Portugal switches on to energy policy

One of the main challenges for the Portuguese presidency will be to make progress on legislative proposals that are to follow from the agreement on energy policy and climate change reached in March at the European Council.

Legislative proposals to promote clean energy and cut emissions and to divide a 20% greenhouse gas emission reduction target between 27 member states could emerge in the next six months, though the Commission has not committed itself to meeting any deadlines.

A proposal for binding car emission reduction targets could also slip to 2008.

Oil companies will, however, be anxiously watching the progress of a revision to the EU fuel quality directive, which suggests setting them a 10% emission reduction target over ten years.

A review of the EU-wide emissions trading scheme (ETS) is also expected after the summer recess. The ETS sets a cap-and-trade system for big emitters in Europe, including oil companies.

Portugal also hopes to negotiate political agreement on including aviation in the ETS before the end of its presidency.

The presidency will have to pay attention to external energy relations, with an EU-Brazil summit scheduled for July and an EU-Russia summit in October. Brazil is a major producer of biofuel, exporting to countries including Sweden, and 30% of EU oil and 40% of gas come from Russia.

The Commission will be proposing measures to increase the integration of the EU’s energy market and ensure fair access to energy networks.

Under consideration will be whether the Commission insists that ownership unbundling, separation of generating assets from transmission and distribution networks, is the only option for improving the integration and competitiveness of the EU’s energy markets. Álvaro Mendonça e Moura, Portugal’s permanent representative to the EU, said last week (11 June) that the Portuguese presidency favoured ownership unbundling but acknowledged that there was no widespread agreement on this approach. A majority of energy ministers from EU countries, including Germany and France, advised the Commission last week not to present ownership unbundling as the only option.

Alternatives include measures to promote independent transmission systems operators and strengthen the powers and independence of national energy regulators, especially on cross-border issues.

The Portuguese presidency is not expecting to wrap up negotiations on the package by December but is aiming to make progress on some aspects.

One of the main challenges for the Portuguese presidency will be to make progress on legislative proposals that are to follow from the agreement on energy policy and climate change reached in March at the European Council.