EU Energy Policy Update - October 2012   


Controversy over shale gas exploration in Europe continues

The European Parliament's Committees on Industry, Research and Energy (ITRE) and Environment, Public Health and Food Safety (ENVI) voted in September 2012 on their respective draft reports on the environmental impact of shale gas and shale oil extraction activities. A large majority of the members of the ENVI Committee supported the resolution, while the members of the ITRE Committee were more divided in their votes with 32 in favour and 23 against. Following the ITRE vote, members of the conservative EPP group were responsible for the adoption of a "pro-industry" resolution, which critics believe does not sufficiently take environmental aspects into account. Concerns were also raised regarding the lack of safety guarantees. Both resolutions must now be adopted at the European Parliament's October plenary session.


While the European Parliament has debated the environmental impact of shale gas extraction, the European Commission has released three studies on the various impacts of shale gas exploration in Europe including energy security benefits, climate change and environmental implications. The studies state that shale gas production can help reduce dependency on electricity imports and cut emissions by up to 49 percent when compared to coal. However, the studies also note that shale gas emits more CO2 emissions and is more hazardous to environment and human health than conventional natural gas.


The Czech Republic has recently followed fellow Member States Bulgaria and France in imposing a moratorium on shale gas exploration, which will be valid from mid-October 2012 until at least June 2013.

Energy Roadmap 2050

ITRE Committee holds hearing on Energy Roadmap 2050

On 18 September, the European Parliament ITRE Committee held a hearing entitled "Energy Roadmap 2050, a future with energy." MEP Romana Jordan (EPP, Slovenia), rapporteur for the opinion for the European Parliament ENVI Committee, outlined at the onset of the hearing that her Committee's opinion will mainly focus on climate change and Emissions Trading System (ETS). MEP Jordan also called for clear objectives for reducing emissions. MEP Jacek Saryusz-Wolski (EPP, Poland), rapporteur for the opinion for the European Parliament Committee on Foreign Affairs (AFET), reported that Europe's energy policy needs to take full account of the wider political and external environment. The hearing consisted of three panels considering outlook scenarios toward 2050; an integrated European approach to energy policy; and the future outlook on economic structures and impact on needs in 2050. MEP Niki Tzavela (EFD, Greece), rapporteur of the ITRE report on the Energy Roadmap 2050, emphasised at the conclusion of the hearing that Europe's energy policy needs to be clear for both citizens and investors.


Commission launches anti-dumping investigation into Chinese solar panels

On 6 September, the European Commission launched an anti-dumping investigation into imports of solar panels, cells and wafers from China. In June 2013, the Commission will issue its provisional findings and will elaborate on whether they consider there has been dumping by China. The findings will be based on the information collected in the upcoming months. This is the most significant anti-dumping complaint the European Commission has received in terms of import value affected. In 2011, Chinese solar imports to Europe amounted to EUR21 billion. The anti-dumping complaint was lodged on 25 July by EU Pro Sun, an industry association of European solar producers. On 25 September, EU Pro Sun filed a second official complaint to the Commission, this time on alleged Chinese solar subsidies. The Commission has 45 days to decide whether it will open another investigation.


According to Ecofys, a consultancy specializing on sustainable energy, the Commission plans to publish a guiding document on green power subsidies in the first half of 2013. A combination of different instruments will be favoured rather than a one-size-fits-all policy. The focus has moved from EU-wide harmonisation to coordination and cooperation.


ILUC proposal is due to be published in October, according to Commissioner

According to the European Commissioner for Energy, G�nther Oettinger, the European Commission's legislative proposal on indirect land-use change impacts (ILUC) of biofuels is scheduled to be published in October 2012. At an informal meeting of energy ministers in Cyprus on 17 September, Commissioner Oettinger and the European Commissioner for Climate Action, Connie Hedegaard, stated that they agreed on the proposal and confirmed a plan to limit the use of biofuels from food crops, so-called first-generation biofuels, to no more than 5 percent. Only second-generation biofuels should be allowed beyond the 5-percent threshold. The goal of the Commission for post-2020 is to generate biofuels from non-food feedstocks, such as waste or agricultural residues (second-generation biofuels) or from seaweed (third-generation biofuels).  By 2020, 10 percent of transport fuel should come from renewables in the EU. Commissioner Oettinger expressed his confidence in reaching a deal between Member States and the European Parliament by Spring 2013. The European biodiesel association (EBB) has warned that such plans would kill the entire European biodiesel sector, particularly criticising the 5-percent limit on biofuels from food crops as being based on "unscientific" data.


GRID+ project launches public consultation and ITRE Committee adopts TEN-E guidelines

On 18 September, the GRID+ project launched a public consultation on the European Electricity Grid Initiative (EEGI) Roadmap. The consultation runs until 15 October and aims to gather stakeholder input on strategic transmission, distribution and common transmission/distribution R&D activities. The EEGI Roadmap is one of the European Commission's European Industrial Initiatives, which forms part of the Strategic Energy Technology Plan with the aim of fostering and supporting the deployment of smart grids in Europe. The EEGI Roadmap set out to prepare for the uptake of electricity highways in Europe to ensure the development of low-carbon electricity systems in EU Member States by 2050.


On 18 September, the European Parliament ITRE Committee adopted new guidelines for strengthening the development of trans-European energy (TEN-E) infrastructure projects. Members of the ITRE Committee agreed to the choice of priority corridors while also signaling their support for the Commission's proposal for a three-year limit on the time Member States take to license projects and the requirement to set up "one-stop shops."

Energy Market

European Commission concerned on capacity mechanisms

In October 2012 the European Commission is expected to release a Communication on the internal energy market. According to a leaked draft Communication, the Commission is concerned about the lack of progress in fully liberalising the energy market by 2014 and particularly cautious of the "capacity mechanisms" that some Member States are implementing. Apparently these mechanisms are likely to provide more opportunities for fossil fuel power plants rather than renewable energy production. The European Wind Energy Association (EWEA) published a report proposing the development of new markets for grid services. EWEA believes this would guarantee security of supply without any distortions in the market. The European Regulators' Group for Electricity and Gas published a status review of its guidelines of good practice on indicators for retail market monitoring for electricity and gas. The document contains an overview of national regulatory agencies' practices in the monitoring of retail markets and an assessment on Council of European Energy Regulators (CEER) Member countries' implementation of retail indicator measures.

Climate Change

Progress at the UNFCCC Bangkok climate talks

At the Bangkok climate talks (29 August - 5 September), delegates made limited progress regarding a new market-based mechanism and the REDD+ (Reducing Emissions from Deforestation and Forest Degradation). funding mechanism. Delegates have also held preliminary talks about the design of a potential new agreement to be reached in 2015 as well as the necessary changes to existing voluntary pledges for 2020. At the latest round of EU general affairs ministers meetings, Member States have not agreed to devote 20 percent of the next EU budget to climate change measures. Members of the environment committee (ENVI), have called for the allocation of 30 percent of funds on climate change measure and have also complained about the delay regarding the decision process. During last week's EU-China summit, the European Commission reached an agreement with the Chinese authorities for €25 million to fund inter alia CO2 emission reduction projects. The Norwegian government announced its intention to compensate energy-intensive industries for electricity price increases caused by the EU emissions trading scheme. Plans still have to be approved by the European Free Trading Association's Surveillance Authority and some details remain unsettled. According to data released by the European Environment Agency (EEA), in 2011 the EU reduced its greenhouse gas emissions by 2.5 percent. Lower gas and heat consumptions, due to a moderate winter, together with higher green energy generation caused the reduction.

In This Issue
> Gas
> Energy Roadmap 2050
> Renewables
> Biofuels
> Infrastructure
> Energy Market
> Climate Change


Institutional Calendar


4 October, Brussels - ITRE Committee Coordinators meeting with Energy Commissioner G�nther Oettinger


8-9 October, Brussels - ITRE Committee meeting 


22-26 October - Strasbourg

European Parliament Plenary Session


29 October, Luxembourg - Transport, Telecoms and Energy Council Meeting,

Energy & Clean Tech Team


Other Events


2 October, Brussels: Dods - Completing the internal energy market: what needs to be done?

3 October, Brussels: EURELECTRIC - EU Islands: Towards a sustainable energy future

3 October, Brussels: Forum Europe - The European Gas Policy Forum 2012: Shale Gas - Supporting Security Of Supply And Climate Action In Europe?

3 October, Brussels: BritCham - EU Committee Panel Debate on Smart Cities

4 October, Brussels: Bruegel - Climate Change and EU Policy - why has so little been achieved?

5 October, Brussels: EURELECTRIC - The Future of the EU ETS

9-10 October, Brussels: Euroheat & Power - The next DHC Generation

18 October, Brussels: BritCham - Energy, Environment & Transport task force briefing on "Changes to the ETS and emission trading" with Ms. Polona Gregorin, DG CLIMA

25 October, Berlin: European Academy for Taxes, Economics and Law - EU Financing for Energy Efficiency and Renewables in Public Projects

Contact Antonio Dai Pra