EU Moves Closer to Deal on 2030 Climate, Energy Strategy

The European Union made headway toward a deal on a strategy to shift to a low-carbon economy and boost security of energy supplies amid a natural-gas dispute between Russia and Ukraine.

Energy and environment ministers from the EU’s 28 member states met in Milan yesterday to prepare ground for a compromise at the Oct. 23-24 summit, where the bloc’s leaders are expected to decide on policies for 2030. The challenge for governments is to reconcile the need for cheaper and safer energy while accelerating the pace of emissions reductions.

“There’s a real sense that a deal can be done and a real determination to try to get a deal done,” Ed Davey, U.K. secretary of state for energy and climate change, said in an interview after the meeting. “There’s still quite a deal of diplomacy to be done, but we’re narrowing down on the differences.”

EU nations are discussing a recommendation by the European Commission to adopt a binding goal to cut greenhouse gases by 40 percent by 2030, accelerating the pace of emissions reduction from 20 percent in 2020 compared with 1990 levels. The EU’s regulatory arm also proposed an EU-wide target to boost the share of renewables in energy consumption to 27 percent and an additional goal of increasing energy efficiency by 30 percent in the next decade.

‘Constructive Debate’

“It was a very constructive debate,” EU Climate Commissioner Connie Hedegaard told reporters after the ministerial gathering. “I’ll leave Milan with the impression that it will be possible for our heads of state to make the package.”

At their summit, which will take place in Brussels, EU leaders are also scheduled to discuss energy security strategy for Europe. The debate to diversify energy supply sources and reduce the region’s dependence on fossil fuels comes as a pricing dispute led to the cutoff of Russian natural-gas supplies to Ukraine, the transit country for around 15 percent of the EU’s demand for the fuel.

“It’s ironic that in a way you could say energy security is being put on the table because of what’s happening in Ukraine and Russia,” Davey said. The conflict is helping people understand “if we’re going to make investment to improve our energy security, they’re the same investments that we’ll have to make to tackle climate change.”

Temporary Deal

The EU is trying to broker a compromise between Russia and Ukraine and proposed a temporary deal to restore flows before winter. The next round of three-way talks will be set this week, the commission said in a statement on Oct. 3.

Russian Energy Minister Alexander Novak on Sept. 26 called the EU plan “a big step” toward an agreement. Ukrainian Energy Minister Yuri Prodan said last week that his country is “ready to reach an agreement but not at the volumes and in the timeframes set by Russia.”

Concerns among EU governments over a possible disruption have increased as Russia and Ukraine have traded accusations of threats to EU-bound gas since July. European nations have already agreed to stress test Europe’s energy system to help overcome a potential cutoff in the 2014-15 winter and the results showed the bloc can manage potential problems, according to Claudio de Vincenti, Italian deputy minister for economic development.

“Different stress tests have been conducted, ranging from a one-month-long interruption, which could be very well dealt with, up to longer interruptions, which would pose more serious problems, though we could also deal with as well,” said de Vincenti, whose country holds the rotating EU presidency.

Energy Security

EU leaders plan to decide on further measures to enhance the bloc’s energy security later this month. They have already backed the completion of the common energy market, developing interconnections, modernizing infrastructure and diversifying supply sources. The ministerial meeting laid down the basis for the summit to be a success, EU Energy Commissioner Guenther Oettinger told reporters yesterday.

Germany’s largest utility, EON SE, Swedish utility Vattenfall AB, French power-equipment maker Alstom SA and 54 other companies, funds and associations sent a letter to EU heads of state, urging them to agree on a “robust” climate and energy policy framework and energy strategy, the International Emissions Trading Association said today.

European nations are beginning to really see how the bloc’s agendas to boost energy security and fight climate change are complimentary, according to Davey. He said that while member states remained divided over the framework for renewable energy and efficiency, there was a lot of agreement around a greenhouse-gas reduction target of at least 40 percent by 2030.

“The energy and environment ministers are handing over to the heads of state a package which is actually very well developed,” he said.

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