Energy Union: state of play and way forward

It’s been almost a year since the Energy Union Package (EUP) was launched by the European Commission and almost a month after the Paris Agreement on climate change. But, what is the current state of play? What is the way forward? Here, we will look at the progress made over the last months and the issues that need to be dealt with in 2016 in order to meet the energy policy targets.

 

Let us first remember what the EUP is about. On the 25th of February 2015 the Commission presented its EUP designed to continue the development of the European energy market and guarantee energy security. Aside from the completion of the energy market, sustainability and affordability concerns played a role. However, the main driver that led to the launch of the Energy Union was the realisation that the EU had to urgently decrease its dependency on Russian gas. In the light of these considerations, the EUP focuses on three main priorities. First, it aims to continue the diversification of Europe’s natural gas market. Second, it views to modernise the electricity market, and, third, it wishes to develop energy efficiency via the use of renewable and other alternative forms of energy. Additionally, the Package testifies EU’s leadership in the transition to a low-carbon economy.

 

The Vice-President of the European Commission in charge of the Energy Union Maros Sefcovic Belgium - Brussels - July 2015 © European Union / Tim De Backer
The Vice-President of the European Commission in charge of the Energy Union Maros Sefcovic
© European Union / Tim De Backer

On the front of economy decarbonisation the EU has made significant progress. Between 1990 and 2014, economic growth and greenhouse gas emissions have been decoupled, thereby demonstrating that the EU is particularly successful when it comes to increasing carbon-efficiency and fighting pollution. Progress was also made in the transition to an economy less based on fossil fuels, especially in emissions trading, renewables, and in low carbon technology and energy efficiency investments.

 

To meet the ambition to become the best in renewables, the Commission put forward a new electricity market design. Reaching this objective would, in practical terms, mean that renewables are becoming a mainstream energy source, thus providing for the energy needs of one fifth of the European citizens. In the same spirit, the Commission has proposed to revise the EU Emission Trading System so that it becomes the main European instrument. To contribute to the shift to low-carbon economy, aside from integrating climate objectives in its policy initiatives, the EU has made available investment funds that aim at supporting energy sustainable projects.

 

Reaching these targets requires two elements: good implementation and effective enforcement of the Paris Agreement, thus showing how intertwined the EUP and the climate change objectives are. The challenge therefore lies in delivering these commitments on the ground. Indeed, after COP21, all countries will have to translate their pledges into concrete policy actions in order to reduce green house gas emissions and fuel consumption. Delivery on these commitments would offer business opportunities for enterprises active in the field and create jobs and growth in the EU.

 

All in all, the EU is on track towards meeting the targets. However, there still exist barriers. In 2016, all actors need to speed up their efforts and address all five dimensions of the Energy Union (supply security, a fully-integrated internal energy market, energy efficiency, climate action-emission reduction, research and innovation).

The Package itself possesses all necessary elements of a successful policy initiative: coherence, consistency and vision. What is needed is for it to be fully and correctly implemented.

Eva SALI

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