of view is shared by the Czech Republic, Slovakia, Poland and Lithuania but challenged by Austria which remains strongly opposed to all preferential treatment being given to the nuclear option. Environment Commissioner Stavros Dimas could not, however, be clearer. He answered the French president by saying: “Nuclear power is not a renewable source”.
Germany, which should be allocated a target of 18% (currently 9%) voiced its fears loud and clear saying that the Commission's plans are counter-productive and threaten the national incentive systems in place to promote green energy at guaranteed prices. In a joint letter addressed to the Commission, Germany and Spain (which are to have a 20% target set for them) voice opposition to the plan to have a virtual trading system for certificates of renewable origin. For example, a company that produces wind power in Germany or solar power in Spain would be awarded a certificate guaranteeing the origin of the electricity that could then be sold on to the United Kingdom. Resale would fuel the British target with electricity produced in another member state. Berlin and Madrid believe that such a system - whether voluntary or mandatory - could endanger and undermine existing systems in Europe that guarantee prices and access to power grids for renewable energy enterprises. This kind of system “will put a very successful development of renewables at risk, which is not acceptable to our governments”, the German/Spanish letter pointed out. This position is supported by Slovenia, which currently holds the EU Council Presidency, and Latvia which, with nearly 40% renewables in 2005, is concerned about the system suggested by the Commission which will allow rich countries with a smaller potential for producing renewable energy (United Kingdom, Ireland, Netherlands and Luxembourg) to have to buy their quotas. The countries reticent about the system proposed by the Commission fear that their most profitable renewable energy production will be exported, thus endangering their subsidy systems as, in order to achieve their targets, these countries will have to support more costly and less developed renewable energy production. Environmental NGOs also wonder about the feasibility of the trading system suggested by the Commission. “We already have in Europe a successful, simple system for promoting renewables in Germany and Spain that creates stability and certainty in the market. The Commission is setting the right objective but the tool appears to be perverse”, said Mahi Sideridou, Greenpeace's policy director for climate and energy.
At the beginning of the week, at the Commission, it was still hoped that the mechanism would be sufficiently flexible to allow member states that so wish to produce all or part of their renewable energy target in other member states. In an interview with the German magazine, Kapital, last weekend, Commissioner Dimas denied that the Commission's plans could endanger the incentive systems used in Germany and Spain. According to Les Echos of 18 January, the Commission has now amended its project. The French daily explains that companies will have to choose between trading and guaranteed prices. They would no longer be able to benefit from subsidies from one country to develop renewable energy in that country only to sell their certificates to other countries, as set out in the earlier version of the text. “At first sight”, this adjustment would no longer threaten the traditional support system.
According to various sources, Italy and Greece will probably each be set a target of 17% compared with a target of 14% for the United Kingdom. Finally, just like Slovakia, the new member states are likely to be set targets just as modest as London: on 10 January, Slovakian Economy Minister Ubomir Jahnátek said he was satisfied with the 14% target set Bratislava. (E.H.)