emission trading scheme by numbers
The EU’s Emission Trading Scheme reform took a huge step forward last year when the European Parliament’s Environment Committee voted in favour of MEP Ian Duncan’s report. He talks us through the process and what happens next.
Ian Duncan is an MEP with the European Conservatives and Reformists (ECR) and represents the Scottish Conservative Party at a domestic level.
Once upon a time, not so far away… well the 15 December in Brussels, the Environment Committee of the European Parliament held its final session of 2016.
It was an extraordinary session, in more ways than one, with only one item of business: to vote on the reform of the EU’s Emissions Trading Scheme (ETS).
The vote had been scheduled to take place the week before, but despite my best efforts the distance between the groups was just too great, and so I postponed the vote.
In truth, the distance was still too great 24 hours before the rescheduled vote, but there was magic in the air that Thursday and by a margin of 41 (53 votes for, five against with seven abstentions) the merry legislators passed the report, so beginning the legislative journey of ETS reform.
As we count down the days to the final parliamentary plenary vote (scheduled for 15 February) I thought it might be interesting to explore the ETS in numbers.
The reform takes shape…
The vote took place on 15 December, which was 518 days after the European Commission first published its proposal, 455 days after I was appointed rapporteur, and 197 days since my report was published, 174 days since I tendered my resignation as rapporteur on ETS reform and 162 days since the chair of the ENVI committee turned down my resignation. (Ah, Brexit… It seems just like yesterday…).
Alongside me, negotiating the reform, were seven MEPs (my shadows and I) representing the eight political groups, together with 14 assistants (who knew far more than the eight of us).
We spent over 40 hours in official session and countless more unofficially on the telephone, in various corridors and occasionally in bars (alcohol may have been taken) to distill the 729 amendments laid against my report into a document compromising 17 amendments, spanning 78 pages and over 20,000 words.
The year of our labour saw Brexit, Trump and the entry into force of the Paris Agreement. It also saw actual labour: S&D shadow Jytte Guteland gave birth to a baby boy. He will be five by the time the reform we have begun actually enters into force.
What was agreed
2.4% – The annual rate by which allowances will be removed from the market (equal to the elimination of 528 million tonnes of CO2) from 2021-30.
This figure represents an increase of 0.2% on the Commission proposal, and means an additional 242 million tonnes of CO2will be removed during the term of the reform, so ensuring the EU meets it ambition of reducing emissions by at least 80% by 2050.
57% – the proportion of allowances to be auctioned by member states (or by the Commission) to provide the money for the Modernisation Fund, the Innovation Fund, and part of the harmonised scheme to compensate for indirect costs.
The ENVI Committee agreed that up to 5% of this share could be transferred to support industry should the number of ‘free allowances’ ever run out (during negotiations it was termed the ‘Duncan mechanism’; I suspect my late mother would have been immensely proud of that fact, even if she didn’t quite understand its significance. I am writing this article on what would have been her 80th birthday).
If the Duncan mechanism is not triggered, or if the full 5% is not needed to compensate industry, up to 200 million additional allowances will be cancelled, so reducing further the surplus of allowances on the market.
100% – the share of revenues from auctioned allowances that member states must use for climate action. At present, member states spend only 80% of the auction revenues on climate projects. Increasing this to 100% will make available a further €120 billion of funding for renewables, energy efficiency and climate mitigation.
1 billion – the number of allowances that will be cancelled during the phase in order to reduce oversupply in the market. Due to the financial crash in 2008 and the related dip in EU industrial production, analysts estimate the market will be oversupplied by roughly 2.5 billion allowances by 2021.
Removing 1 billion of these permits will help restore market balance and deliver a carbon price that incentivises industrial innovation in Europe.
24% – which represents a doubling of the rate of withdrawal of carbon permits from the market, compared to the Commission proposal. The permits will be banked in what is known as the Market Stability Reserve (MSR).
Coupled with the cancellation noted above, this doubling of withdrawal (12 to 24%) will help reduce oversupply in the market and encourage a meaningful carbon price.
100 – the number of sectors that will no longer qualify for free allowances and therefore exit the ‘carbon leakage’ list. The ENVI Committee agreed with the Commission to focus the list on those sectors most at risk of upping sticks and departing the EU, to lands where carbon costs are lower.
0 – the number of new coal fired power plants that can be funded through the ETS funding mechanisms.
MEPs will be asked to endorse the ENVI Committee’s report on 15 February 2017, in a plenary vote. By then it will be only 1,416 days until the actual reform comes into being (and 685 days until the Market Stability Reserve actually starts stabilising the market), and around 5.6 billion tonnes of CO2will have entered the atmosphere
If MEPs endorse my report, then the Parliament will shortly thereafter (the number of days is anyone’s guess) enter into negotiations with the European Council – termed the trialogue, since it is chaired by the European Commission – and the carbon market reform will have taken another step to becoming law.
Easy as one, two, three…
eu risks missing climate goals without 'sustainable' biofuels, experts warn.
The European Commission’s proposal to gradually phase out “sustainable” first generation biofuels will prevent the EU from meeting its 2030 climate goals, experts claim.
In November last year, the European Commission presented its draft proposal to review the Renewable Energy Directive for the post-2020 period as part of a Clean Energy Package.
The executive proposed that biofuels should have a limited role in decarbonising the transport sector and should not receive public support after 2020.
The Commission’s plan is to reduce the contribution of conventional biofuels in transport from a maximum of 7% in 2021 to 3.8% in 2030, effectively bringing crop-based biofuels use to pre-2008 levels.
It also created an obligation to raise the share of other ‘low emissions fuels’ such as renewable electricity and advanced biofuels in transport to 6.8%.
The Commission was heavily criticised by industry. Ethanol producers accused the executive of being supportive of oil use in EU transport, while the biodiesel industry called the proposal “unacceptable”, predicting an increase of fossil fuels in transport due to a lack of availability of advanced biofuels.
Missing climate goals
Speaking at an event in the European Parliament on Tuesday (10 January) organised by the European renewable ethanol association, ePURE Secretary General Emmanuel Desplechin pointed out that the use of “sustainable conventional biofuels” such as ethanol made from corn, wheat, and sugar beets would help the EU meet its climate and energy goals for transport.
He, also, said that it could be a real “missed opportunity” for the EU.
“Instead of further encouraging the use of renewable low-carbon fuels, such as biofuels made in Europe from sustainably produced European feedstock, the Commission’s proposal is friendly to oil,” he noted.
The industry claims that ethanol produced in Europe has 64% GHG higher savings compared to petrol, which is equivalent to the annual GHG emissions of 4 million cars.
In apolicy paper, the industry calls the Commission’s proposal “counteractive” and says that it risks missing the EU 2030 climate and energy goals, leaving a shortfall of approximately 10% from what is needed.
Tory MEP Julie Girling [ECR], who hosted the event, expressed her concerns regarding the European Commission’s proposed policy framework.
“I worry about the confusion policy backdrop,” the British MEP noted, adding that EU lawmakers should focus on science.
“Renewable energy use in transport requires a serious and sensible grip on what can be achieved […] to change the policy rules for biofuels – not once, not twice, but three times – doesn’t strike me as a sensible way forward,” she emphasised.
Dr Paul Deane of the Environmental Research Institute, University College Cork, noted that transport was responsible for about 1/3 of the energy that we consume in Europe and about ¼ of our emissions.
“It’s the only sector that emissions are on increase across Europe and this is worrying,” he said, adding that a lot of member states have a lot of ground to cover and many others will not meet their binding 10% goal by 2020.
For Dr Deane, this slow progress could be attributed to the fact that bioenergy policies have been one of the most volatile policy areas in Europe. “The political uncertainty around the policy has stalled a lot of investments,” he emphasised.
Another reason, according to Deane, is that the original renewable directive’s “hopes” for advanced biofuels were not met over the last few years, primarily due to costs, the collapse of the oil market and political instability, which has contributed to the lack of investment in a number of projects.
Referring to electric vehicles, he said that they would play an important role in delivering emissions’ reductions for passenger cars from now to 2050. However, their impact in the short to medium term is “small or ineligible”.
“Modelling by the Commission shows electricity in road transport reaching between 1%-3% (of energy in transport) by 2030 and up to 20% by 2050. The same modelling shows liquid biofuels meeting 36% of energy in transport in 2050,” he explained, stressing that their expensive technology will be faced with a difficult commercial landscape.
More common sense
Deane also emphasised that we should not forget biofuels.
“Biofuels that demonstrate proven emission reductions and low indirect land use change (iLUC) should play a role in decarbonizing transport in Europe,” he said, adding that there was a need for a more common sense approach of energy in transport, where “policies encourage the correct type of biofuels that deliver significant emissions’ reductions and policies that discourage biofuels which don’t”.
He noted that bioenergy was a wide family of fuels, and that the challenge to EU lawmakers is to develop a policy that is clear and makes distinctions between the different families of biofuels.
Deane also criticised the perception of science in EU policy, saying that one should not be picky.
“Policy should be science-based and evidence-driven. In Europe, we either accept the science or we don’t,” he concluded.
No information on employment
Bernd Kuepker, policy officer with DG Energy, explained the executive’s rationale behind the proposed plan and noted that member states might set a lower limit and distinguish between different types of biofuels, for instance, by setting a lower limit for the contribution from food or crop-based biofuels produced from oil crops, taking into account iLUC.
But, he stressed that there was a difference between the ethanol from crop-based starch and advanced biofuels, which have low or negative estimates for iLUC.
“On the contrary, [crop-based starch] has clearly positive and really significant iLUC and will not be able to achieve the savings that the Commission aims at,” the EU official said.
Another important angle is the risk for job losses, where the industry believes that the Commission’s plan will lead to the permanent loss of 133,000 direct and indirect rural jobs.
Asked by EurActiv.com whether the Juncker Commission has conducted an employment impact study of the case, Kuepker said that there was none in place.
“We looked at different factors and generally what has been considered is that the highest share of jobs is in the agricultural sector and we don’t expect it to stop,” he stated, adding that with the plans for advanced biofuels, job losses related to first generation biofuels will be compensated.
“So, it’s certainly not a policy whose main objective is to create jobs, but the proposal will not decrease the employment rates either,” he concluded.
Dr. Carlo Hamelinck, an energy expert at Ecofys consultancy, said that sustainable biofuels are essential for sustainable transport and noted that it was remarkable that the Commission decided to limit them as without biofuels, more cropland is abandoned and a decline of EU agricultural sector is expected.
He explained that conventional biodiesel feedstocks had typically large ILUC impact due to the loss of soil organic carbon in grass and forest land contrary to the conventional ethanol and advanced fuels, which both have a lower ILUC impact thanks to the lack of connection to palm oil.
eu social fund brings progress despite low expectations
The European Social Fund has reached half of all EU workers and helped 10 million citizens find jobs. Contrary to the popular wisdom, the social situation in Europe is improving.
The EU is known for imposing budgetary constraints and pushing liberalisation in Europe’s economies. It is rarely associated with social progress. Now, the European Commission has begun to address this image problem.
It intends to do this mainly by highlighting the positive impact of the European Social Fund (ESF), the oldest of the EU’s redistribution programmes. The ESF was followed by the European Regional Development Fund (ERDF) and the Cohesion Fund.
According to statistics published on Thursday (5 January), the FSE helped some 10 million Europeans find jobs between 2007 and 2014, at a cost of €115 billion. 21.1 million EU citizens are currently unemployed.
This detailed and highly complex investigation was carried out by the European Commission, using information from the people concerned, coupled with macroeconomic models.
Of the 232 million EU citizens in employment in 2015, almost 100 million directly benefitted from the FSE. The biggest beneficiaries of the fund were women (52%) and young people (32%).
The ESF also appears to have had a positive effect on the most vulnerable populations, like migrants, disabled people and members of marginalised communities, such as the Roma.
Certain countries also gained more than others from the scheme. In Bulgaria, the EU’s poorest member state, the ESF’s programme to keep young people in education has had a noticably positive impact.
Variable results from one country to another
But the results of the European Social Fund have not all been positive. It is put to good use in some countries, but not always those that need it most.
Romania, Slovakia and Hungary, for example, have only used a very small part of the fund available to them to promote jobs.
What is more, the diversity of projects and objectives supported by the ESF makes the real effect of EU-funded programmes on jobs difficult to evaluate.
And the programmes assessed as part of the ESF include those co-financed by the EU, those that received EU funding for a determined period of time, mobility, childcare and education support. The FSE delivered the best results in countries with less developed social systems.
Finally, the study highlighted the issue of harmonisation: the EU adds much less value to the countries with the most advanced social systems, like France, than it does to some others. In the long term, harmonisation will bring all the social systems towards an average level that is likely to be lower than that of the most advanced countries.
An improving situation
Along with other recent social statistics, like the report on Employment and Social Development in Europe 2016, this study paints a positive picture of the progress made by European countries in recent years.
The economic recovery and the stabilisation of unemployment have also led to greater stability among other indicators, such as poverty and inequality.
Since 2013, the risk of poverty has also fallen everywhere in Europe. With the notable exception of Greece and Italy, the share of the population suffering from extreme deprivation has also declined sharply.
Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said, "Today's evaluation proves that the European Social Fund makes a real difference in the lives of Europeans. It is our main instrument to invest in human capital. Thanks to European support, millions of people have found a job, improved their skills or found their way out of poverty and social exclusion. It is solidarity at its best."
energising european recovery
Last year’s Winter Energy Package contains the seeds of two fundamental economic and political requirements needed for the EU to prosper: returning some ‘power to the people’, alongside European investment and network integration, write a number of energy experts.
Michael Grubb is professor of climate change policy at University College London; Simon Müller is an analyst at the International Energy Agency in Paris; Jean-Michel Glachant is the director of the Florence School of Regulation; and Karsten Neuhoff heads the climate policy department at DIW Berlin.
Energy is a backbone of economic development. The origin of the EU itself lies in the European Coal and Steel Community, an energy-based treaty that helped to power post-war reconstruction.
December’s Winter Package marks recognition that the energy challenge has changed fundamentally. Embodying the much-vaunted Energy Union, it is constructed around major challenges, which also offer profound opportunities.
The first opportunity lies in the way in which new technologies are revolutionising the potential role of energy consumers, and indeed could create a whole new class of ‘prosumers’. Farmers, retail chains and even households, particularly in rural areas, have new opportunities to be active participants in the energy system.
They can offer generation from localised renewables, and deliver flexibility, for example from automated management of thermal (think fridge and freezers) or electrical (think electric cars) storage. Industrial consumers could also make money from smart scheduling of industrial production or cheap on-site backup generation.
If trust is a problem (and in few sectors is trust in suppliers so low as in energy), and ‘take control’ is seen as an answer, then offering more consumer control over energy use and potentially generation is not a bad place to start.
The EU package offers basic standards, legislative frameworks and data protection systems required to underpin this. Becoming ‘prosumers’ could give hundreds of millions of people a bigger stake in the energy system, and also stem the sense that technology modernisation is leaving rural economies behind.
But the energy transition also demands huge investment, at a time when European economies are struggling with stagnation. Much of European energy infrastructure is aged and polluting, and dependent on fossil fuel imports.
Better networks could improve security and reduce costs. Dramatic reductions in the cost of solar and wind energy in particular (in addition to batteries) brings within reach two interrelated goals: the delivery of the Paris Agreement goals on climate change, and reducing European energy dependence in a world of increasingly febrile international relations just as the US is losing its strategic interest in Middle East oil security.
The Winter Package establishes a governance system to coax and coordinate member states towards the goals already agreed. The transition cannot be bankrolled by government expenditure or by imposing more costs on consumers, but neither is needed.
As many have noted, the paradox of modern finance is the huge pools of private capital which are earning next to nothing, indeed, some institutional investors are accepting negative interest rates for perceived safe havens, like German railway bonds.
This is effectively paying for infrastructure to hold their money. With such cheap capital, renewable energy and network infrastructure can make attractive destinations for investment in an energy transition with investment potentially exceeding €100 billion a year across Europe: enough to help inject some momentum into European economic recovery.
Programmes to improve Eastern Europe’s building efficiency and maybe infrastructure for electric vehicles would make the endeavour even bigger. And even more than modern railways, energy efficiency, and energy sources which once constructed will be very cheap to run, have every prospect of boosting long run productivity.
The key need is to establish investor confidence born of a clear commitment to building a consumer-oriented low carbon energy system fit for the 21st century. The Winter Package makes first promising steps into the direction.
The revised renewables directive includes an article on “Stability of financial support”, which is essential to attract cheap capital to the sector.
Effective reform of carbon pricing can underline the strategic direction for European energy (and raise finance). The financial framework in the package could further facilitate investment in particular against the background of the fragile finances of many southern European countries.
Those countries too would form the natural nucleus for a trans-Mediterranean investment programme to engage North Africa – countries with abundant clean energy resources just cables away, with a desperate need for productive investment which could also help to stem the tide of refugees.
Like the original coal and steel community, the key to stability is not markets, but investment with a common purpose.
A crucial factor in Europe’s malaise is that it has lost its sense of ambition and mission. Developing the energy industries and infrastructure for a 21st century energy system is an investment in all our futures, for which Europe is still best placed to lead.
And who knows, by bringing investment, purpose, and engagement, it might even save the Union itself.
pro-europeans call for more erasmus funding
As Erasmus turns 30, politicians and teachers have called for a massive increase to the programme’s funding. Hugely popular and undeniably successful, Erasmus is currently accessible to just 7% of young people.
“€17 billion out of a €1 trillion budget is not enough for this important tool of citizenship,” said Harlem Désir, the French minister of European Affairs. Like the majority of the participants at the 30th anniversary celebrations in Paris last monday, Désir believes the success of the Erasmus programme is a clear case for more funding.
The anniversary event brought together teachers, students and politicians, including the French ministers of education, labour and European affairs, as well as Italian Europe minister Sandro Gozi and French European Commissioner Pierre Moscovici.
Erasmus has changed a great deal since its modest beginnings as a student exchange programme three decades ago. Since then, a total of five million people have taken part, including 600,000 from France. And the number is accelerating.
Currently, 35,000 French secondary school and university students, as well as 16,000 apprentices, take part in Erasmus each year, according to the ministry of education.
“We often hear politicians saying they will extend Erasmus to apprentices, but this has already been done,” said Education Minister Najat Vallaud-Belkacem.
The next objective, which is not due to be completed until 2020, is to extend the programme to people in professional training.
The Erasmus budget was increased by 40% for the period 2014-2020. But while reaches just 7% of all 18-25 year-olds, three quarters would like to benefit from the scheme, given the opportunity.
And with good reason: 100% of Erasmus students recommend the programme.
For Italian minister Gozi, himself a former Erasmus student at the Sorbonne in Paris, the programme’s resources should be massively increased. “With a budget of €150bn, we would have ten times more exchanges,” the minister said, before being brought down to earth by Commissioner Moscovici.
“The problem is that the European budget represents less than 1% of the GDP of the member states. This is not enough, by a long way,” the Commissioner for economic and financial affairs said.
“We spend 40% of the EU budget on agriculture, 40% on structural funds, whose effectiveness is questionable, and too little on human capital and research,” he added, in a call for a rethink of the EU’s budgetary priorities post-2020.
The political challenges related to the programme were only tentatively raised. “Education should play a role in citizenship education, in learning the freedom of expression,” said Vallaud-Belkacem.
She mentioned the terrorist attack carried out against Charlie Hebdo in Paris two years ago, after which EU education ministers tried to establish a European citizenship programme.
“At a time when some people want education to be purely national and mobility to be reserved for the elite, we should highlight the benefits of the EU,” the minister added.
But the strongest message of support for the European dream came from Naliaa Vakulenko, a young Ukrainian Erasmus student on exchange at the University of Amiens, who took part in the Euromaidan demonstrations in 2014.
“We fought for the right to become part of the EU. Many of us died, very young people gave their lives to change the world,” the young woman said. She encouraged participants in the Erasmus programme to realise their dreams.
“We are living in a time when certain people like to say that enlargement was a bad thing and that it should stop. My father was of Romanian origin and my mother Polish. Europe has to be an open society. We have to do this cultural groundwork to establish what Europe really is so that it remains a reality,” said Moscovici.
Built on the foundations of pilot student exchanges between 1981 and 1986, the Erasmus programme was adopted on 15 June 1987 by the Education Council. At the time, the programme only involved 12 countries: Germany, Belgium, Denmark, Spain, France, Greece, Ireland, Italy, the Netherlands, Portugal and the United Kingdom.
In the 1987-88 academic year, Erasmus allowed 3,244 students to study abroad.
Over the last 30 years, the programme has given more than five million people, including 3.3 million students, the chance to travel and live abroad. In the 1990s the programme was exclusively for students, but the more recent Erasmus+ programme is aimed at a more varied audience: primary, secondary and professional school pupils, apprentices, job-seekers, students, young volunteers, education and training professionals, youths and sports clubs.
Since 2014, the Erasmus+ programme has brought together 33 participant countries and 169 partner countries around the world.
COMMISSION AND MEMBER STATES CLASH OVER CAPACITY MECHANISM
The European Commission fears that capacity mechanisms would just translate into subsidies for coal power plants. Therefore, installations exceeding emission limits should not take part in support schemes, according to a proposal under the Energy Union’s Winter Package.
A new electricity market design proposed by the European Commission aims to ensure that stronger price signals will motivate power companies and the industry to invest in their generation units or capabilities for demand response.
“National market rules like price caps and state interventions currently hinder prices from reflecting when electricity is scarce,” the Commission said in the draft regulation on the internal power market, a part of the Winter Package.
That means member states will have to accept that price caps are removed from the EU electricity market and prices may become significantly high at certain moments.
Markets of individual member states or regions should also be better integrated, as current price zones do not always reflect actual scarcity and follow political borders instead, the Commission explained.
“If there is a strong demand in some area, for sure the price should be high to attract trade into this region,” Oliver Koch from the Commission’s DG Energy said at the SET Plan – Central European EnergyConference(CEEC) in Bratislava, held in the first week of December.
“You can organise a market in a national manner if you wish, but one thing is clear – it will be tremendously more costly. It is difficult to cooperate, but there is no other alternative,” he warned.
However, several member states are losing their trust in price signals created by the market and have started to arrange so-called capacity mechanisms instead.
Under such schemes, electricity generators or demand response operators are remunerated for keeping their capacities on standby. That should guarantee enough energy will be available when, for example, solar or wind power plants are not able to produce enough electricity.
The Commission’s competition directorate found 35 former, existing or planned capacity mechanisms in eleven member states during a special inquiry launched 18 months ago.
These countries believe that under the current market conditions with low wholesale prices, energy companies need such subsidies otherwise they would not invest in their generation capacities.
According to critics, the schemes may fragment the EU single market, distort competition by favouring certain producers or types of technology, and create barriers to trade across national borders.
The Commission’s proposal wants to address this problem with EU-wide harmonisation of so-called adequacy assessment. That should help to evaluate whether remunerations are needed to ensure sufficient capacity is available or whether there is enough power that may be imported from another state, for example.
Such an assessment should be carried-out by the European Network of Transmission System Operators for Electricity (ENTSO-E) and approved by the EU’s energy regulating agency, ACER.
“The EU-wide analysis is a highly important basis that must not be ignored when a capacity mechanism is being assessed but we feel it would be an overkill to base the decision only on the EU assessment,” ENTSO-E Secretary-General Konstantin Staschussaid at the conference.
He stressed that increasing amount of electricity is being produced by small-scale installations controlled at local level and the role of demand side response is also rising. Therefore, member states should also be allowed to consider their own smart-grid driven analyses.
Subsidies for coal
Controversies were caused by another proposal included in the fresh regulation. In line with the European Investment Bank’s emissions performance standard, capacity mechanism should not be accessible to newly-built power plants exceeding a benchmark of 550 grams of CO2 per produced KWh.
That would mean coal-fired generation capacities could not take part in the support schemes.
For existing power plants, a transitional period of five years after the regulation’s entry into force should be established.
For coal-reliant countries like Poland, this would mean that significant parts of their energy portfolio would not be profitable to operate. According to Maciej Burny from Poland’s largest power producing company, PGE, the country would face a significant lack of power generation capacities after 2025.
“Principally, we are against any capacity mechanism if they are not fully justified. But from a broader perspective, there are different conditions and energy mixes in individual member states and according to current EU state aid rules, technologically neutral approach should be always followed,” said Márius Hričovský from Slovak energy company Stredoslovenská energetika.
“The emission performance standard could hinder technological neutrality in this instance,” he added.
“The feeling behind this proposal was that the capacity mechanism could materialise as subsidies securing the survival of plants that should otherwise leave the market,” DG Energy’s Koch explained, adding that this was a political choice by the Commission which entered the proposal at the last minute.
“This is a package for decarbonisation path until 2030, 2040 or 2050. Coal will play a very limited role at that time. This is an assumption which is not shared by everyone, but it is one of the basic ideas of the package,” Koch also said.
waste reform: from environmental disaster to economic opportunity
MEPs have the chance to unlock over 800,000 jobs by improving waste management and waste prevention across the EU. If they support progressive waste reform, the benefits will be huge for citizens, businesses and governments, writes Piotr Barczak.
Piotr Barczak is waste policy officer at the European Environmental Bureau.
On 24 January, the European Parliament’s environment committee will vote on the pending legislative proposals on the 2015 Waste Package put forward by the European Commission.
The Waste Package is the main set of legislation accompanying the Circular Economy strategy, which aims to support the transition towards a more sustainable and stronger economy by expanding recycling, reuse and repair.
However, the package has been widely criticised by campaigners and progressive businesses. Despite the announcement by European Commission Vice-President Frans Timmermans that the 2015 Circular Economy Package would be more ambitious than the 2014 proposal, the targets for recycling and reducing landfill waste are weaker. The plan also fails to adequately address waste prevention by repair and reuse, and lacks a legal framework that incentivises prevention.
MEP Simona Bonafè, Rapporteur for the Waste Directive from the Socialists & Democrats group, put forward a new set of proposals in June last year outlining the importance of having stronger targets. In her report, which will be put to a vote on 24 January, she proposes to increase recycling targets for municipal solid waste from the current 65% proposed by the Commission to 70% by 2030. The suggested amendments also include the implementation of an 80% target for the recycling of packaging waste.
An ambitious Waste Package would provide a unique opportunity for EU decision-makers to put Europe back on track towards economic recovery. The European Commission’s own impact assessmentestimated the targets put forward by Bonafè would unlock 580,000 jobs by 2030, as well as €72 billion a year in savings for businesses benefiting from greater resource security. But figures for job creation could go up to 867,000if, on top of the 70% recycling target, the executive adopted better policies for reuse – especially with regards to furniture and textiles.
In addition, a more effective combination of waste management and prevention policies would bring member states closer to achieving their climate change targets by cutting down between 146 and 244 million tonnes of greenhouse gas emissions by 2020.
These proposals are badly needed. Today we are far from reaping the full benefits of a circular economy. In Europe, we still burn or bury 50% of the waste we produce, destroying valuable resources that are often imported from overseas at a high price. This outdated model of a linear economy has made member states heavily dependent on imports at the expense of competitiveness for European industries.
It is for this reason that much more is expected from the MEPs gathering in Brussels on 24 January. Legally binding targets for waste prevention are needed just as much as higher recycling targets for waste management. Member states are currently exempt from any legal obligation on food wasteand marine litter, despite their commitment to introducing reduction targets under the Sustainable Development Goals. Such political targets need to be legally anchored to the Waste Package in order to make governments accountable and avoid empty promises.
Furthermore, MEPs should reconsider the time derogations for recycling targets that are granted to certain underperforming member states. This is primarily in the interests of such countries, which would risk being left even further behind. Member states should instead be incentivised to generate less waste by receiving more adequate recycling targets based on their level of waste generation. This way, prevention would be rewarded, rather than wastefulness.
As waste generation becomes increasingly costly from both an economic and environmental perspective, MEPs are called to support a swift and ambitious transition to the circular economy. The benefits are well known – it’s now down to EU decision-makers to put in place the measures necessary to close the loop.
how can energy union governance help put efficiency first?
Energy efficiency markets are driven by legislation. This is why a strong energy efficiency directive supported by a robust governance mechanism are key to delivering the multiple benefits of energy efficiency, argue Monica Frassoni and Harry Verhaar.
Monica Frassoni is president of the European Alliance to Save Energy (EU-ASE) and Harry Verhaar is head of global public and government affairs at Philips Lighting.
The Paris Agreement, championed by the European Union, sets the long-term direction we have to take: keeping global warming well below two degrees or in other words moving towards a carbon-neutral society in the early to mid-21st century. This will require the transformation of our economy thanks to low-carbon technologies. In this transition, business will be key. We are committed to a low-carbon economy. It makes economic sense and we deeply believe businesses should play a positive role in shaping a better world for future generations.
As businesses, we need a clear long-term framework at European level to catalyse investments. This is why the governance of the Energy Union matters. We need predictability and confidence. It is not rocket science: we need know that the EU is serious about its climate commitments and that, as a result, the market for energy efficient technologies will steadily grow in Europe. Consequently, we should also be clear about how to ensure that all member states comply. After all, the overall ‘spirit’ that the Clean Energy for All Europeans package radiates is that moving forward with the required ambition level will bring a wide range of benefits for all EU member states.
There is no time for ambiguity. In the Clean Energy package, the Commission indicates that Europe’s energy sector needs to attract €379 billion of investment each year between 2020 and 2030 to reach the 2030 targets. This means almost tripling the current investment level of €130bn per year. To help bridge this gap, the Energy Union governance framework needs to:
- Ensure that national targets add up to EU targets;
- Clear any doubt about the delivery of these targets;
- Provide clarity about national policies post-2020;
- Deliver efficiency first.
The lack of national targets creates uncertainties about the potential of national markets. Energy Union governance usefuly provides some – if limited – clarity by setting out what happens if member states’ pledges do not add up to the EU target. National binding targets are the ideal solution, but in their absence the Commission made the right move in proposing a binding energy efficiency target. It is the prerequisite for the targets to have any credibility at all, as the governance to support their delivery depends on it.
Moreover, the Commission needs to have a clear mandate to ask the least ambitious member states to raise their contributions. Other mechanisms can be imagined but there should be no doubt about the Commission’s willingness to make it work.
Similarly, there should be no doubt about the member states delivering their national plans. The climate and energy plans need to be monitored and any deviation from the national trajectories corrected as soon as possible by the member states if the plans are to be more than words on paper.
A timely delivery on the policy objectives will have an immediate positive impact on investment decisions and encourage ambitious long-term strategies.
With regard to current policies and measures, we take a cautiously optimistic approach: they proved to work but badly need to be strengthened. Despite the economic growth that happened over the past almost thirty years, we consume as much energy as we did in 1990. We succeeded to a large extent in decoupling growth from energy consumption. So we are doing well – but we could be doing better. Closing the existing loopholes will boost Europe’s competitiveness and make us more resilient to energy price fluctuations.
We want to see these policies continued, reinforced and, critically, steadily implemented over time as more energy efficiency can be achieved by accelerating the renovation of infrastructure, in particular buildings, and this will create between 1 and 1.5 million local jobs. Regulatory changes and backtracking on agreed objectives can have disastrous market consequences, as the renewable industry has experienced in some cases in the recent past.
Finally, the Commission needs to deliver on its promise to put efficiency first. Demand-side management and energy efficiency should compete on an equal footing with supply-side alternatives. It makes sense to compare all options and chose the best one, yet this is currently not always the case. Energy efficiency and demand-side management are suffering from policy-makers’ bias towards building new pipelines or additional capacity, while this might not always be the most cost-effective choice.
It starts by treating energy efficiency as an infrastructure, comparing it with alternatives (e.g. adding more power capacity) and taking the best investment decisions to avoid ending up with stranded assets. It continues with empowering local actors by lifting accounting, legal and financial barriers that hinder the delivery of the ambitious Sustainable Energy and Climate Action Plans. It ends with holding member states accountable for how they integrate efficiency in their plans and requiring the Commission to map out what efficiency first means at EU level.