Transcript Slide 1

The EU’s 2030 Climate and Energy Package
E3G, January 2014
About E3G
• About us
– E3G is an independent, non-profit organisation operating in the public
interest. We have a global outlook and reach, with offices in London,
Brussels, Berlin and Washington DC, together with a regular presence in
• Mission
– E3G works to accelerate the transition to sustainable development
• Strategy
– E3G mobilises multi-sector coalitions to deliver strategically important
– E3G develops and disseminates new methods and models for change
E3G - Third Generation
Presentation Outline
1. What is the EU 2030 Package?
2. How ambitious is the 2030 package?
3. How the EU’s 2030 Ambition Compares
– What It Means for Paris
4. The Politics of 2030
Background: The EU “20-20-20 Package”
• The EU first developed a unified approach to climate
and energy policy in 2008: 20-20-20 package:
Building momentum before Copenhagen
Personal commitment by political leaders, including
the President of the European Commission
 EEA Report: targets will be met
• 2030 Package following the same structure
Continues Trajectory of EU Decoupling GDP
Growth and Carbon Emissions
• 1990-2013: EU GDP increased by 42%, GHG emissions
decreased by 17%:
The 2030 Framework for Climate & Energy:
Agreed Headline Targets
Ref: European
The 2030 Framework for Climate & Energy: Agreed
Headline Targets II
• A binding EU target of at least 40% domestic reduction in GHG
emissions compared to 1990, delivered collectively with reductions in
– ETS sectors: 43% by 2030 compared to 2005
– non-ETS sectors: 30% by 2030 compared to 2005.
• An EU-wide binding target of at least 27% for the share of renewable
energy consumed in the EU by 2030.
• A non-binding EU target of 27% energy efficiency improvements against
future energy consumption projections; will be reviewed by 2020,
having in mind an EU level of 30%.
• A target of 15% by 2030 for interconnections; the minimum
interconnection target of 10% is to be met urgently, and no later than
What Legal Force for the 2030 Package?
• 2030 package ≙ a political agreement between EU Heads
of State and Government.
• EP more ambitious: achieved inclusion of EE target.
• EU Commission to implement the agreement through
legislative and non-legislative procedures (2015-20)
• Approval for legislation necessary by European Parliament
and Council of the European Union:
ETS reform, RES and EE targets.
The 2030 Framework for Climate & Energy:
The ETS Elements of the 2030 Agreement
• ETS cap to decline with 2.2% from 2021 onwards, from 1.74%.
• Continued free allocation (to prevent carbon leakage)
• Innovation Fund (“NER400”)
• 400m allowances
• For CCS, RES, low carbon innovation in industrial sectors
• For projects in all Member States
• New Modernisation Fund
All items subject
of the European
consultation on
the revision of the
EU ETS directive
running until midMarch 2015
• 300m allowances
• For energy efficiency improvements and modernisation of energy systems
• For 10 lower income Member States (same states benefiting from free
allocation to energy sector)
• Involvement of EIB
Structural Reform of the European Carbon Market:
New ETS Legislation in 2015
In January 2014, the European Commission proposed an automatic mechanism
• to remove the 2bn surplus of ETS allowances – to meet the medium-term target
in a cost-effective manner.
to make the ETS more resilient to possible future demand shocks.
The Market Stability Reserve (MSR) would introduce more flexible auction supply by:
Putting allowances in the reserve in case of too high surplus
Releasing allowances from the reserve when allowances get scarce.
MSR to come into force in 2021, institutionalising a surplus of ETS allowances
between 400 and 833 million tonnes.
Next steps: The European Parliament is currently examining the proposals;
negotiations between Parliament, European Council and Commission are expected
in March-April, for a possible plenary vote on the final text in July 2015.
Market Stability Reserve (MSR)
Alongside the 2030 Framework
A Resilient Energy Union
 Vice-President for Energy Union Maroš Šefčovič’s vision evolves around 5
• Security, solidarity and trust: Better coordination, cooperation with
neighbours (Energy Community & Mediterranean countries), potential
common purchasing of gas.
• Completion of a competitive internal energy market: through more
regional cooperation, better and smarter infrastructure, and with support of
the Investment Package.
• Moderation of demand, by improving energy efficiency; possibly supported
by a higher EE target for 2030.
• The decarbonisation of the EU energy mix, notably through a commitment
to renewables and to the international process.
Research and innovation for new energy technologies.
Presentation Outline
1. What is the EU 2030 Package?
2. How ambitious is the 2030 package?
3. How the EU’s 2030 ambition compares – What It
Means for Paris
4. The Politics of 2030
EU 2030 Agreed by Consensus: Coal Dependency of
Poland Pulled Down EU Ambition
[Ref: E3G analysis]
Most CEE Countries Still Low Efficiency and
Low Carbon “Technology Takers”
Large EE potential
& High carbon intensity
Low innovation capacity –
“technology takers”
 Need positive low carbon
economy offer
[Ref: E3G analysis based on Eurostat]
Central and East European
countries to benefit
Low Efficiency/ High Import
Dependency Countries
most from energy efficiency
40% GHG Cuts Are Not the Most CostEffective Trajectory
• -40% GHG goal based on modelling in 2013 on cost effective
trajectory to meet 80% reduction by 2050.
• Since this modelling was undertaken:
– Uncertainty in the oil markets has increased,
– Natural gas prices have increased due to Ukraine-Russia
– Renewable and LED prices dropped by 40%-100%
between 2001 and 2011.
– GDP growth forecasts for the EU have fallen by half
• A more cost-effective goal would be 45-47% domestic cuts.
Renewable Energy Deployment Rates Would Have
to Slow
Potential for Increased Investment in Energy
Efficiency including before 2020
• Europe far from utilising its cost-effective EE potential in all sectors:
– a 27% EE target was agreed  big battle, but not over.
– a 40% target would have increased EU GDP by 4.5% GDP in 2030 (or
around €457 billion) vs. 1% for a 30% target.
– EE could drive job creation: construction (+20%), engineering (+4%) &
manufacturing (+2%).
• Energy Security concerns driving more interest in EE through EU Energy
Union especially in low efficiency, gas-dependent countries.
• Individual EU MS developing their own EE measures and policies: Germany
and France.
• More EU funding available for EE but challenges with MS capacity and
expertise: struggle to deliver effective projects.
• Juncker Plan for €300bn stimulus prioritises EE and renewables investment.
 More reforms needed to enable large-scale EE uptakes (e.g. Buildings).
Energy Intensity in Comparison
Relative energy intensity (toe/€1000), 2012
Source: Eurostat 2014
Presentation Outline
1. What is the EU 2030 Package?
2. How ambitious is the 2030 package?
3. How the EU’s 2030 ambition compares – What It
Means for Paris
4. The Politics of 2030
What Does This Mean for Paris?
• Package is focused on EU domestic policy.
• Package will form basis of EU INDC in March 2015.
Unclear if GHG target (“at least”) will increase: could
allow use of external offsets and ETS trading.
• Process for translating package into INDC still unclear.
• EU also needs to make decisions on pre-2020 action
and finance (pre and post 2020) before Paris.
How the EU Compares: US-China Agreement
US to reduce GHG emissions by 26-28% by 2025 (1990 levels)
China to peak emissions by 2030 latest
Presentation Outline
1. What is the EU 2030 Package?
2. How ambitious is the 2030 package?
3. How the EU’s 2030 Ambition Compares – What It
Means for Paris
4. The politics of 2030
Businesses Backing More Ambition
• High carbon/energy intensive businesses concerned about
competitiveness due to high electricity prices in Europe.
• But: Business Europe not representing all businesses: e.g.
Unilever left in August 2014.
• Counter-arguments by low carbon business champions
lobbying for more ambition on EE (e.g. Prince of Wales
Corporate Leaders Group):
– Incentivising energy savings to reduce dependence on
electricity prices.
– Business opportunities: wind turbines, power lines,
smart demand services, insulation, etc.
Cities Backing More Ambition
• Cities more vocal because of increased vulnerability to
climate impacts.
• Covenant of Mayors, Committee of the Regions and city
networks including Energy Cities backed more ambitious,
binding 2030 targets (50% GHG, 40% RES, 40% EE).
• The Covenant of Mayors includes over 5,000 EU cities and
regions which voluntarily committed to cut CO2 emissions
by over 20% by 2020.
• Compact of Mayors (incl. Turkish Mayors) initiative
alongside COP20 in Lima setting climate targets and
reporting mechanisms.
Four Conclusions on EU 2030
1. The EU 2030 package is a major contribution to global
efforts to keep global climate risk below the agreed 2C
The “at least 40%” domestic GHG reduction target is
(just) consistent with EU 2050 goal of 80% GHG cuts.
The politics of economic crisis prevented a stronger
Four Conclusions on EU 2030
2. The EU is likely to achieve more than a 40% GHG cuts
by 2030.
EU 2030 targets for renewable energy and energy
efficiency continue business-as-usual growth rates.
The efficiency target does not utilise EU cost-effective
Energy security concerns will drive national policies to
go beyond EU goals.
Four Conclusions on EU 2030
3. The EU will increase action before 2020. The EU is
likely to deliver 24-25% GHG cuts by 2020, mostly due
to policy actions & the impact of the economic crisis.
Low carbon investment will be prioritised in the €300
billion stimulus package.
ETS reform and further efficiency measures will be
agreed by 2016, including in increased in vehicle
Four Conclusions on EU 2030
4. The EU and Member States are implementing deep
reforms. Member States such as UK, Denmark,
Germany and France have legislated deep reforms to
their energy markets, including power sector
decarbonisation goals.
The EU Energy Union will drive more coherent energy
policy and the 2030 interconnection target will
support the emergence of regional electricity free
trade areas. All new buildings will be zero carbon
from 2020.
What Are the Messages from Lima?
• COP20 highlighted need for fossil fuel phase-out.
• Climate Finance as a political tool: rebuilds confidence
amongst developing countries that developed
countries are serious about their commitments.
• Climate Finance provides the means and incentives
for developing countries to act on both mitigation
and adaptation measures.
An EU Perspective on Paris COP 21
• 2015 must reframe success – we need a new mindset of
reciprocity and trust.
• A “deal” ≠ success – a deal is necessary but not the arbiter of
• The immediate reaction to and perception of the agreement
from business and media is critical.
• There is a spectrum of success –2015 will unlikely deliver an
outright 2°C outcome.
• Vital to cap worst case scenarios, build effective capacity to
ratchet up ambition.
What Does This Mean for Turkey?
• EE as a way to tackle issues around energy
dependence and competitiveness.
• RES potential in Turkey one of the biggest in the OECD
(wind, solar, hydro, geothermal).
• Energy trading hub: to include RES?
• Climate risks and extreme weather events = the “new
normal”? Impact on cities.
• Resource pressures and economic interdependence
requiring cooperation in energy and climate policy
Thank You
Please visit our website
You can contact us at
[email protected]
[email protected]