EGEC Summer Statement 2021: A briefing on recent and upcoming energy policy in the EU

EGEC presents you its third Statement on the European energy policies and strategies, with a special topic: What does ambition mean in climate & energy policy?

The 2030 target for renewable energy sources has been discussed for the past 10 years.

The last proposal was published by the European Commission on 14th July 2021 to deliver the EU Green Deal. After an intensive work, but with less consultations than previous proposals, the European Commission adopted a set of proposals to make the EU's climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

On renewables, the amended directive sets a target of at least 40% in the Union’s gross final consumption of energy in 2030. How ambitious is this new target?

Let’s have a look at the last 10 years of discussion on this target for renewables: from low to medium or high level of ambition.

Let’s start with the 20/20/20 targets published in 2009

We started with the famous 20/20/20 targets – the first framework for 2020 –, which included a 20% of EU energy consumption coming from renewables. This European target relied on legally binding national targets until 2020. The first Renewable Energy Sources (RES) Directive was published in March 2009 for a target in 2020, so 11 years in advance.

Surprisingly, already in 2012 the EU Council asked the European Commission to propose a new 2030 RES Directive by 2014. It was a strange timing, just three years after having set a 2020 target and without an assessment of the real impact on the market. EGEC was not in favour of such an early discussion; it was clear that the debate was biased.

Review of the renewable target: an ambition, which is lower than business as usual

Several organisations and new platforms were established to slow down the development of renewables by attacking them on technology costs, market integration, system costs, support schemes...but only focusing on electricity, and voluntary avoiding the debate on the heating & cooling, and transport sectors, which were almost fully depend on fossil fuels!

EREC, the renewables industry umbrella association, endorsed a legally binding EU target of at least 45% renewable energy by 2030. Some were blaming this target of being unrealistic... but let’s see the final result!

In January 2014, the European Commission issued a Communication stating that “A greenhouse gas reduction target of 40% should by itself encourage a greater share of renewable energy in the EU of at least 27%.”

We were told that the renewable industry should be happy with such a target, as it could have been worst. What an odd ambition, one that is lower than business as usual!

A second negative result from the actions of the non-pro renewable groups could be seen in the new strict rules on State Aid Guidelines for RES support schemes. The Commission also started to work on a proposed package for an integrated EU energy market focusing on the electricity market design, but again failing to achieve the internal market for energy by excluding heating & cooling.

At that point renewables associations, after the end of EREC in 2014, were proposing a 30% RES target. The European Parliament also called for binding targets of at least a 30% share of renewable energy consumption.

Medium level of ambition for the RES target in the ‘Clean Energy For All Europeans’ package

After two years of intensive discussion, the European Commission came up with the ‘Clean Energy For All Europeans’ or ‘Winter package’ in November 2016. Backing Council’s conclusions, the new RES Directive proposed a 27% RES target.

In January 2018, the European Parliament voted in plenary for a share of energy from renewable sources in the Union's gross final consumption of energy in 2030 of at least 35%.

The European Renewable Energy industry had already jointly called for at least 35% target.

This was backed by a new unexpected actor: the International Renewable Energy Agency (IRENA). Since October 2016, IRENA conducted an analysis of EU's renewable energy prospects by 2030. Their study was calling for a 33% share of RES share in 2030. This study had quite an impact on the European Commission’s position.

After trialogue, in June 2018, the EU adopted a new regulatory framework including a binding renewable energy target of 32% for 2030, with an upwards revision clause by 2023. So just through negotiations, the target was increased by 5 points. It’s interesting to underline that each time a new target has been proposed, it has been accompanied by a modelling exercise and the publication of impact assessment to justify it.

And here comes the EU Green Deal...

In its proposal on 14th July 2021 for delivering the EU Green Deal, the European Commission states that the “Member States shall collectively ensure that the share of energy from renewable sources in the Union’s gross final consumption of energy in 2030 is at least 40%”. It means a 13-point increase in the target from the 2012 proposal! In this case the push is coming from political ambition.

We are now less than 10 years from the 2030 objective. What are the lessons from the 2010-2020 decade?

The electricity sector is far from being decarbonised. 80% of the heating & cooling sector is based on fossil fuels, and the decarbonisation of the transport sector is even lower. The potential for renewables in these three sectors is far from being fully tapped into.

Firstly the EU has adopted a 2030 RES target of 27%, which has now increased to 40% thanks to a change in political good will. While the modelling exercise backed this decision, it was certainly not the driving force.

A 40% RES target for 2030 is achievable, so a 45% RES target is just the right ambition - as already advocated 10 years ago.

After all, time is important. We don’t have much time, so every day really does count.

Have a good reading and recharge your batteries for the second semester to faster the decarbonisation of our economy. See you for the Winter Statement in December 2021.

Philippe Dumas (EGEC Secretary General)