1. The EU's Climate and Energy Policy Manchester, 24 October 2012
Damyana Stoynova
DG Climate Action
European Commission

2. Outline Climate policy challenges
The EU's key policy instruments until 2020
Emissions Trading System
Effort Sharing Decision
Renewable Energy
Energy Efficiency
2050 Low-carbon Roadmap
2050 Energy Roadmap
Next Steps
Review of the ETS auction time profile
Climate mainstreaming in the next MFF
Further initiatives

3. Limiting climate change – a global challenge
2°C goal requires that global emissions are cut by 50% by 2050 compared to 1990
EU objective of reducing greenhouse gas emissions by 80-95% by 2050 compared to 1990, in the context of necessary reductions by developed countries and strong action by emerging economies
Need for a low carbon 2050 strategy providing the framework for the longer term action
Need to fix intermediary stages towards reaching the 2050 objective

4. Where does the EU stand now?
2010 greenhouse gas emissions 15.5% below levels
EU GDP grew by more than 40% during the same time
EU on track towards 20% emission reduction by 2020

5. Where is the rest of the world?
Concrete emission pledges made by countries responsible for > 80% of global GHG emissions
Copenhagen pledges: take halfway to emissions levels securing chances to stay below 2°C – 6 to 11 GtCO2e mitigation gap by 2020 to close
Share of non-Annex I emissions in total emissions >50% CO2 and >60% including all GHGs (2011)
Durban roadmap to global agreement in 2015

6. 2020 Climate and Energy Policy Framework and
Key Instruments

7. Europe 2020 headline targets for climate and energy
Reduce greenhouse gas emissions by 20% compared to 1990 as a first step, and move to -30%, if conditions are right.
Increase the share of renewable energy to 20% in gross final energy consumption by 2020.
Improve energy efficiency by 20% by 2020.

8. Emission reduction target (1): key policy instruments
GHG Target in 2020: -20% compared to 1990
-14% compared to 2005
EU Emissions Trading System (ETS)
-21% compared to 2005
Non ETS sectors (transport, buildings, waste, agriculture)
-10% compared to 2005
27 Member State targets
stretching from -20% to +20%

9. The EU Emissions Trading System
Single carbon price across the EU
Flexibility for EU companies
Functioning and liquid market
Adequate measures to address carbon leakage
Incentives for new technologies (NER300)
Using revenues to spur smart and sustainable growth and jobs

10. The Effort Sharing Decision: not all MS expect meeting their national non-ETS targets
2020 projections
2020 national target
Current projections show the EU would meet its 2020 target. However, for 13 Member States, the existing policies would not be sufficient to reach their national target.

11. Renewables target: All countries are contributing
Share of renewable energy (% of total energy use)
2020 national target
2009 performance

12. Energy efficiency target: Key policy instruments
Diverse set of policies and measures, e.g.
CO2&cars: 130g/km in 2015, 95g/km in 2020
Energy efficiency standards: light bulbs, appliances, electric motors
Energy labelling: domestic appliances
Buildings Directive
Energy Efficiency Directive
Challenges ahead
Finance: renovation of buildings – link with EU budget
Structural changes: e.g. urban planning, modal shift
System changes: e.g. electrification

13. The Energy Efficiency Directive
Brings forward legally binding measures to step up Member States' efforts to use energy more efficiently at all stages of the energy chain
Requires MS to set indicative national targets for 2020
On 4 October the Council formally adopted the Directive, after the positive vote of the EP on 11 September
The Directive is expected to enter into force by the end of
Then Member States would have 18 months to transpose and start implementing it (May-June 2014)

14. 2050 Low Carbon Roadmap

15. 2050 Low-carbon Roadmap
Identifies cost-effective pathway, with intermediate milestones
Identifies key technologies guiding R&D
Identifies investments needs and benefits
Identifies opportunities and trade-offs
Guides EU, national and regional policies
Gives direction to private sector and private households for long term investments

16. A cost-efficient pathway towards 2050
80% domestic reduction
in 2050 is feasible:
With currently available technologies,
With behavioural change only induced through prices
If all economic sectors contribute to a varying degree & pace.
Efficient pathway and milestones:
-25% in 2020
-40% in 2030
-60% in 2040

17. 2050 Low-carbon Roadmap: Investing in innovation and fuel savings
Additional domestic investment: € 270 billion annually during , equivalent to 1.5% of GDP (Total investment – 19% of GDP in 2009), of which
Built environment (buildings and appliances): € 75 billion
Transport (vehicles and infrastructure): € 150 billion
Power (electricity generation, grid): € 30 billion
Fuel savings: € 175 to 320 billion on average annually during
Making EU economy more energy secure:
Halves imports of oil and gas compared to today
Saving € 400 billion of EU oil and gas import bill in 2050, equivalent to > 3% of today’s GDP
Air quality and health benefits: € 27 billion in 2030 and € 88 billion in 2050

18. 2050 Energy Roadmap

19. Scenarios explore routes to decarbonisation of the energy system
Reference scenario (as of March 2010)
Current Policy Initiatives (as of April 2011)
 40% GHG reduction by 2050
High Energy Efficiency
Diversified Supply Technologies
High RES
Delayed CCS
Low Nuclear
 80% GHG reduction
Current
trends
scenarios
Decarbonisation
scenarios

20. Energy savings throughout the system are crucial
Range for current trends scenarios
Range regarding decarbonisation scenarios
Gross energy consumption - range in current trend (REF/CPI) and decarbonisation scenarios (in Mtoe)

21. Electricity plays an increasing role
Range regarding decarbonisation scenarios
Range for current trends scenarios
Share of electricity in current trend and decarbonisation scenarios of the Energy Roadmap (in % of final energy demand)

22. Renewables move centre stage – all fuels can contribute in long-run
2030
2050
75% 0%
25%
50%
75%
RES
Gas
Nuclear
Oil
Solid fuels
50%
25% 0%
RES
Gas
Nuclear
Oil
Solid fuels
2005
Decarbonisation scenarios - fuel ranges (primary energy consumption in %)

23. Next steps

24. Next steps (1): Review of the ETS auction time profile
State of the EU carbon market
Liquid and growing market
From 2013 the ETS undergoes substantial overhaul
Growing supply, demand imbalance
Surplus build-up with the start of the economic crisis, accelerated by a large inflow of international credits
Surplus expected to increase rapidly up to 2013, in part due to regulatory provisions

25. Review of the ETS auction time profile: back-loading
Back-loading: changing the auction time profile during phase 3 of the ETS
The 25 July package:
Draft for a future amendment of the Auctioning Regulation
Proposal for a Decision amending the ETS Directive
SWD on the functioning of the ETS and the impact of back-loading
Process: Vote in the Climate Change Committee, scrutiny by Council and Parliament; Co-decision procedure for the proposed Decision to amend the ETS Directive.
Need for discussion on structural measures

26. Next steps (2): The next EU budget 2014-2020
Mainstreaming the climate-related share of the EU budget will be raised significantly to 20% of the whole EU budget (at least €200bn for climate-related expenditures)
Horizon 2020: around 35% of the Horizon 2020 budget should be climate-related expenditure.
Cohesion policy: more developed and transition regions should allocate at least 20% of their ERDF resources to investment in efficiency and renewables. Less developed regions would allocate at least 6%.
Connecting Europe Facility
Greening of the CAP

27. Next steps (3): Further initiatives
Under negotiation with Council and Parliament
Monitoring Mechanism Regulation
Land use, land use change and forestry Decision
Review of cars and vans regulation
Under preparation
Carbon Market Report
Review of F-gases regulation
Maritime emissions
Adaptation Strategy