My honourable friend the Minister of State for Energy (Malcolm Wicks) has made the following Written Ministerial Statement.
Due to conflicting parliamentary business, my noble friend the Parliamentary Under-Secretary of State for Business and Competitiveness, Baroness Vadera, represented the UK at the Energy Council in Brussels on 28 February in place of the Secretary of State for Business, Enterprise and Regulatory Reform, John Hutton.
The council was dominated by discussions of the internal market legislative package, in particular of energy unbundling. The council also had a policy debate on the 2020 climate and energy legislative package and agreed conclusions on the strategic energy technology (SET) plan.
On the SET plan, Ministers agreed conclusions on the Commission communication on the long-term perspective for the development of low-carbon energy technologies.
Following a Commission presentation on the climate change and energy 2020 package, Ministers’ responses highlighted the following concerns:
All member states supported these targets, although I and others noted their ambition. Several member states noted the need for flexibility to enable cost-effective delivery of the overall GHG target. Many emphasised energy efficiency. Detailed points were made by individual member states against rounding the targets; in favour of a 1990 base year; taking better account of efforts already made; and the need for a better balance between energy and environmental interests in large (hydro) projects.
Guarantee of Origin (GO) Certificates
Most countries endorsed the need to allow cross-border trading of renewables in the EU, noting that considerable work would be needed to refine the practical arrangements. Smaller member states commented that GOs would be essential to meet their targets. I encouraged wider application of trading to cover non-EU countries. A number of member states expressed concern about the impact on their national renewables support schemes. The Commission said that it had tried to provide flexibility for those member states that wanted it, while allowing national schemes to continue.
Carbon leakage/energy intensive industries
Many member states referred to the letter signed by some member states advocating EU action to address the prospect of carbon leakage. They emphasised the global nature of the issue—including the risks of industry relocating outside the EU, EU competitiveness and price inflation. Some argued for a phased approach to tackling the problem.
Carbon capture and storage
Commissioner Piebalgs referred to the significance of CCS and mentioned the UK as a front-runner. He noted the Commission’s openness to considering the possibility of member states providing finance under the revised environmental state aid guidelines.
The presidency concluded that most delegations welcomed the 2020 package and its ambitious nature and that political agreement of the package was possible by the end of the year. The presidency would take account of member states’ comments in the next draft of the spring Council conclusions.
On the internal market legislative package, substantive discussion of unbundling was taken over lunch in closed session after introductions by the presidency and the Commission, during which the Commission noted the five principles that any alternative option would have to meet. The Commission emphasised that ownership unbundling was the most efficient option: any alternative would have to achieve equivalent effect.
In the formal session, the presidency proposed a simple procedural conclusion stating that the Commission’s proposal, supplemented by all other contributions, would be the basis for continued discussion, with the aim of agreement in June. All member states accepted this. This was a positive outcome for the UK.
Under any other business, the Commission reported on developments related to security of supply. A report on the energy security correspondents’ network would be submitted to the June Council and energy security would feature heavily in the next strategic energy review, to be debated at the December Council. Ways to enhance solidarity, promote market access and infrastructure projects, and improve resilience against energy shocks would be addressed. One member state intervened to stress the importance of this issue in view of its specific circumstances: it would make proposals for the conclusions of the spring European Council.