Global Economics

EU States Can't Agree on Energy Targets


EU states did not back European Commission calls for binding targets on renewable energy or biofuels at an economy ministers' meeting in Brussels on Thursday (15 February), with a long way to go before the EU has a real energy policy despite broad agreement on the direction to take.

More than 10 member states led by Sweden and Denmark were keen to sign up to a binding target of 20 percent renewable energy consumption at EU level by 2020, but the rest, including the UK and Poland, declined amid confusion on the impact of industrial reforms individual states would have to undertake to hit the EU goal.

On the surface, the 27 EU states did agree to a binding goal of 10 percent of biofuel use at EU level by 2020. But taking a closer look at ministers' conclusions, the small print says "the binding character of this target is subject to...biofuel becoming commercially available" in what is a fledgling industry today.

Member states also fudged the question of ownership unbundling, with the commission last month campaigning that national energy champions such as Germany's E.ON or France's EDF should be broken down into smaller pieces because they stifle competition and investment.

EU capitals endorsed the general principle of "effective separation of supply and production activities." But they did not commit to any specific legal model, asking Brussels to do more homework on questions such as: would EU unbundling give the edge to predatory outside firms, such as Russia's Gazprom, in future?

Thursday's text fleshed out the EU's new energy philosophy: climate change is a clear and present danger; each country has sovereignty over which type of energy it uses; EU states must "speak with one voice" and show "solidarity" in the face of foreign supply shocks, such as January's Russia-Belarus oil crunch.

It also pinpointed stronger EU relations with gas and oil suppliers in Algeria, Kazakhstan, Turkmenistan, Uzbekistan and Azerbaijan and transit state Georgia as key foreign policy goals. And it backed nuclear energy as a way of driving down CO2 emissions.

The European Commission's most ambitious energy proposal - for the EU to stick its neck out with a binding, unilateral target to cut CO2 emissions by 20 percent by 2020 - will be discussed by environment ministers next Tuesday, with one EU diplomat saying "we are optimistic this will be agreed."

The economy and environment ministers' ideas will underpin energy talks by EU leaders in March and form part of the EU's final energy action plan in June, with the European Commission then set to propose a basket of new energy bills in autumn that should become EU law by 2010.

LITTLE STEPS

"The longest journey begins with the first step - that is how we will have to progress here," German economy minister Michael Glos said, speaking for the EU presidency. "We have made a breakthrough [today]. We have adopted a draft energy plan."

"It's an area where we've never had a common policy and it's not an easy task," energy commissioner Andris Piebalgs said. "We need a policy that is acceptable to everybody from Cyprus to Ireland and that is acceptable to both Germany and Poland, so it's not easy."

Commenting on the overall tone of the Thursday joint statement, Polish economy minister Piotr Wozniak said "It's not exactly written in the language of directives. It's a little bit more general and descriptive than we would have liked."

One of the most divisive issues in the EU energy sector today - Germany's plan to build a Baltic Sea gas pipeline to Russia, bypassing Poland - also came up on the margins of the meeting, with Mr Glos praising the €12 billion project on EU energy security grounds but appearing to rule out any EU funding.

WEATHER CELEBRITIES

"There are a number of very important private companies involved in the consortium, so I don't see that they would need any [EU] help," he said, after the president of the European Investment Bank, Philippe Maystadt, declined his support for the pipeline earlier this week.

Pipelines and big international agreements are not the only tricks in the EU's energy bag, however. On Friday, 45 TV weather presenters from across Europe will come for a day-long seminar in Brussels, with commission officials set to encourage the TV crowd to talk more about climate change and CO2 on their shows in future.

"These are credible celebrities. Many of them have meteorological training and speak with a great deal of awareness on the issues, as well as being faces that people see in their living rooms every day," an EU official said. "So it's the best of both worlds."

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