* EU spent 573 bln euros in 2011 on fossil fuel imports
* Energy savings law would create jobs, save on imports
* Commission tackling ETS auctioning rescheduling
* Deeper structural ETS change would require more time
By Barbara Lewis
LUXEMBOURG, June 11 The European Union has made
progress toward a deal to reduce energy use by improving
efficiency, Denmark's Energy Minister Martin Lidegaard said on
Monday, as the debate enters what should be its final stage.
He added any agreement is not likely to include language on
setting aside carbon permits to prop up the EU's Emissions
Trading Scheme (ETS).
The Danish EU presidency, with backing from the European
Commission, has made energy saving a priority for its six months
in EU office, which expires at the end of June. The last stage
of debate to hammer out a text begins on Wednesday.
"We have made some progress on the Energy Efficiency
Directive. I am a little more optimistic. We have made serious
progress, but we are still not there," Lidegaard told reporters.
"My mandate on the Energy Efficiency Directive (EED) does
not include the ETS. Member states feel it should not be there.
I don't consider it realistic to put it there."
The EU previously set a target of a 20 percent cut in energy
use by 2020 through measures such as renovating buildings and
improving technology. Without a new law, the 27-member bloc is
likely to achieve only around 10 percent.
Even with the proposed law, the bloc might only achieve 15
percent because so many member states have raised objections
that have watered down the Commission's original text.
Advocates of the proposed legislation say it is the most
obvious way to cut emissions, improve energy security, create
jobs in building renovation and save debt-ridden member states
billions of euros on imports of fossil fuel.
Opponents say there is no money available for upfront
spending and that proposals to improve insulation in public
buildings, for instance, are impractical.
The already complicated argument, dominated by mathematical
formulae and haggling over percentage points, has also been
tangled in debate on how to prop up the ETS after prices for
carbon permits sunk to record lows that provide little or no
incentive for low-carbon investments.
The theory, which some dispute, is that improved energy
savings would add to an already huge surplus of carbon permits,
which has resulted from the recession in the euro zone.
After a vote from the European Parliament earlier this year
called for some carbon permits to be set aside, the European
Commission announced it was reassessing the ETS auctioning
timetable to try to tackle the huge surplus of permits generated
by economic slowdown.
Climate Commissioner Connie Hedegaard reiterated on Monday
that she hoped the results of a carbon market review would be
made public before the Commission summer recess, which takes
place around August, and that changing the auctioning timetable
could be a swift process in EU terms.
No one raised objections at Monday's Luxembourg meeting when
she mentioned the change, referred to as backloading, she said.
A more structural reassessment of the ETS law would be far
more complex and would have to be tackled as "a second step",
Although permit prices at less than 7 euros are
far too weak to drive low carbon investment, Hedegaard said, the
ETS was still helping to tackle climate change by setting limits
on how many tonnes big emitters can pollute.
"We should not forget that the ETS is doing its job of
reducing emissions," she said.
Consensus is building on the need for the ETS to be robust,
"Finance ministers have started to realise it's in their
interest to have a robust price if they want the revenues."
She reiterated her support for the EED and quoted Commission
figures that last year the EU spent a total of 573 billion euros
($716.9 billion) on imports of coal, oil and natural gas.
"All the governments of Europe say they want growth and they
want something that can create jobs in the short term. No matter
how hard they think about it, it will be very difficult to think
of better ideas (than the Energy Savings Directive)," she said.
($1 = 0.7993 euros)
(editing by Jane Baird)