On 22 January 2014 the European Commission presented its package for a reorientation of climate and energy policy to 2030. It comprises a non-legislative communication on the new climate and energy policy to 2030, which provides for a binding Europe-wide greenhouse gas reduction target of 40 percent with 1990 as the base year. In addition, a target of 27 percent is proposed for the development of renewable energies which would be binding for the EU but not at national level. To realise the EU renewable targets, the Commission proposes a new governance structure which entails the preparation of national plans. The proposal no longer contains an energy efficiency target, where the Commission wants to review the current energy efficiency directive before the end of this year and propose a new version if deemed appropriate. For BDI, setting a binding climate target and a realistic renewables target is fundamentally the right path. But, as a next step, it is essential to enshrine coherence of targets and instruments also in law.
The package also comprises a legislative proposal for the introduction of a market stability reserve in the framework of the emission trading scheme which provides that 12 percent of the surplus of emission allowances is placed in a reserve every year starting on 1 January 2021 or is released from the reserve back into the market above a certain threshold. The overall target of a 40 percent reduction should translate into a 43 percent reduction obligation (2005-2030) for the ETS sector. In the Commission’s vision, the annual reduction of the cap for emissions from business sectors falling under EU-ETS would also have to be increased from the current 1.74 percent to 2.2 percent for the period from 2021. The task of rapporteur has been awarded to the European Parliament’s EPP group but it is unlikely that there will be a legislative deliberation by the European Parliament and Council still in 2014 in light of the European election on 25 May and the reconstitution of the Commission in October.
Lastly, the package contains a communication and a study on energy prices and costs as well as a recommendation and a communication on promotion of shale gas.
How things will develop: at EU level, the European Council (EU summit) will address the climate and energy package on 20 and 21 March 2014 with a view to adopting conclusions in June. At international level, the UN Climate Conference (COP 20) of Heads of State and Government International will be held in Lima in December, more or less as a staging post en route to an international climate agreement which is due to be signed in Paris in December 2015. The EU plans to go into the negotiations in Paris with a binding climate target. The new climate and energy framework is intended to be the basis for this.
Source: BDI The German Business Representation
