Why the dropping of EU renewables targets is actually a good thing

Late last month, the European Commission published its snappily-titled “Policy framework for climate and energy in the period from 2020 to 2030”, in which it moved away from setting legally binding national renewable energy targets, instead simply setting an EU wide target.

This means there will be no successor commitment to the mantra of 20% reduction by 2010 we’ve seen under the current Renewables Directive. The commission has been spurred on to look at policy by the energy price pressures across the EU and the rising differential between the EU and its main industrial competitors, particularly the USA. It concluded that taxes and levies, together with network costs, were the main drivers behind the recent European price surge. They have decided that, in addition to further efforts to liberalise the energy market, policies should be developed to ensure that carbon emission reduction is conducted in the most cost effective way possible.

The policy focus has therefore shifted from encouraging renewables to reducing carbon, allowing individual nation states the freedom to achieve carbon reduction in a manner that best suits their circumstances and ensuring the most economically beneficial reductions. The new policy sets a 40% reduction target for 2030 for EU carbon emissions with respect to 1990 levels, this being an interim target ahead of the 80% plus target in 2050. The 40% 2030 target is ambitious given that the EU will have taken nearly 20 years to reduce emissions by 21% by 2020. Providing the EU can return to healthy growth and maintain the political consensus for carbon reduction, the target is achievable albeit with an increasing price tag.

It is not the energy itself that is important it is the carbon content of the source of the energy. This is why the UK approach is more logical

The policy shift brings EU wide policy more in line with the UK which has focussed (quite rightly) on carbon, allowing a range of cost effective mitigation measures to be introduced as seen in the CO₂ focussed Part L of Building Regulations.

EU climate policy has, until recently, focussed on energy rather than carbon, leading to a greater emphasis on renewables rather than demand reduction. After all, it’s not energy use itself that is driving climate change, it is the carbon. This skew in emphasis has led to strange EU policy such as the “nearly zero energy building” requirements in article 9 of the Energy Performance of Buildings directive. The EU policy implies that a building can use almost no energy, but even the most energy efficient buildings require some energy to provide hot water, to power fans, lights and pumps.

It is not the energy itself that is important it is the carbon content of the source of the energy. This is why the UK approach is more logical with its focus on carbon, allowing a mix of strategies based on cost effectiveness. Of course, the UK zero carbon buildings policy and implementation has its own challenges - but that’s for another day.

The centime seems to have dropped in Brussels that green at any price is not politically acceptable, no matter how strong the scientific case. The refocus on carbon is a good thing and I am surprised the green lobby has once again attacked the change. If energy prices continue to rise and the EU continues to lose out economically to other parts of the world with lower energy prices, the EU will not be able to afford the low carbon policies. Add to that further voter disaffection, and the political will to foot the bill will fall away. I am reminded that one definition of sustainable development is that which balances the needs of the environment with social and economic needs. It seems to me that Brussels is coming into line with UK thinking and about time too.

Nick Cullen is a partner at Hoare Lea