EU Energy Breakthrough
February 15, 2007
"We have made a breakthrough and we have now adopted a draft energy action plan," said German Economy Minister Michael Glos, who chaired the meeting.
The energy ministers agreed at a meeting in Brussels that bio-fuels should constitute at least 10 percent of fuels used in new vehicles by 2020.
But that 10 percent target will be subject to bio-fuels being available in sufficient quantities for commercial use, and for the necessary legal changes to be made.
"The binding character of this target is subject to production being sustainable, to second generation biofuels becoming commercially available and the fuel quality directive being amended accordingly to allow for adequate levels of blending," the ministers agreed.
Move towards higher renewables percentage
They also agreed to increase the use of renewable energy to 20 percent of the EU's total energy consumption by 2020. The current level is just seven percent.
This second objective is non-binding, a fact which will disappoint the European Commission, the EU's executive arm, which first proposed the measures in a wide-ranging policy paper last month aimed at moving the bloc towards a common energy policy.
Neither did the ministers go along with the Commission's proposal to force the "unbundling" of the electricity and natural gas industry into separate production and distribution networks, though they backed the overall objective of an "effective" management separation.
European Union regulators want to split energy utility groups, in electricity and natural gas markets, into separate production and transmission businesses so as to make networks accessible to companies without their own grids.
Utility split plan causes division
The proposal by the EU's executive arm split the member states, with France particularly hostile to any idea of an imposed separation of its electricity company EDF and its transportation system RTE.
The energy ministers called on the European Commission to elaborate on its proposals "taking account of the characteristics of gas and electricity sectors and of national and regional markets," according to a joint statement.
They did however acknowledge the overall objective "where possible" of the "effective separation of supply and production activities from network operations," known as unbundling.
This should be based on "independently run and adequately regulated network operations systems which guarantee equal and open access to transport infrastructures and independence of decisions on investment in infrastructure."
The Commission believes that breaking the link between energy suppliers and the operators of distribution networks is required to introduce competition in energy markets.
Unbundling seen as key to competition
The "unbundling" of supply and distribution, two functions carried out by monopolistic companies in many countries, is seen as necessary to enable new suppliers to enter national energy markets.
Glos said that when the 27 EU member states get together "it is not always easy to reach a common decision," while describing the original Commission proposals as "balanced."
"We didn't reject and we didn't endorse," said EU energy Commissioner Andris Piebalgs, "we endorsed the goal." He added that clarification was needed on what unbundling means. "Some members interpret it as (forced) privatization," he said.
The energy ministers debated a package of measures presented by the Commission last month, aimed at launching a common European energy policy. The theme will be at the heart of debate at an EU summit on March 8-9.