The number one priority for Team Juncker is a €315-billion investment plan for Europe. Second, is “better regulation”. First Vice-President Frans Timmermans presented the European Commission’s 2015 work programme to MEPs in Strasbourg on 16 December. Energy Post looks at the new initiatives, scrapped initiatives and those that hang in the balance for energy and climate policy.
Just 23 new policy initiatives are foreseen by the Juncker Commission for next year (compared to over 100 in 2014) and just two of them fall into the energy and climate category. The first is a non-legislative “strategic framework” for an Energy Union that will focus on “energy supply security, integration of national energy markets, reduction in European energy demand, decarbonising the energy mix and promoting research and innovation in the energy field.” Little new there then.
The Union initiative however, will also include a “revision of the EU Emission Trading Scheme (ETS) as part of the legislative framework post-2020”. In practice, EU ETS reform at the moment consists of passing into law a “Market Stability Reserve” that will make the system more resilient to changes in demand – and kick up the carbon price. The reserve is already being debated by member states and MEPs and is due to be agreed in the first half of next year. Proposals for further reform of the scheme will follow after.
In contrast, new EU energy and climate commissioner Miguel Arias Cañete has told the European Parliament there will be no legislative follow-up to tackling non-ETS carbon emissions (e.g. from agriculture and transport) until after the UN climate talks in Paris in December 2015. This is reflected in the new work programme, which only refers to new legislation on the EU ETS. On transport, the commissioner plans to start with a high-level stakeholder conference in the summer.
The second and only other new initiative in the work programme pertaining to climate and energy is a non-legislative position that the Commission plans to put out, on what the EU expects from the Paris climate conference.
Equally interesting is what the Commission explicitly proposes to stop doing in 2015. With 80 existing proposals set to be scrapped or replaced (compared to around 30 a year in the last five years), its list of cuts is as long as its list of new initiatives is short. Up for the chop is a proposal to revise the EU’s energy taxation directive, for example, which has been “fully denatured” by member states and still evades agreement. Tax issues must be agreed unanimously by member states in the EU – a tall order. The last revision of the energy taxation directive took six years. This one, which sought to introduce a CO2 component to fuel taxes and ultimately make diesel more expensive than petrol, won’t get the chance.
“It would be pointless to let the EU institutions waste time and energy on proposals which have no chance of being adopted. So whenever that’s the case we will think of other, more effective ways to achieve our common objectives.” – Frans Timmermans, First Vice-President for Better Regulation, 16 December 2014
In another blow to a climate policy for transport, a 2005 proposal on passenger car-related taxes is also being axed. Member states have simply ignored it since 2007. One of its aims was to help reduce CO2 emissions from cars. Several proposals in the nuclear realm are also up for deletion. One is a 2011 proposal for an EU-wide registration system for carriers of radioactive materials. There is “no foreseeable agreement”. A similar fate awaits proposals made over a decade ago to increase the scope and ceiling, by €2 billion, of Euratom loans for nuclear power stations. Again, these require unanimity.
Other proposals will be modified: this includes a proposal on “national emission ceilings” for air pollutants such as particulate matter, which has drawn the ire of member states although nearly all European city dwellers continue to be exposed to pollution well above recommended World Health Organisation limits. The Commission now proposes to modify this proposal “as part of the legislative follow-up to the 2030 energy and climate package”. This can be interpreted as a better integration of air quality and climate policy, or a postponement of acting on air quality until the climate and energy issues are dealt with.
The proposed modification that has caused the biggest stir however, is to a package of circular economy (read: waste management) proposals issued just before the summer. Outgoing environment commissioner Janez Potočnik wanted resource efficiency to be his legacy and these proposals were a milestone. But again, member states rich and poor have complained of costs and there were rumours the plans would be withdrawn altogether. Instead, they will be replaced by “a new, more ambitious proposal with a broader approach”. Not everyone is convinced.
“Commissioner Timmermans has seemingly interpreted his “better regulation” brief as one of deregulation.” – Philippe Lamberts, co-president for the Greens in the European Parliament
Other energy and climate laws will face fresh scrutiny in 2015 as part of the Commission’s “better regulation” effort. These include the 2009 renewables directive (which underpins the 20% renewables by 2020 target), a 2009 carbon capture and storage directive (which requires member states to create a legal framework for storage), two regulations on reducing CO2 emissions from light-duty vehicles, and a 2009 directive on using public procurement to promote cleaner, more energy-efficient vehicles. Results for all these evaluations are due in 2015. Also next year, the Commission will launch an evaluation of the controversial fuel quality directive, which mandates a carbon emission reduction from fuel suppliers and through which the Commission has attempted to ban oil sands from Europe. Back in January, as part of its 2030 proposals, the Commission proposed to discontinue the mandated reduction.
Finally, the better regulation agenda also foresees more “fitness checks” and “cumulative cost assessments” to make sure industries aren’t drowning under the weight of (unnecessary) EU legislation. A fitness check for the refining sector is already underway with results due in 2015. In addition, the Commission will launch the same exercise for forest-based industries, glass and ceramics, the chemicals industry and the construction sector. The focus is on “profit margins and international competitiveness”. The question on everyone’s minds is where Timmermans will find the balance between pushing industries to innovate and adapt, and keeping them alive and kicking to do so.