Aankondiging Raad Energie (en)

The Energy Council will be held on Thursday 28 February, in Brussels. It will start at 10h00 and last until 13h00/13h30. A lunch will follow where Energy Ministers will discuss the internal energy market, in particular: "the question of how to achieve effective separation of supply and production activities from network operations in a manner consistent with the orientations set out by the 2007 Spring European Council". More specifically, the Presidency intends to have a debate with the Ministers in order to discuss how to move forward on these issues in order to facilitate an agreement at the Energy Council of 6 June.

Four items will be discussed by the Energy Ministers

• 1. 

  The first item concerns the adoption of Council Conclusions on the European Strategic Energy Technology Plan, presented at the Energy Council of 3 December 2007.

These Conclusions will be one of the Ministers' contributions to the Spring European Council of 13-14 March. To this extent, the Competitiveness Council of 25 February 2008 has already adopted the Council Conclusions ''Turning Challenges into Opportunities'. No real debate is foreseen.

• 2. 

  The second item concerns the policy debate on the Commission's proposals of the Energy & Climate Change package adopted on 23 January 2008.

This point should take most of the Council session, at least 2 hours and a half depending on the number of Ministers who take the floor. Commissioner Piebalgs will first present their respective proposals leaving then the ground to the Ministers for a policy debate. The Presidency would like the discussion to focus on some important aspects of the renewable energy proposal such as the measures of the directive with the view of stability for investments, sustainability scheme and trading of guarantees of origin. A set of questions has been prepared to structure the debate.

Ambition of the package as a whole. An adequate balance between promoting environmental sustainability and combating climate change, ensuring the competitiveness of European economies and increasing security of supply is of paramount importance. In this light, are the measures contained in the "Climate Action and Renewable Energy" package sufficient to meet the objectives and targets which were endorsed by the EU Heads of State and Government at the 2007 Spring European Council?

The Commission considers that the proposals demonstrate that the targets agreed last year are technologically and economically possible and provide a unique business opportunity for thousands of European companies. According to the impact assessments that accompany both proposals, these measures will dramatically increase the use of renewable energy in each country and set legally enforceable targets for governments to achieve them. All major CO2 emitters will be given an incentive to develop clean production technologies through a thorough reform of the Emissions Trading System (ETS) that will impose an EU-wide cap on emissions. The package paves the way for the European Union to reduce greenhouse gases by at least 20% and increases to 20% the share of renewable energies in the energy consumption by 2020, as agreed by EU leaders in March 2007. The emissions reduction will be increased to 30% by 2020 when a new global climate change agreement is reached.

More info

IP/08/80 .

Also

http://ec.europa.eu/energy/climate_actions/index_en.htm

Sustainability Criteria. Sustainability is one of the pillars of Climate-Energy policy as well as an objective for several other EU policies; trade in biomass and biofuels will be required for the EU to achieve its targets. In that light, how do you assess the effectiveness of the sustainability scheme (will it ensure sustainable production of biofuels on the one hand and enable efficient trade to and within the Community on the other)?

The Commission received from March 2007 European Council a mandate to make a proposal for a directive that includes a 10% biofuels compulsory target. The reasons why a separate biofuels objective was necessary are well known. First of all, biofuels make sure that the transport sector plays its part in greenhouse gas reduction. Secondly, by declaring that Europe is serious about biofuels, we send a clear signal to the oil market. Thirdly energy crops are a positive agricultural alternative for European farmers. The Commission expects most of biofuels consumed in Europe to be produced in the EU. That will substantially reduce our foreign oil dependency, expected to be about 90% by 2030. Finally an ambitious policy on first generation biofuels will attract necessary investment in research for 2nd generation biofuels, a technology based on vegetal waste with a much higher potential and less environmental impact.

It is important to mention that the only available alternative to biofuels is oil. Currently there is no other, since alternative technologies, such as hydrogen have still a long way to go. Oil produces more CO2 than biofuels, not only when burnt, but also when extracted (gas flaring), refined, and transported, often from long distances and not without danger (Prestige, Erika...). And the possible benefits for EU farmers, developing countries, and research into second generation biofuels will be drained by our bill for oil. In 2004 we were dependent on 80% from abroad for our oil imports and 80% of this oil came from just 5 countries (Russia, Saudi Arabia, Libya, Iran and Norway), which makes Europe extremely vulnerable for security of supply but also for oil prices.

However, with its sustainability criteria the Commission wanted to make clear assurances that the biofuels used in Europe, and receiving support, are sustainable biofuels. This means that they must cause 35% less greenhouse gas emissions - taken over their whole life-cycle - than the fossil fuels they replace. Most biofuels save greenhouse gases, and some save as much as 80% of greenhouse gases compared to oil.

The public must be reassured that the biofuels they buy do not increase greenhouse gas emissions, do not lead to the destruction of rainforests or other biodiversity-rich areas, do not exacerbate food shortages and are not unreasonably expensive. In addition, we should highlight the commitment of the EC, in the draft biofuels directive in preparation, to monitor regularly its impact on food security and food prices, as well as on the environment, and if relevant to make the necessary adjustments.

Renewable Energy Sources (RES). Are the provisions of the RES Directive (such as binding targets and indicative intermediate targets) and the package generally adequate to ensure stability for investments necessary to reach the goals?

The general approach of the Renewables directive ensures coherence while maximising each Member State's comparative advantage. This is achieved through, on the one hand, differentiated targets for each Member State, and, on the other, by the development of instruments, in particular transferable Guarantees of Origin for new investments, which ensures that action is taken where a comparative advantage exists, and where costs are consequentially lower.

The national targets have been fixed according to two parameters. The first is that there is a flat-rate percentage increase that is the same for every Member State. This flat rate percentage is based upon the gap, for the EU as a whole, between the 8,5% share of renewable energy in 2005, calculated in terms of final energy consumption, and the 20% target in 2020. This method is used for meeting half of the overall target.

The second element is one that reflects fairness. The wealth per citizen within the EU varies widely between the Member States. The Commission has considered it equitable for richer Member States to do more than poorer Member States. The other half of the overall target has therefore been fixed by dividing the necessary effort into an equal amount per EU citizen. This equal amount is then differentiated on the basis of GDP per capita within the Member State in relation to the EU average and then multiplied by the number of inhabitants for the relevant Member State. This re-distributes the share per capita according to "ability-to-pay". This is all the more important when one reflects that the new Member States, who have considerable potential to develop renewable energy production further, are lacking the means with which to finance the necessary investments.

The weighting between these two components is equal. Consequently, the flat-rate percentage is 5.75%, and this is also the share of the EU total that has been differentiated on the basis of GDP per capita. Percentages for each Member State have been rounded to the nearest full percentage point. For the large majority of Member States, and for the large majority of EU citizens, the national targets proposed are considered to be acceptably close to their estimated potentials. With the flexibility allowed under the proposal, the means for meeting the targets cost-effectively are available if Member States so wish.

Trade of Guarantees of Origin (GOs). The RES Directive proposes a system of tradable GOs. Does this system as envisaged provide the flexible and cost-effective way to reach the targets while ensuring the successful operation of the national support schemes?

With the Transferable Guarantees of Origin, the Commission opens up the concept of comparative advantage for renewable energy production, which is in turn a reflection of the reality of different Member States having different natural endowments, and so different potentials.

However, not all Member Stats with potential have the financial resources to capture this potential, which is why it is so important to provide mechanisms that finance renewable energy production where it is cheapest, and which gives incentives to some Member States to go further than their own national targets for the benefit of other Member States whose targets will be very expensive to meet domestically. Such flexibility will allow the emergence of inward investment in the renewable energy sector, where the extra costs of renewable energy production is paid for by another Member State from the one on whose territory the renewable energy is actually produced.

The host Member State benefits because the inward investment creates jobs and wealth, and enables domestic technical know-how to be developed. Inward investment brings macro-economic benefits, even if there are some extra costs associated with enabling that inward investment, such as strengthening transmissions systems if intermittency is increased. The security of supply of the host Member State is enhanced by the greater share of renewable energy produced and consumed on its territory, and the resulting avoidance of fossil fuel imports. Furthermore, in terms of CO2, the renewable energy production reduces emissions compared to what they would otherwise be, thereby facilitating the achievement of climate change goals. These are all very significant advantages.

The financing Member State benefits from meeting its renewable energy targets at lower cost than it would have otherwise been able to achieve on its own. Consequently, its own consumers pay less than would otherwise be necessary to meet the national targets. This is good for the financing Member States' competitiveness.

The end result of this flexibility is that the mutual advantage of both Member States is served. More renewable energy will be produced for the same cost, thereby maintaining political support and increasing the likelihood of ambitious targets being met.

• 3. 

  The third item concerns the policy debate on the Commission's proposals of the 3rd Internal Energy Market.

Policy debate on key issues on the basis of the Presidency's note. The debate will be held in the light of the orientations set by the Spring European Council of 2007 and with the objective of reaching a political agreement on the package at the June Council. In its note, the Presidency proposes a compromise for each of the elements examined so far.

Ministers will be invited to debate the key elements of the package examined so far : effective separation (art. 8); minority shareholding; third country clause (art. 8a); public ownership; Certification/designation of TSOs, including ISOs (art. 8b and 10) ; derogations ; investment planning; regulatory powers/duties ; multiple regulators ; handling of cross-border cases [regulatory regime / exemptions for infrastructure] ; Comitology procedure for the adoption of guidelines ; compliance with guidelines adopted by comitology (art. 22e) and on the Agency.

Commissioner Piebalgs will be able to present the Commission's non paper presented at the Coreper meeting of 20 February. The Commission's non-paper does not, in any case, change or prejudge of the content of the Commission's legislative proposals on the table of the institutions. The official position of the Commission on this point remains unchanged. On 19 September of 2007, the Commission made its proposal for a third energy market package, so as to increase competition, ensure effective regulation and encourage investments to benefit consumers.

The preferred solution of the Commission to reach this objective was, and remains, ownership unbundling. At the same time, the Commission has put forward also an alternative option, the Independent System Operator (ISO). Both options are in line with the conclusions of the March European Council, notably to ensure effective separation between supply and transmission activities. Since then, the proposal is being discussed by the legislators, i.e. the Council and the Parliament.

The 31 January 8 Member States (AT, BG, DE, FR, GR, LU, LV, SK) presented the so-called Third Option, which the Commission considers as a useful contribution to taking the discussions forward, and is presently studying the pros and the cons of this concept. Commission's experts prepared a "non paper" which explores, taking the Third Option ideas into consideration, possible ways to reach the objectives requested by the European Council and the Parliament, namely effective unbundling, but it cannot be considered as a political position of the Commission.

In principle, the Third Option, as proposed, does not seem to lead to effective separation of supply and production activities from network operations, and in substance does not appear to go much beyond the principles established already under the Second Energy Package. The option would need to be completed by a number of additional safeguards to ensure the structural independence of decision making of the TSO, so that no conflict of interest can arise, and that, in practice, it is operated as a truly independent company.

It is likely that Commissioner Piebalgs presents the "non-paper" before the lunch to be discussed during the same. It is therefore not excluded that the Presidency will resume the discussion of the lunch, back in Council.

• 4. 

  The fourth item is the usual information point from the Commission on the important events and actions under the international relations in the field of energy.

Commissioner Piebalgs will inform the Energy Ministers on the state of implementation of the external priorities outlined in the Energy Policy for Europe Action Plan 2007-2009. The main topics of his presentation include the International Partnership for Energy Efficiency Cooperation; Energy cooperation with major suppliers and transit countries; Euromed and the Energy Community.

Commissioner Piebalgs will also advance the importance of "security of supply and external energy policy" in the next Strategic Energy Review, foreseen for adoption in November 2008. If the work proceeds as scheduled, the Strategic Review would be available in time for Energy Ministers us to have a first exchange of views on it at the December Energy Council. This would enable the Energy Council to feed its views into the discussion at the 2009 Spring European Council.