The European Council summit in March 2007 committed the EU member states to radical greenhouse gas (GHG) emissions reduction, energy efficiency and renewables targets. The Berlin Declaration issued shortly afterwards echoes the commitments made. Emissions reduction and renewable energy will be at the heart of the agenda for the upcoming G8 summit hosted by Germany. The EU has also signalled its intention to play a leading part in negotiating the international agreement that will replace the Kyoto Protocol when it expires in 2012. GHG emissions reduction, energy efficiency measures and the increased use of renewable energy will therefore play an increasingly important role in shaping policy at the EU level. Difficult negotiations and legislative action will be required, however, before these policy initiatives are translated into a new regulatory framework.
Brussels Council Summit
On 9 March this year, the European Council summit on climate change and energy resulted in the member states committing to unprecedented future emissions reduction and renewable energy targets.
The summit, held in Brussels and hosted by German premier Angela Merkel, the current president of the EU, agreed a headline target of cutting the EU’s GHG emissions by 20 per cent by 2020, as compared with 1990 levels, with a promise to move to 30 per cent if other industrialised countries follow suit. Individual targets for member states are to be agreed via a new burden sharing agreement. The member states also committed to a legally binding 20 per cent target for renewable energy as a share of the EU’s total consumption by 2020 and a non-binding target of a 20 per cent improvement in energy efficiency by 2020. The summit agreed a range of other targets and measures designed to deliver the overall GHG emissions reduction target, including a requirement that biofuels account for 10 per cent of vehicle fuel by 2020, an agreement to set up 12 demonstration clean coal plants by 2015 and increased funding for carbon capture and sequestration research and projects. Separately, the summit endorsed plans for legislation to increase competition in the European energy market to ensure that clean power producers have sufficient market access.
Berlin Declaration 2007
The Berlin Declaration was issued on 25 March, marking the 50th anniversary of the EU. The Declaration confirms the EU’s intention to ‘jointly lead the way in energy policy and climate protection and make our contribution to averting the global threat of climate change’, reflecting the agreements recently reached in Brussels.
Upcoming G8 Summit
Angela Merkel is expected to use the EU’s commitment to tackling climate change, as agreed in Brussels and consolidated in the Berlin Declaration, to shape the agenda of the G8 Summit due to take place in Germany in June. It is expected that Germany will seek to promote a post-Kyoto agreement that includes a global version of the EU’s carbon trading scheme.
Ms Merkel has already stressed that any future agreement on climate change will have to include the following key issues: a GHG emissions reduction goal designed to limit increases in global temperatures to no more than 2°C; an international system of carbon pricing to provide incentives for the development and adoption of technologies and procedures that limit the emission of GHG; and a system of technology transfer to ensure that emerging economies such as China and India, as well as the developing world, have access to cleaner technologies.
The targets agreed at the Brussels summit are likely to accelerate legislative developments to tackle climate change at the EU level. If the ambitious targets for emissions reductions and renewables are to be achieved, substantial investment in low carbon technologies and particularly renewable energy, in which the EU is a global market leader, will be required. State aid rules and EU regional grants will also need to be tailored to facilitate the development of this sector. France, among other member states, expects a greater emphasis to be placed on the use of nuclear technology to generate energy as the most effective answer to the problem of reducing GHG emissions while ensuring security of energy supply. There will need to be legislative predictability, consistency and uniformity at both the EU and the member state levels to ensure effective co-operation in achieving buy-in to achieving the targets from those whose activities will be greatest effected in the future, namely industry and the general public.
The European Commission’s ongoing review of the EU Emissions Trading Scheme (ETS) directive is likely to be substantially influenced and shaped by the EU’s new commitments, and it is likely that in addition to aviation and shipping, other sectors – such as surface transport – will come under close scrutiny with the view to including them in the scope of the EU ETS in the near future. Despite high-profile political commitment, however, difficult negotiations on how the overall target will be shared as individual targets for the member states may prove a substantial obstacle to smooth implementation of the agreed targets as member states attempt to safeguard their national interests as far as possible.