The EU's council of ministers this month adopted the final legal texts of the energy and climate change package of legislation negotiated by Member States in December last year. The new legislation is intended to meet the 2020 climate goals to reduce greenhouse gas emissions by 20% below 1990 levels and boost the share of renewables in the total energy mix to 20% by the same date.
The package is composed of six measures. The revision of the EU's flagship emissions trading scheme (ETS) will come into force in 2013, requiring power installations to buy all their emissions allowances at auction to correct the deficiencies of the previous scheme in which free allocations resulted in massive windfall profits. For other ETS sectors, auctioning will be gradually phased in, with 20% of emissions permits bought at auction by 2013 and 70% by 2020. Full auctioning will not begin before 2027. Those Member States with significant coal-based production have negotiated substantial derogations to their industries that are deemed to be at risk of carbon leakage, that is, reallocation to third countries where environmental protection laws are less strict.
For the sectors outside of the ETS, such as transport and agriculture, the package contains an "effort-sharing" decision, which sets out binding emission-reduction targets for each Member State in order to reach an overall cut of 10% by 2020. A regulatory framework is also established for the capture and underground storage of carbon dioxide to help support this new technology before it becomes commercially viable. A Directive will also be published for the promotion of energy from renewable sources. Individual targets will be set out for the proportion of renewables in Member States' final energy consumption, to reach 20%. In addition, the Directive states that each country should reach a 10% renewables share in its transport sector, and establishes criteria for the sustainable use of biofuels.
The two remaining measures establish carbon dioxide limits for new passenger cars and standards for fuel quality.
The EU has pledged to raise its emission-reduction target to 30% by 2020 if other industrialised countries, notably the US, commit to comparable goals in ongoing global climate negotiations. But as December draws closer, with the culmination of the talks in Copenhagen expected to produce a deal on a successor to the Kyoto Protocol, it seems unlikely that the US will bring out a national climate bill that would satisfy the EU.
