EU on thin ice with Winter Package

The European Commission today published its energy package for 2030. This was its big moment to show that the EU was up to the job of transitioning to a clean and efficient energy system that would reduce emissions in line with the Paris climate agreement. Despite a significant improvement in energy efficiency, the overall package leaves the EU way off track to meet its international climate commitments by still rewarding the polluting fossil fuel companies and showing scant regard for the renewable industries.

Reactions:

Roland Joebstl, EEB Climate and Energy Policy Officer, said:

”By proposing a mere 27% by 2030 goal for renewables, the Commission is proposing to slash their roll out by half the current rate in the next decade at a time when the rest of the world is picking up speed. Worse still, no effective measures are proposed to ensure that the bio-energy part of the energy mix is sustainable.” [1]

“On energy efficiency the Commission has delivered its pre-Paris promise to increase ambition. This is a step forward, but many more benefits are within reach if the European Parliament introduces a 40% binding target and eliminates the loopholes in the Energy Efficiency Directive.” [2]

Christian Schaible, EEB Policy Manager for Industrial Production, added:

“The CO2 limit proposed for capacity markets is a bad joke; it would impact practically none of the existing EU coal power plants and fail to address the toxic health and other environmental impacts of coal.” [3]

Stephane Arditi, EEB Policy Manager Products and Waste, said:

“Today’s Commission announcement suggests the Ecodesign policy is back on track after months in the deep freeze. All together, the new work plan, new measures and revised measures could save by 2030 the equivalent of 30% of the residential electricity consumption of Europe in 2013”. [4]

 

The main points of the deal:

[1] On renewable energy and governance:

An EU-level renewable energy target of 27% represents barely more than business-as-usual, which is estimated at 24%. This means that Europe risks a rate of renewable energy development in the next decade that is half of the current rate. The EU must achieve a much higher share of renewable energy (45% by 2030) to be in line with the Paris commitments.

The Commission’s proposal for a new governance system does not compensate for the lack of national binding targets after 2020. The Commission leaves it entirely up to Member States to ensure that their contributions add up to the EU target. What happens if they do not is not sufficiently defined.

Also, the proposed two-step approach of new sustainability criteria for forest biomass (requirement for national legislation to be in place and in case of a lack thereof, assessment of supplier specific evidence) is unlikely to deliver. As long as there is no EU legislation on forests, the Commission will have a difficult task assessing the appropriateness of national forestry legislation and supplier specific evidence. Failure to ensure the sustainability of bioenergy will risk a repetition of the controversy that has surrounded biofuels and their impacts on land use.

[2] On energy efficiency:

In October 2014 the European Council agreed its position regarding the 2030 Climate and Energy Framework. This included support for an EU-wide energy efficiency target of at least 27% and a review by 2020 with view to increasing this to 30%. With today’s proposal, the Commission delivers on the 30% in the review of the Energy Efficiency Directive (EED). Yet, calculations by the EU executive show that increasing ambition on energy efficiency from 27% to 40% would boost average real income for all households by 2%, create jobs for 860,000 people and cut air pollution, saving 18 million life years or 225,000 lives, between now and 2030.

The EED’s main leveraging tool, namely the energy efficiency obligations of Article 7, require EU countries to save 1.5% of energy every year. Today’s package suggests continuing this obligation until 2030 and beyond. This will provide longer term certainty to investors and other stakeholders involved in the implementation of the measures. However, the Commission is still not proposing to close the loopholes that currently allow EU countries to lower the savings to be delivered by around a half, from 1.5% to 0.75%.

The European Parliament’s implementation report on the EED, published in June 2016, called for more ambitious energy efficiency policies with a binding 40% energy efficiency target with binding targets at a national level and the eradication of contradictions and loopholes to bring the revised Energy Efficiency Directive in line with the EU’s climate protection targets and the Paris climate deal. Today’s proposal opens the door for the Parliament to fix the revision of the EED during negotiations with Member States.

[3] On market capacity mechanisms:

The European Commission says that it does not want capacity payments to be used as a backdoor subsidy for high-polluting fossil fuels. However, by merely proposing a CO2 performance criterion of 550g of carbon dioxide per kilowatt hour for new plants where investment decisions have been made after 2020, the measure will only have an impact on less than five plants in the whole of the EU since existing plants are generally responsible for the worst pollution and try to make use of these support schemes up to 2025. The draft rules also do not factor in any other environmental protection objectives or negative impacts on air, water, resource use or waste generation against which the new generators would be benchmarked.

The EEB therefore believes the following minimum criteria should be added: (1) a premium for demand-side management measures over generation capacity since the highest public gains are achieved through energy efficiency; (2) that environmental upgrading and retrofitting is required by the EU Best Available Techniques (BAT) Reference Standards; (3) an end to all support for coal generators; (4) the EU to require that emission performance standards go beyond the most updated BAT Standards and are meaningful (e.g. 350g CO2eq/KWh with net electrical efficiency >60%. For Combined Heat and Power Combined Cycle Gas Turbines (CCGT) a net total fuel utilization should be >95%).

Furthermore, environmental performance goals should always go beyond and be fully compatible with EU guidelines on state aid for environmental protection and energy 2014-2020. And, if biomass is eligible, strict sustainability criteria need to be put in place.

[4] On Ecodesign:

The new Ecodesign Working Plan includes seven new product categories: building automation and control systems, electric kettles, hand dryers, lifts, solar panels and inverters, refrigerated containers, high-pressure cleaners (most likely only focusing on energy labels).

It also includes a more in depth investigation of three ICT products considered for their resource saving potential in the context of EU circular economy policy that may be added to the work plan – smartphones, base stations and gateways.

Also included are three new measures representing a saving potential of 100TWH primary energy by 2030. These are an ecodesign measure for air heating and cooling products, ecodesign and energy labelling measures on verification tolerances to improve product testing and reduce the scope for cheating, and a recommendation for self-regulation providing guidance to support industry in the pursuit of voluntary agreements as an alternative to regulation.

These announcements suggest a strengthening of the ecodesign contribution to a circular economy, and a reinforced collaboration among member States on market surveillance and of the international cooperation on tests standards for products.