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Energy Fudge Not All Bad

by afew Fri Feb 16th, 2007 at 09:00:23 AM EST

A Council of the European Union meeting was held yesterday on energy, particularly on the proposals made by the Commission in An Energy Policy for Europe (see here and here). [A word of explanation: the Council is made up of ministers of the Member States -- in this case, specifically concerned with energy questions -- and their function is to take decisions and provide for implementation of Commission proposals.]

The meeting was presided by German economy minister Michael Glos who afterwards commented:

The longest journey begins with the first step - that is how we will have to progress here.

Or, according to Polish economy minister Piotr Wozniak:

It's not exactly written in the language of directives. It's a little bit more general and descriptive than we would have liked.

In fact, the summary released for the press (pdf) contains a lot of fluff and kicking of cans down the road. Some of that's a pity, some isn't.

An overall good point:

The Council ... supports ambitious overall EU targets for reducing greenhouse gas emissions for 2020 as a key component of the global action required to achieve this climate change objective, taking into account national circumstances. The Council acknowledges that the impacts of dangerous climate change resulting from increased greenhouse gas emissions would have grave consequences, inter alia for global economic development, and therefore underlines the need for an integrated climate and energy policy, in a mutually supportive way.

However (from EUObserver):

The European Commission's most ambitious energy proposal - for the EU to stick its neck out with a binding, unilateral target to cut CO2 emissions by 20 percent by 2020 - will be discussed by environment ministers next Tuesday, with one EU diplomat saying "we are optimistic this will be achieved."

Another good point, a bit more precise though still vague (Council press release):

[The Council] calls for a thorough and rapid implementation of the ambitious five main priorities as highlighted in the Council conclusions of 23 November 20061 on the Commissionís Action Plan on Energy Efficiency, relating to energy-efficient transport, dynamic minimum efficiency requirements for energy using equipment, energy efficient and energy saving behaviour of energy consumers, energy technology and innovations and the energy savings from buildings

So: recognition of climate change and the need for reduction of GHG emissions; and support for the Commission's (in fact fairly ambitious) energy efficiency proposals. But there was a lack of agreement on renewables (EUObserver):

More than 10 member states led by Sweden and Denmark were keen to sign up to a binding target of 20 percent renewable energy consumption at EU level by 2020, but the rest, including the UK and Poland, declined amid confusion on the impact of industrial reforms individual states would have to make to hit the overall EU goal.
However, among the renewables are biofuels, and there there seemed to be some agreement not to fall into the trap of making binding the target of 10% by 2020 (Council press release, my bold):

a 10 % binding minimum target to be achieved by all Member States for the share of biofuels in overall EU transport petrol and diesel consumption by 2020, to be introduced in a cost-efficient way. The binding character of this target is appropriate subject to production being sustainable, second-generation biofuels becoming commercially available and the Fuel Quality Directive being amended accordingly to allow for adequate levels of blending.

"Production being sustainable" is a big question. As we've seen at ET, domestic production of biofuels on a scale sufficient to supply even the voluntary 2010 target of 5.75% brings land-use conflict with food production. Neither can intensive irrigated maize monocropping be called sustainable. The result is bound to be massive imports of ethanol from Brazil and palm oil from Indonesia/Malaysia, both based on widescale monoculture plantations replacing slash-and-burned rainforest. The mention of "second-generation" biofuels as a condition for future biofuel use in the EU is reasonable since these are fuels obtained from cellulose, and the feedstocks (wood, grass) can be obtained in a sustainable manner on marginal land. (Though it should be clear there are limits to the sustainability of that too -- by no means will we ever supply the colossal amounts of liquid fuel currently used for transport, with cellulose-based ethanol).

So -- were the energy ministers advised by their technical staff that first-generation biofuels were a pipe-dream? At least, it seems no countries were fighting in favour of what looks like a pie-in-the-sky target...

We can feel a certain degree of satisfaction there, and -- though this outcome was more predictable -- also with the kick for touch on unbundling, or the break-up of "national champions" to produce a neo-lib competitive market dream. (EUObserver):

Member states also fudged the question of ownership unbundling, with the commission last month suggesting that national energy champions such as Germany's E.ON or France's EDF should be broken down into smaller pieces because they stifle competition and investment.

The EU capitals endorsed the general principle of "effective separation of supply and production activities." But they did not commit to any specific legal model, asking Brussels to do more homework on questions such as: would EU unbundling give the edge to predatory outside firms, such as Russia's Gazprom, in future?

(The official press release doesn't mention Gazprom, it says: vertically integrated energy companies from third countries... ;))

To sum up, the Council (and it's the Council that takes the decisions, not the Commission) doesn't seem eager to rush after the Commission in some of its more naÔve (biofuels) and ideologically-determined (liberalised market) policy directions. Never mind the fluff, it's not all bad.

Thanks for the clear summary, afew.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Feb 16th, 2007 at 09:32:30 AM EST
Catch the monkey. Excellent breakdown, afew, and I father from it there seems impetus towards a direction I like. Together with the halt (for now) on unbundling energy companies, as Jerome reported this morning, this seems like a good Friday.
by Nomad on Fri Feb 16th, 2007 at 10:08:55 AM EST
Very good afew..

I have always defended that the OCmission of the proposals ahs more light than shadows...although it is very specific on targets regarding privatizaition... they are not set in stone... furthermore, regarding CO2 prodcution, it presents ambityions targets where multiple frameworks can be created.

I would ahve liked an specific framework proposal like strengthening and clarifying the present scheme of Co2 cost... but now states coudl talk about strong taxes.. or wahtever they wish..

Regarding biofuels... I am still hoping some research down there in Extremadura about biofuels coudl use non-eatable crops as buel.. adn reach 7% or even 10%. Further thatn that.. it seems impossible.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Fri Feb 16th, 2007 at 11:32:38 AM EST
That's better than what I would havew expected of 'em. Thanks for the digest!

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sun Feb 18th, 2007 at 12:57:18 PM EST

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