Energy policy of the European Union
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The EU Treaty of Lisbon of 2007 legally includes solidarity in matters of energy supply and changes to the energy policy within the EU. Prior to the Treaty of Lisbon, EU energy legislation has been based on the EU authority in the area of the common market and environment. However, in practice many policy competencies in relation to energy remain at national member state level, and progress in policy at European level requires voluntary cooperation by members states.[8]
In 2007, the EU was importing 82% of its
The European Investment Bank took part in energy financing in Europe in 2022: a part of their REPowerEU package was to assist up to €115 billion in energy investment through 2027, in addition to regular lending operation in the sector.[12] In 2022, the EIB sponsored €17 billion in energy investments throughout the European Union.[13][14]
The history of energy markets in Europe started with the
History
Early days
The history of
In the late 1980s, the
Start of an internal market
The 1992
Renewable energy and the 20/20/20 target
In 2001, the first Renewable Energy Directive was passed, in the context of the 1997 Kyoto Protocol against climate change. It included a target of doubling the share of renewable energy in the EU's energy mix from 6% to 12% by 2010. The increase for the electricity sector was even higher, with a goal of 22%. Two years later a directive was passed which increased the share of biofuels in transport.[19]
These directives were replaced in 2009 with the
Energy Union
The Energy Union Strategy is a project[21][22] of the European Commission to coordinate the transformation of European energy supply. It was launched in February 2015, with the aim of providing secure, sustainable, competitive, affordable energy.[23]
Donald Tusk, President of the European Council, introduced the idea of an energy union when he was Prime Minister of Poland. Eurocommissioner Vice President Maroš Šefčovič called the Energy Union the biggest energy project since the European Coal and Steel Community.[24] The EU's reliance on Russia for its energy, and the annexation of Crimea by Russia have been cited as strong reasons for the importance of this policy.
The European Council concluded on 19 March 2015 that the EU is committed to building an Energy Union with a forward-looking climate policy on the basis of the commission's framework strategy, with five priority dimensions:
- Energy security, solidarity and trust
- A fully integrated European energy market
- Energy efficiency contributing to moderation of demand
- Decarbonising the economy
- Research, innovation and competitiveness.[11][25]
The strategy includes a minimum 10% electricity interconnection target for all member states by 2020, which the Commission hopes will put downward pressure onto energy prices, reduce the need to build new power plants, reduce the risk of black-outs or other forms of electrical grid instability, improve the reliability of renewable energy supply, and encourage market integration.[26]
EU Member States agreed 25 January 2018 on the commission's proposal to invest €873 million in clean energy infrastructure.[27] The projects are financed by CEF (Connecting Europe Facility).[28]
- €578 million for the construction of the Biscay Gulf France-Spain interconnection, a 280 km long off-shore section and a French underground land section. This new link will increase the interconnection capacity between both countries from 2.8 GW to 5 GW.[29]
- €70 million to construct the SüdOstLink, 580 km of high-voltage cables laid fully underground. The power line will create an urgently needed link between the wind power generated in the north and the consumption centres in the south of Germany.
- €101 million for the CyprusGas2EU project to provide natural gas to Cyprus
European Green Deal
The
The president of the European Commission, Ursula von der Leyen, stated that the European Green Deal would be Europe's "man on the moon moment".[31] Von der Leyen appointed Frans Timmermans as Executive Vice President of the European Commission for the European Green Deal. On 13 December 2019, the European Council decided to press ahead with the plan, with an opt-out for Poland.[32] On 15 January 2020, the European Parliament voted to support the deal as well, with requests for higher ambition.[33] A year later, the European Climate Law was passed, which legislated that greenhouse gas emissions should be 55% lower in 2030 compared to 1990. The Fit for 55 package is a large set of proposed legislation detailing how the European Union plans to reach this target, including major proposal for energy sectors such as renewable energy and transport.[6]
After the Russian invasion of Ukraine, the EU launched REPowerEU to quickly reduce import dependency on Russia for oil and gas. While the policy proposal includes a substantial acceleration for renewable energy deployment, it also contains expansion of fossil fuel infrastructure from alternative suppliers.[7]
Earlier proposals
The possible principles of Energy Policy for Europe were elaborated at the commission's green paper A European Strategy for Sustainable, Competitive and Secure Energy on 8 March 2006.[34] As a result of the decision to develop a common energy policy, the first proposals, Energy for a Changing World were published by the European Commission, following a consultation process, on 10 January 2007.
It is claimed that they will lead to a 'post-industrial revolution', or a low-carbon economy, in the European Union, as well as increased competition in the energy markets, improved security of supply, and improved employment prospects. The commission's proposals have been approved at a meeting of the European Council on 8 and 9 March 2007.[35]
Key proposals[36] include:
- A cut of at least 20% in greenhouse gas emissions from all primary energy sources by 2020 (compared to 1990 levels), while pushing for an international agreement to succeed the Kyoto Protocol aimed at achieving a 30% cut by all developed nations by 2020.
- A cut of up to 95% in carbon emissions from primary energy sources by 2050, compared to 1990 levels.
- A minimum target of 10% for the use of biofuels by 2020.
- That the energy supply and generation activities of energy companies should be 'unbundled' from their distribution networks to further increase market competition.
- Improving energy relations with the EU's neighbours, including Russia.
- The development of a European Strategic Energy Technology Plan to develop technologies in areas including renewable energy, carbon capture and sequestration(CCS).
- Developing an Africa-Europe Energy partnership, to help Africa 'leap-frog' to low-carbon technologies and to help develop the continent as a sustainable energy supplier.
Many underlying proposals are designed to limit global temperature changes to no more than 2 °C above pre-industrial levels,
In 2014, negotiations about binding EU energy and climate targets until 2030 are set to start.[42][43] European Parliament voted in February 2014 in favour of binding 2030 targets on renewables, emissions and energy efficiency: a 40% cut in greenhouse gases, compared with 1990 levels; at least 30% of energy to come from renewable sources; and a 40% improvement in energy efficiency.[44]
Current policies
Energy sources
Under the requirements of the
Europe spent €406 billion in 2011 and €545 billion in 2012 on importing
For over a decade, the European Investment Bank has managed the European Local Energy Assistance (ELENA) facility on behalf of the European Commission, which provides technical assistance to any private or public entity in order to help prepare energy-efficient and renewable energy investments in buildings or innovative urban transportation projects.[49][50] The EU Modernisation Fund, formed in 2018 as part of the new EU Emissions Trading System (ETS) Directive and with direct engagement from the EIB12, targets such investments as well as energy efficiency and a fair transition across 10 Member States.
The
As part of the REPowerEU Plan, the European Union has significantly decreased its reliance on Russian gas by reducing imports from 45 percent in 2021 to 15 percent in 2023, while also achieving a near 20 percent reduction in overall gas usage. By March 31, EU natural gas storage levels reached over 58 percent, the highest for this period, supported by regulatory measures that mandate storage facilities to maintain at least 90 percent capacity by November each year. These strategies are part of the EU's broader efforts to diversify energy sources and increase sustainability, aligning with investments in renewable energy and efficiency enhancements across member states.[52]
Energy markets
The EU promotes
The 2004 Gas Security Directive[53] has been intended to improve security of supply in the natural gas sector.
Energy efficiency
Energy taxation
IPEEC
At the Heiligendamm Summit in June 2007, the G8 acknowledged an EU proposal for an international initiative on energy efficiency tabled in March 2007, and agreed to explore, together with the International Energy Agency, the most effective means to promote energy efficiency internationally. A year later, on 8 June 2008, the G8 countries, China, India, South Korea and the European Community decided to establish the International Partnership for Energy Efficiency Cooperation, at the Energy Ministerial meeting hosted by Japan in the frame of the 2008 G8 Presidency, in Aomori.[54]
Buildings
Buildings account for around 40% of EU energy requirements and have been the focus of several initiatives.
As part of the EU's
Transport
EU policies include the voluntary ACEA agreement, signed in 1998, to cut carbon dioxide emissions for new cars sold in Europe to an average of 140 grams of CO2/km by 2008, a 25% cut from the 1995 level. Because the target was unlikely to be met, the European Commission published new proposals in February 2007, requiring a mandatory limit of 130 grams of CO2/km for new cars by 2012, with 'complementary measures' being proposed to achieve the target of 120 grams of CO2/km that had originally been expected.[61][62]
In the area of fuels, the 2001
Flights
Airlines can be charged for their greenhouse gas emissions on flights to and from Europe according to a court ruling in October 2011.[63]
Historically, EU aviation fuel was tax free and applied no VAT. Fuel taxation in the EU was banned in 2003 under the Energy Taxation Directive, except for domestic flights and on intra-EU flights on the basis of bilateral agreements. No such agreements exist.[64]
In 2018 Germany applied 19% VAT on domestic airline tickets. Many other member states had 0% VAT. Unlike air travel, VAT is applied to bus and rail, which creates economic distortions, increasing demand for air travel relative to other forms of transport. This increases aviation emissions and constitutes a state aid subsidy. Air fuel tax 33 cents/litre equal to road traffic would give €9.5 billion. Applying a 15% VAT in all air traffics within and from Europe would be equal to €15 billion.[citation needed]
Industry
The
Consumer goods
A further area of energy policy has been in the area of consumer goods, where energy labels were introduced to encourage consumers to purchase more energy-efficient appliances.[66]
External energy relations
Beyond the bounds of the European Union, EU energy policy has included negotiating and developing wider international agreements, such as the
The EU-Russia energy cooperation will be based on a new comprehensive framework agreement within the post-
For ensuring efficient follow-up and coherence in pursuing the initiatives and processes, for sharing information in case of an external energy crisis, and for assisting the EU's early response and reactions in case of energy security threats, the network of energy correspondents in the Member States was established in early 2007. After the Russian-Ukrainian Gas Crisis of 2009 the EU decided that the existing external measures regarding gas supply security should be supplemented by internal provisions for emergency prevention and response, such as enhancing gas storage and network capacity or the development of the technical prerequisites for reverse flow in transit pipelines.[68][69]
Just Transition Fund
Just Transition Fund (JTF) was created in 2020 to boost investments in
Solar anti-dumping levies
In 2013, a two-year investigation by the European Commission concluded that Chinese solar panel exporters were selling their products in the EU up to 88% below market prices, backed by state subsidies. In response, the European Council imposed tariffs on solar imported from China at an average rate of 47.6% beginning 6 June that year.[72][73]
The Commission reviewed these measures in December 2016 and proposed to extend them for two years until March 2019. However, in January 2017, 18 out of 28 EU member states voted in favour of shortening the extension period. In February 2017, the commission announced its intention to extend its anti-dumping measures for a reduced period of 18 months.[74][75]
Research and development
The European Union is active in the areas of energy research, development and promotion, via initiatives such as
SET Plan
The
The SET plan initiatives included a
Public opinion
In a poll carried out for the European Commission in October and November 2005, 47% of the citizens questioned in the 27 countries of the EU (including the 2 states that joined in 2007) were in favour of taking decisions on key energy policy issues at a European level. 37% favoured national decisions and 8% that they be tackled locally.[80]
A similar survey of 29,220 people in March and May 2006 indicated that the balance had changed in favour of national decisions in these areas (42% in favour), with 39% backing EU policy making and 12% preferring local decisions. There was significant national variation with this, with 55% in favour of European level decision making in the Netherlands, but only 15% in Finland.[81]
A comprehensive public opinion survey was performed in May and June 2006.[82] The authors propose following conclusions:
- Energy issues are considered to be important but not at first glance.
- EU citizens perceive great future promise in the use of renewable energies. Despite majority opposition, nuclear energy also has its place in the future energy mix.
- Citizens appear to opt for changing the energy structure, enhancing research and development and guaranteeing the stability of the energy field rather than saving energy as the way to meet energy challenges.
- The possible future consequences of energy issues do not generate deep fears in Europeans' minds.
- Europeans appear to be fairly familiar with energy issues, although their knowledge seems somewhat vague.
- Energy issues touch everybody and it is therefore hard to distinguish clear groups with differing perceptions. Nevertheless, rough distinction between groups of citizens is sketched.
Example European countries
Germany
In September 2010, the German government adopted a set of ambitious goals to transform their national energy system and to reduce national greenhouse gas emissions by 80 to 95% by 2050 (relative to 1990).[83] This transformation became known as the Energiewende. Subsequently, the government decided to the phase-out the nation's fleet of nuclear reactors, to be complete by 2022.[84] As of 2014, the country is making steady progress on this transition.[85]
See also
- CHP Directive
- Directorate-General for Energy
- Energy Charter Treaty
- Energy Community
- Energy diplomacy
- Energy in Europe
- EU Energy Efficiency Directive 2012
- European Climate Change Programme
- European Commissioner for Energy
- European countries by electricity consumption per person
- European countries by fossil fuel use (% of total energy)
- European Ecodesign Directive
- European Pollutant Emission Register(EPER)
- Global strategic petroleum reserves
- Internal Market in Electricity Directive
- INOGATE
- List of electricity interconnection level
- Renewable energy in the European Union
- Special economic zone
- Transport in Europe
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External links
- Official website
- European information campaign on the opening of the energy markets and on energy consumers' right.
- European Strategic Energy Technology Plan, Towards A Low CarbonFuture.
- Eurostat – Statistics Explained – all articles on energy
- ManagEnergy, for energy efficiency and renewable energies at the local and regional level.
- BBC Q&A: EU energy proposals
- 2006 Energy Green Paper
- Collective Energy Security: A New Approach for Europe
- Berlin Forum on Fossil Fuels.
- Netherlands Environmental Assessment Agency – Meeting the European Union 2 °C climate target: global and regional emission implications
- German Institute for International and Security Affairs – Perspectives for the European Union's External Energy Policy
- Wiley Interdisciplinary Reviews -- (open access)Dupont, C., et al. (2024). Three decades of EU climate policy: Racing toward climate neutrality? WIREs Climate Change, 15(1), e863.
In the media
- 8 Sep 2008 New Europe (neurope.eu) : Energy security and Europe.
- 10 Jan 2007, Reuters: EU puts climate change at heart of energy policy
- 14 Dec 2006, opendemocracy.net: Russia, Germany and European energy policy
- 20 Nov 2006, eupolitix.com: Barroso calls for strong EU energy policy