Opinion of the Economic and Social Committee on the 'Proposal for a Council Decision concerning the organization of cooperation around agreed Community energy objectives` () (97/C 206/22)

On 27 January 1997 the Council decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for Energy, Nuclear Questions and Research, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 2 April 1997. The rapporteur was Mr Hernández Bataller.

At its 345th plenary session of 23 and 24 April 1997 (meeting of 23 April), the Economic and Social Committee adopted the following opinion by 79 votes to one with two abstentions.

1. Introduction

1.1. The purpose of the draft decision submitted by the Commission is to set out broadly-based Community objectives in the energy sector and to establish a framework for cooperation around these agreed energy objectives.

1.2. The draft decision includes a list of energy objectives basically covering competitiveness, environmental protection, security of supply, external energy relations and the promotion of energy efficiency and renewable.

1.3. The starting point for the proposal is the Resolution of the Energy Council of 7 May 1996 on the White Paper 'An energy policy for the European Union`, which invited the Commission to put in place a process of cooperation between the Community and the Member States in order to ensure that Community and national energy policies are compatible with agreed common energy objectives. These energy objectives were identified in the Council Resolution of 23 November 1995 on the Green Paper 'For a European Union energy policy`.

1.4. As indicated in numerous ESC opinions, energy is one of the key elements in Community competitiveness and in the quality of life of its citizens. As a strategic resource and sine qua non for economic growth and well-being, it will have to play a major role in the process of economic convergence.

1.4.1. Similarly, the current economic and commercial globalization (in which energy plays a particularly important role), the development of the internal market and the interaction between energy and the environment have all pointed to the need to develop a comprehensive energy policy.

1.5. To this end the Commission published a Green Paper 'For a European Union energy policy` on which the Committee gave its views in its opinion of 5 July 1995; the comments made in this opinion still reflect the Committee's current thinking.

1.5.1. The Green Paper was followed by the White Paper on an energy policy for the European Union - on which the Committee was not consulted - in which common energy objectives and a five-year illustrative work programme were drawn up.

1.6. The Committee has emphasized that the adoption of energy-related decisions at Community level must be based on a joint analysis of both the current energy situation and future prospects; this will require close cooperation between the Member States and the Community in carrying out energy studies and analyses, without prejudice to the work carried out in the International Energy Agency.

1.7. It should be pointed out that in its previous opinions on Community energy policy (), the Committee agreed with the Commission on the need to establish a common Community energy policy as well as on the importance of establishing Community energy objectives and ensuring that national energy policies are consistent with these objectives and serve the interests of the common policy.

2. General comments

2.1. In keeping with its earlier opinions, the Committee welcomes the Commission initiative, which is aimed at increasing cooperation between Member States around agreed energy objectives, and which provides a response to the call made by the Council in its Resolution of 7 May 1996 on the White Paper on an energy policy for the European Union.

2.2. The Committee would point out that the initiative should be seen as an important step towards a concerted approach to energy problems. In this regard, it is worth recalling that the Committee supported the introduction of an energy chapter in the Treaty in its own-initiative opinion on Community energy policy of 14 September 1994 ().

2.3. It therefore considers that the draft decision establishes an ambitious framework for cooperation, including a list of agreed energy sector objectives, together with the main Community instruments which may help achieve them. However, in order to ensure that this framework for cooperation is applied, at a later stage the way in which it is to be put into practice will need to be defined and Member State and Community responsibilities demarcated.

2.4. In this respect, the Committee regrets the excessively general way in which the proposal has been drafted. This will require subsequent expansion and implementation if the objectives it pursues are to be attained. The wide range of Member State and Community energy-related instruments, programmes and responsibilities means that proper cooperation must be established on the basis of the definition of common objectives and working methods ensuring both dialogue and transparency.

2.5. The Committee agrees with the Commission that the purpose is not to establish rigid sectoral energy objectives, but rather to concentrate on 'the energy cooperation policy process`. The aim is not to put national energy policies into a Community straightjacket, but to ensure that national policies and measures in the energy sector are consistent with agreed Community energy objectives.

2.5.1. The Member States' energy sectors and policies will continue to reflect their available resources, policy options and socio-economic conditions, but this diversity will have to accord with a number of objectives agreed jointly at Community level.

2.6. The creation of a real internal energy market demands a sufficient degree of consistency between Member State energy policies and certain common objectives.

2.7. The Committee also believes that this framework for cooperation should not be restricted to an on-going exchange of information and a cooperative approach to energy studies and analysis, with a view to producing regular reports assessing trends in the sector, but that it must represent a starting-point from which the Council can examine the state of the energy sector and the Commission can prepare whatever new proposals are necessary, the purpose being to guarantee compatibility of national policies with the agreed objectives.

2.8. The lack of a common energy policy or of greater cooperation in the energy sector results in duplication of Community and national measures. Since national energy policies and Community energy initiatives are complementary, they should be viewed as a whole, since their effectiveness depends on their consistency with each other.

3. Specific comments

3.1. Framework for cooperation

3.1.1. The framework for cooperation is set up in three of the proposal's articles. Article 1 establishes the objectives to be attained through the proposed framework; Article 2 lists the action to be taken by the Commission to achieve them; and, lastly, Article 3 calls on the Member States to inform the Commission annually of the measures taken by them to achieve the agreed energy objectives set out in the annex.

3.1.2 In this respect, the Committee believes that if the compatibility of national energy policies with the agreed energy objectives is to be verified, there will, in the future, need to be a clearer and more precise definition of how this cooperation, exchange of information and joint examination of national energy policies are to be established and maintained.

3.1.3. Similarly, the framework for cooperation will have to mobilize and reflect all levels of action - local, regional, national and Community.

3.1.4. The Committee backs the aim of increased transparency of action in the energy sector through the regular publication of a report on energy policy developments at Community and Member State level in relation to the agreed objectives. The report will serve as a basis for evaluation and adjustment of the energy objectives.

3.1.5. Lastly, the Committee urges the Commission to identify more clearly its own role within this framework. Apart from the exchange of information and its analysis and study work, the Commission's task should be to support Member State measures in the energy sector, in constant compliance with the principle of subsidiarity.

3.2. Objectives

3.2.1. The Committee generally endorses the objectives set out in the annex which accord with the green and white papers on Community energy policy and the relevant Council resolutions.

3.2.2. The Committee considers that the objectives, listed in the annex, must be flexible and general enough to respond to possible market changes and as a whole represent a guideline for Community action and Member State energy policy.

3.2.3. The Committee therefore believes it essential to reach a consensus on a number of clear, practicable Community energy objectives to help successfully face the present and future challenges in the sector. These objectives will serve as a benchmark against which to check the compatibility of Member State energy policies with Community actions.

3.2.4. Hence the Committee would point to the need to review the wording of the objectives with a view to making them clearer, removing ambiguity and avoiding contradictions or duplication.

3.2.5. Provision must be made for regular updating of the objectives in the light of the Commission's analyses and reports. Energy policy must be determined within the limits of the long-term economic prospects for the sector, and with due consideration for the political risk involved in extra-Community energy supplies. Flexibility and adaptability are therefore necessary in defining and implementing Community-level energy objectives.

3.2.6. The Committee would however point out that the simultaneous pursuit of some of the listed objectives could be hampered by contradictions between them. Consequently, priorities must be established and a balance struck between the objectives wherever possible, applying the flexibility and versatility demanded by such objectives.

3.2.7. Firstly, in order to clarify the proposal, a distinction must be made between three levels of objective to be pursued by energy policies and actions. They must be integrated in order to achieve a proper balance.

3.2.7.1. At the first level, energy measures - like all Community measures - must contribute to achieving the general objectives contained in Treaty Article 2. These include the establishment of a common market, the harmonious development of economic activities, respect for the environment, a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion.

3.2.7.2. Beyond these objectives, however, energy policies must help achieve aims compatible with competitiveness, security of supply and environmental protection.

3.2.7.3. Lastly, and more specifically within the general framework established by the other two levels, Member State energy policies and Community actions must be consistent with the specific energy objectives set out in the annex to the draft decision.

3.2.8. In seeking to achieve these objectives, account must always be taken of the principle of subsidiarity, the principle of proportionality and economic and social cohesion.

3.2.8.1. Under the terms of Treaty Article 3b, the principle of subsidiarity means that in areas which do not fall within its exclusive competence, the Community shall take action only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can be better achieved by the Community. Community action must concentrate on areas where it can bring about real added value.

3.2.8.2. Similarly, the Community will take action, under its exclusive competence, where certain national policies create barriers to trade and other market distortions hampering the achievement of the agreed energy objectives, without prejudice to the aims of the Treaty and to the criteria for the public service and the services of general interest.

3.2.9. Specific comments on each of the objectives contained in the annex

3.2.9.1. Energy objectives set out in the Treaties

In accordance with its comments in its earlier opinion on the Green Paper 'An Energy Policy for the European Union` (), the Committee feels that together with the objectives of market integration, sustainable development, environmental protection and security of supply, two further important general objectives should be added: creation of employment and economic and social cohesion, which must be taken into particular account in energy policies.

3.2.9.2. Integration of the Community energy market

The Committee agrees with the Commission that market integration is the central factor in all Community energy action, since a fragmented market would leave such action at the national level. Integration of the energy market must include participation by all energy sources when a Community energy structure is being decided.

3.2.9.2.1. Secondly, the Committee wishes to emphasize the importance of developing the trans-European networks, in that they contribute to security of supply, the completion of the internal market and help strengthen economic and social cohesion. The Council Resolution on the Green Paper 'For a European Union Energy Policy` singles out as an objective 'the development of the requisite energy infrastructure, in particular trans-European networks, where the need arises and on economically viable terms`. For this reason, it is important to emphasize the need to mobilize adequate financial resources to attain this objective.

3.2.9.3. Transparent and undistorted energy prices

The Committee agrees with the Commission on the need to secure transparent and undistorted energy prices.

3.2.9.4. Sustainable development: integration of energy and environmental objectives

Given the growing international dimension of many environmental questions and greater public awareness of these issues, the Community will have an increasingly important role to play in this field. Integration of energy and environmental objectives is essential, although the appropriate balance must be struck between them. Preparations for all environmental actions or initiatives must include a cost-effectiveness assessment and measures to ensure uniform conditions of competition. The Committee stresses the importance of voluntary agreements in this area, together with the fact that use of the various economic instruments in this field must take account of industrial competitiveness.

3.2.9.5. Strengthening security of supply

The action to achieve this objective must be defined more clearly. The Committee points out that if this objective is to be met, it will be necessary to boost the following, amongst others: use of indigenous sources of energy, diversity of energy sources, flexibility in interconnecting networks, international cooperation to strengthen the Union's economic and political links with its supply areas, energy cooperation with third countries, and continuing to apply security, storage and mutual support measures to cope with any interruption of supplies. Given the Union's continuing dependence on imported energy for the foreseeable future, cooperation with other major energy consuming areas will remain essential.

3.2.9.6. Coordinated approach to external energy relations

The Committee underlines the importance of coordinating external energy relations with third supplier countries and developing countries. Relations with third countries must be stepped up, not only in relation to security of supply, but also because energy sector cooperation can contribute to economic development and political stability. The role of the Energy Charter Treaty must be highlighted, as must cooperation with the countries of the Mediterranean basin.

3.2.9.6.1. While the Community has indeed assumed major international commitments through bilateral and multilateral agreements, these must be further strengthened if a solution is to be found to the problems arising from its considerable and growing external dependence, and the fact that many energy issues, especially where the environment is involved, have an international dimension.

3.2.9.7. Promotion of renewable energy resources and energy efficiency

The Committee welcomes the aim of promoting the use of renewable energy resources and increasing energy efficiency: these objectives can make a significant contribution to achieving a healthier environment and, in conjunction with the development of indigenous resources, reduce the Community's dependence on external energy resources, thereby boosting economic growth and employment. The Committee leaves further comment in this area to its opinion on the Green Paper on renewable energies.

3.2.9.8. New proposals

The following should also be included amongst the objectives:

a) contributing to a high level of consumer protection and, to this end, providing information so that users may be able to make a useful contribution to energy policy;

b) enhanced competitiveness of the Community industry in comparison with our main competitors: this entails energy supplies at non-excessive prices.

3.3. Instruments available to the Community in the energy sector

3.3.1. The Committee believes that as well as the definition of Community energy objectives, their practical implementation is crucial, as are the instruments required for this.

3.3.2. The Member States' reluctance to give up powers in the energy sector means that Community policy must focus on developing horizontal instruments on which consensus and greater Community-level coordination might be easier to achieve and more fruitful.

3.3.3. The Committee is aware that the attainment of the Community objectives involves using all the instruments provided under the Treaties in a coordinated fashion and in line with the principle of subsidiarity.

3.3.4. It would also repeat, however, the view expressed in its opinion on the green paper that when applying these instruments it is particularly important to define the responsibilities and powers of the Community and the Member States as clearly as possible.

3.3.5. The Committee underlines the importance of including the Community's trade policy and the common foreign and security policy among the instruments listed in the annex.

3.3.5.1. In this respect, it may be recalled that Treaty Article J begins by stating that 'a common foreign and security policy is hereby established`, and that 'the Union and its Member States shall define and implement a common foreign and security policy ... covering all areas of foreign and security policy`. In accordance with Article J.1(4), it is the duty of the Member States to support the Union's external and security policy actively and unreservedly, and to refrain from any action which is contrary to the interests of the Union or likely to impair its effectiveness as a cohesive force in international relations.

3.3.5.2. The objectives of this policy include promoting international cooperation. A number of instruments are also provided with which to achieve the objectives and implement the policy: systematic intergovernmental cooperation, joint positions, joint action and financial means. These are key instruments in ensuring security of energy supply, in view of the Community's large and growing external energy dependence.

3.3.6. The development of trans-European networks must be a further instrument to be taken into consideration in the energy sector, insofar as they not only contribute to facilitating completion of the internal energy market, but also increase flexibility and security of supply and encourage economic and social cohesion.

3.3.7. Lastly, the Committee would insist on the importance of stepping up research and development and the dissemination of new and better technologies in the sector, highlighting the need for Community research and development programmes to support the national measures adopted by the various Member States.

Brussels, 23 April 1997.

The President of the Economic and Social Committee

Tom JENKINS

() OJ No C 27, 28. 1. 1997, p. 9.

() OJ No C 393, 31. 12. 1994; OJ No C 256, 2. 10. 1995.

() OJ No C 256, 2. 10. 1995.