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Wednesday, June 26, 2019

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Energy/Energy Efficiency: Commission Proposal On 2030 Climate and Energy Framework Adopted

The European Commission presented its long-awaited Communication for a Policy Framework on Climate and Energy 2030.

The Communication aims to ensure regulatory certainty for investors and a coordinated approach among Member States, leading to the development of new technologies. Moreover, it should continue the targets currently set for 2020: progress towards a low carbon economy, increased competitiveness in the energy market and security of supply by reduced dependency and creating affordable energy for all consumers.

The key elements of the 2030 policy framework are:

  • A binding greenhouse gas reduction target: the target of a 40% emissions reduction below the 1990 level would be met through domestic measures alone. Similarly, emissions from sectors outside the  EU ETS would need to be cut by 30% below the 2005 level.

  • An EU-wide binding renewable energy target: The binding target for renewable energy is at least 27% in 2030. This target leaves flexibility for Member States to transform the energy system adapted to national preferences, as the measures will not be translated into national targets.

  • Energy efficiency: The Energy Efficiency Directive will be reviewed in June, and therefore no targets are set for the moment. The Commission will consider the potential need for amendments to the directive once the review has been completed.

  • Reform of EU ETS: The Commission aims to establish a market stability reserve (see legislative proposal below) to address the surplus of emission allowances built up. The reserve, will operate completely following the pre-defined rules and cannot be augmented by the Commission or Member States.

  • Competitive, affordable and secure energy: The Commission proposes a set of key indicators, relating to i.e. energy price differentials, supply diversification and interconnection capacity,  to assess progress over time and develop a factual policy response if needed.

  • New Governance System: EU Member States will have to submit national plans for competitive, secure and sustainable energy, also covering energy efficiency, based on a common approach.

The Communication is accompanied by:

Impact Assessment

The European Commission has equally published an impact assessment of the energy and climate and summary of the impact assessment, following the earlier publication of the “Roadmap on Energy Efficiency Strategy: progress towards the 2020 EU target and next steps” and “Action Plan to implement internal energy market at retail level”. The Impact Assessment summary is available here. The Impact Assessment concludes that:

  1. The EU is on track with its GHG Target

  2. To reach the 20% RES target, more efforts from Member States are needed

  1. The EU is likely to miss its 20% target on energy savings

  2. End-user prices for electricity and gas have increased and are likely to continue to increase.

What is next?

  • The European Council will debate the framework on  3-4 March 2014. This will be followed by discussions in the Parliament.

  • The Council is expected to adopt the framework at the European Summit on 20-21 March 2014

Implications for your sector:

  • The framework builds on the existing ‘climate and energy package’ of targets for 2020 as well as the Commission’s 2050 roadmaps for energy and for a competitive low-carbon economy as such, it may have far-reaching and long-term implications for industry. It should be noted however, that the 2030 Framework itself, is a Communication and therefore not a legally binding document. Further legislative proposals are expected in September.

  • The Energy Efficiency Review process will start in June. It is essential to monitor the progress on Energy Efficiency in your Member State. It should be expected that following this review, targets for energy efficiency by 2030 may be set.

  • With regard to Renewables, Member States are given discretion on setting national targets, although the overall EU binding remains set at 27%.

  • The Emissions Trading Scheme reform will provide more certainty to market participants and will tackle the large and growing imbalance between the supply and demand for allowances in the EU ETS. The creation of the market stability reserve therefore does not decrease or increase the number of free allowances given to industrial companies under the EU ETS.

On energy efficiency more particularly:

The Commission also released an EU strategy roadmap which sets the way for assessing the actual achievements of the implementation of the EED against the energy efficiency objectives, and for taking possible measures/ reviewing the EED to guarantee that these objectives will be achieved.

Under the EED, Member States had the legal obligation to submit their indicative targets by April 2013. The indicative targets submitted indicate that about 17% energy use reduction would be achieved by 2020, and not 20% as is the target. Progress has been achieved since 2010 when it was estimated that the EU would achieve only about a 9% reduction. Nevertheless, a 3% gap appears to remain. A planned Impact Assessment (IA) and initiative should, therefore, provide assessment of the progress towards the 2020 target and analyse whether further action is needed within the 2020 time-horizon.

The EED review will start in June 2014.

More information:

Watch the press conference at: http://ec.europa.eu/avservices/ebs/schedule.cfm, or download all relevant documents here: http://europa.eu/rapid/press-release_IP-14-54_en.htm

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