UPDATE 2-EU bosses outline energy savings goal to cut need for Russian gas

Wed Jul 23, 2014 12:07pm EDT

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* Environment campaigners say 30 percent not enough (Updates with comment, context, detail)

By Barbara Lewis

BRUSSELS, July 23 (Reuters) - The European Commission on Wednesday put forward a target to improve energy savings by 30 percent as part of efforts to curb EU reliance on Russian gas imports.

Energy Commissioner Guenther Oettinger said the Commission agreed unanimously on 30 percent, more ambitious than a level of 25 percent which had been considered as part of a range of options.

"Given the need for energy security in gas because of the situation in Russia and Ukraine, what we think is a more ambitious energy efficient savings target is appropriate," he told a news conference.

Environmental campaigners and Green politicians, however, said 30 percent was not enough and cited Commission research that has shown gas imports would fall by 40 percent with a 40 percent target, but only 22 percent with a 30 percent target.

They also cite benefits to gross domestic product as a higher target would create more jobs in the building and insulation sectors, for instance.

Climate Commissioner Connie Hedegaard, who had called for a target of at least 30 percent, said Wednesday's decision was good news for reducing carbon emissions and "not such good news for (Russian President Vladimir) Putin".

Energy savings are divisive because of the cost of the investment needed to make buildings, for instance, less wasteful.

Member states will have to discuss the proposed goal and have set themselves a deadline of October to agree on a set of climate and energy policy for 2030.

They must decide on whether the target should be binding on individual nations or at an EU-wide level and precisely how the 30 percent reduction in energy use compared with projected business as usual should be calculated.

TOO MANY GOALS?

The 2030 goals are to follow on from 2020 climate and energy policy, which includes targets to cut greenhouse gas emissions by 20 percent compared with 1990, increase the share of renewable energy to 20 percent of use and increase energy efficiency by 20 percent.

The Commission says the European Union is on course to meet those targets, but not all nations agree that multiple goals are the best approach.

Germany has called for a 2030 binding energy savings goal and a renewable target as well as an emissions reduction goal.

But some business interests and Britain have pushed for a single emissions-cutting target, complemented by a strengthened EU Emissions Trading System (ETS).

The ETS is meant to be the EU's flagship policy for tackling climate change but prices of only around 6 euros per tonne are too weak to drive investment in low-carbon technology.

Reducing energy use can have the effect of adding to the surplus of carbon allowances that has weakened the market and lowering their value further.

Marcus Ferdinand, an analyst at Thomson Reuters Point Carbon, said a separate Commission proposal to launch a Market Stability Reserve to regulate the supply of ETS allowances could outweigh the "slightly bearish impact of the proposed energy efficiency target".

Business Europe, Europe's business lobbying group, issued a statement saying it remained "unconvinced by the proposed multi-target approach" and that the ETS should be "the only driver of energy efficiency investment in industry".

The insulation industry and other business interests, however, welcomed the tentative energy savings goal.

"Improved energy efficiency will play a fundamental role in helping Europe achieve its climate, energy security and competitiveness goals," said Stephanie Pfeifer, Chief Executive of the Institutional Investors Group on Climate Change, which groups pension funds and asset managers that control 7.5 trillion euros ($10.10 trillion) ($1 = 0.7427 Euros) (Additional reporting by Ben Garside in London; Editing by Dale Hudson and William Hardy)

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