EUROPEAN COMMISSION

DIRECTORATE-GENERAL FOR ENERGY

Directorate A - Energy policy
The Director
Brussels,
ENER/A
Speaking Points
Introductory remarks
Cost effectiveness, competitiveness and coherence are at the heart of
the Commissions 2030 Framework for Energy and Climate Policies.
We need to agree quickly on the 2030 framework, to rovide
redicta!ility and certainty for o"r investors #for them, 2020 is aro"nd
the corner$, to comlete the internal energy market, and tackle imort
deendency.
% sta!le, long-term perspective for European industry to invest in
energy caacity and infrastr"ct"re sho"ld hel the &nion to caitali'e on
the stronghold it has in high(tech man"fact"ring of caital goods, s"ch
as ind"strial technology, ower e)"iment, transort vehicles and
aliances.
*he comletion of the internal energy market is central to a cost-
effective implementation of energy policy objectives "ntil 2020 and
the 2030 Framework, there!y safeg"arding E"roe+s cometitiveness
and energy sec"rity.
*here are also international reasons for coming forward with a 2030
roosal now, given that ne,t year a new !inding glo!al agreement
covering all emitters is foreseen. *he E& will !e ready to make its
contri!"tion in sring 20-..
*he recent develoments concerning &kraine sho"ld enco"rage "s to
move faster in terms of imroving o"r energy independence, fle,i!ility
and diversification of so"rces. *he 2030 Framework is a key action to
imrove !oth cometitiveness and sec"rity of s"ly.
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Key elements of the 2030 package
*he Commission rooses that the E& adots a domestic 2030
greenhouse gas emissions reduction target of 40 below !""0
levels. *he foc"s of the framework m"st !e on decar!onising o"r
energy system in a cost(effective way, giving /0 a large degree of
fle,i!ility on how to achieve this. We consider that this target is
am!itio"s, !"t realistic #102 is the cost(effective mile(stone on the ath
to 20.0$.
*he ackage also incl"des a binding target of at least 2# for
renewable energy at the E$ level. 3owever, this wo"ld not !e !roken
down into 24 !inding national targets anymore. 5ne of the lessons we
have learned from the c"rrent 2020 ackage is that this fragmentation of
national olicies is artly co"nterrod"ctive.
% lot of %E& technologies are now competitive in their own right
#s"ch as on(shore wind and solar$, with significant !enefits in terms of
energy trade !alances, indigeno"s energy so"rces, 6o!s and growth.
Energy efficiency remains fundamental to a cost(effective transition
of the energy system that creates growth and 6o!s. *he )"estion of how
!est to deliver the necessary am!ition on energy efficiency will !e
analysed in greater detail in a review of the Energy Efficiency directive
in mid(20-1. We will wait for this review first !efore we consider ossi!le
targets etc.
*he Commission+s aim is to give fle'ibility to (ember &tates so as to
come to the most cost-effective solutions, in line with national
circ"mstances. 7"t there needs to !e !etter coordination and regional
cooeration as national decisions also affect neigh!o"ring co"ntries,
and s"rveillance to ens"re that national meas"res are in line with the
internal market. *he c"rrent fragmentation m"st !e overcome.
*he roosed governance scheme m"st rovide fle,i!ility to /em!er
0tates while at the same time ens"ring that commonly agreed targets at
the E& level are met. *he aroach to develo national plans m"st
strike the !alance !etween the need to ens"re investment certainty and
the right to adat to changing circ"mstances.
*herefore, comleting the internal energy market for !oth electricity
and gas is an essential art of o"r aroach. % f"lly integrated,
cometitive market co"ld res"lt in cost savings of !etween 10 to 80
!illion e"ro "ntil 2030.
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0"ch rogress cannot take lace witho"t a roerly integrated)
modern energy infrastructure. *his is why the /arch E"roean
Co"ncil invited the Commission to roose secific interconnection
objectives to be attained until 2030.
*he (arch European *ouncil concl"ded that it will adot the new
framework as soon as ossi!le !"t no later than +ctober 20!4.
Energy prices
,igh energy prices in the E& contin"e to !e a so"rce of concern, for
ind"stry and for cons"mers. Clearly, if those energy cost differential with
ma6or other regions were to ersist, this wo"ld !e a serio"s challenge (
artic"larly for energy intensive industries.
*he E&s net energy imort !ill reached over E&9 100 !illion in 20-2
#3.-2 of E& :;P$. *his is twice the average level in the ast two
decades < certainly a call for action.
*he Commission+s reort on energy rices and costs #which we 6"st
"!lished as art of the 2030 ackage$ confirms that energy prices
have risen in nearly every /em!er 0tate since 2004. 3owever, we
have seen that many factors are at lay.
7"t the real key drivers of price increases include ta'es and levies,
as well as higher network costs, the indirect costs ca"sed !y the
fragmentation of o"r internal market, the lack of infrastr"ct"re,
oligoolies, etc.
5"r reort s"ggests that the effects of energy rice rises can !e artly
mitigated by ensuring cost effective energy and climate policies,
cometitive energy markets and imroved energy efficiency. *he 2030
framework can hel to alleviate this thro"gh energy efficiency,
renewa!le energy, and the s"staina!le e,loitation of indigeno"s
energy reso"rces.
*he Commission has adoted new r"les on "!lic s"ort for ro6ects in
the field of environmental rotection and energy. *he state aid
g"idelines will s"ort /em!er 0tates in reaching their 2020 targets,
while addressing how (ember &tates can relieve energy intensive
companies that are artic"larly e,osed to international cometition
from charges levied e.g. for the s"ort of renewa!les.
3owever, targeted s"!sidies m"st !e financed !y other cons"mers or
ta,ayers.
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Competitiveness
0trengthening Europe-s competitiveness is at the core of o"r
roosals. E"roe can !e the chamion of low(car!on economies, while
f"rther develoing its cometitive osition in the world.
*he E& E*0 will remain a central instrument for the transition to low
car!on economy, !"t it needs to !e restored as an effective instr"ment.
=f not, we risk a fragmentation of olicies and m"ch higher costs for
ind"stry.
For this reason we have roosed to esta!lish a market stability
reserve in the E& E*0 to tackle the s"ly(demand mismatch. *his will
give redicta!ility for the regime ost 2020.
For energy-intensive industries e,osed to international
cometitiveness, we will limit the risk of car!on leakage now and in the
f"t"re. =n this decade the Commission aims to g"arantee continuity in
the methodology of the composition of the carbon leakage list.
*he ossi!ility of earmarking E.& revenue to compensate higher
electricity prices for E//s deemed at risk of car!on leakage, which is
!eing considered !y many /0s and is already alied in 0lovakia,
sho"ld !e analysed caref"lly.
Post(2020 we sho"ld contin"e with an improved and better focused
system of free allocation, if other ma6or economies do not take
comara!le action. *he e,erience with the e,isting r"les is a val"a!le
starting oint to ens"re simlicity, redicta!ility and effectiveness.
Within the 2030 Framework, the Commission also rooses a set of
key energy indicators relating to the internal market, energy sec"rity
and competitiveness. 5ne e,amle is energy price differentials with
ma6or trading artners. *hese indicators will allow "s to monitor
rogress over time and to rovide a facts !ase for olicy resonse.
Considering the investment challenge, it will !e artic"larly imortant to
devise smart financing mechanisms to leverage rivate sector
investments, in artic"lar in lower income co"ntries. Financial
instit"tions s"ch as the E=7 sho"ld ena!le attractive loan conditions for
rod"ctive investments.
*he *ommission is ready to contemlate governance arrangements to
ensure that funds are used well in (ember &tates, e.g. via the E=7,
!"t also in the framework of the E"roean 0tr"ct"ral and =nvestments
F"nds #at least 23 !illion > in 20-1(2020$ and 3ori'on 2020 #? !illion >
over the same eriod$ in order to s"r research and innovation.
(
Energy Security
=n the conte,t of the international events !etween 9"ssia and &kraine,
the (arch European *ouncil stressed the need for the E& to intensify
its efforts to red"ce energy dependency, esecially for the most
deendent /em!er 0tates.
*he Commission was asked to cond"ct an in-depth study on E&
energy sec"rity and to resent a comprehensive plan for the red"ction
of E& energy deendence.
*he Commission+s forthcoming European Energy &ecurity &trategy
will foc"s on 8 key actions@ -$ 9ed"ction of energy demandA 2$ =ncrease
of E& energy rod"ctionA 3$ ;iversification of energy s"lyA 1$ F"ll "se
of the =E/ incl"ding the e,ansion of interconnectionsA .$ 0torage and
strategic stocksA ?$ Energy technology develomentA and 8$ 0eaking
with one voice in e,ternal energy olicy.
*he 2030 0ramework will generate s"!stantial synergies with the
European Energy &ecurity &trategy in a medi"m(term ersective. =n
artic"lar, the increase of indigeno"s energy so"rces via the roosed
target of 282 for the share of renewa!le energy as well as the red"ction
of energy cons"mtion via a new energy efficiency framework will
contri!"te to lowering E& energy deendence.
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