The European Commission has formally opened the debate on the development of European climate and energy targets for 2030. As the current targets expire in 2020, the Commission wants to replace these with longer term milestones. Considering the long investment cycles inherent to the energy sector, the aim is to put a new framework in place as soon as possible to provide investors with the regulatory certainty required. The new framework would also aim at keeping the EU on track to meeting its long term objective of cutting emissions 80-95% by 2050.

To kick off this debate, the Commission has published a Green Paper on a 2030 framework for climate and energy policies. A public consultation has simultaneously been launched, allowing stakeholders to submit their views on the questions the Green Paper rises regarding the architecture of the future framework. These questions mainly concern the possibility of introducing new legally-binding targets in terms of emissions reductions, renewable energy generation and energy savings, i.e., extending the current framework. This is indeed the key question that will have to be resolved. In the last few years, European Commissioners Oettinger (Energy) and Hedegaard (Climate Action) have both supported this policy option, arguing that the current framework is, to a large extent, producing the sought results.

Thus, the open consultation will allow the Commission to "dip its toes in the water" and check to what extent the introduction of new targets would be supported. Stakeholders are welcome to submit their views until 2 July. All companies working in the energy value chain should consider participating as this policy process will likely have a strong impact on Europe's energy future. All groups involved in the energy sector - from traditional companies working on fossil fuel extraction and transportation to new energy technology developers - will have an interest in participating in the open consultation.

Once the consultation is closed, the Commission will analyse the feedback received and consider it in the development of the new policy framework. A legislative proposal is expected by the end of the year.

The Commission's draft legislation on biofuels' indirect land-use change (ILUC) has received a chilly reception in the Member States. EU environment ministers met on 21 March to discuss this proposal, which seeks to limit the production of first generation biofuels in favour of more advanced biofuels.

According to experts, conventional biofuels coming from food crops lead to changes in land use and an intensification of agricultural processes, rising food prices and greenhouse gas emissions. To offset these externalities, the Commission has proposed to amend current legislation on renewable energy and transport fuels to curb their use, setting a 5% cap. The proposal also introduces ILUC factors into the reporting of biofuels' emissions savings, targeting specific feedstock depending on their potential to lead to new emissions. This measure particularly targets oil crops, which are used to produce biodiesel. Should this measure go through, biodiesel would be considered to be more polluting than diesel petrol of fossil origin.

While some Member States have called on the Commission to take strong action to combat ILUC issues - notably the UK, the Netherlands and Denmark - the vast majority of them are following a more practical approach to this negotiation. Many of the environment ministers raised questions about the feasibility of accelerating the transition to advanced biofuels, which do not require the use of agricultural land, in such a short timeframe. Others highlighted the importance of ensuring the new measures are consistent with planning security for investors. Some Eastern European Member States have vocally opposed the proposal, notably Poland and the Czech Republic.

This can put the Council of Ministers in a collision course with the European Parliament, which is more likely to sympathise with the Commission's objectives as well as with the environmental NGOs that have been calling on the EU to tackle the ILUC issue. Therefore, the future of this legislative proposal looks uncertain. The vote at the Environment Committee, which is scheduled to take place on 10 July, should shed light into Parliament's likely position and trigger inter-institutional negotiations with the Council.

Following an informal agreement reached in January, the European Parliament and Council of Ministers have this month rubber stamped the Regulation on guidelines for Trans-European energy infrastructure. It will hence be published in the EU Official Journal in the next few weeks, becoming EU law.

Presented by the European Commission in October 2011, this Regulation aims to accelerate the development of European energy infrastructure projects in oil, gas and electricity. Under certain conditions, these projects may be eligible for EU co-funding under the new Connecting Europe Facility (CEF). These conditions would mainly relate to the trans-European nature of the project at hand.

The agreement introduces new rules designed to accelerate the issuing of permits for projects 'of common interest,' e.g., cross-border infrastructure projects concerning at least two Member States. These include electricity grids delivering power from offshore wind farms, electricity storage projects and gas pipeline networks. As per this agreement, project developers should obtain permits within the limit of three and a half years. The waiting time is currently closer to 12 years.

Developers will first have to submit applications asking for their projects to be considered 'of common interest.' Twelve groups of regional experts will assess such applications, including Member States, the Commission, transmission system operators and project promoters. The ultimate decision as to whether to award a project with the 'common interest' status will be taken by Member States and the Commission through committology.

Transport ministers meeting in Brussels on 11 March held a debate regarding the European Commission's recent proposal on alternative fuels for road transport. The draft legislation includes legally-binding targets for the development of electricity, hydrogen and natural gas recharging stations in Europe's roads. The hope is that expanding the refuelling infrastructure will result in lower vehicle prices and higher consumer acceptance.

The ministers' reception has been chilly at best. Not a single Member State wants to see the Commission impose binding objectives for the number of refuelling infrastructures on its territory. Some Member States have even described the Commission's objectives as "unrealistic," such as Italy. More generally, many governments consider that these measures would impose a huge financial burden in an economic downturn. The Czech, Dutch and Bulgarian ministers spoke on these terms. Other Member States want to push back the proposed 2020 deadline until 2030, particularly Romania, Hungary and Lithuania. Therefore, the likelihood of the proposal becoming EU law in its current form seems severely limited.

In addition, the Commission's choice for an EU-wide standard plug for electric vehicle public recharging stations is also a contentious issue for certain Member States. This is notably the case in France, which uses a different technology.

As in the case of the biofuels proposal (above), the European Parliament is likely to sympathise with the Commission's objectives. This will again lead to a clash between legislators and to an uncertain outcome. In Parliament, the Transport Committee will be leading on this dossier. Other committees are likely to submit opinions, notably Energy, Internal Market and Environment. The rapporteur and timeline for negotiations are yet to be agreed upon.

As the European Commission pursues anti-dumping and anti-subsidies investigations on solar photovoltaic panels of Chinese origin, the Chinese government is playing an increasingly active role in defending its solar industry. This month, Chinese Trade Minister Chen Deming gave a press conference in Beijing and encouraged EU leaders to pursue negotiations instead of litigation, warning that countervailing duties would inflict great losses on both sides. In particular, he advocated for Chinese and European companies to negotiate this issue and collaborate in order to boost their industrial cooperation and seek to expand in third-party markets.

So far, the Chinese government's attempts to find a political solution to this issue have proven ineffective and are unlikely to deter the Commission from pursuing its investigations. Having received trade defence complaints from the European industry filling certain criteria, EU Trade Commissioner Karel De Gucht has repeatedly said the Commission is legally obliged to act. The results to both investigations are expected in May, when the Commission will announce whether it has found conclusive proof of anti-dumping and anti-subsidies. If so, provisional duties will be applied to Chinese panels upon arrival in Europe.

However, the EU Member States will have to ratify any Commission decision to apply duties. Thus when the Commission's legal investigations come to an end in May, a political process will open. At that stage, every Member State will carefully measure its interests in the framework of this investigation, as well as the state of their wider relations with China, before deciding whether or not to support the Commission's findings. Needless to say, the Chinese government's involvement in this process will then become much more effective.

The European Commission has launched a Public Consultation on the future of Carbon Capture and Storage. The Consultation launched on 27 March is the latest step in the battle fought by the European Commission to convince the industry and consumers of the benefits of CCS. The targets the Commission have identified for the next twenty years - as outlined on the 2050 Energy Roadmap and the Roadmap for moving a Low Carbon Economy in 2050 - are dependent on the use of CCS.

The objective of the Consultation is to allow stakeholders to share their views with the Commission on the possible means to promote CCS in Europe. Up until today, CCS in Europe had to be seen as a failure: out of the 22 small-scale demonstration CCS projects, only two are in Europe, neither of which is in the EU. There are several reasons why CCS has not been implemented as initially intended. The Commission has acknowledged some of these factors on its Communication, focusing on two primary causes: cost and public demand.

Regarding cost, it is clear that the technology required for an effective CCS industry is expensive and the economic benefits are scarce. This is mainly due to the current carbon prices being very low, which makes it unappealing for economic operators to invest in CCS. In addition to the economic aspect, CCS has failed to convince both the public and decision makers on its merits. Some Member States even have bans or restrictions on carbon storage while, in general, CCS projects have faced strong public opposition in Europe.

The Commission is therefore seeking the input of stakeholders to come up with the winning formula to secure the future success of CCS - a task that will require great political agreements and a great deal of imagination.

A new study from the Atlantic Council think tank in Washington, D.C., titled "Lowering the Price of Russian Gas: A Challenge for European Energy Security," has concluded that Gazprom is having its dominant position in Europe threatened.

According to researchers David Koranyi and Adnan Vatansever, the reason Gazprom's position is threatened is the fact that Europe has invested in diversifying its energy sources, and has thus become less dependent on deals with Gazprom. These investments have balanced the situation, yet the balance of dependency remains far from being even. Eastern Europe in particular is still dependent on Gazprom for energy supply as it awaits the development of the LNG terminals and the long-promised influx of gas from the Caspian.

The EU's stronger and more defiant stand can be better seen in the on-going anti-trust probe into Gazprom. The authors of the study recommend the Member States to "speed up implementation of the third EU energy package" and for the Commission to pursue the case against Gazprom for dominant position in the EU Court of Justice.

The European Parliament's Committee on Industry, Research and Energy (ITRE) has approved a report by Herbert Reul MEP (EPP, Germany) calling for a more harmonised, EU-level system to promote the use of renewable energy by 2020. The report asks the European Commission to pay special attention to taxes and other incentives in future legislation in order to meet the EU targets for renewable energy for 2030.

Mr Reul has also pointed out that the setting of targets will not in itself provide solutions to the renewable energy sector. The report adopted on 19 March also calls for a modernisation of the existing grid infrastructures, together with the development of sensible systems of energy storage.

The European Commission has launched a Consultation Paper on the 2015 International Climate Change Agreement: Shaping international climate policy beyond 2020, seeking to start a discussion on how the EU can best shape the future international climate change regime. All stakeholders with an interest in climate issues are welcome to submit their contributions until 26 June.

In this paper, the Commission argues that it is not likely the world's governments will manage to agree on the new regime by 2015, as it was agreed at the Durban Climate Conference in December 2011, and ratified at Doha one year later. The main issue, the Commission goes on to say, lies at the heart of the relationship between the developed and developing worlds on climate issues. This is the so-called "common but differentiated responsibility," which should determine the way in which each group of countries contributes to climate change mitigation efforts.

In this regard, the developed world demands that the new regime sets emissions reduction commitments on the most advanced developing nations so as to ensure that future mitigation efforts are effective. However, these developing nations perceive climate change as a problem created by the developed world and demand their right to develop their economies without constraints. Furthermore, these developing nations are not likely to take action as long as the United States, the world's single largest polluter, refuses to make any commitments. This has created a political deadlock that will be difficult to break.

According to the Commission, there is little chance this issue will be solved in the next two years. Other difficulties also remain, notably on climate finance. Progress remains modest in achieving the objective of ensuring that an efficient financial flow is set up between the developed and developing countries to help the latter mitigate the effects of and adapt to climate change. These countries are not likely to move forward unless the developed world grants them acceptable financial compensation. This is not likely to happen considering the current macroeconomic conditions in the West.

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