Green EU needs 'credible' CO2 price, funding guidance

Mon Apr 16, 2012 6:51am EDT

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By Barbara Lewis and John Acher

COPENHAGEN, April 16 (Reuters) - EU member states must have a credible carbon price, a new set of policy goals and could need clearer funding guidance or the growth of renewable energy will falter, Energy Commissioner Guenther Oettinger said on Monday.

The European Union is officially on track to meet a goal for 20 percent of its energy to come from renewable sources by 2020.

After that, there is no policy certainty and "abrupt changes" for instance to solar subsidies are destroying confidence among investors, the commissioner said.

At the same time, the EU's Emissions Trading Scheme (ETS), meant to encourage low carbon energy has crashed to record lows, far below the level needed to be a green incentive.

"We need a functioning ETS and credible carbon price as a precondition," Oettinger said.

In times of crisis, some member states were unfairly blaming renewable spending for adding to economic problems.

"In some cases, renewables support is being used as a scapegoat," he said, but argued public deficits were not the result of support for renewables.

"It does not normally come from the public budget," he said. "It might be necessary to give clear guidance to member states from the side of the commission."

Oettinger was addressing the annual conference of the European Wind Energy Association in Copenhagen.

DANISH AMBITION

Later in the week, the Danish EU presidency will host informal meetings of energy and environment ministers, which will continue the debate on how to get beyond the group's existing set of 2020 green energy targets.

At the same time, the commission, the EU's executive arm, is drawing up a policy document on renewables strategy.

Apart from funding, Oettinger said it would look at closer cooperation between member states and on new grids to accommodate green power.

"Wind and solar are facing increasing difficulty. We urgently need to increase the speed with which we adapt the infrastructure," he said.

He also wants positive links with markets beyond the European Union.

"We need to continue to ensure the EU industry can access these markets," he said, citing the United States and China.

China, especially, has been seen as a threat by some in the industry to continued expansion as it competes aggressively and dominates the supply of rare earths, a component in high-tech industry, including green energy.

Denmark's own environmental ambitions are the highest in the EU. It is a world leader in wind energy and it wants to be free of fossil fuel energy by 2050.

"Together we can transform the EU economy into a green superpower," Danish Prime Minister Helle Thorning-Schmidt told the conference.

But the Danish EU presidency is struggling to persuade some of the 27 member states to be anywhere near as ambitious.

Poland, which is heavily reliant on carbon-intensive coal, in March vetoed a low carbon road map, which would establish non-binding milestones on carbon reduction to give guidance after the 2020 target on a 20 percent emissions cut expires.

A 2050 energy road map, which ministers will debate informally in Denmark this week, has also run into controversy.

Pro-nuclear nations have argued nuclear power generation, which does not emit carbon dioxide, has as much right as renewables to be counted in low carbon goals, while Poland dislikes what it sees as discrimination against coal.

Oettinger and other commissioners have said binding targets are the way to get results. Oettinger has also said there is a need to agree a new set of policy goals before the current commission's term of office ends in 2014. (Editing by James Jukwey)

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