The European Commission has today, 22 January 2014, published its proposal for the EU’s climate and energy policy for 2020-2030. It is positive that the main focus is now more clearly on reducing greenhouse gases. The Commission’s proposed emissions reduction target of 40% by 2030 is in line with the commonly agreed EU targets set for 2050.
The biggest difference with the current policy is that only an EU-level target has been set for increasing renewable energy instead of national targets, which is a step in the right direction. However, the target is binding and thus overlapping with the carbon emissions reduction target. A better alternative would have been to put the sole emphasis on reducing greenhouse gases and to let the energy industry take care of increasing renewable energy in a market-driven and cost-efficient manner.
“The Commission’s proposal is a compromise that doesn’t give sufficient consideration to the impact of energy costs on Europe’s competitiveness. Overlapping targets and steering mechanisms unnecessarily increase the energy and climate policy's price tag, which ultimately is paid by European energy consumers and tax payers,” notes Esa Hyvärinen, Vice President, Corporate Relations, Fortum.
Positive in the Commission’s proposal is also the stability mechanism for the emissions trading, which can be used to remedy the central weaknesses of the current system: the strong fluctuation in demand and the oversupply in the market. It also reduces political risk, i.e. the repeated interference in the system rules and in the amendment of them.
“It is important that the Heads of State reach a consensus during spring 2014 on the direction of Europe’s energy and climate policy so that policy decisions can advance to the preparation of legislation. It is essential to now secure an efficient emissions trading system and examine increasing renewables purely and simply at the EU-level. This way we can take steps towards at least a slightly more competitive Europe,” Hyvärinen says.
Esa Hyvärinen, Vice President, Corporate Relations, Fortum, tel. +358 40 8262646
Kari Kankaanpää, Sustainability Manager, Climate and Environmental Affairs, Fortum,
tel. +358 50 4532330
Fortum’s purpose is to create energy that improves life for present and future generations. We provide sustainable solutions that fulfil the needs for low emissions, resource efficiency and energy security, and deliver excellent value to our shareholders. Our activities cover the generation, distribution and sales of electricity and heat as well as related expert services.
Fortum’s operations focus on the Nordic countries, Russia, Poland and the Baltics. In the future, the integrating European and fast-growing Asian energy markets provide additional growth opportunities. In 2012, Fortum’s sales totalled EUR 6.2 billion and comparable operating profit was EUR 1.7 billion. We employ approximately 10,400 people. Fortum’s shares are quoted on NASDAQ OMX Helsinki.
Additional information: www.fortum.com