EU proposes 2030 framework for climate and energy policies

22 January 2014

The European Commission proposed 2030 climate and energy policy goals. The 2030 targets include a reduction in greenhouse gas (GHG) emissions by 40% below the 1990 level and an EU-wide binding target for renewable energy of at least 27%. The proposed policy framework provides more flexibility in meeting the overall goals by dropping the sub-targets for sectors of the economy. Importantly, the Commission has not proposed any targets for renewable energy or biofuels for the transport sector beyond 2020.

The target of a 40% GHG emissions reduction below the 1990 level—the center piece of the proposal—would be met through domestic measures alone, with increased role of the EU emissions trading system (EU ETS). The Communication setting out the 2030 framework is accompanied by a legislative proposal for a market stability reserve for the EU ETS starting in 2021, to improve its robustness.

The EU-wide target for renewable energy of 27% in 2030 is also driven by a more market-oriented approach. The new target would not be translated into national targets through EU legislation, thus leaving flexibility for Member States to transform the energy system according to national preferences. The 2030 framework proposes a new governance framework based on national plans for competitive, secure and sustainable energy, to be prepared by the Member states based on upcoming guidance by the Commission. The Commission envisions that under the proposed new mechanisms, the share of renewable energy in the electricity sector would increase from 21% today to at least 45% in 2030.

The proposal does not include any biofuel targets for transportation for the period beyond 2020, reflecting the realization that biofuels present one of the more costly approaches to reduce GHG emissions. The lack of biofuel targets suggests that the EU may drop the Directives that define the current targets through 2020—the Renewable Energy Directive (2009/28/EC) that requires a 10% share of biofuels in transportation and the Fuel Quality Directive (98/70/EC & 2009/30/EC) that sets a target of a 6% GHG reduction for fuels used in the transport sector. (Under another recent proposal, the 2020 biofuels targets of 10% might be reduced to around 6%.)

In the proposed 2030 framework, the Commission emphasized that “first generation biofuels have a limited role in decarbonising the transport sector. A range of alternative renewable fuels and a mix of targeted policy measures building on the Transport White Paper are thus needed to address the challenges of the transport sector in a 2030 perspective and beyond.”

The Communication setting out the 2030 framework is accompanied by a Report on energy prices and costs, which assesses the key drivers and compares EU prices with those of its main trading partners. The report suggests that the rising energy prices can be partly mitigated by ensuring cost effective energy and climate policies, competitive energy markets and improved energy efficiency.

The 2030 framework will be debated in the European Council and European Parliament. The European Council is expected to consider the framework at its spring meeting on 20-21 March.

Source: European Commission