EU Energy Policy Strategy: Towards a Low-Carbon Economy

EU Energy policy Strategy: Towards a low-carbon economy

Daniel FraileMarch 2014

Outline

• EC low carbon economy and Energy roadmap 2050

• The 2020 package- current policy• The post-2020 process• What’s next

EC 2050 roadmap

EC Roadmap for moving to a low carbon economy in 2050

EC 2050 Energy roadmap: 5 Decarbonisation Scenarios

Source: EC Energy Roadmap 2050

ON THE WAY TO 2050

First stop: 2020

2009 EU Climate and Energy Package

• Two binding target– 20% GHG Reduction target (compared to 1990 levels)– 20% Renewable energy share of final energy demand

• 10% RES in transport by 2020

• One indicative target– 20% energy efficiency (with respect to 1990 levels of

primary energy demand)

• Emission Trading Scheme for carbon allowance

2009 EU Climate and Energy PackageREGULATIONS• Regulation (EC) No 443/2009 setting emission performance standards for new passenger cars as

part of the Community's integrated approach to reduce CO2 emissions from light-duty vehicles

DIRECTIVES• Directive 2009/28/EC on the promotion of the use of energy from renewable sources• Directive 2009/29/EC to improve and extend the greenhouse gas emission allowance trading

scheme of the Community • Directive 2009/30/EC as regards the specification of petrol, diesel and gas-oil and introducing a

mechanism to monitor and reduce greenhouse gas emissions AND as regards the specification of fuel used by inland waterway vessels

• Directive 2009/31/EC on the geological storage of carbon dioxide

DECISIONS ADOPTED JOINTLY BY THE EUROPEAN PARLIAMENT AND THE COUNCIL• Decision No 406/2009/EC on the effort of Member States to reduce their greenhouse gas

emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020

2020 Targets on GHG emissions

2020 GHG Emissions Target (compared to 2005 levels) (%)

2020 Targets for Renewable Energy

Share of renewables in gross final Energy consumption

Primary energy demand by fuel

Source: EC Energy trend to 2050, Reference scenario (2013)

RES penetration in different sectors

Source: EC Energy trend to 2050, Reference scenario (2013)

Post-2020 Energy & Climate policy framework

The post-2020 Climate and Energy Framework

2030 C&E Framework

Energy roadmap 2050:

No-regrets options

RE strategy: post-2020 RES

framework

ETS failures: - back-loading proposals

- long-term structural measures

UNFCCC: New climate

agreement by 2015

Pathway to 2015

The European Commission Proposal on a 2030 E&C framework- NGO views

– Low ambition: 40% for GHG and 27% for RES– No concrete figure for Energy efficiency– No national binding targets for RES nor Energy

efficiency– Lack of focus on sustainability– Too much focus on electricity prices/ competitiveness – Focus on power (and ETS) sector. Abandon efforts on

transport. Little attention to heating & cooling – Positive appraisal of ETS as the main tool

Why – 55% domestic by 2030

• Logical pathway from -15% to -95%

• Realistic pathway based on current -2%/yr

• Feasible based on multitude of studies

Realistic vs EC 2050 Roadmap pathway

2006 2011 2015 2020 2025 2030 2035 2040 2045 20500

10

20

30

40

50

60

70

80

90

100

Realistic

Current

Roadmap

-5%

-80%

-95%

-55%

-40%

-20%

-35%

What do we need to reach -95%? We need 3 binding targets

• Need to make the right choices (risk of high-carbon lock-in). Pushing for full potential

– GHG emissions reductions (at least -55% by 2030)

– Demand reduction (at least -40% by 2030)

– Renewable energy (at least 45% by 2030)

• Need targets to steer massive investments in production capacity and grids

• Not by carbon price alone, need complementary policies

carbon price policy is not enough

IEA: Summing up the parts, 2011

Power sector related policies supporting a 3 targets approach Energy market design

Continuation of support policies for RES, to reduce technology cost and to overcome non-market barriers

Implementation of a functioning single European energy market that promotes an energy transformation

Creating a level playing field for all energy technologies

Coal related policies Full implementation of IED, and committed to continuously

strengthening best available techniques

Phase coal out of system (i.e. EPS)

Carbon Market ETS- Permanent cancellation (~2,2bn) ETS- Cap reduced at approx. 2,6% annually

What’s next

• Ban-ki-Moon Summit, September• EU deadline for a 2030 target: October• UNCFF deadline: 1Q 2015

• Energy efficiency directive review, June • Review of subsidies schemes across Europe

Thank you for your attention.

RES are fundamental for Europe’s decarbonisation

EC decarbonisation scenarios: -RES in final energy: ~ 30% in 2030 -RES in electricity: 52% to 58% in 2030

Many scenarios on the power sector evolution

Source: SEFEP METASTUDY 2012- Compiled from data provided by the given studies and by Eurostat (2010)

Development of RES in electricity generation (including net imports)

EC decarbonisation scenarios range (RES between 52 to 58%)

European Commission White Paper

1+1/2 targets package: 40% GHG, domestic (compared to 1990) EU-wide binding target for RES: at least 27% No carbon target for fuels (FQD) and no sub-target for RES

transport Indicative level for Energy efficiency: 25% New governance process with national decarbonization roadmaps

Legislative proposal- ETS Reserve mechanism shale gas enabling framework guidelines- No regulation Analysis on energy prices and costs

Key aspects of the White Paper GHG Target:

ETS: 43% (compared to 2005) ETS’s Linear Reduction Factor: 2,2%

after 2020 Non- ETS: 30% (compared to 2005) No clear effort sharing methodology LULUCF to be included No conditionality New ETS reserve mechanisms Review of carbon leakage list- BAU

*[…to maximise the resource efficient use of biomass in order to deliver robust and verifiable greenhouse gas savings and to allow for fair competition between the various uses of biomass resources in the construction sector, paper and pulp industries and biochemical and energy production. This should also encompass the sustainable use of land, the sustainable management of forests in line with the EU's forest strategy and address indirect land use effects as with biofuels.]

RES Target: EU-wide binding: at least 27%No RES transport target Improved biomass policy*Substantial revision of RED for

after 2020New governance before 2020Phase out support after 2020

GHG emission reduction targets

40%

Key stakeholders in Brussels2-3 targets &

more ambition1 GHG Target& low ambition

BEUC (consumers)?

Nuclear lobby

Eurelectric

Gas lobby (Eurogas, EIGA)

EREC- Renewable Energy industry

Coalition for Energy savings

Progressive energy companies

Business Europe

No targets: Only an instrument

Coal lobby (Euracoal)

Oil and Gas (OGP,

Europia),

Energy-intensive industry

(chemical, paper, cement, lime, metals, glass,

consumers, clay, etc.

NGOs

EC Green paper

• 27th March• COM Green

Paper on 2030, and public consultation

Public consultation

• 500 response• Until July 2

Informal Minister council –

Dublin

• 23rd April • MS informal

views on targets

European Council on

energy

• 2nd May, • EU Heads of

States give mandate to COM for analysis and sets the timeline

Impact assessment for targets/ Energy prices study

• Summer/ autumn • EC internal work

December 2013

• COM to present communication on 2030 policy options

Timeline- EU process: Next steps

EU Council on Competitiveness

• February 2014• EU Council on

Competitiveness

EU Council on 2030

• March 2014

Ministerial meeting for int’ negotiations

• May/June• MS to take EU

position on domestic target for int climate negotiations

UN “Ban-ki-Moon” meeting

• September

COP20-Peru

2014

2013

what it’s like being an environmental NGO (in Brussels) trying to lobby for change, the imbalances in lobbying capacity between such NGOs and large

corporations?NGOs

Many Industry groups, many voices

Large industry groups: Eurelectric, Business Europe, etc.

Member States: UK, DE, FR

Opportunities & Challenges