'20 20 by 2020' says Europe

23 January 2008

The European Commission has made long-awaited proposals on energy and climate change. By 2020 it wants a 20% cut in carbon dioxide emissions, and 20% of energy to come from renewables.

"Europeans want a vision, and a plan of action," said European Commission President Manuel Barroso when announcing the 'package'.

The draft legislation follows on from a March 2007 agreement outlining the same aims. The new proposals contain five main strands: the imposition of "specific, binding national targets" for each of the 27 European Union member countries for greenhouse emissions; mandatory targets for the percentage of renewables in each country's total energy consumption; an overhaul of the existing carbon dioxide emissions trading scheme; a proposed law on carbon capture and storage (CCS); and new state aid rules.

Europe should cut its own emissions by 20% by 2020, and be ready to "step up to 30% with international agreement," Barroso said.

The renewable energy targets, is to reflect each country's economic potential to produce energy from sources such as wind, solar, geothermal or hydropower. The targets are for shares of consumption, not installed capacity, and countries will be able to purchase renewable energy from other EU countries to help meet their targets. Nuclear energy is not included in the list of renewables, which begs the question: what will happen in countries that already generate a large proportion of their energy from carbon-free nuclear? Reports prior to the EC announcement have suggested that France would face a requirement to achieve a 23% share of renewable energy by 2020, Germany a likely 20% target and Sweden a 50% target. France already generates some 78% of its electricity by nuclear and Sweden close to 50%.

A statement from Scandinavian generator Fortum said increasing renewable shares from a high starting point would be "challenging" and that "the targets cannot be achieved without considerable support." Cost for the society and energy consumers will be high and consequences for the fuel and energy market remain unclear. "Therefore, it is crucial to design the support schemes so that they are market based and efficient," concluded Fortum CEO Mikael Lilius.

With respect to a 10% target for biofuels use, Barroso made clear his commission had "fully respected the other side of the mandate" - "the need for environmental sustainability." Biofuels have come under fire recently because the demand for land to produce biofuel has harmed food supplies and even affected forestry.

Levelling the playing field

The change to a system of auctioning all carbon dioxide emissions allowances, currently distributed to industry free of charge, would come into force for seven years from 2013. Richer member states would be expected to carry a heavier burden than poorer countries, with some central and eastern European countries being allowed to increase their emissions.

The cost of this, according to Barroso would be Eur3 per week for every European - less that 0.5% of GDP. Italian MEP Alessandro Foglietta put this at Eur60 billion ($87 billion) and, noting the details of the proposals were not yet known, complained that measures did not cover transport or housing. Foglietta said that Europe's leading role in the fight against climate change was beyond question and he wanted that role to be reflected in the actions of Europe's global rivals.

In favour of nuclear energy spoke Jana Bobsikova of the Czech Republic, who said that Europe should work to promote awareness of what nuclear energy can do in generating baseload power without carbon dioxide emissions. She said "reasonable governments like Finland and the UK are doing this." Gunnar Hokmark of Sweden said that although today's announcement was on renewables, it was his belief that if Europe makes full use of them, it must not phase out nuclear power and "consume its [nuclear power's] achievements in the fight against carbon dioxide." He concluded: "We need both."

Capturing carbon

The new directive brings carbon capture and storage (CCS) to the fore. Carbon dioxide that is captured and stored will be credited as not emitted under the emissions trading scheme, and all EU members will have to ensure that new carbon-emitting power plants will have suitable onsite space for the storage of compressed carbon dioxide. Whether CCS on a large scale will be technically or economically viable within the timescale of the legislation is a moot point.