EU2020 – Energy and Climate Change

06 Jan 2012

Shane Fitzgerald

Europe 2020, an EU strategy for jobs and smart, sustainable and inclusive growth, is based on five headline targets which are measured by different indicators.

This series of blog posts looks at each of the targets in turn.

The third headline target is in fact a combination of three ambitious targets in the area of energy and climate change policy. The EU's ambitious 20:20:20 strategy aims to:

1.    Reduce greenhouse gas emissions by 20% compared to 1990

2.    Increase energy efficiency by 20%

3.    Increase the share of renewable energy sources in final energy consumption to 20%

On greenhouse gas emissions, there is huge variation across the member states, which can be accounted for by their very different industrial profiles and economic trajectories. Figures are also complicated by the Emissions Trading System because the EU2020 reduction targets only concern emissions not covered by that system. The emissions it covers will be reduced by 21% compared to 2005 levels. 

This is one of the few target areas where Europe's ongoing economic crisis is likely to improve the result, as the drop in economic activity will result in a reduction of emissions overall. Straitened circumstances should also lead governments, industry and citizens to try to save money by increasing energy efficiency. However, economic uncertainty, a lack of credit and plummeting investment levels are all bad news for renewable energy projects, many of which have high upfront capital costs.

To help tackle this problem, the Commission has launched a pilot 'project bond initiative' that should help individual infrastructure projects to attract long-term private sector debt financing. Innovative funding models for crucial transnational projects such as renewable energy plants and smarter electricity grids were also a central proposal of the report of the CRIS Committee of the European Parliament.

As is the case with traditional fuels, renewable energy resources are far from evenly distributed. Some countries enjoy a potential abundance of wind, solar or hydro power, while others are likely to remain dependent on energy imports for the forseeable future. We can see that once again the Nordic countries have performed strongly relative to their peers, with Sweden getting nearly half of its energy from renewable sources and Finland over a third.

A recent report on Improving Energy Efficiency Strategies in the EU Framework argues:

Opportunities and prospects offered by energy efficiency are not yet recognized to full extent among European decision makers. Energy efficiency, together with renewable energy, is addressing four key policy topics at a time: climate protection, energy security, energy costs, and technology leadership.

Eurostat has a detailed webpage devoted to the consumption of energy in the EU, which observes of these figures that:

The lowest levels of energy intensity – a measure of an economy’s energy efficiency – were recorded for Denmark and Ireland in 2009, while the most energy-intensive Member States were Bulgaria, Estonia and Romania. It should be noted that the economic structure of an economy plays an important role in determining energy intensity, as post-industrial economies with large service sectors will, a priori, have considerably lower energy use than economies characterised by heavy, traditional industrial activities. Between 1999 and 2009, substantial energy savings were made in the Bulgarian and Romanian economies, as well as in the Baltic Member States, Malta, Poland and Slovakia, as the amount of energy required to produce a unit of economic output (as measured by gross domestic product (GDP)) was reduced by 25 % or more; Ireland, Sweden and the United Kingdom also achieved reductions of just under one quarter.

It is important to note that in addition to the overall target for the EU as a whole, each country has set specific targets taking account of its level of development in each area. For example, Finland, Sweden and Latvia are committed to maintaining and increasing the high percentage of renewable energy in their overall consumption level, whereas Ireland and Italy are aiming for a more manageable 16-17%.

Member states' individual targets are outlined in national reform programmes published by member states in April 2011 and summarised in this table.

 

This content forms part of the E View project, which is part-funded by DG Communication of the European Parliament. 

 

As an independent forum, the Institute does not express any opinions of its own. The views expressed in the article are the sole responsibility of the author.