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Reactions to EU climate and energy package

January 24, 2008 2:00 PM

The CO2 reduction and renewable energy targets put forward by the Commission on 23 January have evoked, according to EurActiv, a flood of reactions from member states, industry, NGOs and other stakeholders. Below follows an overview from EurActiv:

On 23 January, the Commission put forward far-reaching proposals on renewable energies (EurActiv 24/01/08), as well as emissions trading and greenhouse gas reduction targets (EurActiv 23/01/08).

Positions:

The United Kingdom welcomed the proposals, despite an admission by UK Environment Secretary Hilary Benn that reaching the targets will be "quite challenging". The UK has one of the lowest levels of renewable energy use in the EU, but the country is "already scoping a vast expansion of wind energy offshore and tidal power on the Severn, and we are already thoroughly reviewing our strategy to drive progress further," according to a press statement.

Germany appears to be more divided on the issue, with Economy Minister Michael Glos arguing that the Commission should not "dictate the rules to us", the BBC reported.

Glos' official reaction as published on the website of the German industry ministry was more positive, however. And Germany's environment minister Sigmar Gabriel called the proposals "very balanced" and "economically viable", under the condition that "energy-intensive industries which are included in emissions trading but in particular compete internationally, continue to receive the necessary CO2 allowances free of charge". "In my view, this should apply to steel, aluminium and cement production," he added.

Sweden and Denmark were not pleased about the plans, with Denmark's environment minister Connie Hedegaard complaining that the CO2 and renewable energy obligations were "rather harsh", the BBC reported. But Hedegaard also told the Copenhagen Post that "we want to be a leader in this area, so in that sense this is something we have to live up to".

At nearly 40%, Sweden has the highest level of renewable energy use in the EU, and Denmark's share at 17% is also considerable. Both countries argue that their previous efforts are not being taken into consideration by the Commission and that achieving further significant progress will be difficult.

France reacted confidently and positively to the plans. The country "will in 2020 become the most sober carbon-emitting economy in the European Union," said ecology minister Jean-Louis Borloo.

The Christian Democrats (EPP-ED group) in the Parliament called the Commission's proposals a "good policy paper for the European Parliament to work with".

But the UK Conservatives questioned the details of how the aims of the package can be achieved. Concerning renewables, MEP Giles Chichester said: "We must also recognise that renewables are not the free lunch some people think. They do have costs attached, which include financial, environmental and inflexibility factors".

The Socialist group generally reacted positively. "We obviously need to examine the texts in detail, but the general direction of the proposals is the right one," the group said in a statement.

The Greens accused the Commission of 'pessimism', arguing that the exemption of certain energy intensive industries from full auctioning is "starting from the negative assumption that no other countries will introduce binding measures to reduce emissions from these sectors. This could be circumvented by the use of a climate levy," the group said in a statement.

Eurelectric, representing the EU's electricity industry, warns that "policymakers at all levels should be aware that the scarcity of allowances created by stricter caps [under the revised EU Emissions Trading Scheme] will impact on electricity prices, irrespective of the switch to auctioning".

CEMBUREAU, representing the European cement industry, wants the Commission to "rethink" its assessment of the cement industry's vulnerability to outside competition, warning that there is an "extraordinary increase in the volumes of cement and clinker being imported to European ports, sea terminals and grinding stations from countries which do not bear the burden of carbon constraints, resulting in carbon leakage, as well as an increase in CO2 emissions from shipments".

Europe's pulp and paper industry, represented in Brussels by the Confederation of European Paper Industries (CEPI), is concerned that increased biomass cultivation for biofuels production - particularly given a likely increase in state subsidies to biofuels producers as outlined in the Commission's revised state aid guidelines - will lead to a shortage of raw materials required by the industry.

With respect to emissions trading, CEPI argues that "full auctioning is not needed to ensure a properly functioning carbon market or carbon price and will not help industry to meet the required targets but it will unnecessarily damage European industry".

Referring to the Commission's proposed 35% greenhouse gas savings criteria for biofuels, biotech industry association EuropaBio proposed a "stepwise approach", whereby fuels with "a relatively low [greenhouse gas] savings threshold" would be permitted initially, but that additional greenhouse gas reduction requirements would "increase through time".

eBio, the European Bioethanol Fuel Association, is also calling for a "longer transition period to adapt to this target".

Euroheat & Power, the International Association for District Heating, District Cooling and Combined Heat and Power, "considers crucial to ensure a more transparent market for guarantees of origin and effective support schemes benefit t renewable installations independently from their size. The differentiation between old and new installations, as well as the 5 MWth capacity threshold in the current proposal might leave many heat producers 'under the radar', thus limiting the scope for progress".

In the interest of job protection, the European Trade Union Confederation (ETUC) is pushing strongly for a carbon tax or other protection mechanism against imports from countries with less stringent environmental regulations. ETUC "considers that a border protection mechanism is essential, irrespective of the permit allocation method" ultimately chosen under the EU Emissions Trading Scheme.

UEAPME, the European craft and SME employers' organisation, also argued in favour of a carbon tax in order to "offset the losses which can be predicted for some European industry sectors".

AmCham EU, the American Chamber of Commerce to the European Union, proposes a "market-driven approach that relies on innovation and technological developments along with changes in individual behaviour".

The European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP) said in a statement that "any European energy and climate policy must be seen in the context of a global economy", and that "a lopsided European approach leading in the end to a shrinking economy and to less employment has to be rejected".

The European Federation for Transport and Environment (T&E) called the 10% biofuels target a "dead end", and Dr. Clairie Papazoglou of the European division of BirdLife International questioned why the Commission is "pushing forward so strongly with a deeply flawed policy [on biofuels] in the face of overwhelming evidence that the risks greatly outweigh the benefits".

Climate Action Network (CAN) Europe said that the emissions trading proposal "will go some way to limit the industry-driven gamesmanship by some member states that we saw in the past. However serious loopholes in the proposal, introduced by industry lobbies, reflect a missed opportunity. The current proposal therefore will not fully set industry on a path to a climate-friendly future".

Greenpeace lamented that the envisioned greenhouse gas cuts do not add up to 30%, a figure the organisation, as well as the Greens in Parliament, considers to be the minimum for keeping average temperature increases to below 2 degrees Celsius.

The group is also "particularly unhappy about the number and type of climate projects outside the EU that both governments and industry will be allowed to use to offset their emissions".

EuBrazil, the European association committed to the improvement of economic, political and cultural relations between Europe and Brazil, supports the Commission's 10% biofuels targets despite the fact that "many international reports, such as that produced by the OCSE last October, are not all favourable on the potential of bio-combustibles". The association emphasised that "Brazilian production standards have been praised for the high quality that has been achieved".

Other external reports:

Governments

Parliament

EU Actors positions

Industry federations and trade unions

NGOs

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