Europe in the World

Climate and Energy Platform

Looking after 2020 – Creating a framework for climate and competitiveness

27 June 2013

Philip Lowe, Director-General for Energy at the European Commission, argued that given that the EU’s current energy and climate policies, which began to be adopted in 2006-7, it is now necessary to have a “reality check” ahead of next year’s changeover in the EU institutions.

Lowe argued that energy policy cannot be conceived in terms of climate change alone, explaining that the European Commission’s parallel agenda is the creation of an open, competitive, integrated and interconnected energy market in Europe.

Putting the EU on a competitive, low-carbon energy trajectory will require a lot of renewables in the system, regardless of whether nuclear or CCS is also part of the energy mix, the Commission official argued. Smarter transmission and distribution infrastructures are required, the market must function at wholesale and retail level, and efforts to boost energy efficiency must be redoubled, he argued.

Adrian van den Hoven, the Deputy Director-General of BUSINESSEUROPE, outlined his organisation’s policy recommendations for 2030:

  • Competitiveness and security of supply targets for energy: we must look at the energy prices of our rivals and set EU targets, for example to try to reduce our energy differential with the USA.
  • The EU should set one target: a CO2 target for 2030, which must be linked to the global level playing field. Renewables targets and subsidies should be phased out.
  • The Emissions Trading Scheme (ETS) must be a cornerstone of the EU’s climate policy.
  • Support for renewables deployment must be phased out.
  • There should be a shift away from subsidies and tariffs to supporting R&D with a focus on technological development.
  • Better energy policy coordination between member states.
  • Diversify the EU’s energy supplies: the EU will become increasing dependent on imports, especially of gas and oil, as its own supplies deplete. Nuclear and shale gas can help to address security of supply concerns, he said.

Hendrik Bourgeois, Vice-President European Affairs at General Electric, said that reconciling climate change and competiveness is a challenge for industry as well as for policymakers. From an economic point of view, Europe’s growing dependence on fossil-fuel imports is not necessarily irrational – if it is cheaper to import something than it is to produce it domestically, then it is economically sustainable to do so, he argued.

BASF Vice-President Wolfgang Weber said that his company would like to see energy cost and supply targets included alongside climate targets in the EU’s next framework, and called for a flexible balance to be struck. He concluded by stressing the importance of taking a bottom-up rather than a top-down approach to creating robust 2030 EU climate and energy targets sector by sector.

David Baldock, Executive Director of the Institute for European Environmental Policy, said he did not have the impression that EU policy is too climate-centric, and argued that climate change is a global concern that needs addressing.

Baldock argued that Europe’s targets are only modest and that it is under pressure to do something, because the rest of the world is starting to wonder what the EU is doing on climate change.

75% of the EU population live in cities and 85% of EU GDP is produced in cities. 75% of the energy it uses is consumed in cities and 69% of the EU’s CO2 emissions are emitted in cities, said Michael Klinkenberg, a Policy Analyst at Eurocities, arguing that the EU cannot achieve its climate and energy goals without bringing cities on board.

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