EN Official Journal of the European Union C 128/136

Opinion of the European Economic and Social Committee on the ‘Renewable Energy Progress Report: Commission Report in accordance with Article 3 of Directive 2001/77/EC, Article 4(2) of Directive 2003/30/EC and on the implementation of the EU Biomass Action Plan, COM(2005) 628’

COM(2009) 192 final

(2010/C 128/26)

On 24 April 2009 the European Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on

The Renewable Energy Progress Report: Commission Report in accordance with Article 3 of Directive 2001/77/EC, Article 4(2) of Directive 2003/30/EC and on the implementation of the EU Biomass Action Plan, COM(2005) 628

COM(2009) 192 final.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 12 October 2009. The rapporteur was Ms ANDREI.

At its 457th plenary session, held on 4 and 5 November 2009 (meeting of 4 November 2009), the European Economic and Social Committee adopted the following opinion by 97 votes to two with four abstentions.

1. Conclusions and recommendations

1.1. The EESC considers that climate change represents one of the most important environmental, social and economic threats facing the planet and only fast and responsible measures by all countries can mitigate its effects. However, the EU and its Member States should continue to be the drivers for an ambitious climate policy. The use of renewable resources could represent one of the main tools for reducing greenhouse gases and also for ensuring energy independence and security of supply for Europe.

1.2. The Committee is concerned that the EU is unlikely to reach the 2010 targets set by Directives 2001/77/EC and 2003/30/EC, and urges the Member States to take responsible measures and make every effort to achieve the agreed targets by 2010.

1.3. The EESC highlights the need for a single long-term EU energy strategy. Furthermore, the electricity market needs a stable and predictable long-term regulatory framework.

1.4. The renewable energy sector will offer multiple possibilities for job creation in Europe and regional development.

1.5. In addition, a better evaluation of the supplementary financial pressure put on the family budget should be made available.

1.6. Farmers and SMEs could play a key role in the renewable energy sector.

1.7. The Committee reiterates that in the transport sector, energy efficiency should be the first priority, possibly followed by the use of biofuel, when such a production method is sustainable.

1.8. In order to fulfil their targets, Member States should diversify the technology, using new engines in the transport sector, investing more in alternative fuels such as second and third generation biofuels, encouraging and supporting further R&D.

1.9. For an integrated assessment on biofuel potential and also to avoid the use of valuable agriculture land and precious areas of biodiversity, the EESC proposes that each Member State create and make available a country map showing areas of land appropriate for energy crops.

1.10. Due to concerns regarding the pressure that will be placed on forest exploitation, the EESC recommends that important steps and decisions regarding the biomass used for energy production be taken only after an appropriate monitoring system is in place.

1.11. The Commission should consider allocating appropriate funding to raise public awareness and educate EU citizens on the subject of energy. Further financing should be made available to ensure that experts in the field of energy efficiency and renewable energy production are available.

It should be proposed and reiterated that R&D budgets for renewable energy must be maintained and increased despite the financial crisis affecting Member States and the EU; otherwise all autonomy vis-à-vis other powers may rapidly be lost.

1.12. For the next progress reports, the European Commission should also consider the option of monitoring and reporting the treatment and recycling of renewable energy equipment when it reaches the end of its life cycle.

2. Introduction

2.1. On 24 April 2009, the Commission adopted its communication COM(2009) 192 final ‘The Renewable Energy Progress Report’, accompanied by a more detailed staff working document SEC(2009) 503 final. ‘The Communication recalls the European policy framework for renewable energy: the importance of renewable energy for meeting our climate change and sustainability objectives, improving the security of our energy supply and developing an innovative European renewable energy industry to generate jobs and wealth for Europe’.

2.2. Under Directives 2001/77/EC and 2003/30/EC, the Commission established 2010 targets for the share of electricity from renewable energy and for the share of renewable energy used in the transport sector. These directives require that EU Member States submit annual reports, analysing progress against their national indicative targets, and that the EC review progress every two years. In addition, a Biomass Action Plan was adopted in 2005 (1) to focus attention on the specific need for Member States to develop Europe's biomass resources.

2.3. Member States were free to choose their preferred support mechanism in order to achieve their targets.

2.4. This latest progress report notes the poor progress of the last two years, with only two Member States already reaching their targets. It confirms the earlier analysis indicating that the EU is unlikely to reach the 2010 targets. The EU could reach a 19 % share in electricity consumption from renewable energy, rather than 21 %, and it could reach 4 % instead of 5,75 % from renewable energy resources in the transport sector.

2.5. The report explores the reasons and explains that the new Renewable Energy Directive (2009/28/EC) (2), agreed as part of the energy and climate package, addresses all the concerns highlighted in the report and provides a solid basis for removing barriers and increasing the growth of renewable energy for the next 10 years.

3. Commission documents

3.1. Renewable energy for the electricity sector

3.1.1. The Commission Communication provides information on progress reports, focusing on data from 2004 to 2006 for electricity and 2007 for biofuel.

3.1.2. The data shows a share of 15,7 % of EU final electricity consumption from renewable energy sources in 2006, up from 14,5 % in 2004. The 2010 target of 21 % will not be reached without significant additional effort. Only two countries, Hungary and Germany, reached their 2010 target, six Member States had made more progress towards their 2010 target than the European average, but seven countries have halted or actually reduced their shares.

3.1.3. The diversity of technologies used has been limited. The highest growth has occurred in the use of solid biomass and wind.

3.1.4. Different rates of progress are registered due to the 27 different support schemes used, consisting of various policy tools, including: feed-in tariffs; premium systems; green certificates; tax exemptions; obligations placed on fuel suppliers; public procurement policy; and research and development. Inconsistency and rapid changes in the policies and budget hamper the development of renewable electricity projects.

3.1.5. The main problems for implementation are identified in the area of administrative barriers and access to the grid: insufficient grid capacity, non-transparent procedures for grid connection, high connection costs and long lead times to obtain permits for grid connection. Those major obstacles are generated more often by limits on administrative and other resources than technological constraints.

3.1.6. In addition, in some Member States grid connection and expansion costs and the charging regimes of some transmission system operators and distribution system operators still favour incumbent producers and discriminate against new, often decentralised, smaller renewable electricity producers. This hampers job creation and growth at local and regional level.

3.1.7. The guarantee of origin regime has still not been implemented fully by all Member States, due to problems of reliability, double counting and the risk of disclosure of the same energy to two different groups of consumers. This has undermined the consumer market for renewable electricity in general.

3.2. Renewable energy for the transport sector

3.2.1. The Directive on renewable energy in transport (Directive 2003/30/EC) required Member States to set targets for the share of renewable energy replacing petrol and diesel in transport in 2005 and 2010, taking as their starting point reference values of 2 % and 5,75 % respectively. The progress report of January 2007 (3) showed that in 2005, biofuels achieved a share of 1 % in the EU, with only Germany and Sweden reaching the reference targets.

3.2.2. According to Member States' reports, in 2007, 8,1 Mtoe (2,6 %) of the total fuel consumed in transport in the EU was from biofuels. In 2007, biodiesel accounted for 6,1 Mtoe or 75 % of renewable fuels in transport, of which 26 % was imported. Bioethanol constituted 1,24 Mtoe or 15 % of renewable fuels in transport of which 31 % was imported, the remaining 10 % being made up of pure vegetable oil consumed in Germany, Ireland and the Netherlands and biogas in Sweden.

3.2.3. Germany, France, Austria, Sweden and the UK remained the top five biofuel consumers in 2006 and 2007, consuming 87 % and 81 % of the total EU biofuels respectively. There was no reported consumption of other types of renewable energy in the transport sector. The use of hydrogen from any source remains insignificant; little electricity from renewable energy sources is used in road transport.

3.2.4. Net bioethanol imports increased from 171 Ktoe in 2005 to 397 Ktoe in 2007 and the share of domestic biodiesel production has been falling. The EU trade balance of biodiesel changed from positive in 2005 (355 Ktoe exported) to negative in 2007 (1,8 Mtoe of biodiesel imported). A major cause of this change was cheaper soy oil methyl ester from the United States and ethanol produced from sugar cane in Brazil and Argentina.

3.2.5. Tax relief and biofuel obligations have been the most common instruments used by Member States to promote biofuels. In 2005-2006, all Member States, except Finland, used excise tax exemptions as the main support measure, while biofuel obligations were only used by three countries. Since 2007 more than half of Member States have adopted obligations to produce blended fuels with a certain biofuel, in most cases combined with partial but increasing levels of taxation. Some countries use a quota mechanism and tender.

3.2.6. Additionally, some Member States provide support for biofuels through specific measures. These policy instruments include measures relating to agriculture such as the production of feed stocks and to industry where necessary operations to achieve the intermediate and finished product are carried out; measures relating to distribution of biofuels; the purchase and maintenance of cars and vehicles utilising biofuels.

3.3. Economic and environmental impact

3.3.1. From an economic point of view, increased use of biofuels has contributed to security of supply by decreasing fossil fuel dependence and diversifying the fuel mix in the EU.

3.3.2. The biomass and biofuel sectors have also contributed to the EU economy by generating additional jobs. In 2005, non-grid biomass use accounted for 600 000 jobs, biomass grid and biofuels contributed over 100 000 jobs and biogas around 50 000. In addition, agriculture and forestry play an important role in supplying the fuel for biomass technologies.

3.3.3. The net greenhouse gas savings achieved in the EU from biofuels placed on the market and consumed in 2006 and 2007 amounted to 9,7 and 14,0 Mt CO2 eq respectively. This implies that EU biofuel consumption has been fulfilled through the re-use of recently abandoned agricultural land or through slowing down the rate of land abandonment in the EU.

3.3.4. The introduction of biofuels remains more costly than other CO2-abatement technologies in other sectors, but with today's technologies it still remains one of the available solutions to curb the growing CO2 emissions of the transport sector.

3.4. Infringement proceedings

3.4.1. Since 2004, the Commission has started 61 legal proceedings against Member States for non-compliance with Directive 2001/77/EC on the promotion of electricity produced from renewable energy sources in the internal electricity market. Of these, 16 have not yet been resolved. On the basis of Directive 2003/30/EC on renewable energy in transport, since 2005 the Commission has started 62 legal proceedings against Member States, many of which were for failure to comply with reporting obligations or failure to set national objectives in compliance with the references values of the Directive.

3.5. Renewable energy used in heating and cooling

3.5.1. This sector is responsible for approximately 50 % of all final energy consumption and 60 % of all renewable final energy consumption. It is dominated by biomass, but also includes solar thermal and geothermal energy.

3.5.2. Biomass can be used in the production of heating and electricity, as well as in the form of ‘biofuels’ i.e. the use of biomass in transport. This is why the EU produced the Biomass Action Plan (BAP) in 2005 with 33 actions, which highlighted the need for coordination of policy, and why this report reviews progress in the biomass sector.

3.5.3. Problems confronting the growth of biomass include administrative and non-market barriers, such as the need for clearer and harmonised definition of terms and bottlenecks arising from long and legally complicated procedures for processing permits.

3.5.4. There are still several administrative barriers that hinder the development of bioenergy plants within EU Member States. The Commission carried out a study on benchmarking bioenergy permits, analysing time requirements in the EU and factors affecting the success or failure of getting a permit.

4. General observations

4.1. The EESC welcomes the Commission's communication, highlighting the ongoing need for a new and stronger legislative framework, including ongoing monitoring and reporting. Some of the identified barriers have already been considered when drafting the new renewable energy directive and guidelines for the National Action Plan.

4.2. The EESC reiterates that it fully supports the use of renewable energy and that it is aware that in the medium to long term a much higher share of renewables than the 20 % envisaged for 2020 will be needed if the Council's ambitious target (a 60-80 % CO2 emissions reduction and higher energy self-sufficiency) is to be achieved (4).

4.3. The EESC highlights the need for a single long-term EU energy strategy.

4.4. To reach the Community's objectives with regard to the expansion of electricity produced from renewable sources, more public awareness and education is needed to obtain public support. This is why an important role could be played by national programmes for supporting developments in the renewable energy sector.

4.5. The renewable energy sector offers many possibilities for job creation in Europe. The ‘Low carbon jobs for Europe’ (5) WWF study shows that at least 3,4 million European jobs are directly related to renewable energy, sustainable transport and energy efficient goods and services.

4.6. Renewable energy production often depends on local or regional small and medium-sized enterprises (SMEs) and farmers.. The opportunities for growth and employment that regional and local renewable energy investments bring about in the Member States and their regions are important. The EESC recommends that regional development measures should be taken, encourages the exchange of best practices in renewable energy production between local and regional development initiatives and promotes the use of EU funds in this area.

4.7. In recent years, the Commission has allocated substantial financial resources for the development of second-generation biofuel technologies under FP6 and FP7 (6). Under the ‘Intelligent Energy Europe II Programme’ good practices were also identified to promote bioenergy in EU Member States. Currently, the EU should shift from innovative examples to multiplication of the best practices (7) in the most efficient way.

4.8. Financing research on new engines and second generation biofuels and other renewable fuels is necessary; taking measures to enhance market access to alternative fuels is also recommended (8).

4.9. For the next progress reports, the European Commission should also illustrate the options for treating and recycling renewable energy equipment at the end of its life cycle. A good example in this field is the activity of the Association PV Cycle, setting up a voluntary take back and recycling programme for end-of-life modules and to taking responsibility for PV modules throughout their entire value chain, creating the tools for monitoring, reporting and developing best practices in the field.

5. Specific comments

5.1. Renewable energy for the electricity sector

5.1.1. The Committee is concerned that the EU is unlikely to reach the 2010 targets set up under the two directives. We therefore urge Member States to take responsible measures and to devote all the efforts needed to fulfil the agreed targets, even if they were not mandatory. As the Stern report emphasised, inaction will be much more expensive in the long run.

5.1.2. Today 27 different national support schemes exist, and there is a risk that Member States will outbid each other to reach their targets, making it more expensive than necessary. In order to fulfil their targets, Member States should diversify the technology used, encouraging and supporting more R&D (9) and proper education and training (10). A good example of the development of R&D with the financial support of the state is the IMEC centre in Belgium (www.imec.be).

5.1.3. The EESC again underlines the need for a common strategy for energy policy on the part of Member States, based on cost-benefit analysis. Many bodies, including the EESC, have called for the EU to speak with one voice. However, as long as some Member States look primarily to their own interests, the European energy arena will remain weaker, more vulnerable and less efficient than it could potentially be; the larger the Member State is, the more impact it will have (11). In this respect, at the end of June the EC presented the guidelines for the National Action Plan (12) for renewable energy, facilitating a common understanding of the use of renewable energy.

5.1.4. In order to overcome the main barriers identified in the report regarding access to the grid, there is a need for strong support for renewable energy utility grid integration as well as for the use of intermittent energy storage systems (such as batteries) for integrated renewable energy production. Regarding administrative barriers, Member States should give serious consideration to the Commission’s recommendation for a single administrative body responsible for all necessary authorisations, working in a more transparent way (13). Furthermore, the electricity market needs a stable and predictable long-term regulatory framework and a better harmonisation of the incentive programmes of the Member States.

5.1.5. Proper implementation in all Member States of the guarantee of origin regime could contribute to reaching the target more cost effectively at the European level.

5.2. Renewable energy for the transport sector

5.2.1. The EESC agrees with the Commission’s statement that ‘the introduction of biofuels remains more costly than other CO2-abatement technologies in other sectors’, but cannot agree that: ‘it still remains one of the few available solutions to curb the growing CO2 emissions of the transport sector’, as long as sustainable transport programmes are not properly implemented in all Member States.

5.2.2. The need for energy efficiency in the transport sector is imperative: a binding percentage target for renewable energy is likely to become increasingly difficult to achieve sustainably if overall demand for energy for transport continues to rise. The EESC has pointed out on a number of occasions that this issue should be tackled with a policy of traffic prevention and a change in the modal split, and also market incentives in favour of more climate-friendly modes of transport such as local public transport and shipping (4).

5.2.3. Currently, European production from renewable energy sources in the transport sector is almost exclusively restricted to biofuels, which cover only 2,6 % for 2007, of Europe's energy needs in the transport sector. In its opinion (14) on the progress made in the use of biofuels, the Committee argued that the policy thus far pursued should be reconsidered, emphasising second-generation agrofuels. At the same time, the development of second-generation conversion technologies should be promoted and supported: they can use raw material from ‘fast-growth crops’, based principally on herbaceous or forestry crops or agricultural by-products, thereby avoiding the use of the more valuable agrofood seeds (15).

5.2.4. In order to avoid the use of agriculture land and areas with biodiversity value, for producing biofuel, EESC is proposing that each MS should make available a country map, showing the areas allocated for energy crops. This measure will also contribute to a better estimation of the biofuel potential at the European level.

5.3. Economic and environmental impact

5.3.1. The Commission document on the economic and environmental impact is fairly optimistic, focusing largely on the positive impact and overlooking the impact of biofuels on food prices. Therefore the EESC recommends that the use of agriculture to produce high-quality food should take precedence over its use for energy production in order to react to higher food prices. The European Union should take steps to improve promotion of sustainability criteria for biofuels and the development of second and third-generation biofuels. By initiating a biofuels certification system, the EU will take the lead in promoting sustainable cropping practices (including land use change and biodiversity protection) inside and outside its borders.

5.3.2. The Commission document does not asses the economic and social impact of using renewable energy sources on the final consumers' budget.

5.4. Renewable energy used in heating and cooling

5.4.1. Due to the use of biomass in the production of heating and electricity, as well as in the form of ‘biofuels’, the Committee anticipates strong pressure on forests. In addition to this, the fact that more than 70 studies (16) funded by the European Commission regarding the total 2020 potentials estimated for the EU-27 differ to a considerable degree (76 Mtoe – 480 Mtoe) increases our concern regarding forest management and the pressure that will be placed on forest exploitation. Important steps and decisions regarding the biomass used for energy production will be taken only after an appropriate monitoring system is in place. It thus looks forward to receiving the Commission's planned report on biomass sustainability (17).

Brussels, 4 November 2009. The President of the European Economic and Social Committee Mario SEPI

(1) COM(2005) 628 Biomass Action Plan.

(2) OJ L 140, 5.6.2009, p. 16.

(3) COM(2006) 845 Biofuels Progress Report.

(4) EESC Opinion on The use of energy from renewable resources, OJ C 77, 31.3.2009, p. 43-48.

(5) http://assets.panda.org/downloads/low_carbon_jobs_final.pdf.

(6) Over EUR 109 million according to the report.

(7) BAP Driver – European Best Practice Report, available at: http://www.bapdriver.org/.

(8) EESC Opinion on Alternative fuels for road transport, OJ C 195, 18.8.2006, p. 75-79.

(9) EESC Opinion on Facing the oil challenges, CESE 46/2009 (point 5.8).

(10) OJ C 277, 17.11.2009, p. 15-19.

(11) OJ C 228, 22.9.2009, p. 84-89.

(12) Commission decision C(2009) 5174-1/30.6.2009.

(13) OJ C 182, 4.8.2009, p. 60-64 (point 4.7).

(14) EESC opinion on Biofuels Progress Report, OJ C 44, 16.2.2008, p. 34-43.

(15) OJ C 162, 25.6.2008, p. 52-61.

(16) Status of Biomass Resources Assessments Version 1, December 2008: http://www.eu-bee.com/.

(17) Article 17 of Directive 2009/28/EC