Tough follow-up on energy pledges

­The European Commission is planning tough legislative action to oblige member states to live up to ambitious targets for cutting greenhouse gases and boosting the use of renewable energy.

The Commission also intends to push hard for energy companies to sell off their transmission networks to ensure greater competition in the market, despite opposition from France and Germany.

The officials last week outlined how the Commission plans to reach 20% use of renewable energy sources in overall consumption by 2020. A planned "comprehensive framework for renewables" would deal with biofuels, heating and cooling and renewable energy generation. A senior official said that the Commission wanted to use for its proposals a legal base requiring co-decision where the European Parliament’s approval is required. It was considering either Article 95, which deals with the internal market, or Article 175 for environmental policy. But an official said there was still a question-mark over whether the decisions might require unanimity under paragraph two of Article 175 which allows member states to veto decisions that affect their energy mix.

A senior official said that there would be no specific targets for use of renewables for heating and cooling and energy generation. But he said that the Commission was planning to use infringement procedures against member states which failed to meet their targets. He said: "There won’t be intermediate targets [for the share of renewables]. We’ll look at how each member states is fulfilling its own ambition. The nearer we get to 2020, the nearer we get to infringement proceedings." Under the infringement procedure, the Commission can refer member states to the European Court of Justice and the court can levy fines on member states for failing to meet their obligations.

The Commission is also planning tough action to force energy companies to sell off their transmission networks, in a process termed ownership unbundling, even though this is strongly opposed by France and Germany.

Competition Commissioner Neelie Kroes on 20 March told MEPs that "ownership unbundling" was the most effective way to ensure that independent rivals have equal and open access to pipelines and electricity grids.

"There are other options but these require a lot of detailed and complex regulation and so more burden on business," she said.

A senior EU official said last week said that ownership unbundling was the Commission’s "working hypothesis", adding that it did not make sense to "propose three different options". While the Commission prefers ownership unbundling, it has been expected to recommend that approach together with an alternative of very tough regulation to ensure the independence of the transmission network operator and cross-border issues such as interconnection.

A senior official rejected suggestions that ownership unbundling was politically unacceptable. He said that more member states had already introduced ownership unbundling (12 for electricity and five for gas) than had originally supported telecoms and air travel liberalisation when the Commission had first proposed opening up those markets. The official argued that the conclusions of the EU leaders’ summit had agreed very positive language including stressing the need to ensure the

"independence of investment decisions" which, he said, was "crucial for unbundling".

Luxembourg Green MEP Claude Turmes said that the Commission’s competition department had understood better than its energy department that the EU energy market was not well regulated.

Turmes added that he was "surprised" that EU officials were suggesting basing the renewables legislation on a Treaty article other than Article 95 because Energy Commissioner Andris Piebalgs had told him that he would use that article.

On nuclear energy, senior officials said that the Commission would inevitably have to take into account the reliance of countries on nuclear power when deciding targets for renewable energy. "In France more than 80% of electricity comes from nuclear energy so the scope for non-nuclear generation is only 20%," the official said.

Turmes criticised this statement pointing out that Piebalgs had said there was no formal engagement by the German presidency or the Commission to take into account the share of nuclear energy when considering the targets for renewables.

The next steps

28 March -?green paper on the role of taxation in energy and climate change policies

July-September - energy market liberalisation package

September - review of the emission trading system (ETS) directive

September - binding CO2 emission reduction targets for the European car industry

September - launch of Joint Technology Initiatives on aeronautics and hydrogen and fuel cells

November - strategic energy technology plan

End of 2007 - burden-sharing proposal to divide the EU’s20% greenhouse gas emission reduction target between 27 member states

End of 2007 - revision of environmental state aid guidelines

End of 2007 - comprehensive framework directive on renewables

(Emily Smith)

­The European Commission is planning tough legislative action to oblige member states to live up to ambitious targets for cutting greenhouse gases and boosting the use of renewable energy.

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