Feb. 17 (Bloomberg) -- European Union leaders intend next month to agree on a timeline for developing energy and climate targets for 2030, delaying a final decision on the polices, according to two people with knowledge of the matter.
Most governments in the 28-nation bloc need more time to reconcile differences over a proposal by the EU’s regulatory arm calling for tighter emissions restrictions and an overhaul of renewable energy policies by 2030, said the people, who asked not to be identified because of policies against speaking publicly. EU presidents and prime ministers will debate the issue in Brussels for the first time on March 20 and may back setting a deadline for a decision later this year, they said.
The delay may be a setback for the global effort to fight climate change and for United Nations Secretary General Ban Ki-Moon, who is convening world leaders on Sept. 23 to set out ways to curb fossil fuel emissions. The EU has for decades been at the forefront of that process, and hesitation on its part may remove a spur for the U.S. and China to act.
“It’s very important that EU leaders set a time horizon in March for endorsement of the commission’s proposal -- that’s a signal that Europe must send globally,” said Tomas Wyns, a researcher at the Institute of European Studies at the Brussels Free University. “Hopefully that will be June. Otherwise it may only be October or at the end of the year.”
Before the EU summit in March, governments are scheduled to discuss the commission’s proposal at a gathering of competition ministers on Feb. 20, with environment ministers on March 3, and energy ministers the next day, according to Greece, which holds the bloc’s rotating presidency.
Heads of state will probably give political guidance on the matter through the European Council, said a presidency official, who asked not to be identified because of communication policy rules. The official declined to comment on the possible outcome of the March meeting.
EU carbon prices rose as much as 3 percent to a 13-month high of 6.88 euros on the ICE Futures Europe exchange in London today, buoyed by the commission’s plan to start temporary curbs on supply as soon as next month. The 2030 package will be the next focal point for investors, since stricter climate targets would mean the supply of allowances will have to be cut more aggressively after 2020.
Debate about the timing of adopting the target highlights the divide between countries in western Europe such as Britain and France, which want a quick decision, and those in the east led by Poland, which are concerned that the new targets will boost energy prices.
The European Commission’s proposal calls for carbon dioxide emissions to be cut by 40 percent by 2030, double the goal for 2020. It would require an average annual investment of 38 billion euros ($52 billion), according to an EU policy paper on Jan. 22. The current pace of reductions would lead the EU to a 32 percent cut by 2030.
The commission’s ambition is to have a political decision on the direction of future policy in time for the Sept. 23 summit, where the UN is seeking pledges that can underpin a global treaty limiting emissions to be approved in 2015 in Paris.
The strategy recommended by the commission also includes an EU-wide target to boost the share of renewables in energy consumption to 27 percent by 2030. The decision to focus on a single greenhouse-gas reduction target binding on member states and discontinue renewables goals for individual nations has been supported by the U.K. and criticized by companies including Vestas Wind Systems A/S and Alstom SA, which make wind turbines and nuclear reactors.
EU nations have established the world’s largest carbon market and extended restrictions on emissions under the Kyoto Protocol until 2020 as Russia, Japan and Canada rejected further limits. The U.S. never endorsed the Kyoto treaty, which was negotiated in the Japanese city by that name in 1997.
It is “imperative” that EU leaders turn the commission’s proposal into a decision in March, French Foreign Minister Laurent Fabius said on Feb. 6, according to Agence France Presse. Without a political declaration next month, Europe may have nothing to offer at the UN climate summit in September, because elections to the European Parliament in May and the end of the current commission’s term in October will complicate the decision-making process, he said.
Poland, which relies on coal for more than 90 percent of its electricity production, said no decision on new energy and climate targets should be made before the commission’s term expires. Future policies in Europe must take into account the region’s competitiveness and the costs of energy, which in some parts of the region are double U.S. levels, according to the Polish government.
“We want a broad discussion in March, not a decision,” Economy Minister Janusz Piechocinski told reporters on Feb. 12 in Warsaw. “Our logic is the following: If Poland is forced, it will veto those European solutions. We are calling for a more ambitious goal: a global agreement.”
Environment ministers will not aim to adopt a unanimous political statement on the 2030 package at their gathering, leaving the matter to the EU leaders, according to the two people with knowledge of the matter.
Only after EU leaders back the strategy for the next decade will the commission be able to start drafting legislation on how to achieve the targets. The law proposed by the commission will then need to be adopted by member states and the European Parliament. That process typically takes a year or two.
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