EU faces energy policy vacuum after 2020

DUBLIN Wed Apr 24, 2013 9:40am EDT

Germany's Environment Minister Peter Altmaier arrives for the weekly cabinet meeting in Berlin April 24, 2013. REUTERS/Fabrizio Bensch

Germany's Environment Minister Peter Altmaier arrives for the weekly cabinet meeting in Berlin April 24, 2013.

Credit: Reuters/Fabrizio Bensch

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DUBLIN (Reuters) - EU ministers meeting in Dublin stood far apart on what energy and environment policy could follow a set of 2020 targets, with a binding legal deal unlikely before 2015.

Energy firms, with long investment cycles, say there is an urgent need for a new EU policy framework.

Debate has become much harder following economic crisis and the shale gas revolution, which has handed the United States the advantage of cheap energy. EU heavy industry argues too much regulation will add to Europe's competitive disadvantages.

Ireland, holder of the EU rotating presidency, and host of Wednesday's talks, said there was consensus on the need for an EU-wide post-2020 framework, but not on the form it should take.

"Whether it will follow the 20 20 20 precedent isn't yet clear," Irish Minister for Communications, Energy and Natural Resources Pat Rabbitte said.

In 2007, EU ministers agreed in outline three 2020 goals: to cut carbon emissions by 20 percent, increase the share of renewables in the mix to 20 percent and improve energy savings by 20 percent. These entered the statute books in 2009.

Representing the range of opinion within the 27 member states, German Environment Minister Peter Altmaier said he supported a set of three targets, mirroring the 2020 model, while Poland said nothing should be agreed yet.

The European Commission has outlined possible 2030 goals. It hopes to come out with a formal proposal by the end of the year, Energy Commissioner Guenther Oettinger said, but agreement will take time because of European Parliament elections and a new set of commissioners who will take office next year.

"I think in 2015 at the latest, we could come to binding legal decisions," Oettinger said of the 2030 debate.

He said he supports a new carbon cutting goal and a new renewable energy target, but is flexible.

"I think CO2 emission reduction is an obligation for us, but in a pragmatic manner," he told Reuters. "Me, personally, I'm open," he said, but added: "I would prefer an additional renewable target."

CARBON SCHEME

The European Union is broadly on course for cutting carbon and increasing renewables, but will not hit the energy savings goal, even after a new Energy Efficiency Directive was agreed last year. Oettinger has said it is too soon to consider another one.

The collapse of the EU Emissions Trading Scheme (ETS) has further complicated the quest for a unified EU energy policy. Many argue that the problems in the carbon market mean individual member states will revert to national policies. Britain, for instance, has already agreed a carbon price floor.

The power sector has voiced most concern about the lack of an investment signal for low carbon energy, given a carbon price of only about three euros per ton.

The European Parliament's rejection last week of a plan to boost carbon prices could mean a decade of market weakness, analysts have said.

Poland, reliant on carbon-intensive coal, led opposition to efforts to boost the ETS and says policy debate must focus on EU competitiveness and what the rest of the world is doing.

Warsaw will host U.N. climate change talks later this year, followed by Paris in 2015 - the deadline for a new global deal on tackling climate change.

Polish Environment Minister Marcin Korolec said that the bloc should not decide its energy and environment policy ahead of the U.N process.

Ahead of elections later this year, the German government has been split over the cost renewable subsidies and of carbon.

Germany's Altmaier said Europe had "a certain responsibility" to lead the international debate, adding he and many other countries still backed "a triad of climate targets".

(Writing by Barbara Lewis, editing by William Hardy)

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