How sharp is the EU’s 2020 vision?

The redistribution of renewable targets may not be enough to cut emissions. Jennifer Rankin reports.

Europe’s target of getting 20% of its energy from renewables by 2020 has a pleasing neatness; the combination of twenties arrived at through a mixture of policy analysis, political bargaining and probably a desire to please headline writers. Mainly it is the result of a political compromise: the European Commission had called for a 15% renewables target, the European Parliament wanted 25%.

But well-intentioned targets can be problematic. Juan Delgado, a research fellow at Breugel, a think-tank, says it is good to have a target for policy commitments, but thinks that the 2020 target has some pitfalls. "At some point, this target could be an obstacle to reducing emissions," he says. He suggests that policymakers do not have a clear idea about the level of renewables sufficient to reduce emissions.

Delgado adds that the emphasis in the proposed renewables directive, the Commission’s roadmap to meeting the target, on developing the cheapest technologies is problematic. "It [the proposal] creates incentives only for cheap renewables. But wind has a limit…there is a risk that money is deviated into products that are good for 2020, but not necessarily for 2050," he says, citing solar energy as an example of a more expensive technology.

To reach the 2020 target, EU countries will take on different shares of the burden, weighted according to growth in gross domestic product. By 2020 Sweden will have to produce almost half its energy from renewables. Slow starters, such as the UK, have lower targets, but these will still be tough.

To help member states meet the target, the Commission has proposed a trading system (analogous to the emissions trading scheme) through which countries can buy and sell their obligations in renewables. Countries will be able to buy guarantees of origin (certificates proving the renewable origin of energy) from other countries, where renewables are cheaper to produce.

In theory, this means that countries such as wealthy Luxembourg could buy credits from Poland, where the potential for biomass is abundant. Commission officials envisage the trading system as a way of re-distributing wealth within the Union.

The directive still has to be agreed by the Council of Ministers and the European Parliament, but even after these hurdles, the prospects for a trading scheme look uncertain. Some countries resisted the idea of compulsory trading, seeing it as a threat to their domestic systems. Germany and Spain have well-developed feed-in tariffs for renewables. In response to lobbying from these countries, the Commission proposed a voluntary trading scheme. But there is a risk that countries will decide not to trade at all. And in practice, trading renewables could be highly complex requiring a cat’s cradle of bilateral contracts between governments. Commission officials also think that a voluntary scheme will be more expensive than a compulsory scheme.

The 2020 target and its accompanying directive raise difficult questions, but some think they are an improvement on current policy. The renewables lobby is pleased that heating and cooling will come under the renewables framework for the first time, with an obligation for minimum energy use from renewables in new and refurbished buildings. A previous directive on renewables dating from 2001 set a non-binding target that member states should get 21% of their electricity from renewable sources by 2010, but countries are likely to miss this by several percentage points.

Are EU countries more likely to meet binding targets? Much will depend on how the draft directive is translated into law over the coming year. The EU hopes to wrap up the energy package by early 2009 at the latest. But even after this time, Europe’s renewables policy is likely to remain a work in progress.

The redistribution of renewable targets may not be enough to cut emissions. Jennifer Rankin reports.