EU Announces Climate and Energy Policy Package

The EU Commission has announced its ‘Energy and Climate Change Package’, building on proposals agreed in early 2007. The package comprises a review of the EU’s Emissions Trading Scheme (ETS), sets targets for renewable energy, establishes a framework for the development of Carbon Capture and Storage(CCS) technology and outlines how the EU’s ‘CO2 burden’ will be shared between the 27 EU member states.

The aim is to reduce the overall level of EU greenhouse gas emissions by 20% by 2020.

The ETS is to be expanded to cover a wider range of greenhouse gases, with emissions targets adjusted year on year to reduce emissions, from sectors included, to 21% of 2005 levels by 2020, across the EU. Energy credits for the power sector will be auctioned from the beginning of the scheme, with other sectors, to include aviation, entering this process gradually. Allowance may be made for those sectors particularly vulnerable to competition from developing economies, such as those in India and China. Funds generated through the ETS will be used to foster innovation and growth in renewables, R&D and CCS. They will also be used to help developing countries adapt to climate change. The ETS extension will begin in 2013.

National targets for emissions reductions have been proposed for emissions not covered by the ETS.

Biofuels should make up 10% of all transport fuels across the EU by 2020, if production is shown to be sustainable this will not cause other environmental problems.

It is hoped that the package of measures can be agreed by MEPs and Member States by the end of 2009.