European Council on climate and energy policies

(AE) CLIMATE/ENERGY: 2013 framework agreed but rediscussion possible after Paris (Agence Europe)

The promise has been kept. On Thursday 23 October, the EU heads of state and/or government approved the action framework for climate and energy policies over the period from 2020 to 2030 – and within the set timescale. The leaders see the agreement as ambitious, the European Parliament and environmentalists, on the other hand, regard it as a watered-down deal.

The member states set themselves three targets: a collective, binding reduction of at least 40% in greenhouse gas (GHG) emissions, a European objective of a share for renewable energy of at least 27% of total EU energy consumption, and an indicative objective of at least a 27% improvement in energy efficiency by 2030.

An emissions trading scheme, with a market stability reserve in place by 2021, will remain the principal instrument for realisation of the objectives at the least cost

Flexibility, solidarity, fairness in achieving the targets taking account of national specificities both in the energy and industry sectors covered by the ETS and in non-ETS sectors, such as transport, construction and agriculture, were the key to the agreement reached on the framework, which seeks to ensure affordable energy prices, maintain industrial competitiveness and security of energy supply, and to make a contribution to attainment of the EU's climate targets. In the view of the leaders, the agreement sends a strong signal from the European Union for the UN climate conference in Paris (COP 21, December 2015), at which it is hoped a legally binding global regime to tackle climate change, with all countries on board, will be reached.

Eight hours of negotiations at the highest level were successful in overcoming the final obstacles – that of the United Kingdom, fiercely opposed to all and any energy efficiency objective, and that of the countries of Central and Eastern Europe, heavily dependent on coal-fired power stations and unwilling for the EU to commit unilaterally, on the international stage, to a binding 40% reduction in GHG emissions.

This objective may be collective and binding, but the Central and Eastern European countries, with Poland, which wanted it conditional, most vociferous, were successful in having the conclusions state that the Council will “revert” to this issue after the Paris conference. However, “any change will have to be made unanimously”, noted a diplomatic source. Poland's Secretary of State for European Affairs Rafal Trzaskowski stated that “the clause is there so that decisions harmful to Poland cannot be taken. In short, attempts to toughen European objectives will need our consent. And there will be no such consent”.

Finding an agreement “was not easy, not at all, but we managed to reach a fair decision. It sets Europe on an ambitious yet cost-effective climate and energy path. Economic actors need the predictability of a long-term framework – to plan investments, to spur innovation, to bolster research”, said Herman Van Rompuy. He took the view that this was “a message of commitment. Well in time for the UN conference in Paris”.

José Manuel Barroso hailed the European Council's unanimous approval of the “European Commission's ambitious proposals” for a cut of in GHG emissions. “When we tabled our strategy back in January, many said it was the wrong thing to do at the wrong moment. Tonight we proved the doubters wrong.”

Under the principle of fairness, each country will contribute according to its prosperity and its ability. Solidarity will be expressed through additional financial support to the investment required in low-income countries (those where the GDP per capita is less than 60% of the European average) to help them move to cleaner energies. In addition, under the principle of economic effectiveness, the agreement provides for protection of the competitiveness of European industry and will permit the transfer of emissions quotas among the member states. It will also be possible, in calculating achievement of the targets, for a country to count clean investment made in another country – in both the ETS and the non-ETS sectors, which will share the reduction effort (43% for the ETS sector and 30% for the non-ETS). The Commission will bring forward a legislative proposal on the breakdown of the targets among all sectors.

The indicative target of at least 27% in energy savings is calculated on the basis of existing technologies and will be reviewed in 2020 “having in mind an EU level of 30%”.

It was the energy interconnection objective which, at the end of negotiations, proved difficult. It has been significantly beefed up and raised to 15%, with assurances to Portugal and Spain that they will receive EU funding for their plans (see other article).

Other main adjustments by the European Council:

ETS. The mechanism to compensate modernisation efforts in low-income countries will be created through a reserve of 2% of the EU ETS allowances and the compensation fund will be managed by the beneficiary countries (and not by the EIB alone). The EIB will make a contribution to the selection of projects. A simplified procedure will be put in place for small-scale projects. Free quota allocations to energy-intensive industries that face the threat of carbon leakage will continue until 2030 concentrating on those sectors facing the most serious threat of loss of competitiveness, adapting the system to the real production level and restricting windfall profits.

Non-ETS sectors. The collective effort will be thus: reduction in CO2 emissions compared with 2005 will be 0% for the least wealthy countries and 40% for the wealthiest. A reference to agriculture and the capacity of forests to absorb CO2 was added to increase flexibility – a demand particularly dear to Ireland, a country with a large agricultural sector. The Taoiseach found this addition particularly welcome “because of Ireland's unique position because of our agri-sector”.

French President François Hollande is happy that the emissions reduction target is at least 40%. “France would have preferred to go even further on energy savings but it mustn't be forgotten that transitions have to be made. It will be at least 27% tending towards 30%”, he told the press. He welcomed the member states' desire to “persuade the United States, China and other countries that Europe could be a reference” for the Lima conference (COP 20) in preparation for the Paris conference. “Now was the time for Europe to come to a conclusive, definitive agreement”, he stressed.

A 40% reduction in emissions between 2020 and 2030 “is not negligible” pointed out German Chancellor Angela Merkel, underlining that the EU was pledging “to achieve in ten years what, up to this point, it had agreed to do in 30 years” (20% by 2020 compared with 1990). “We have to make sure our competitiveness does not suffer internationally. We want an ambitious climate programme to have innovation and the future ours and to give the EU a sound negotiating position to set the world the example”, she said. While happy with the progress made, she did not try to hide that, on renewables, she would have like more. “At least 27% renewables, this is a sort of at least target. We could envisage getting more. Countries can do more and Germany will definitely do more”.

Dutch Prime Minister Mark Rutte, pleased with an agreement he felt was “very ambitious, particularly on renewables” was “less enthusiastic” on the energy efficiency target. “There is a risk because we have already done so much that it's not realistic”, he said, consoled by the fact that it was only an indicative target.

Eva Kovacs, Poland's Prime Minister, had at the outset of the summit said she was “focused and determined” not to allow fresh commitments to be imposed on Poland and she was delighted with the outcome. “I said (Ed: in the Polish Parliament) that Poland would not come back from this summit with new obligations. And there are no new obligations!” she said. She also welcomed the retention of free quotas until 2030 “which, without any doubt, is a guarantee that energy prices will not rise” (Ed: in Poland) and “the new reserve will not be 1%, as was still being talked about today, but 2% – 50% of which will go to Poland”.

At the European Parliament, which had been calling for binding targets – 40% emissions reduction, 30% renewable energy and 40% energy efficiency – there was disappointment. “We cannot have another resounding failure that we experienced in Copenhagen (Ed: in 2009). It's not just the Lima and Paris conferences that are important but also the signals that will come out of the European Council. The decisions that you will take today will send a message to the rest of the world”, Martin Schulz told the heads of state and/or government, urging them “not to take any further steps along the slippery slope of inter-governmentalism”.

For Gabi Zimmer, the leader of the GUE Group, “the outcome of the summit shows that the EU leaders will not try to halt climate change”. She also pressed them to commit to an emissions reduction target of at least 50% by 2030 and 80% by 2050. “We need compulsory quotas to swiftly achieve energy savings and increase the share of renewables”, she added.

Environmental NGOs immediately deemed the targets no better than, or even lower than what is already there, and thus not enough to allow the EU to break its dependence on imports of fossil fuels and to contribute to keeping the rise in temperature to below 2 degree Celsius. “The European leaders are sacrificing our future on the altar political haggling. The results look to satisfy the interest of the old economy to the detriment of the well-being of citizens and forward-looking industries. The big polluters will be pleased”, was the assessment of Jason Anderson, climate and energy expert at the European office of WWF. (AN, with CG, MD, JK, IL and EL)