European Commission: EU “On Track” for 2020 Renewables Goal

2 February 2017

The European Union is showing strong signs that it will meet its 2020 renewable energy target, according to a new report by the bloc’s executive arm released on Wednesday 1 February.

The 28-nation bloc’s targets for the end of the decade include a binding commitment to use 20 percent of energy from renewable sources by that time. Within that context, individual member states have their own individual goals to meet and national action plans to follow.

The report issued this week by the European Commission, entitled the “Second Report on the State of the Energy Union,” also says that the 28-nation bloc is making progress toward meeting another target for the end of the decade: specifically, the goal of improving energy efficiency by 20 percent.

Competitive renewables market

The market for renewable energy products has become increasingly competitive over the past several years, with countries racing to stake their claim in this growing sector. EU officials have pushed for making the bloc one of the top players in this field, touting its renewable energy goals as an essential way to support a wider climate action and energy security agenda.

According to the Commission, the share of renewables in the bloc’s final energy consumption reached approximately 16.4 percent in 2015, suggesting that the 20 percent goal for 2020 is within sight.

In a factsheet accompanying this week’s report, the EU’s executive arm credited the bloc’s efforts to increase its deployment of renewables as responsible for lowering domestic wholesale costs of these energy sources – a trend which could soon translate to reduced consumer costs.

The price of solar panels has already dropped by 80 percent from 2009 to 2015, with wind power also seeing reductions in price, though to a smaller scale. The falling costs of renewables will make it easier for incorporating them into market, the report says.

Furthermore, the Commission notes, over one-quarter of the bloc’s electricity is now sourced from renewables, hitting 27.5 percent in 2014. On trade, the report argues that the advances in renewables allowed the bloc to lower its imports of fossil fuels by €16 billion in 2015 – a number which could increase nearly four-fold in the next 13 years.

However, the report also warned that the EU is not keeping pace with other economies in its renewable energy investments, with the share now dropping to 18 percent of the global total relative to nearly half in 2008 – a number which the EU’s executive branch warns falls far below what the bloc needs to stay on track with its objectives.

The European Commission also touts the value of the renewable energy sector in supporting other EU 2020 targets such as the above-mentioned energy efficiency improvements. It also makes the case for the planned 27 percent binding renewables target for 2030, arguing that this goal remains essential for meeting bloc-wide commitments for cutting greenhouse gas emissions by 40 percent by 2030 – an objective that the EU has also affirmed under the UN climate talks.

Moving forward, the Commission has called upon the other EU institutions to make the “Clean Energy for All Europeans” package of proposals a “priority” for 2017. The legislative package was released in November 2016 and included plans ranging from improving the regulatory framework for the renewable energy sector to adopting a more stringent energy efficiency target across the bloc. (See Bridges Weekly, 1 December 2016)

EU ETS: Permit surplus falling

The new report also delivered some positive news for the EU’s carbon market, noting in a related document that the number of excess carbon allowances – otherwise known as permits – have seen a significant drop.

The EU’s Emissions Trading System (ETS) has been the flagship of the bloc’s wider effort to slash emissions. The scheme is now over a decade old and remains the largest carbon market in the world, though that title is expected to go to China when it rolls out its own national-level programme this year. (See Bridges Weekly, 9 September 2015)

Under the EU ETS, companies across the bloc – as well as in Iceland, Liechtenstein, and Norway – are allocated or auctioned carbon permits. These can then be bought or sold in order to meet an overall emissions cap, which is lowered progressively. The problem of excess permits has bedevilled the scheme since the days of the global financial crisis, leading to numerous efforts to restructure the system in order to increase its effectiveness, stimulate greater investment in low-carbon technologies, and ensure its long-term sustainability.

The report released this week saw that the surplus fell by approximately 300 million allowances in 2015, while suggesting that the ETS is still yielding progress in the goal of cutting emissions across the bloc. The EU aims to bring emissions from ETS sectors down by 21 percent relative to 2005 levels by the end of the decade.

The EU institutions are working on legislation to reform the ETS for its next “phase,” which covers the years 2021-2030. A vote in the European Parliament on the latest version of the proposed changes is expected later this month. (See Bridges Weekly, 23 June 2016)

Geopolitical context

Officials from the EU’s executive branch have said repeatedly over the past weeks that the bloc will do its utmost to continue playing a significant role in terms of climate action, even with the recent change in leadership in the United States under new President Donald Trump. (See Bridges Weekly, 26 January 2017)

“Despite the current geopolitical uncertainties, Europe is forging ahead with the clean energy transition. There is no alternative,” said Miguel Arias Cañete, the EU’s Commissioner for Climate Action and Energy, in presenting this week’s report.

In a press release also circulated on Wednesday, the EU climate chief particularly highlighted the increasing number of jobs in the renewable energy sector, as well as the improvements seen in both cutting costs and drawing in investments.

“Now, efforts will need to be sustained as Europe works with its partners to lead the global race to a more sustainable, competitive economy,” he added.

Speaking to the Financial Times this week, European Commission Vice-President responsible for the Energy Union Maroš Šefčovič affirmed that the EU will remain “ready to lead the fight” on this issue regardless of the developments seen in Washington, while also urging the new leadership in the White House to heed the scientific evidence in this field.

Other officials, such as Jos Delbeke, the Director-General of the European Commission’s Directorate-General for Climate Action, have also argued that Trump should consider the private sector arguments in favour of climate action.

Prior to taking office, Trump was arguably best known as a billionaire business magnate, specialising in real estate, along with engaging in various other enterprises ranging from television shows to sports ventures.

“When I talk to experts from the United States, they say it is not to be excluded that because of the business dynamics, that the pledge that the United States have given in Paris, may well be delivered,” said Delbeke at a Brussels event this week, according to comments reported in the EU Observer.

Delbeke was referring to the new, universal global climate deal reached in the French capital in late 2015 under the UN’s Framework Convention on Climate Change (UNFCCC). While the continued participation of the United States in the Paris Agreement is not yet clear, countries from around the world have confirmed that they will build on the momentum generated by its swift ratification process, which has advanced well ahead of schedule. (See Bridges Special Update, 20 November 2016)

To date, 127 parties have ratified the Paris Agreement, which has been in force since November 2016. The 127 parties involved cover more than 80 percent of global greenhouse gas emissions. (See Bridges Special Update, 6 November 2016)

While Trump said on the campaign trail that he would “cancel” the US’ participation in the deal, no such steps have been taken to date.

His nominee for Secretary of State is Rex Tillerson, who was the head of the ExxonMobil oil and gas giant. He was confirmed to the post on Wednesday. Tillerson said last month during his confirmation hearing in front of the Senate Foreign Relations Committee that he does believe in climate change – while raising some questions on the current limitations of climate science – and said that the US is “better served by being at that table than leaving the table” when it comes to the UN climate process.

ICTSD reporting; “Tillerson hedges on climate science, but supports Paris Agreement,” PUBLIC RADIO INTERNATIONAL, 12 January 2017; “Rex Tillerson Says He Believes in Climate Change – but That May Not Mean Much,” TIME, 12 January2017; “EU to lead fight on climate change despite Trump,” FINANCIAL TIMES, 1 February 2017; “Trump cannot deny business case for clean energy, says EU official,” EU OBSERVER, 25 January 2017.

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