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European Commission

[Check Against Delivery]

José Manuel Durão Barroso

President of the European Commission

Statement by President Barroso on the 2030 Energy and Climate Framework

Press conference with Commissioners Oettinger and Hedegaard

Brussels, 22 January 2014

Today we have agreed on the long-term direction for our energy and climate change policy.

We show how the European Union's leadership in global climate action is beyond doubt and we show that we can do this in a way that is beneficial for the economy. An ambitious and smart "2030 strategy" will contribute to Europe's share in global climate action, but will also help to reduce our costly dependency on import of gas and oil, boost our green technology industry and sustainable growth by providing a stable long-term perspective for our companies to invest.

So this "2030 proposal" is critically important. Climate change is a defining challenge of our time, while a truly European energy policy is key for our competitiveness. What we are presenting today is both ambitious and affordable. It shows that we are beyond the debate where you had to either be "green" or a defender of industry. We believe these two issues are not contradictory, but can perfectly go together if handled smartly.

Let me begin with the main headline figures:

Since we are on track with our 2020 policies, we should build on them and go beyond. We are therefore proposing a binding 2030 greenhouse gas reduction target for the European Union of minus 40% (relative to 1990). That is ambitious, but feasible. 40% is the most cost-effective milestone on the 2050 road map for decarbonizing Europe's economy.

We also set a binding 2030 target for renewables at European Union-level. The goal is at least 27% of energy consumption. It is a function of the 40% target, because we can't reach the greenhouse gas target without a collective effort on renewables.

Having such a European Union renewables objective is also a very important signal to investors who need long-term certainty to make investments, and also a clear signal in terms of our security of supply.

However, we propose not to set national binding targets for renewables anymore, individually from Member State to Member State as we do now; because one lesson we have drawn from experience is that they risk the fragmentation of the internal market and do not allow us to reach the targets in the most cost effective way.

Here we will lead a bottom-up approach, leaving more flexibility to member states. They will work with us to make sure the national efforts add up to the European Union target. This flexibility is possible, because we are in a much more advanced stage of renewables policy than a few years ago. But of course our proposals will make it sure that with the new governance system we will be completely assured that we are going to reach the overall targets at European level.

I would like also to be especially clear on this: Member States remain free to set their own national renewables goals if they so wish; they can continue to support renewables, provided they remain within our state aid rules. And some of them are ready to be more ambitious than others. As you know, regarding the state aid rules, we are currently reviewing them to make sure there are no distortions. Because we have seen in the past that in some countries there were distortions precisely because of these national targets on renewables, including heavy subsidiarisation with sometimes important costs for competiveness and also creating distortion in terms of the internal market.

Thirdly, on energy efficiency, a very important, extremely important part of our efforts, the current 2020 strategy, as you know, does not have a binding target. The new Energy Efficiency Directive foresees a review in mid-2014, so this year. We have considered that we should wait until after this review before we consider the next steps, without prejudging them at this stage. But we have agreed that of course energy efficiency will remain a very important objective of our policies.

Of course, to deliver these targets we will need an overarching EU governance structure to ensure the delivery, maximise coherence, promote the integration of the European energy market, boost supply security and provide certainty to businesses.

There are first ideas for this in the package that we are now presenting, notably the "national plans" for secure, competitive and sustainable energy. We will develop this in dialogue with Member States and it is wise to leave now some room for discussion. We want this package to be owned by all Europeans. We are now making the proposal, but at the end we need to have the support of the Member States and of course the European Parliament. After that debate, the Commission will make more detailed proposals.

But our 2030 package is not just about numerical targets, even if they are extremely important.

The completion of the internal energy market for both electricity and gas is essential part of our approach. It is estimated that a fully integrated and competitive market could result in cost savings of between 40 to 70 billion euro until 2030. Such progress cannot take place without a properly integrated, modern infrastructure.

That's why, as you know, we have also in the Multiannual Financial Framework proposed this Connecting Europe Facility and in fact we are doing everything we can to support Member States completing the infrastructure because this is one of the real problems we have that limits the possibilities of a true internal market.

Competition on energy markets must be enhanced through the development of energy transport infrastructure - including cross-border interconnectors, that may be more efficient in ensuring security of supply than support for domestic generation capacity. The agreed Projects of Common Interest under the Energy Infrastructure Regulation are an important step for Member States to meet the 10% level of interconnectors as a share of installed production capacity. The Commission will remain particularly engaged on this, especially because, as we know, the costs of some of this programme are different according to Member States, so it is only fair that there is strong attention precisely to have interconnections with the countries that are not yet fully connected to the European energy market.

Our package also deals with the Emissions Trading Scheme which is one of the keys to reaching our greenhouse gas reduction goals. Today we are tabling draft legislation amending the Emissions Trading Directive to tackle the supply-demand mismatch in the ETS. This will give predictability for the regime post 2020. To be clear on one point: we do not intend to change the market-based nature of the ETS - we want an automatic stabilizer. And even if only to be implemented afterwards we believe we should already now make the legislative proposal, precisely for the reasons that I have mentioned, of certainty for investments.

And we are also dealing with the sensitive issue of shale gas. As you know, shale gas is now, in many ways, changing in a dramatic way the landscape of energy, at least in some parts of the world, also with very important consequences in terms of relative competitiveness. Today we are proposing a Communication and Recommendation on shale gas that balances the right of Member States to decide whether or not to exploit shale gas with the need to draw a Europe-wide baseline of environmental and safety rules. So this is an enabling framework on the basis of the existing acquis. This is not new legislation.

This is a good demonstration of the role that the European Union should play: setting the cross-border rules for the environment, health and safety, but not meddling in the basic energy mix that is to be chosen by Member States.

Finally, we are also publishing a detailed analysis of energy costs and their drivers, which contain very important, interesting and useful facts on the real reasons of rising EU energy costs, and on what we can do at the European level. We need to halt the constantly rising energy costs for households and business. Many factors are at play – we'll see them clearly in that very important study – but I want to see a serious effort made to make our energy as cost effective as possible. And you will see that a big part of the costs are the result of the fact that we don't have yet a really integrated internal energy market and that with very different policies of support from Member States this creates additional costs, not only on taxation, but also because of the fact that there is not for instance a proper interconnection.

Let me conclude on why we are doing this now.

It is in everyone's interest that we provide predictability for investors, that we complete the internal energy market and that we tackle import dependency. This is our internal reason to act. 2020 is basically around the corner so we need already to prepare for 2030, we need to launch the debate now.

But there are also very strong international reasons for coming forward with a 2030 proposal now, precisely to shape the global debate. We are the first to come now with concrete and ambitious proposals for the future. As you know, in 2015, France will host the key UN climate conference in Paris (COP-21). The EU will need to make the first formal commitments, ideally in spring 2015. UNSG Ban Ki-moon will hold a climate "leaders' summit" this September, for which we need a first position. Coming with our proposals now, having already as we have now requested a debate on this in the European Council in March we will enable Europe to keep the leadership role and also to help shaping the global climate action.

What we are presenting to you today is a package that is the result of thousands of hours of work. I really want to thank Commissioners Oettinger and Hedegaard and their services for the very important work they have done, in very close cooperation, and I was happy to be able to support that cooperation. From an expert point of view, there is an incredible input in this package. Trying to see – and you are going to see that in the documents we are going to deliver to you – all the different options, assessments and models, so we can have a truly European and informed debate.

We believe that this package for Climate and Energy is ambitious but realistic. And I am sure it will now launch the "2030 debate" among Member States, the European Parliament and stakeholders. I would like to ask Günther and Connie to give you more details on the specific proposals on what is indeed a very important package that we are proud to present to you today.

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