Miguel Arias Cañete - Commissioner for Climate Action and Energy
Speech before the ENVI committee of the European Parliament
Allow me to start my first intervention as a commissioner before the ENVI committee stressing, as I did during the hearing, the importance that I give to the European Parliament, not only as co-legislator but also as the Institution which most vividly represents European democracy. This is the reason why I decided that my first public intervention as commissioner would be before you today.
During my hearing I promised to engage in an open and transparent political dialogue with you. To me this first exchange of views is the first step in the building up this dialogue. A dialogue that should be one of the pillars in achieving the forward-looking climate change policy that the EU needs.
The climate is changing, and, as it does, its effects are becoming more and more apparent for the everyday lives of our citizens, households and businesses.
The IPCC scientific findings are clear enough in this regard. But they also provide a message of hope, as underlined by the Fifth Assessment Report. This message is clear: it remains within our power to tackle climate change and limit global warming to less than 2°C.
We have a choice and we must have the political courage to act now, with ambition and collectively. This needs to be our common political commitment in the coming months and years, and I am confident that I will be able to also count on you to show that the European Union maintains its global leadership on climate action.
Less than three weeks ago European leaders reached a historic agreement on the headline targets and core architecture of our climate and energy policy for the next decade, the so called 2030 Climate and energy policy framework.
This agreement is the result of longstanding joint efforts and cooperation between the Commission and the European Parliament, the Council and other institutions as well as of a fruitful dialogue with a broad range of stakeholders.
The conclusions of the European Council have created a lot of positive momentum on which we need to build - both at European and at international level.
From this, I want the EU to continue driving forward an ambitious climate policy, while leading globally the international negotiations towards a binding agreement at the Paris climate conference in 2015.
But first and foremost we need to work towards a swift and proper implementation of the 2030 framework. And we need to do it in a smart way, to reap the full benefits of the transition to a low carbon economy, essential for the creation of jobs and sustainable growth.
The 2030 framework will have to be translated into concrete action, so that the EU remains the world leader in renewables technology, we increase our energy efficiency, and we use the full potential of the green economy in the most cost-effective way for our consumers, our industry, and also for our public finances.
But, before outlining first concrete steps on how to implement the 2030 framework I want to share with you some general thoughts on the guidance given by the European Council:
- I warmly welcome the endorsement of the binding domestic greenhouse gas emission reduction target of at least 40% and its respective sub-targets of -43% for the EU ETS and -30% for non-ETS sectors.
I also welcome very much that the European Council has followed the Commission's proposal to establish a binding target of at least 27% of renewables on a European level for 2030. This gives a clear signal to investors that we intend to continue promoting strong growth in the renewables sector while enabling us to move to a more European approach for their support.
- On energy efficiency, it is true that we would have hoped for a more ambitious agreement. The Commission had proposed a target of 30 percent, and President Juncker and I have advocated for a binding rather than indicative target. However, this is subject to a review clause having in mind the 30% target, so we will strive to ensure that our approach becomes more ambitious.
I want to emphasize a very positive element: the 40% is a binding domestic target, which means it will be achieved in the EU, so no further international credits will be used beyond 2020 and therefore all investments will be made in the EU.
- I welcome the principles for setting the targets for the non-ETS sectors: the national targets are to be set in a range of 0 to -40% compared to 2005 emission levels and have to add up to a collective -30% in these sectors across the EU.
Given the ambitious overall non-ETS reductions, leaders stressed the importance of enhanced flexibility. In this regards, we need to remain very vigilant to safeguard the environmental integrity of the system.
- I welcome the agreement on two important funding instruments: 1) an innovation fund for companies across the EU (NER400) and 2) a modernisation fund for lower income Member States. Together, these funds pool over 700 million ETS allowances to be used for modernising EU's energy systems, making the EU more energy efficient and incentivising innovation in energy sector and industry.
- I warmly welcome the reference to a well-functioning reformed EU ETS as the cornerstone of EU climate policy. I want the EU ETS to fully play its role as a technology neutral, cost-effective and EU-wide driver for low-carbon investments. A well-functioning EU ETS will re-inforce the functioning of the internal energy market, stimulate the uptake of renewables, and create further demand for energy efficiency improvements.
- And last but not least, the European Council has also acknowledged the fundamental importance of the internal energy market and, in that context, the specific importance of achieving without delay the 10 % electricity interconnections target by 2020 (15% target by 2030), as proposed by the Commission. It is no secret that meeting the interconnection target will improve energy security and promote further market integration. But it will also facilitate the accommodation of higher shares of renewable energy in the electricity mix. For these, the implementation of critical Projects of Common Interest will be most important.
The elements described above, brings us to the item on the immediate agenda of the European Parliament – the Market Stability Reserve (MSR). I hope that your work will result in its timely adoption, which will (no doubt) stabilise the EU ETS and make it more resilient. In this, as in any other piece of legislation that the Commission proposes, we will make sure that the provisions of the treaty are applied respecting fully the competences of each and every institution.
There are quite some interesting issues being discussed on the Market Stability Reserve, notably 1) its possible earlier start OR 2) the idea of putting the 900 million "backloaded" allowances directly into the reserve. As I have already stressed in the hearing, if there is a majority in favour in the Parliament and the Council, the Commission will not stand in the way of such changes.
I hope that the work on this important piece of legislation can be concluded by the end of the first quarter next year. Achieving a swift and positive outcome for the MSR will allow us to present, as soon as possible (but always after agreement on the MSR) a legislative proposal to implement the reform of the European carbon market for the period after 2020.
This is an ambitious timeline. However, we owe our industry, as well as other carbon market participants the maximum certainty on the post-2020 carbon leakage rules. I commit therefore to proceed swiftly on the wider ETS review after the adoption of the Market Stability Reserve.
When it comes to legislation on non-ETS targets my intention is to embark on detailed impact assessment work next year, on elements – like enhanced flexibility and the integration of the land and forestry sector into the mitigation framework – with a view to tabling a legal proposal soon enough and in accordance with the Commission's Work Programme, and always ensuring the good quality of the proposal and its cost-effectiveness.
As regards our policy on energy efficiency we will have to address the request by the European Council to propose priority sectors in which significant energy efficiency gains can be reaped, and ways to address them at EU level.
In the area of renewable energy we will have to come forward with supportive measures to ensure the achievement of the EU-level binding target of at least 27%.
We will also have to consider how to achieve a transparent and reliable governance system. It will be important to streamline reporting on energy and climate issues to avoid unnecessary administrative costs.
In addition, I also intend to improve the conditions for the deployment of Carbon Capture and Storage (CCS). This will be a key technology if we want to achieve a carbon-free economy by 2100 – as outlined in the latest IPCC report.
Finally, I want to kick off before summer a wide debate on our policies for emissions reductions in road transport and organize a conference where all stakeholders come together and reflect about what has worked well and what can be improved for the period after 2020, for which I would very much welcome your ideas (and active involvement).
As with every other policy measure for which I will be responsible, I attach great importance to hear the views of all stakeholders. Climate policies will not work if we get the economics wrong. This is the reason why I think we should not miss the economic opportunities that climate and energy policies offer for the creation of new jobs and innovation.
In this regard the Jobs, Growth and Investment Package that the Commission will propose in the coming weeks, will be an excellent opportunity to show our determination also on the side of climate and energy investments (infrastructure, renewables and energy efficiency). I am already working with VP Katainen and all commissioners involved so that this policy is an integral part of the €300bn investment plan to be put forward by President Juncker. This Package will also add to the work on the achievement of an Energy Union, which is steered by VP Sefcovic, and in which, as you know, climate action and energy is a pivotal aspect.
After having laid out my plans for European climate action and energy, let me turn to the international negotiations.
Our action on the 2030 framework and its further development will steer, in my view, international action. The EU must set a global example in terms of climate action. Our determination must be seen as an invitation to other major international players to come forward with their intended greenhouse gas reduction contributions. On the road to a global agreement in Paris next year, the climate conference in Lima will be the next milestone. Progress in Lima will be crucial to achieve a global and legally binding agreement in Paris. This is why I intend to work very closely with this Parliament, especially with the delegation of this committee, ahead and during the negotiations in Lima. I want to hear your opinion and to ensure that the EU speaks with one voice.
In that context, the climate conference in Lima must deliver 3 key outcomes:
- Firstly, we need to ensure that all our international partners put on the table their plans for individual greenhouse gas reduction efforts before end of March 2015. An international process needs to be set up in the run-up to the Paris conference to consider and analyse the adequacy and ambition of the individual and aggregate efforts. Only such a process can ensure that finalised mitigation commitments in the 2015 Agreement are sufficient to achieve the objective to keep temperature increase below 2˚C.
- Secondly, we need to make progress on enhancing mitigation ambition also before 2020 so we remain on track to achieve the below 2˚C objective. This is crucial given that the 2015 Agreement will not enter into force until 2020.
- And thirdly, we should have a good understanding of the elements of a draft negotiating text of the 2015 Agreement. Lima must deliver on this as a preparatory step towards a full UNFCCC negotiating text.
In order to prepare the Lima conference, I have already started to coordinate with the High Representative and VP of the Commission, Federica Mogherini. On 5 November we held a first meeting in which we decided that all our EU diplomatic intelligence should be mobilised in view of the negotiations in Lima and that Climate Action should be at the core of our external relations.
This could not be otherwise, if we want the 2030 framework to put the EU ahead of the curve. The EU only accounts for 10% of global emissions today. It is critical that all the major and emerging economies also come forward with their contribution by the first quarter of 2015.
Furthermore, in the coming months my services will be producing a Communication on our vision for the Paris agreement and nature of the collective global effort required to address climate change in a way that reflect contemporary economic and geopolitical realities. To this aim, I look forward to our upcoming debate in plenary during the November II session. I am confident that this debate will enrich the communication, while and our response and contribution in the context of the Paris agreement.
We must therefore make sure climate change is maintained among top global priorities. In the next 13 months these efforts will continue and grow in importance. I look forward to working with my fellow Commissioners and the HR/VP to ensure climate change is a top priority for all our external dialogue in the coming important months.
Ambitious action and comparable efforts by international partners will also alleviate concerns by European industry that climate policy would generate too high a burden and reduce their competitiveness on global markets. It is encouraging that several countries are following the example of the EU and developing and implementing carbon markets, in particular, China, which has started several emission trading systems.
Let me conclude by stressing my conviction that the actions that I have outlined today are an integral building block for the Energy Union. It is only if climate and energy policies are integrated that we can effectively achieve our aims of creating more jobs and ensuring sustainable growth, through a greener and more energy-resilient economy for Europe.
We are called to lead on climate action and show the world that a better climate and economic growth go hand in hand – and that everyone stands to benefit.