One year on:
how does the Energy Union
Strategy fare against the COP 21
commitments?
Reaching an ambitious global agreement at the COP21 in Paris was stressed throughout
2015 as being the key objective for the Commission. Commission President Juncker
described the agreement reached on 12 December 2015 at the UNFCCC as a success for the
European Union. The question is, however, what will the real impact of the Paris Agreement
be on EU policies? This is especially true as the Commission works on the year of delivery
for the Energy Union…
A few weeks ago, the European Commission
celebrated the first anniversary of one of the
Juncker Commission’s 10 political priorities:
the Framework Strategy for a Resilient Energy
Union with a Forward-Looking Climate
Change Policy – a flagship initiative that the
Commission in office hopes will be a marker
of their term’s success.
This is particularly relevant in the current
context of tense political debates and interinstitutional
relations,
where
delivering
outcomes with a direct, tangible and positive
impact on Member States, industry and
citizens is more than ever a much sought after
quality in EU policymaking. The Energy Union
is one of the few sectorial initiatives enjoying
broad support from Member States, industry
and civil society and where the Commission
believes that the EU can show concrete
outcomes.
The first 12 months following the publication of
the Energy Union Strategy were indeed busy
from a policy standpoint. Yet, the “Year of
Delivery” has just begun, so much more is to
be expected.
2015 was a year in which the Commission
focused a great deal of attention on aligning
its efforts to deliver on the objectives of the
Energy Union, while presenting a first series
of policy and legislative proposals included in
the Strategy. These included a proposal to
review the EU Emissions Trading System
(ETS) – the cornerstone of EU climate
legislation – as well as the review of the
Energy
Labelling
Directive
and
two
Communications built upon the founding
principles of the Energy Union: putting
consumers at the centre of energy policies
and further consolidating the EU Internal
Energy
Market.
These
were
the
Communication on delivering a new deal for
energy consumers and the Communication
launching the public consultation on the
energy market design.
This culminated in the State of the Energy
Union Report in November, which provided a
stock take of the actions undertaken by the
Commission
until
then.
Stakeholders’
reactions to the Report were mainly positive,
although the sense of achievement was
pending the delivery of a positive and
ambitious outcome from the December 2015
UNFCCC Conference in Paris.
A Weber Shandwick Memo / April 2016 / Page 1
It is clear that the Commission intends to
expend considerable political capital in
delivering these initiatives – and indeed the
promises the EU made in Paris.
With the latter in mind the Commission
adopted a major Energy Security Package in
February 2016. This focuses on the core
principles of security of supply, energy
efficiency and – as criticised by many and
praised by others – on gas. The Package also
included two new sectorial Strategies, on
Heating and Cooling and on LNG and gas
storage, which set the basis for a number of
additional policy and legislative initiatives that
will see the light in the coming months.
In fact, the lack of addressing energy
efficiency and the role of renewables in the
Heating and Cooling sector is seen as one of
the major gaps in the EU’s climate and energy
work up to now. The Heating and Cooling
Strategy aims to set the scene for ambitious
upcoming legislative reviews: the Renewable
Energy Directive, the Energy Performance of
Buildings Directive and the Energy Efficiency
Directive, as well as the Electricity Market
Design Reform and the Energy Union
Governance.
The LNG Strategy on the other hand is linked
to the increasing potential of this energy
source, aiming to address the gaps in EU
infrastructure and to ensure a diverse and
liquid gas market. Also, the Commission
clearly states that they believe natural gas will
play a key role in contributing to
decarbonisation by easing the coal-to-gas
switch, as well as the switch away from heavy
fuel oils in certain transport sectors. Coming
so soon after Paris, the focus on gas and
increasing gas flow into the EU has raised
some eyebrows, but the Commission sees
these elements as necessary measures for
the rebalancing of the EU energy market.
Many questions about the future of EU energy
and climate policies are yet to be answered,
especially as regards the Commission’s plans
to set up a new Energy Union Governance
framework. With two out of the three key
energy and climate targets for 2030 not being
translated into national objectives – the
targets at the EU level of at least 27% for
improving energy efficiency and reaching at
least 27% for the share of renewable energy
consumed in the EU in 2030 – the
Commission will have to provide a system to
ensure that joint progress is made towards
meeting the common EU goals.
The implications of the Paris Climate Agreement and its impact on upcoming EU Policies
A key victory was said to be the full
endorsement of the goal to limit temperature
rise to well below 2°C – and to ‘pursue efforts’
to limit the temperature increase to 1.5°C.
Also noteworthy is the aim to ‘reach global
peaking of greenhouse gas emissions as soon
as possible, with an agreement to review the
pledges every five years. However, there are
questions about how far the Paris Agreement
will take us, given that there are no real legally
binding measures for the Parties.
So where does this leave EU climate and
energy policy? On the one hand, the
Agreement has given a boost to the
Commission – a failure to find an agreement
could have thrown all their plans into disarray.
In addition, the Commission views COP21
and Climate and Energy policy as positive
stories, where they can demonstrate real EU
impact both in terms of effective diplomacy
and concrete policy. Given the general
support to the Paris Agreement, the
Commission’s main priority is now to deliver
the legislation they have promised. This
means, for example, that Vice-President
Šefčovič and Commissioner Arias Cañete are
reluctant to rock the boat and go further than
the 2014 European Council regarding the
2030 energy and climate objectives. This is
despite calls from the European Parliament
and many Member States to increase targets.
Calls to increase ambition are linked to how
EU policies now measure up against a
potential 1.5°C limit, particularly with respect
to the reform of the European Emissions
A Weber Shandwick Memo / April 2016 / Page 1
Weber Shandwick / One year on… How does the Energy Union package fare against the COP 21
commitments
Trading System. Current projections indicate
that the reformed ETS alone is unlikely to
deliver enough reductions to stay below
1.5°C, but the Commission continues to stress
that they do not have the necessary analysis
to propose a new course of action. Instead,
their stated intention is to prepare an analysis
of what will be necessary to achieve the 2050
goals. Commissioner Arias Cañete has also
stressed the significance of the 2018 global
stocktake, which will address progress
towards achieving climate objectives. Based
on this, the EU may have to consider whether
or not to submit revised targets by 2023 as
foreseen in the review mechanism under the
Paris Agreement.
Therefore, it is unlikely that there will be any
further proposals for the EU ETS reform in the
short term, but new proposals are possible
post 2020. In addition, there have been
signals that the Commission may attempt to
step up the ambition of upcoming legislative
reviews, potentially including those concerning
the Energy Efficiency and Renewable Energy
Directives.
The Paris Agreement has given the
Commission a clear mandate to proceed with
their climate initiatives. However it is also true
that although Paris did exceed many
expectations, it is still open to criticism as to
its future effectiveness. This in turn leads to
two levels of tension: first regarding whether
or not the overall ambition will be enough to
limit the temperature rise; second regarding
the lack of a global level playing field for
industry on climate regulation. To navigate
these tensions, the Commission is highly likely
to stick to their agreed course of action with
some tweaks along the way, but this also hints
at some heated debates ahead.
A look ahead to 2017
With the Summer and Energy Security
Packages on the co-legislator’s table and the
implications of the Paris Climate Agreement
being assessed, the Commission has now
turned its focus to the remaining legislative
and policy initiatives needed to deliver the
Energy Union Strategy. Decarbonisation is the
umbrella theme as the Commission explores
ways to address emissions from key sectors
not included under the ETS. By translating the
2030 targets into legislation, energy efficiency
and sustainability initiatives for non-ETS
sectors (such as transport, buildings or
agriculture), currently responsible for 55% of
the EU’s total emissions, will ultimately
contribute to the overarching decarbonisation
objective of 40%.
The framework for non-ETS sectors, including
transport, buildings, agriculture and waste, will
be revamped with the proposal for a new
Effort
Sharing
Decision
(ESD).
The
Commission will however be challenged to
ensure a balanced contribution between the
sectors,
while
simultaneously
allowing
sufficient flexibility for Member States to take
the local context into account. This is
increasingly relevant as Member States
reduce emissions from the non-ETS sectors,
while implementing horizontal policies aimed
at
enhancing
energy
efficiency
and
sustainability.
With the Energy Efficiency Package, the
Commission will update the overall energy
efficiency framework, including the headline
target of 27-30%, as well as directly targeting
the energy performance of buildings and the
ecodesign and labelling of products. This set
of legislative proposals should contribute to
mainstreaming the ‘Energy Efficiency First’
principle. The Renewable Energy Package,
which will implement an EU-level binding
target of 27% renewable energy by 2030 and
A Weber Shandwick Memo / April 2016 / Page 3
Weber Shandwick / One year on… How does the Energy Union package fare against the COP 21
commitments
address waste to energy and bioenergy
sustainability, will have to be aligned with the
energy efficiency policy, for example when it
comes to decarbonising the heating and
cooling sector.
The need to reconcile energy efficiency with
renewable energy should feature strongly in
the market design proposal, which will seek to
change the fundamentals of the internal
energy market. The Commission aims to
make energy consumption more flexible and
facilitate the decentralisation of energy
production, empowering the consumer
through demand-side response abilities and
integrating on-site and district-level renewable
energy production into the system.
In a European economy still recovering from
the financial crisis, promoting cost-effective
mitigation
will
remain
of
paramount
importance, not only in promoting energy
efficiency and renewable energy measures,
but also between different non-ETS sectors.
The Commission will, for example, present a
proposal to include for the first time land use,
land use change and forestry (LULUCF) under
the 2030 framework. Yet how will it ensure a
fair and equitable distribution in emissions
mitigation requirements between Member
States, recognising local differences and
allowing sufficient flexibility?
A similar dilemma can be witnessed in the
approach to transport. The Communication on
the decarbonisation of transport and the
Action Plan on Alternative Fuels will define
how the sector can contribute and will include
a range of options for decarbonisation at EU
and
national
level.
However,
costeffectiveness demands technology neutrality
to be maintained, with an agnostic and
harmonised EU framework to enable
differentiated action by Member States.
This cost-effectiveness will also have to
feature in the long-term decarbonisation
horizon, as well as in the overall governance
of the Energy Union by allowing Member
States sufficient flexibility. The Commission
will present its Energy Union Integrated
Strategy on Research, Innovation and
Competitiveness,
which
will
include
decarbonisation pathways to 2050 and
beyond. This may also feed into the Second
State of the Energy Union Report, for which
the Commission is considering countryspecific recommendations and a legislative
proposal on Energy Union Governance.
These initiatives assess the implementation of
the Energy Union and lay down the rules for
its governance, ultimately determining the
long-term viability of this flagship initiative.
At a time when Parliament insists on
increasing the level of ambition of upcoming
proposals – while Council seems reluctant to
go beyond its 2014 Conclusions – a major
challenge for the Commission will be to
guarantee that any overlap of the initiatives
does not lead to adverse effects on the costeffectiveness of the measures promoted and
the security of the energy system at large.
A Weber Shandwick Memo / April 2016 / Page 4
Weber Shandwick / One year on… How does the Energy Union package fare against the COP 21
commitments
About Weber Shandwick’s Energy and Climate Practice
Through our portfolio of clients, we have long-standing experience in designing and executing
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and associations in the energy, climate and environment sectors. Putting the client at the centre
of our work, we combine our advisory capacity in a range of disciplines and services designed
to enhance our clients’ ability to identify and explore the most effective engagement strategies
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Ranging from global integrated energy companies, green innovators, renewable energy and
conventional and unconventional hydrocarbon producers, energy-intensive industries or climate
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has become a fiercely competitive and emotive environment.
Firm believers in the integration of interest representation, we also have extensive experience in
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level.
Weber Shandwick has a proven record in promoting flagship climate technologies or alternative
transport fuels, averting regulatory threats for energy producers at European and national level
and broadly representing clients’ interests in the EU energy and climate policy fora.
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