25 July 2016

  |  CBI Updates Team


EU Energy & Climate Change Policy: A busy summer, with more to come over the autumn

Following a lot of activity on EU energy and climate change policy over the summer, the European Commission has more initiatives coming up in the next six months which will impact on national policy. 

EU Energy & Climate Change Policy: A busy summer, with more to come over the autumn

In the midst of a busy summer, the European Commission has much activity planned in the energy and climate change space towards the end of the year – and while the UK plans its exit from the EU, we will remain a part of the policy making process. It is not yet certain which of these initiatives will continue to affect the UK, so is it important that we remain engaged in the debate. 

Since the adoption of the Paris Agreement at the end of last year, and its signature in New York on 22 April, the European Commission has been preparing several proposals to reach the EU’s commitments. Last month, it presented a proposal to the Council to ratify the Paris Agreement. The Agreement needs to be ratified by 55 countries representing at least 55% of global greenhouse gas (GHG) emissions in order to enter into force. 

While the post-2020 reform of the EU Emissions Trading System (ETS) is being negotiated in the European Parliament, on 20 July the European Commission released its Summer Package with proposals on the Effort Sharing Decision (ESD), which will distributes climate targets to each Member States in order to decarbonise the non-ETS sectors. These sectors include transport (except aviation and maritime shipping), buildings, agriculture and waste. The overall target is a 30% reduction on 2005 emissions levels by 2030. The UK’s share of this will be 37% - equivalent to a 45% reduction on 1990 levels. The domestically agreed Fifth Carbon Budget has now been legislated and commits the UK to cutting emissions by 57% on 1990 levels, which goes further than the proposed ESD. 

In the autumn, the European Commission will present an Energy Efficiency Package, including a revision of the Energy Efficiency Directive (EED) and of the Energy Performance of Buildings Directive. The revision aims at implementing the non-binding energy efficiency target of 27% by 2030, which the European Commission is considering ratchetting up to 30%. 

The most important and largest Package will come out in December and include, among other initiatives, proposals for a new Energy Market Design, a revision of the Renewable Energy Directive and a Sustainable Bioenergy Strategy for 2020-2030. According to the Commission, the new Energy Market Design is aimed at reforming the electricity market in order to adapt it to the ongoing European energy transition. The review of the Renewable Energy Directive will aim to cost-effectively achieve the ‘at least’ 27% renewables target, which is binding at EU level, and contribute to the EU political priority of becoming world number one in renewables. 

Please contact Elsa (elsa.venturini@cbi.org.uk) if you would like any more information or would like to discuss how these initiatives would impact your business.