Winter is coming and so is Europe’s heating season. At the same time, the EU’s relations with one of its main supplier of natural gas, Russia, are the worst they have been since the Cold War. As many European governments prepare contingency plans in case of a gas crisis, their leaders will meet in October to decide on EU’s mid-term strategy – the 2030 climate and energy framework. The Union’s targets for energy efficiency, greenhouse gases (GHG) reduction and renewables are the main points to decide on.

Energy efficiency is one of the easiest and cheapest ways to fight climate change and pollution, reduce energy bills, and create a competitive, secure economy. The European Commission recently published a proposal for Europe’s energy efficiency target for 2030. The suggested level of 30% energy savings is described by many stakeholders and experts as ‘baffling’, ‘disappointment’, ‘bonkers’, ‘disgrace’, and ‘lacking ambition’. To be fair though, the Commission has a tough job of striking a balance on a hot topic that has Europe divided.

KEY POINTS

The Commission assessed a range of 2030 energy efficiency targets – from 25% to 40%. It claimed that the recommended 30% target strikes a reasonable balance between reducing energy security risks and maintaining the affordability of the 2030 climate and energy package. Earlier in 2014, the Commission also set the targets for the other 2 pillars of the 2030 framework – 40% reduction of GHG, and 27% share of renewables in EU’s energy mix.

Two international events are motivating the European Union to quickly adopt a common strategy for climate and energy for the 2030 time horizon. The 2015 United Nations climate change conference in Paris is fast approaching. The EU, a self-proclaimed leader in the global fight against climate change, would like to maintain its frontrunner position by sending a strong message of its commitment. The second event that makes energy a hot topic around Europe is the Crimean conflict. Dependence on Russian energy imports makes European leaders uneasy and deciding on EU’s mid-term energy strategy becomes a priority.

CONFLICTING GOALS

In Favour of Higher Energy Efficiency

  • • Strengthen EU’s energy security, in light of the Ukraine crisis - 40% target reduces EU’s energy imports, particularly of gas (40% energy savings by 2030 would reduce by 40% gas imports, relative to 2010)
  • • More ambitious target will send a strong message about EU’s commitment to climate change ahead of the international climate negotiations in Paris in 2015.
  • • Higher target has supporters within the EU - the European Parliament (EP) voted on 5 February 2014 for a binding 40% energy efficiency target, newly elected Commission President Junker has spoken in favour of targets above 30%; the Commission’s earlier expert Impact Assessment shows the benefits of a 35-40% target.
  • • Can be cost-effective because of significant savings from using less energy, generation of new jobs and economic growth in green technology sectors

Against Energy Efficiency Above 30%

  • • High upfront investments – the Commission’s argument for rejecting the 40% target is that it would be too expensive to finance. This could put a strain on Europe’s economy, still fragile and sluggish after the global economic crisis, rising price of energy because of renewables subsidies, loss of competitiveness against USA which is exploiting cheap local shale gas
  • • EU Emissions Trading System (ETS) would haywire – the emissions reduction targets would have to be changed or the ETS would crash

Next Steps

The 2030 climate and energy strategy is not adopted yet. It has a long way to go in the complex process of EU decision-making. On 23-24 October 2014, at a meeting of the European Council, Member States’ heads of state and government will decide on the 2030 framework. The Council conclusions will set the EU’s strategic direction and policy goals for energy efficiency, GHG emissions and renewables, such as the level of the targets and whether they would be binding or not.

After the decision of the European Council, the framework still has to be integrated into EU law. The Commission has the right to suggest how this should be done. Would EU countries be given more freedom to determine their energy policy, or would there be a more coordinated European action? Most likely, the 2030 framework will be turned into EU legislation under the specific legal basis for developing the EU energy policy that the Lisbon Treaty introduced. The new legal basis gives more decision-making powers to the Community because it prescribes the use of the ordinary legislative procedure. In this procedure, the EP and the Council of
the EU adopt together a new law.

Considering the EP’s opinion that Europe needs higher binding targets for 2030, the new climate and policy strategy might still be redirected to a more ambitious path. Developments on the international scene could also persuade European leaders to take more decisive steps to strengthen the security of EU’s energy future.

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