December 2014

New EU Climate and Energy Targets

At the EU Summit in October 2014 the EU heads of states agreed upon climate and energy targets for2030. The targets are:

At least 40% reduction of greenhouse gas emissions 1990 - 2020.

At least 27% renewable energy in 2030 as binding target on EU level

At least 27% energy efficiency increase over baseline in 2030, as an indicative target on EU level

In addition the EU leaders agreed:

- A target of electric interconnection targets between EU countries of 10% in 2020 and 15% in 2030,
- To start a reform of the EU CO2 Emissions Trading Scheme (EU-ETS),
- To develop a governance system for climate and energy policies with key indicators to assess progress, and
- Implementation of a North - South and a Southern Gas Corridor, for national gas, though EU funds were not committed for this

The greenhouse gas target is divided in a 43% reduction of emissions in the sectors covered by the EU CO2 Emissions Trading Scheme (EU-ETS) 2005-2030 and 30% reductions in the other sectors (housing and small business, transport, agriculture), also for 2005 - 2030.
In the EU-ETS most allowances will be auctioned, but energy intensive industries with competition problems will still get some allowances for free and poor EU countries will be allowed to give up to 40% of their allowances for free to their energy sectors. Of the allowances auctioned, 2% of the proceeds will be given to a fund for improvements of energy efficiency and modernization of energy systems in EU countries with GDP/capita below 60% of EU average, 10% will just be given to the EU countries with GDP/capita below 90% of EU average, and proceeds of 400 million allowances will be used for a facility for carbon capture and storage as well as for renewable energy. The remaining proceeds will be shared among all EU countries.
The 30% non-ETS target will be split into 28 national targets ranging from 0% and 40% below their 2005 emissions. The efforts shall be distributed on the basis of relative GDP per capita, which means that high-income countries shall make the strongest reductions. However, the leaders also agreed that targets for countries with high GDP shall be adjusted, if they are not cost-effective. Further, a country can move its transport sector into the EU-ETS, thereby replacing reduction requirements with purchase of cheap allowances.

While the renewable energy target is said to be binding on EU-level, it will not be split into national targets. The leaders just agreed that the target "will be fulfilled through Member States contributions guided by the need to deliver collectively the EU target"
The energy efficiency target shall be fulfilled in a cost-effective manner, and will also not be split into national targets. However, the energy efficiency target will be reviewed in 2020, where the EU countries will consider to increase it to 30% as proposed by the EU Commission.

The 2020 interconnection target of 10% is backed with agreements on EU focus and possible support for interconnections from Spain, Portugal and the Baltic countries to rest of the EU, as well as from Greece.

INFORSE Opinions
These targets give EU a basis for engaging in international climate discussions with a reduction commitment comparable to other large economies. Unfortunately the targets are not as high as necessary to provide EU's fair contribution to limit global warming to 2'C, according to INFORSE and other environmental NGOs. The renewable energy target will require a slow down of the renewable energy development after 2020, where the target is 20%. The energy efficiency target will only give an energy consumption 9% below the expected consumption in 2030, if the 2020 target is reached. In conclusion the 2030 targets are both insufficient and unambitious.
INFORSE-Europe proposes 60% greenhouse gas reductions and 50% renewable energy for the EU-28 by 2030.

Regarding the conditions for the targets:
On the positive side, the 40% target is for reductions inside EU (domestic actions), which is stronger than if international emissions trading would be included.
On the negative side the renewable energy and energy efficiency targets will not be divided into national targets, so it is unclear how much each country should expand renewable energy use.
Another negative point is that it is unclear how the EU-ETS shall be reformed. If it is maintained in its current, ineffective way, excess emission allowances will reduce the effect of the greenhouse gas target.

Regarding the agreement to expand gas corridors, this will lead to higher greenhouse gas emissions and will also go against development of renewable energy.

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