The new climate and energy package launched by the European Union sets more stringent greenhouse gas reduction targets but backs away from national targets for renewable energy production.
The European Commission, the EU’s executive arm, proposed cutting greenhouse gas emissions in the 28-country region by 40 per cent over 1990 levels by 2030. The 2020 goal called for a 20-per-cent reduction.
While the new goal seems far more ambitious, the figure is somewhat deceiving. That’s because the current pace of reduction under the 2020 goal – a business-as-usual scenario – would see a 32-per-cent reduction by 2030.
Environmental groups said the new goal, which is expected to reach draft-law status next year, is inadequate to prevent runaway global warming. “A 40-per-cent greenhouse gas target is simply not enough to set the pace towards a two-degree [maximum warming] global climate deal,” said Ruth Davis, political director of Greenpeace UK.
The most surprising aspect of the EU’s so-called framework on climate and energy was the reversal on renewable energy targets as a percentage of overall energy use. Some environmental and renewable energy associations said they thought the target for renewable energy from solar panels, wind farms and other green sources would be set at 30 per cent or higher in each of the EU’s member states.
Instead, there will be no national renewables goals, though the EU plans to set a regionwide goal of 27 per cent by 2030. The lack of national targets was cheered by some countries, such as Britain, which has been lobbying for more flexibility in setting its domestic energy mix, but deplored by Germany, which is betting big on solar and wind energy as it phases out its nuclear generating capacity.
The decision to scrap the national renewables target appears to reflect the fear that energy prices from such sources are overly expensive. Renewable energy is often lavishly subsidized in the EU, pushing up energy costs to the point that industrial users are complaining that their factories are becoming internationally uncompetitive.
In a statement released Wednesday, the EC said the lack of mandatory national targets on renewables creates “flexibility for member states to transform the energy system in a way that is adapted to national preferences and circumstances.”
The EC also decided against legislation to govern the development of Europe’s potentially vast shale gas resources. It will leave each country to set those standards, pushing a hot political and environmental issue onto national governments.
Energy-intensive industries are lobbying for shale gas development as American natural gas prices plummet, thanks to the burgeoning gas “fracking” industry in the U.S. Midwest and in Texas, taking them to about one-third the European level. In a comment piece in Tuesday’s Financial Times, Lakshmi Mittal, CEO of global steel maker ArceloMittal, said “The EU energy and climate policy is punishing the steel sector and other energy-intensive industries. …Compare this to the U.S., where shale gas and more industry-friendly policies have led to much lower costs for industrial energy users.”
The reversal on national renewables targets suggests the EC is bowing to pressure from consumers and industry to design policies that might at least slow the rise in energy prices. Without mentioning renewables specifically, EC energy commissioner Gunther Oettinger said, “My aim is make sure that energy remains affordable for households and companies.”
In the EU, household electricity prices have climbed on average 4 per cent a year between 2008 and 2012, above the inflation rate. Industrial prices rose by 3.5 per cent a year over the same period. In a background paper on energy prices, the EC noted that electricity prices for aluminum smelters in the EU, based on the EC’s sample, were the highest in the world. Prices in China were the second highest. Prices in Canada and the Middle East were about one-third the EU level, making them the lowest in the world.
The 40 per cent emissions reduction target and the reversal on the national renewables target appear to be compromises agreed by the EC to set a balance between economic growth and environmental protection. “It is in the EU’s interest to build a job-rich economy that is less dependent on imported energy though increased efficiency and greater reliance on domestically produced clean energy,” said EC president Jose Manuel Barroso. “An ambitious 40 per cent greenhouse reduction target for 2030 is the most cost-effective milestone in our path towards a low-carbon economy.”