Commission's Energy Roadmap 2050 - What Direction for EU's Climate Change Policy?
On 15 December 2011, the European Commission published its “Energy Roadmap 2050” in the form of a Communication to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions.(1) The Roadmap should be read in light of the fourth meeting of the Advisory Group on Energy Roadmap 2050 whose minutes were published on DG ENER’s website on 16 January 2012.(2)
In the Roadmap, the Commission confirms EU’s 2050 commitment to reduce greenhouse gas emissions by 80 to 95% compared to 1990 levels.(3) It also outlines five decarbonisation scenarios: (i) a high level of energy efficiency; (ii) diversification in the supply technologies; (iii) a high share of renewable energy sources in gross final consumption of energy; (iv) delayed Carbon Capture and Storage (‘CCS’); and (v) a low level of nuclear energy.(4)
In all decarbonisation scenarios, the Commission calls for “very significant energy savings”. More concretely, the Roadmap aims at a 32 to 41% energy efficiency increase by 2050 based on 2005-2006 levels.(5) This demanding energy efficiency target for 2050 can be contrasted with the pessimistic observations which Philip Lowe (Director-General for Energy at the European Commission) formulated at the Roundtable on “The Future of the European Energy Policy, Energy Efficiency and European Energy Independence” that took place on 14 September 2011 at the European Economic and Social Committee in Brussels.(6) Philip Lowe argued on that occasion that, although the EU was well on its way in achieving the 2020 greenhouse gas reduction target and renewable energy targets, it was still stagnating with respect to its 2020 20% energy efficiency objective. Philip Lowe underlined that Member States were very much opposed to the idea of having binding targets formally imposed upon them in the field of energy efficiency: they would instead mark a strong preference for indicative targets.(7) Philip Lowe also pointed out that only 4% of small companies and 20% of large corporations established in the Union would already have a policy on energy efficiency.
The Commission also calls for the share of renewable energy to reach 55% of the Union’s gross final consumption of energy by 2050.(8) As regards renewable electricity more specifically, the Commission, in two of its decarbonisation scenarios, calls for a share of 60-65% and of 97% of renewable energy sources in the gross final consumption of electricity to be reached by 2050.(9) The Roadmap insists on the essential role of renewable heating and cooling in the Union’s move towards decarbonisation: the Commission urges for energy consumption to be directed at “low carbon and locally produced energy sources (including heat pumps and storage heaters) and renewable energy (e.g., solar heating, geothermal, biogas, biomass)”.(10) In the transport sector, the Commission points to a mixture of alternative fuels as a necessary substitute for oil, biofuels remaining the most viable alternative to oil for aircrafts, long-distance road transport, and railways (when they cannot turn to electricity). The biofuels relied upon ought to be sustainable: they must help diminish demand for food production land and improve the level of net greenhouse gas savings.(11)
Stimulation of local production of renewable energy presupposes the emergence of smarter distribution grids with a view to accommodating variable generation from multiple sources of distribution (e.g., solar photovoltaic) and a growing demand for renewable energy.(12)
The Commission, in its Roadmap, is realistic about the fact that public support schemes, in particular in the form of energy subsidies, will still be needed after 2020 in order to further stimulate green technologies. These support schemes ought to be specific in their scope, foreseeable and proportionate. They should be suppressed once the underlying “market failures are resolved” and the maturation of these technologies arrived at.(13)
As regards the future of CCS, the Roadmap suggests that it is contingent on its acceptance by the public and on the adequacy of carbon prices. CCS, if deployed by 2020 and widely used by 2030, is expected to have a significant impact on the decarbonisation of many heavy industrial infrastructures. The combination of CCS and of biomass could result in “carbon negative values”.(14)
The Roadmap’s proposed energy system presupposes the achievement of a “fully integrated market” for 2014,(15) the definition of “2030 milestones” for the promotion of renewable energy sources, more consistency with a common approach to international energy policy, and a substantial increase in energy efficiency (amongst other factors).(16)
Philip Lowe at the fourth meeting of the Advisory Group on Energy Roadmap 2050 and the Commission as a whole through its Roadmap have announced that their next priority would be the elaboration of a 2030 energy policy framework.(17)
[1] European Commission, “Energy Roadmap 2050”, COM(2011) 885/2, available at: http://ec.europa.eu/energy/energy2020/roadmap/doc/com_2011_8852_en.pdf
[2] Minutes of the fourth meeting of the Advisory Group on Energy Roadmap 2050, Brussels, 12 December 2011: http://ec.europa.eu/energy/energy2020/roadmap/doc/energy_roadmap2050_advisory_group_minutes_2011_12_12.pdf
[3] Energy Roadmap 2050, p. 2.
[4] Energy Roadmap 2050, p. 4.
[5] Energy Roadmap 2050, p. 7.
[7] This position is somewhat reflected in the Commission’s Proposal for a Directive on Energy Efficiency formally issued in June 2011. This generic Directive, if adopted by the European Parliament and the Council, would refrain from imposing binding national targets in the implementation of EU’s 2020 20% energy efficiency target. Instead, Member States would have to fix in advance indicative national energy efficiency targets in the form of absolute levels of primary energy consumption (i.e., gross inland consumption) in 2020. The Commission would have to determine by 30 June 2014 whether the EU is capable of reaching its 20% energy efficiency target. If not, the Commission may want to propose another EU legislative act that would make national energy efficiency targets formally binding upon Member States: Proposal for a Directive of the European Parliament and of the Council on energy efficiency and repealing Directives 2004/8/EC and 2006/32/EC, COM(2011) 370 final, Brussels, 22 June 2011 (Article 3).
[8] Energy Roadmap 2050, p. 7.
[9] Energy Roadmap 2050, p. 6-7.
[10] Energy Roadmap 2050, p. 11.
[11] Energy Roadmap 2050, p. 11.
[12] Energy Roadmap 2050, p. 15.
[13] Energy Roadmap 2050, p. 17.
[14] Energy Roadmap 2050, p. 12.
[15] In order to help foster an EU integrated energy market, the European Economic and Social Committee (an advisory and interinstitutional body of the EU in charge of representing employers, employees and civil society more generally) has been in favour of instituting a “European Energy Community” so as to promote a “joint approach to energy production, transmission and consumption”. This would start with the establishment of “regional energy blocks” where Member States and operators would have the opportunity to align their strategic positions concerning network development and energy mix. See Press Release of 18 January 2012, CES/12/2:
http://europa.eu/rapid/pressReleasesAction.do?reference=CES/12/2&format=HTML&aged=0&language=EN&guiLanguage=en
[16] Energy Roadmap 2050, pp. 19-20.
[17] Energy Roadmap 2050, p. 20.
Flying Green: Jobs for Europe, Lawsuits for the United States
Based on research by the United Nations Intergovernmental Panel on Climate Change, the aviation industry accounts for just over 2% of all global greenhouse gas emissions and that figure will increase to at least 3% by 2050. In an increasingly carbon and fuel constrained world, some aviation firms and governments are seeing a competitive advantage in going green while unfortunately the U.S. is lagging behind.
2011 results demonstrate that Airbus is pulling ahead of Boeing in new plane orders and the underlying reason is a more thoughtful private sector and government strategy for clean energy coming out of Europe. The 2011 Paris Air Show was the best ever for Airbus, earning firm orders for 418 aircraft worth about $44 billion at list prices, compared to only 47 planes valued at $7.5 billion for Boeing according to one industry figure.
Glen Hurowitz at the Center for International Policy writes in a recent Grist column that “the results are due almost entirely to Airbus’ new hyper-efficient 320neo model, which is a whopping 15 percent more fuel efficient than Boeing’s options, meeting buyers’ demands at a time of high fuel prices and growing concern over greenhouse gas emissions.” This translates into approximately 1 million American jobs lost to European competition because of new orders for more efficient Airbus planes.
A mixture of a price on carbon in Europe, coupled with a strong corporate culture to increase efficiency create this Airbus advantage. On the legal side of the equation, the European Union’s Emissions Trading System (EU ETS) will begin to regulate carbon emissions for airlines landing within EU borders starting in 2012 with a view to cutting airline emissions over time. Meanwhile, Congress has completely dismissed the concept of cap-and-trade regulation for the foreseeable future. Additionally, the Air Transport Association of America is fighting the applicability of these pending costs when U.S. Airlines land in the EU. In addition to the trade association efforts, the Obama Administration will likely consider options to fight the applicability of the EU ETS laws on U.S. airlines, citing potential violations of international law as noted in the New York Times.
Beyond these legalities however, there is clear global demand for more efficient modes of transportation that are otherwise equal to their competitors in terms of cost and comfort. Airbus has an ecological vision out to 2050 that their CEO regularly touts irrespective of what the law requires. But certainly that vision recognizes the growing number of countries that are regulating carbon through a variety of policies and measures.
Ultimately it is a better use of time and energy for Congress and the Obama Administration to adopt “equivalent measures” to the EU ETS that encourage innovation and scaled-up efficiency. A litigious approach aimed at thwarting the inevitable global trend towards increased efficiency in the airline industry will cost a lot of time, money and U.S. jobs.
EU Commission Roadmap: An 80% to 95% Reduction of Greenhouse Gas Emissions by 2050
On March 8th, the European Commission adopted “A Roadmap for Moving to a Competitive Low Carbon Economy in 2050” in which it proposed an 80% to 95% reduction of GHG emissions by 2050 from a 1990 baseline. The Commission thereby confirmed the European Council’s “Low Carbon 2050 Strategy” announced at its February Summit.
In order to reach this ambitious long-term target, the Commission recommended achieving transitional reductions across all GHG-intensive sectors: 20% by 2020, 40% by 2030 and 60% by 2040. The Commission nevertheless observed that the EU should be in a position to reduce up to 25% of its total GHG by 2020 provided (amongst others) that:
In order to reach this ambitious long-term target, the Commission recommended achieving transitional reductions across all GHG-intensive sectors: 20% by 2020, 40% by 2030 and 60% by 2040. The Commission nevertheless observed that the EU should be in a position to reduce up to 25% of its total GHG by 2020 provided (amongst others) that:
(i) the EU reduces its use of primary energy by 20% by 2020; and
(ii) the EU reaches a 20% share of its overall energy consumption in renewable energy by 2020 (for more information on these two energy objectives, see Commission’s Communication of 31 January 2011 titled: “Renewable Energy: Progressing towards the 2020 target”).
Parallel to these generic targets, the Commission also proposed sector-specific reductions. For instance, the Commission suggested GHGs from the agricultural sector be reduced by 36% to 37% for 2030, and by 42% to 49% for 2050. A reduction by 2050 of 54% to 67% of GHGs originating from the transport sector was also recommended. The Commission also advised a reduction by 2050 of 83% to 87% of GHGs in the industrial sector.
This roadmap draws increased political attention to agriculture as an important source of climate change concern. The Commission indeed estimated that, by 2050, the agricultural sector would generate one third of EU’s total GHGs) due to increase in global population and demand for related products.
The roadmap, which in no way was meant to represent hard law, encourages the EU (in addition to the present EU’s investment of 19% of its GDP in 2009) to dedicate 1.5% of its total GDP to investments, private and public, in low carbon energy sources and low carbon infrastructure. The Commission noted in its roadmap that higher fuel efficiency is a key factor in reversing the process of GHG increases. Therefore, the consumption of sustainable biofuels, especially in the transport sector (primarily aviation and heavy duty trucks) should be prioritized. This strategy would result in lowering Member States’ reliance on energy imports and their exposure to oil price instability.
The Commission will use this roadmap as a policy document to encourage further international negotiations on a global climate change agreement and to reinforce EU’s cooperation with its “Neighbourhood Partners” towards the adoption of initiatives for the promotion of a low carbon economy. The roadmap will also stimulate further dialogue with economic sectors that contribute significantly to GHGs within the EU. We will provide further updates on the Commission’s actions as they are available.
