EU deal on Energy Union Governance enables local authorities to participate in designing national climate and energy futures

At 4 am this morning, the EU institutions reached an agreement on a key component of the Energy Union, the regulation on the Governance of the Energy Union. Through this regulation, the EU defines the political process for ensuring that the EU’s mid- and long-term energy and climate objectives are met. Member States will have to draft 2030 national energy and climate plans and involve stakeholders, including local authorities, in the design and implementation of their plans.

After a negotiation marathon driven forward by the Bulgarian Council Presidency, which wanted to deliver results at all costs ahead of the end of its mandate on 30 June, the EU Parliament, the Council and the EU Commission agreed on a deal on how Europe will govern its energy and climate policies in the next decade.

The Energy Union Governance regulation will ensure that the EU’s 2030 energy and climate targets – reduction of at least 40% of greenhouse gas emissions, a minimum of 32 % renewables in the EU energy mix and the 32.5 % goal of energy efficiency savings – are achieved. For this purpose, EU Member States are required to draft 2030 national energy and climate plans that will include national targets, contributions, policies and measures for each of the five dimensions of the EU Energy Union:

• decarbonisation
• energy efficiency
• energy security
• internal energy market
• research, innovation and competitiveness

Alongside their 2030 plans, Member States will also have to submit their decarbonisation strategies towards 2050. Member States should not only hold a mandatory public consultation for their plan, but also engage in a dialogue with stakeholders, including local authorities. Those Member States that don’t have a permanent dialogue structure with stakeholders in place, shall establish a dialogue – a rather flexible legal formulation, that leaves it to the discretion of Member States to design the participatory process for their national energy and climate plans. 
Ahead of negotiations, the EU Parliament, spearheaded by the charismatic Luxembourgish MEP Claude Turmes (Greens/EFA) and the European Covenant of Mayors board had called for the mandatory establishment of “multi-level climate and energy dialogue platforms”, while the Council would only “consider establishing” such platforms. It seems as if both EU institutions reached a compromise in this regard, but what it will precisely translate into in Member States during implementation, remains to be seen.

The Energy Union Governance regulation also encourages Member States to cooperate to achieve their targets. If Member States are not on track to meet their goals, the EU Commission can intervene and ask for additional measures to be adopted at national level, or propose new EU-wide measures to plug the gap. This is aimed at reducing the free-riding effect, where Member States lagging on renewables and efficiency would rely on others to fill the gap. Furthermore, Member States have to respect the principle of “Energy efficiency first” when making decisions on new infrastructure investments in their national plans. In addition to this, following effective lobbying from the Socialists & Democrats group in the EU Parliament, there is a new obligation for Member states to report on those who cannot afford to pay their energy bill, and the need to set an objective to reduce energy poverty in the national plan, if significant levels of energy poverty are detected.

Finally, the agreement on the Energy Union Governance stipulates that the EU will aim for a net-zero carbon economy “as early as possible”. The EU Parliament had called for an explicit reference to 2050 for the EU to have a net-zero carbon economy, but the Council blocked this provision in the final accord. Moreover, the EU institutions agreed that by 1 April 2019 at the latest, the EU Commission will propose a 2050 EU strategy for greenhouse gas emissions in line with the Paris Agreement, with an analysis taking account of two things:

• The remaining “carbon budget” at global and EU level in order to keep global warming “well below 2°C” and close to 1.5°C; and
• Scenarios for the EU’s contribution towards the objective of achieving net-zero emissions by 2050 and negative emission afterwards.

The Commission analysis will be published ahead of the COP24 in Katowice, Poland, in December, after the scientists from the International Panel on Climate Change (IPCC) issues its special report on how to meet the 1.5°C warming target, expected in autumn.

EU completes energy efficiency legislation post-2020

Alongside the Energy Union Governance deal, the EU institutions also brokered yesterday night an agreement on the future of the Energy Efficiency Directive (EED). EU lawmakers agreed on a 32.5 % goal of energy efficiency savings by 2030, which is, contrary to the renewables target, non-binding. The EED, same as the renewables directive, also includes a 2023 review clause in order to increase the ambition. Moreover, Member States have to deliver 0,8% in annual energy savings after 2020, and can use a wide range of flexible measures (or loopholes) in this regard. 
Already earlier this year, the EU had completed the negotiations on the revision of the Energy Performance of Buildings Directive (EPBD), which creates a path towards a low- and zero-emission building stock in the EU by 2050, strengthens national renovation strategies and supports the roll-out of e-mobility charging infrastructure in buildings.

As next key steps for the EU energy future, the negotiations on the electricity market design are set to start under the Austrian Council presidency end of June / beginning of July.