Fortum welcomes the Energy Union package published by the European Commission today. It is an important step forward in developing a common energy policy for Europe.
Current political uncertainty across EU borders, combined with economic, competitiveness, and climate change related challenges call for the need to build a genuine Energy Union. Energy must be recognised as a policy sector where member states really have a common interest and where there is a strong positive interdependency between member states. We need European solutions for European issues, be it efficient climate protection, market integration, stable energy supply or affordable energy for industry and households. Fortum especially appreciates the strong focus placed on the development of the internal energy market as well-functioning and properly interconnected energy market is both a major competitiveness asset and a key precondition for increased security of supply.
Energy Union should be seen as the start of a gradual convergence of 28 national energy policies towards a genuinely common European energy policy supported by enforced EU-level energy actors – the EU Commission, ACER and ENTSO-E/G.
Paris Protocol Communication
Fortum considers the Commission’s Communication “The Paris Protocol - A blueprint for tackling global climate change beyond 2020" an important element in the international preparations for the Paris COP21.
The EU’s proposed commitment of at least 40% emission reduction is a solid basis, but as stated in the Communication the EU should be open to the use of international credits to complement domestic actions. This could enable the increase of the overall ambition and more importantly could contribute to the evolvement of a more global carbon pricing regime. Fortum is satisfied that the EU reiterates its aim to start presenting legislative proposals by mid-2015 for the implementation of the 2030 climate and energy framework. This should in particular include a proposal for the revision of the emission trading scheme (ETS).
Market Stability Reserve
Fortum also commends yesterday’s voting result of the Market Stability Reserve (MSR) file in the European Parliament’s ENVI Committee. ENVI’s decision on all key amendments regarding the earlier implementation of MSR and putting all backloaded and unallocated allowances into the reserve essentially improves the original proposal. The voting result with a mandate to start the trilogue negotiations immediately makes a swift adoption of the MSR legislation possible.
In Fortum’s opinion, MSR combined with the upcoming revision of the emission trading scheme can restore confidence in the carbon market and give an appropriate price signal for low-carbon investments in the society.
Highlights of the Energy Union action plan:
• Implementation of the 10 % electricity interconnection target by 2020 and a follow-up Communication on measures to reach the 15 % electricity interconnection target for 2030 (2016)
• Initiative on market design and regional electricity market (2015-16)
• Review of the existing Security of Supply legislation (electricity 2016 and gas 2015-16)
• New Deal for energy consumers, including measures to empower consumers, deploy demand response, phase-out of regulated prices, linking wholesale and retail markets (2015-16)
• Legal proposals to enforce the energy regulatory framework; ACER and ENTSO-E/G (2015-16)
• New Renewable Energy Directive to implement the 2030 target, best practices in RES self-consumption and RES support systems (2015-17)
• Sustainability policy for bioenergy (2015-17)
• Communication on Waste to Energy (2016)
• Legislative proposal to revise the EU Emissions Trading System (2021-2030) and national effort sharing on non-ETS target (2015)
• Review of the Energy Efficiency Action Plan (2016), Energy Labelling Directive (2015), Eco-design Directive (2015), and Energy performance of Buildings Directive (2016)
• New EU Strategy for heating and cooling (2015)
• Review of the Energy and Environment State Aid Guidelines (2017-19)