Dods EUM: ITRE-ENVI - A 2030 framework for climate and energy policies

On November 7th 2013, the ENVI- and ITRE-committees held a joint meeting on the 2030 framework for climate and energy. Please find below a summary of the discussion.

By Dods EU monitoring

28 Feb 2014

Dods EU Briefing

 

Source: European Parliament, Committee on the Environment, Public Health and Food Safety & Industry, Research and Energy

 

Subject: A 2030 framework for climate and energy policies – Consideration of draft report

 

Date: November 7 2013

 

Procedure: Own Initiative Report

 

Rapporteurs: Anne Delvaux (EPP, BE) / Konrad Szymanski (ECR, PL)

 

Documents: Draft report, Working document, Green paper, Legislative Observatory

 

Timetable:

  • Deadline for amendments: November 12 2013
  • Next ITRE/ENVI joint meeting: December 2 2013
  • Vote in ITRE/ENVI: January 9 2014
  • Plenary: February 4 2013

 

 

On November 7th 2013, the ENVI- and ITRE-committees held a joint meeting on the 2030 framework for climate and energy. Please find below a summary of the discussion.

 

Anne Delvaux (EPP, BE), rapporteur for the ENVI-committee, began by mentioning that the Rule 51 on joint committees applied for the report.

 

She then said that she intended to amend the report to face five challenges: an economically efficient low carbon economy, best benefits for job creation, how to address the IPCC objectives, energy independence vis-a-vis exporting countries (including considering the potential of renewables) and finally, in the long term, how ordinary citizens could have competitive energy prices.

 

Immediate action was necessary in order to send out a signal before the Commission’s green paper in January and the Council dealing with the topic next March. She further summed up that there must be an overview of the 2020 climate package.

 

She moved on to name the pitfalls that existed currently. Firstly, there was the issue of policies of national subsidies for renewables whereby some countries had invested much without calculating cost-efficiency. As an example, some renewables were moving into their mature face and there were distortions regarding natural gas, for example. The excesses in subsidies meant that technology neutrality should be pursued in the report. It would be a pity to question the legitimacy of renewable sources of energy because national policies had not been up to the task.

 

Moreover, she thought that there must be national phasing out of fossil fuels. Overlapping duplication is counterproductive. The inter-linkages between targets and monitoring achievements would also be important to remember here.  

 

Concerning energy efficiency, its potential had been underestimated. She contested this point and thought that energy efficiency should move to the stage centre.

 

Finally, concerning competitiveness and energy security, these have also been neglected by the current framework.

 

In 2030, investors were looking for a reliable response, not last minute solutions. The legislative framework should not be constantly altered. Sectors, where renewables were involved, were a major source of jobs. The latter could increase by 3,4 million jobs by 2030.

 

The three objectives of emission reduction targets (energy efficiency, greenhouse gas emissions and renewable energy) were all necessary to underpin the efforts. Profitability, as well as the protection of the environment, would be important.

 

She then spoke about a binding target for renewables. She mentioned the example of “over-developing” the renewables’ capacity in Germany and thought that similar measures could be taken in other Member States, given that corrective measures were taken.

 

She then spoke of energy imports and said that according to some estimations, 94% of oil could be imported by 2030 if nothing was done about the current situation.

 

Moreover, she mentioned the “Multilateral Energy Forum”, created by the Benelux countries, as a good example of regional cooperation on energy. The Forum had created a regional energy market for Western Europe. Why not build on initiatives like this one, she wondered. They would offer ways to increase certainty that Member States were consulting with each other before decisions were taken affecting neighbouring countries, etc.

 

Concerning ETS and going forward with it, one set of ideas, such as relying solely on backloading, would not be enough. The economic fundamentals for the ETS would have to be reviewed, she added.

 

Finally, she admitted that the level of ambition on the targets in her report was questionable. “Having a target and a percentage must not make us forget that a clear signal for the strategy is also needed”, she said and thought that a strategy was just as important as targets.

 

Konrad Szymanksi (ECR, PL), rapporteur for the ITRE-committee, said the two rapporteurs shared the same concerns; they both wanted to switch to the low carbon economy in a cost efficient way, they both cared about jobs in all industry branches and finally they both were concerned about energy security and diminishing EU’s dependence on importing energy. Lastly, they both agreed on the need to reach proper energy prices.

 

The question currently was how exactly to get there. In his opinion, a cost effective switch to a low carbon economy was not going to happen without a serious analysis of the current policy. In this respect, he wondered whether it was acceptable to be obliging Member States and companies “to do the same thing three times”.

 

He then criticised the emphasis given to green jobs by saying that they were not going to create enough new jobs. Moreover, it was not enough to tap on the renewable resources. The market was not prepared to unconventional sources of energy either.

 

He had three main points to make. Firstly, EU climate policy must reflect European economies and not what kind of burdens countries such as Brazil, China and India have. Sooner or later the EU would be bound with those countries in a comprehensive free trade agreement. Europe’s share of global emissions was very insignificant and would probably get even lower in the future. Thus, unilateral action by the EU was not going to solve the problem.

 

Secondly, the success of EU’s climate policy should already have brought about other countries and regions wanting to follow in those footsteps. However, nobody seemed to want to do that.

 

He then called for stable rules for the industry. Unfortunately, EU’s climate policy was one of the unstable factors. An example of bad policy was the fact that the EU had tried to change the rules of ETS in the middle of the policy.

 

Energy prices were too high in Europe and climate policy was partly to blame. Europe was a strong continent in terms of trade potential with partners such as Canada, Japan, South-Korea and the US. There would have to be a strategic goal of the new opening of the climate policy.

 

The goal of a stable energy security and supply was important for him. The policy should be focused on bringing down energy prices especially in the context of international trade. In this regard, there was a need for the single energy market. Moreover, the development of infrastructure for renewables must be created.

 

Lastly, he thought that the potential of each Member State was very different in terms of geography, climate, trade and the geopolitical situation, etc. This went without saying. But this diversity should be considered in terms of “who was burdened with what” in climate policy. Not only GDP should be considered but the CO2 emissions per capita, and energy efficiency as well.

 

Concerning the three goals of a cost effective low carbon economy, some Member States had partly switched to low carbon economies, whereas others had not. This should be reflected in the new climate package. Otherwise, the old mistakes would be repeated and no one would definitely follow in Europe’s footsteps.

 

Finally, he emphasized that the goal for reducing emissions should be fair and a “fair sharing of responsibilities” was needed (he was referring to the responsibilities of countries and in particular to that of Poland). The ETS and non-ETS should also be reflected in the report.

 

Alejo Vidal-Quadras (EPP, ES) spoke in behalf of MEP Herbert Reul and the EPP group about the targets for 2030. The EPP group agreed that one must learn from experience and the 2020 framework. The conclusion they drew was that the 2020 targets had focused on climate policy too much in detriment of energy policy. There had been a subordination of energy policy to climate policy. Therefore, this must be rebalanced now.

 

Concerning the facts, there had been an economic crisis and access to credit had been reduced. Electricity prices had increased by 14% between 2010 and 2013 for private consumers and even more for companies. What was worse is that energy prices in the EU were set to increase more. Europe only represented 11% of global emissions. This, with the lack of motivation of competitors, meant that all efforts were put to a reduction that in global terms was not even efficient.

 

Moreover, the EU was sacrificing its industry on the way. Environmental sustainability must be linked with competitiveness, he agreed but thought that the mistakes for 2020 should not be repeated now.

 

For the time being, the EPP group would not opt for another binding renewable target. However, they did think European research funds must help renewables reach a mature stage. Investments already made could not be harmed. But energy sources which were not yet competitive could not be further supported.

 

A general CO2 reduction target was a better idea. In addition, the EPP group could discuss an energy efficiency sub-target which could lead to money saving’s in the long term (for 2020, the efficiency target had merely been indicative whereas the renewables target was binding – now the EPP group wanted to reverse this policy).

 

Marita Ulvskog (S&D, SE) believed the EU was running out of time. The Commission had made it clear that they would give their position in the beginning of next year, while next spring the future of climate and energy policy would be dealt with in the Council.

 

Therefore, there should not be so much disagreement in the European Parliament. What the EPP had just said was a sign of what the Parliament did not agree on.

 

Moreover, the draft report text was an odd one, she thought. It said, for example, that a transfer to energy and climate policy would threaten competitiveness. She could not accept this because she was from an industrial part of Europe but also an environmentalist. This was a point where the EU could beat their competitors. This meant developing systems that impact climate change.

 

Moreover, renewable energy policy was being extended on the ground and this should not be destroyed by suddenly chancing course. Concerning the EPP group’s policy, the economic crisis has nothing to do with climate and nature. She had thus been surprised by the report.

 

The Parliament must give concrete suggestions; this was the aim of the report. Thus, figures for the new targets were needed, also for 2050 (80-95%), for the reduction of CO2 emissions, as well as for extending renewables and energy efficiency. All these targets must be binding and then the Member States must decide for themselves on how to get there. If there was no statement, this meant subsiding fossil fuels. Without targets for renewables, investment would be more expensive for renewables.

 

Britta Thomsen (S&D, DK) spoke about competitiveness and mentioned that Barroso had recently made a statement on the EU being a leader in green technologies. Only by investing in green technology the EU could be competitive. Today, China, Brazil and other such countries are investing more in this economy than the EU. Mrs Merkel had also recently commented that talking was not enough but investments were needed. Without a framework, investments would not happen. Investments must come from private sources.

 

Moreover, she thought high energy prices had nothing to do with renewables. They depended on imports.

 

Lastly, she mentioned that targets for energy efficiency would send the right signals. Binding targets for renewables would be also needed.

 

Fiona Hall (ALDE, UK) said the point about binding targets for energy efficiency mentioned by Mr Vidal-Quadras had been a good one. The non-ETS side of emissions was an important share of the issue. From a security of supply point of view, less energy should be used. The Frauenhofer Institute had recently mentioned that emissions could be reduced by 40% by 2030 considering energy efficiency and the non-ETS sector. The non-ETS side of things could do the heavy lifting.

 

Concerning renewables, it would be important to remember the success stories of 2020. The EU had increased the amount of renewables and the cost had come down. It had also been a growth area during recession. Renewables were not the main reason why energy prices had gone up. The fossil fuel prices were to blame.

 

Secondly, concerning the myth of subsidies not working, they did work but needed to be better formulated. If a technology was supported once it was mature, this created a bubble and was not good.

 

Moreover, the EU said there should be indigenous energy, i.e. shale gas, but this was not the cheap answer. The need for industrial policy and renewables must be thought of from this point of view.

 

Gerben-Jan Gerbrandy (ALDE, NL) said the EU had limited abilities to secure its energy supply because there was little fossil fuel in the EU. Shell had said recently that there was no future for shale gas in Europe. So, if there was no fossil fuel, the solution was either nuclear energy or renewables. This was why the focus should be on renewables. He then recommended the German “Energiewende” for the rest of Europe. One single target for climate would be sufficient for the climate but not for the target of energy security, also sought after by the report. The three binding targets were thus all needed.

 

Bas Eickhout (Greens/EFA, NL) commented on the difficulties of having two rapporteurs. He raised the topic of the IPCCC climate study and commented on it by mentioning the problem of cumulative emissions which would lead to increased global temperatures. In 30-year time, if business as usual was allowed to continue, the critical level of 2 degrees Celsius would be reached.

 

However, he agreed with the previous speakers that there was also need for investment security, also beyond 2020.

 

Lastly, he spoke in favour of a strong report which was needed for the international climate negotiations, especially the 2015 conference in Paris. The EU was on its way to -30% by 2020. The ambition level should be -60% by 2030, he thought. At least the UK government’s suggestions went beyond the poor number of -40% often referred to -50%. The UK was also in favour of the GHG emission target, as well as targets for carbon capture and storage and nuclear energy. He wondered why they could not embrace other technologies such as renewables and energy efficiency.

 

Lastly, concerning state subsidies, 100 billion Euro was being given to fossil fuel, as opposed to 35 billion Euro to renewables. If the talk was about getting rid of subsidies, “let us look at fossil subsidies”, he finished.

 

Niki Tzavela (EFD, EL) said she agreed with MEPs Szymanski and Vidal-Quadras. Being realistic and pragmatic would be important. She suggested looking at the ETS and the completion of the internal energy market. Looking at coal and gas, the use of the latter had increased although it was less polluting than coal.

 

Moreover, there were different systems of subsidies for renewables in place in the Member States. In this respect, she referred to MEP Herbert Reul’s previous report which had been calling for a pan-European target by 2030 and agreed with this goal.

 

Lastly, she spoke about exports of LNG from the US and thought that this could disrupt the functioning of the EU’s internal energy market.

 

Peter Liese (EPP, DE) was in favour of the three binding goals. Even the Lisbon treaty said that the EU could promote energy efficiency and renewables. It was a mistake not to have made energy efficiency binding in the first place. Energy efficiency would bring prices down and reduce systemic costs.

 

In terms of the goals and targets, he had received the German government’s view and the German target was not that far (at least -40% by 2030) from the UK government’s position.

 

Maria Da Graça Carvalho (EPP, PT) said legislative certainty to the economy should be ensured, as well as a view beyond 2020. Some of the issues of the 2020 package should be corrected. More emphasis should be given to the competitiveness, energy efficiency and research for renewables.

 

She then spoke in favour of an interlink between the Iberian Peninsula and France for transporting renewable energy.

 

Further, she referred to the targets and the disagreement over them and suggested the possibility of a combined target for energy efficiency and renewables. This could give some flexibility for the Member States. They should define their goals in the beginning to give certainty for industry. Sub-targets for transport and heating were also needed and there should be no discrimination or favouring of biofuels only, for example. In a nutshell, the targets need to be more complex than the ones for 2020.

 

Jo Leinen (S&D, DE) said the consensus points of the MEPs over the report should be focussed on. Energy was expensive, it had been established, but this was not because of the climate policy in the EU. For instance, China was developing wind energy and electric vehicles. The EU must be careful not to miss the boat. A predictable legislative framework was needed. Within the objective there could be differentiation of who does what.

 

Adam Gierek (S&D, PL) said CO2 emissions were the main evil and at the Warsaw conference certain things could be clarified. He then criticised the Greens policy of 2050 goals and going beyond 2 degrees Celsius if business as usual was applied. Finally, he agreed with the previous speakers that the climate package should be modified as soon as possible. In this respect, he said “yes” to high efficiency energy and innovation.

 

Richard Seeber (EPP, AT) said progress was being made in CO2 emission reduction but efficiency is where the problem is. This concerned for example buildings, where quick improvements could be made. The subsidies for renewables were not the problem and certainly not reducing the subsidies. Subsidies for fossil fuel had increased substantially recently. However, renewables must have some investment. He was not in favour of separate strategies for the countries.

 

António Fernando Correia De Campos (S&D, PT), said the emission reduction success story should be continued. In this context, there was need for smart grids for intermittent supply. One key to supply was energy efficiency. The trans-European energy market, if not developed, would make the EU lose market efficiency and in environmental sustainability. The regulation on European grids existed but there was energy isolation defended by certain countries. Smart grids would only function through investments. Finally, he thought that there were ambiguities in the current report which is why it should be made clearer.

 

Eija-Riitta Korhola (EPP, FI) told her colleagues about her experiences in Finland when having met her voters, and how she had told them that the EU emission method was very expensive. She thought the report was very balanced and she “almost” hoped no amendments would be made. The EU was on track for reaching the 2020 targets and was only responsible for 11% of the global emissions (and would only be accountable for 4% by 2030). Probably, it would also be easier for the EU to change their strategy than it was for the others.

 

Concerning renewables and some of them being mature and thus phased out, she agreed with that approach. Renewable energy should not be breast-fed. Fossil fuels should not be pampered either. Such approaches only punished the technology and locked it to an uncompetitive status.

 

Moreover, reasonable prices for electricity were needed. However, she was worried about paragraph 33 of the report on country GDPs. Surely the most cost efficient emission reduction target should be considered and is most likely that these would work in low GDP countries.

 

Vittorio Prodi (S&D, IT) said that rationalisation, energy efficiency in other words, must be applied to renewables too. Moreover, a European backbone for electricity transmission was needed, so that the renewables could be connected and shared. Agricultural and forest waste could also be integrated to and combusted in plants. Solid waste energy brought about high energy efficiencies (65%) which meant that heat pumps could be used for low temperature areas. Thus, combustion might not even be needed for many areas in the future. Burning fossil fuels could be solved sooner rather than later.

 

Kathleen Van Brempt (S&D, BE) said to MEP Korhola that unfortunately there would be many amendments arriving. Looking at recital A, it talked about different things at an equal footing. Concerning the energy price setting, there was a debate in Flanders about this, but the industry and politicians wanted the approach to stay market driven. She then commented on the Energy Commissioner having taken out from the report the facts that fossil fuels were subsidised much more than renewables. The latter must maintain their level of subsidy. She was happy to hear that EPP was in favour of binding targets. “Let’s push ahead on ambitions on ETS”, she concluded.

 

Corinne Lepage (ALDE, FR) mentioned that she was in favour of the three binding targets. Concerning competitiveness of the European economy, it was clear that the energy sources of today were renewables, whereas fossil fuels were a thing of the past. Whether there was eco-tech or electric vehicles, all these areas were such that the EU must be a leader. There must be ambitious targets for areas where the EU partly already met them. It would be important to consider the particularities of countries but the Polish situation was not special enough in her view.

 

Edit Herczog (S&D, HU) said more cross border cooperation between the Member States was needed. Moreover, combined binding targets were needed. Secondly, concerning competitiveness, EU’s advantage was about the knowledge and science that can be built into any technology. IPR and patent rights in the field of energy were vital, in particular at a moment in time, when fake power stations were being built. Thirdly, concerning energy efficiency, it would have to be the major driver for all material science, including the chemical sector. Knowledge was the competitive advantage Europe had. Moreover, there must be investment. The supplier sector for energy was lacking behind. Without it, the transformation could not be done.

 

Paul Rubig (EPP, AT) said investment must be ensured. ETS should concentrate on electricity and not the processing industry. Consumers would decide which products they want to buy. CO2 levels should be considered here. A VAT reduction for them should be considered for products with low CO2 emission levels. Moreover, he was in favour of three targets. Security of supply will loom large in the future. Concerning electricity costs, life cycle costs should be looked at, all the way to storage. “Thus, we could see what is expensive and what is affordable”, he added. The new generation of renewables must get the support it needs.

 

Lena Kolarska-Bobińska (EPP, PL) expressed her support for the report as it stood and hoped the amendments suggested in the committee would not be considered. She agreed that climate policy had been dominating. Redefining the mechanisms should be considered. The question was whether to stay with three objectives or whether they should correlate. She thought the Member States should be allowed to decide on their strategies.

 

Werner Langen (EPP, DE) said there was a mismatch with the renewables policy. The consumer had had to pay for the German Energiewende. The current German oversupply in wind energy meant that Poland and the Netherlands got free electricity, whereas prices had gone up in Germany while they were decreasing in the Netherlands. The island effect of the internal market of the EU also needed to be looked at. He specifically referred to Malta and Cyprus which needed to move to solar from oil.

 

Konrad Szymanksi (ECR, PL) began answering by noting that there should be a warning given about following the wrong logic; there was no “golden means” for dealing with the situation. There must be a variety of instruments on energy security and the rest of the points he had mentioned in the beginning. This issue was not about conflicting policies. Own resources were also important. In the EU, conventional, renewable and nuclear energy existed but the right mix was needed. Reliance on one single resource could not be handful.

 

Conventional energy sources and shale gas would not change the energy landscape in the EU. There were countries like the UK where energy efficiency measures could change the market situation. Did the current political instruments serve the purpose, he asked and answered to himself “no”. There must be a balance on efficiency and renewables. There should be no obscurity of the legislative framework.

 

However, it should be kept in mind that 80% of all energy demand in the future would be realised by fossil fuels, mainly carbon. He would prefer wind and solar energy but this was the reality. Not keeping with the facts would lead to a one-sided approach.  

 

Oreste Rossi (EPP, IT) asked the rapporteurs to go further in order to bring about the internal energy market and to bring down energy costs. Italians paid 80% more than Germans, Polish or French for their energy. Thus, there was unfair competition.

 

Edite Estrela (S&D, PT) said there was a need to create employment by this policy. The EU must be ambitious in the reduction of greenhouse gas emissions, as well as promote investment in renewables. It would be important to keep on supporting fossil fuels as well. The sources need to be diversified.

 

Peter Liese (EPP, DE) said that MEP Werner Langen had brought about an important point; on renewables there was not sufficient agreement. Moreover, there was need for investment in storage demand management and networks. Bringing down costs did not mean there should not be a binding target for renewables. A binding goal for energy efficiency would be needed and a directive on ETS.

 

Stefaan Vergote, DG CLIMA, said that the Commission was preparing to come forward with the climate and energy package 2030 perhaps by the end of the year or at the beginning of the next year. The Commission wanted a coordinated framework for the three pillars. The rising import bills of importing gas were worrying the Commission.

 

He noted that rapporteur Szymanski had put accent on global action. This would be crucial for tackling the problem. The next COP was starting in Warsaw soon. What was encouraging was that recently China and the US had come forward with statements about their plans for emissions after 2020 in the next years.

 

He then commented on a recent Commission report on global emissions. This report was bad news every year. This year, the report mentioned decoupling global emissions from economic growth. Developing countries had also taken some action in terms of emissions.

 

Concerning ETS, the stakeholder consultation, followed by the green paper, had found that there was consensus on the priority of ETS on how to address climate policy across Europe. Concerning the non-ETS sector and the effort sharing decision (transport, buildings etc.), it was good that the report emphasised those sectors in the overall approach.

 

Mechthild Woersdoerfer, DG ENER, said energy efficiency was important for the Commission and it should continue to be one of the corner stones for the EU. There would be a report next year on this, as well as a report on the measures taken on energy efficiency.

 

She then added that in some countries there were different measures for retroactive cuts of subsidies.

 

Looking into 2030, renewables are very important for the Commission. Moreover, the internal energy market is one of the most important areas for energy. The Member States need to cooperate even more. Completing the internal energy market would be important.

 

Concerning energy prices, the 2030 climate and energy package would address this. The Commission was coming up with an analysis of energy prices by the end of the year. The main factor for the rise of prices was the price of fossil fuels. Network costs and renewables would also be analysed in this report which would be released in conjuncture with the 2030 climate and energy package (out in January next year).

 

Anne Delvaux (EPP, BE) commented that one target only would not be able to deal with all these issues. The text was a result of the consensus between the two rapporteurs.

 

In terms of profitability, she insisted on renewables in the framework of the capacity to move forward in those sectors not covered by ETS. Construction and transport must be really stressed in this context. Moreover, there must be subsidies for the types of renewables that have not been matured yet. Fossil fuel subsidies should be tackled and they should not be allowed.

 

Concerning energy prices, there must be realism on how the prices are built up. Transparency for the companies and citizens is needed.

 

Further, investment in R&D is a must. There would also have to be more cooperation. Moreover, Member States deciding on their own of getting rid of nuclear energy without telling their neighbours; this is not acceptable. There should have been a policy of communication between the countries, as well as a broader energy mix in Europe.

 

Finally, she repeated that she thought there must be three binding objectives, but the efforts must be refocused. The targets must be realistic.

 

Mechthild Woersdoerfer asked whether the Commission could consider postponing the publishing of their climate and energy package in January until the current report had been voted on Janury 9 2014. She said the European council had asked for a reply to the green paper by the end of 2013. However, the Commission could show flexibility in next January, to take the Parliament’s report into account.

 

Matthias Groote (S&D, DE) said financial markets and insurance markets had not been looked at here. Energy mixes had been dealt with already in 2009 but there was now need for better harmonisation.

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