Communication from the Commission to the Council and the European Parliament - Final report on the the Green Paper "Towards a European strategy for the security of energy supply"
Date: 2002-06-26
Institutions: European Commission
Subjects: competitiveness, energy consumption, energy policy, energy saving, environmental protection, renewable energy, security of supply, self-sufficiency in energy

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 26.6.2002
COM(2002) 321 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE
EUROPEAN PARLIAMENT

Final report on the the Green Paper "Towards a European strategy for the security of
energy supply"

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE
EUROPEAN PARLIAMENT

Final report on the the Green Paper "Towards a European strategy for the security of
energy supply"

1. The Green Paper on the security of energy supply, adopted by the Commission more than a
year  ago,  opened  up  a  debate  on  energy  policy  unprecedented  in  30  years.1  In  most  of  the

Member States this debate revived discussion on national options in the energy field. It was

used for reference in some third countries, like the United States (during the preparation of the

Bush energy plan), Japan and Russia. The Barcelona European Council of March 2002 notes

in  its  conclusions  "the  intention  of  the  Commission  to  present  the  report  on  the  security  of

supplies based on the results of the  debate  generated  by  the  Commission's  Green  Paper  on

Security of Energy Supplies, in view of its next meeting in Seville".

2.  Looking  ahead  to  the  next  twenty  to  thirty  years,  the  Green  Paper  drew  attention  to  the

structural  weaknesses  and  geopolitical,  social  and  environmental  shortcomings  of  the  EU's

energy supply, notably as regards European commitments in the Kyoto Protocol. Enlargement

will do nothing to alter the situation. Even before the events of 11 September the Green Paper

also underlined the need to include plant safety questions in the security of supply concept.

3. The European economy, steadily demanding more and more energy, is essentially based on

fossil  fuels  (oil,  coal  and  natural  gas),  which  make  up  four-fifths  of  its  total  energy

consumption  and  almost  two-thirds  of  which  it  imports.  Natural  gas  from  Russia  alone

represents nearly 20% of our consumption. The EU's own energy supply covers barely half of

its  needs.  If  nothing  is  done  by  2030  the  share  of  fossil  fuels  is  going  to  increase.  Energy

imports will be much higher in 30 years' time, amounting to 70% of total needs. 90% of oil is

likely to be imported.

1  The  Green  Paper  and  the  web  page  on  the  debate  are  accessible  on  the  Internet  at  the  following  address:
http://europa.eu.int/comm/energy_transport/en/lpi_lv_en1.html.  Since  the  start  of  2002  there  have  been  an
average 30 000 visitors a month to the different parts of this website.

2

                                                
Import dependence and rising import ratios may lead to concern about the risk of interruption

to or difficulties in supply. However it would be simplistic and wrong to conceive security of

supply  as  merely  a  question  of  reducing  import  dependency  and  boosting  domestic

production. Security of supply calls for a wide range of policy initiatives aimed at, inter alia,

diversification of sources and technologies and without ignoring the geopolitical context and

its implications.

4. The Green Paper offers a clear strategy based on demand management. It has the merit of

pointing out that the EU has little room for manoeuvre with regard to energy supply – notably

due to its low, or in certain cases less competitive (e.g. coal), energy resources.   Therefore it

is appropriate for the Union to concentrate on guiding and steering demand, unlike the United

States  which,  in  the  energy  plan  it  announced  in  May  2001,  seeks  to  meet  demand  by

constantly boosting supply.

5.  The  Green  Paper  put  13  questions  as  a  framework  for  the  general  debate.  These  have

triggered  a  number  of  responses  and  reactions  both  from  Member  States  -  including

parliamentary  and  regional  assemblies  -  and  from  companies,  consumer  associations  or

NGOs.  The  Council  has  put  together  some  provisional  conclusions  and  the  European

Parliament,  the  Economic  and  Social  Committee  and  the  Committee  of  the  Regions  have
delivered their opinions2.

From the many answers received it is clear that the discussions on the Green Paper responded

to a need, and their content shows approval for the line taken by the Green Paper and most of

the proposals. It has even been possible to enter into a dispassionate debate on the place and

role of nuclear power, which has helped to shed some light on the national debates.

6.  The  conclusion  is  that  there  is  virtually  unanimous  agreement  on  the  strategic  axis  of

demand  management:  energy  consumption  must  be  guided  and  steered.  The  conclusions  of

the Barcelona European Council, stressing in particular the need for better energy efficiency

by 2010 and rapid adoption of energy taxation proposals, clearly give political backing to this

priority.  Without  waiting  for  the  debate  to  end,  the  Commission  made  some  very  well-

received  proposals  along  these  lines,  involving  actual  legislation  and  not  just  encouraging

2 A summary of replies to the questions in the Green Paper is annexed.

3

                                                
words or exchange of good practice, some of which have already been adopted by the Council

and the European Parliament.

One  of  these  proposals  in  particular  was  the  Directive  on  electricity  production  from

renewable sources, adopted in  2001, under  which Member  States  undertake  to  comply  with

national  targets  for  future  consumption  of  electricity  produced  from  renewable  energy

sources,  to  set  up  a  system  of  guarantees  of  origin  of  green  electricity,  and  to  introduce

accompanying measures to facilitate the market penetration of green electricity on the internal

market. Within this regulatory framework, 22% of the  electricity  consumed in the European

Union by 2010 should have been produced from renewable energy sources.

Another  was  the  proposal  for  a  Directive  on  energy  saving  in  buildings,  which  provides  a

precise  legislative  framework  for  limiting  energy  consumption  in  this  sector,  representing

40%  of  the  energy  consumed  in  the  European  Union.  Given  the  right  conditions  for

economising and improving efficiency, it should be possible to save about 22% of this energy

consumption. The Directive proposed will help to achieve this objective by the establishment

of  a  common  methodology  for  calculating  and  regularly  updating  minimum  energy

performance standards for new and existing buildings, to be adopted by the Member States in

accordance  with  the  subsidiarity  principle,  and  certification  schemes.  In  addition  to  these

arrangements there will be improved inspection of heating and cooling installations.

Finally, the Commission has also made regulatory and fiscal proposals to promote biofuels,

providing that these will make up a minimum of initially 2% of all fuels sold in 2005, rising

to  5.75%  in  2010.  In  the  longer  term  the  great  progress  being  made  by  substitute  fuels,

including biofuels, might make it technically possible to replace 20% of the petrol and diesel

used for road transport with these products by 2020.

Implementing  these  proposals  will  bring  a  saving  of  approximately  10%  in  conventional

energy use in the coming years and make it possible to limit the rising trend in energy demand

in the Union due to increased consumption by households and the tertiary sector (estimated at

2-4% per year by 2010 in the Member States and 3-6% per year in the candidate countries).

Certainly in the transport  field  -  representing 32%  of  energy  consumption  and  28%  of  total

CO2 emissions - the effort to reduce demand is key. Measures recommended by the Transport

Policy  White  Paper  for  judicious  management  of  mobility,  modal  rebalancing  and  true

complementarity between transport modes will actively contribute to achieving this objective,

4

as called for by the Gothenburg European Council. Revitalising the railways, investing in the

trans-European networks and harmonising fuel taxes for commercial users are all instruments

towards the same goal, as is the impending proposal for a framework directive on charging for

infrastructure  use  -  the  importance  of  which  was  re-emphasised  by  the  Barcelona  European

Council in its conclusions - in order that by 2004 the prices of the different transport modes

better reflect their cost to society.

7.  A wide debate also developed around the Green Paper proposal for a new approach to oil

stocks.  The  Green  Paper  proposal  for  strategic  oil  reserves  would  aim  to  increase  greater

reliance on solidarity between the Member States in time of crisis. It should be remembered

that in 2004 the enlarged Union will be consuming more than 20% of world oil production.

Geopolitical uncertainties and oil price volatility raise the issue of improving the organisation

of  strategic  oil  stocks  and  co-ordinating  their  use.  The  Commission  is  analysing  whether

proposals  on  this  subject  are  necessary,  taking    account  of  various  positions.  Similartly  a

discussion  took  place  as  regards  the  need  for  strategic  gas  stocks.  The  Commission  is

assessing the situation taking into account amongst others whether complementary measures

have to be taken for the stability and successful completion of the internal energy market..

Against this  background,  increased  dialogue  between  the  European  Union  and  the  producer

countries is imperative for improving market transparency  and concluding satisfactory supply

agreements.  This  dialogue  also  contributes  to  improved  conditions  of  stability  in  those

countries.    Support  for  this  idea  has  been  expressed  in  several  contributions  to  the  Green

Paper  debate.  Such  consultation  has  to  continue  whatever  the  international  economic

situation,  whether  prices  are  rising  or  falling.  and  must  also  include  discussion  on

infrastructure safety aspects

8. The debate on the Green Paper has shown the need to develop a Europe-wide security of

supply  concept  which  alone  will  enable  Europe  to  control  its  energy  future.  As  recently

emerged from the Paris, Brussels and very recently Moscow summits, the dialogue the EU is

entering  into  with  Russia  aims  to  create  a  new  energy  partnership.  Projects  have  been

launched on network security, protection of investments or identification of major projects of

common interest. Hopefully, this dialogue will make it possible to determine the best future

use  of  long-term  supply  agreements  and  production  sharing  agreements,  on  which  the

representatives of industry expressed some major concerns in the Green Paper debate.

5

9. Efforts to promote  new  and  renewable energy sources,  representing  only  6%  of  the  EU's

energy balance, have been too feeble so far: on present trends they will account for only 9%
of total European consumption by 20303. The Green Paper's proposal for the development of

these sources to be financed by conventional energy sources prompted a mitigated response.

10.  The  nuclear  factor  remains  an  inseparable  part  of  the  debate.  The  Green  Paper  made  it

possible  to  hold  a  frank  and  open  exchange  of  views  on  nuclear  energy,  which  arouses

diverging  views  within  the  Union.  The  Green  paper  noted  that  ‘concerns  about  global

warming  have  changed  the  perception  of  energy  supply  constraints’  and  that  this  was

‘particularly  pertinent  for  nuclear  energy’  as  its  use  for  electricity  generation  together  with

renewable energies and energy efficiency makes it possible to avoid emissions of greenhouse

gases  that  result  from  burning  fossil  fuels.    The  saving  in  greenhouse  gas  emissions  it

represents amounts to more than 300 million tonnes of CO2 (equivalent to half of the vehicles

on  EU  roads).    This  figure  is  far  from  negligible  and  no-one  disputes  the  fact,  on  the

understanding  that  it  is  seen  in  the  context  of  a  large  range  of  other  measures  aimed  at

reducing  emissions.      Under  its  European  Climate  Change  Programme  (ECCP),  the

Commission  has announced a set of measures that can potentially cut emission by some 122

to  178  million  tonnes  of  CO2  equivalent,  and  is  further  identifying  emission  reduction

options.

The  phase-out  or  moratoria  which  certain  Member  States  have  adopted  for  their  nuclear

industry  will  not  affect  the  capacity  of  the  Community  to  achieve  its  Kyoto  commitments,

since those decisions, on current planning , will only have an effect after 2012. In the medium

and  long  term  and  with  the  current  state  of  the  art,  it  must  be  considered  that  the  total

abandonment of nuclear power would mean that 35% of electricity production would have to

come from renewable and conventional energy sources, to which must be added considerable

efforts in energy efficiency and the fact that energy demand is forecast to rise.

Against  this  background,  the  range  of  choices  available  to  the  Member  States  has  to  be  as

wide as possible, without prejudice to their sovereignty in these matters.  The nuclear option

remains  open  to  those  EU  Member  States  who  would  like  it.  This  is  the  case  in  Japan,  the

United States, Canada and elsewhere.

3 Source: PRIMES modelling

6

                                                
But  one  major  lesson  to  be  drawn  from  the  Green  Paper  debate  is  that  the  future  of  this

industry depends on finding a clear and unequivocal answer to the question of the processing
and  transportation  of  radioactive  waste.4    Under  the  sixth  Research  Framework  Programme

for 2000-2006 the European Union is committed to supporting nuclear research and especially
to  improving  nuclear  safety  and  waste  management5.    It  will  be  remembered,  also,  that

nuclear  safety  has  been  treated  for  the  first  time  as  a  specific  subject  in  enlargement

negotiations. In particular, the Union has insisted that candidate countries that operate nuclear

reactors  of  certain  vintage  types  that  cannot  be  upgraded  at  a  reasonable  cost  commit

themselves to their early closure according to a fixed timetable. The Commission considers,

as it underlined at the Gent European Council, that these commitments should be included a

fortiori  in  the  adhesion  Treaty.    Since  1999,  the  Commission  has  been  mobilising

considerable  Community  funds  necessary  for  the  decommissioning  efforts  in  the  three

countries affected.

The question of nuclear safety in an enlarged Union remains a major concern for most of the

participants in the debate on the Green Paper. It is not surprising, therefore, that the Laeken

European Council in December 2001 demanded a high level of nuclear safety in the enlarged

Union, including regular reporting.

For  the  next  stage,  the  Commission  will  examine  a  proposal  opening  the  way  to  a  truly

Community  approach  to  nuclear  safety  in  the  form  of  common  standards  and  practices  and

European  control  mechanisms  and  peer  review.  The  Union  could  also  contribute  to  rapid

progress towards lasting solutions to the management of radioactive waste by fixing precise

deadlines at Community level for the introduction of more effective waste storage systems at

national level.

11. Concrete proposals for harmonising taxation as well as questions of charging in transport

are  met  with  some  reservation.  However,  the  lack  of  tax  harmonisation  is  causing  some

distortion of competition between Member States. Furthermore, sustainable development calls

for charging and taxation measures which will take negative external factors into account. The

4 A Eurobarometer survey carried out on behalf of the European Commission in October-November 2001 shows
that two-thirds of respondents thought nuclear must remain an option for electricity production if a reasonably
safe solution can be found for managing nuclear waste.

5  Nuclear  research  therefore  benefits  from  an  8%  increase  in  its  research  budget  compared  with  the  fifth
framework programme, and out of a total budget of €17.5 billio n, €1.23 billion has been allocated to the
nuclear sector.

7

                                                
Barcelona  European  Council  reinvigorated  these  aspects  by  asking  for  the  energy  taxation

Directive  to  be  adopted  by  the  end  of  2002.  Similarly,  the  European  emission  permit

arrangements which the Commission has proposed should be put quickly into place. .

The internal energy market contributes to establishing healthy competition, guaranteeing the

safety  of  energy  supplies,  reinforcing  the  competitiveness  of  the  European  economy  and

requires a better  use of  existing  cross-border  capacities.      A  power  blackout  like  the  one  in

California  recently  is  not  possible  in  the  internal  market,  which  is  reinforced  by  rules

governing  investment,  competition  and  access  to  resources  and  transport  networks  which

protect  against  this  type  of  breakdown.  To  refute  a  common  misconception,  the  internal

energy market does not only seek systematically to  reduce prices  to consumers, but  to set a

fair  price  in  compliance  with  public  service  obligations.  An  evaluation  of  the  openness  of

markets was carried out  at the request of the  Stockholm European Council (benchmarking).

This report confirms one of the main themes of the Green Paper, the need for more openness

in the electricity and gas market coupled with new needs for regulation and evaluation.

Trade within the European Union - in the case of electricity still only 8% of production - is

suffering from a lack of interconnection infrastructures. As the Barcelona European Council

brought out, improving the use of existing networks and completing missing links will help to

improve  long-term  security  of  supply.  In  this  regard,  as  stated  in  the  Green  Paper  the

Commission  has  proposed  a  European  plan  for  the  development  of  gas  and  electricity

infrastructures  and  priority  co-financing,  within  the  trans-European  networks  budget,  of  a

dozen  interconnection  projects  declared  to  be  of  European  interest.  Generally  speaking,  the

Barcelona  European  Council  has  taken  a  decisive  step  towards  completion  of  the  internal

energy market, especially in deciding to  guarantee industrial and commercial consumers the

freedom to choose their electricity and gas suppliers from 2004 onwards.

12. During the Green Paper debate, some, notably the European Parliament, wondered about

the limited legal and institutional means at the EU’s disposal to implement an energy policy

adapted to the potential weaknesses in its supply.

It  remains  the  case  that  the  Union  has  achieved  significant  progress  in  the  energy  area  by

using  several  instruments  :    the  implementation  of  the  internal  energy  market  relies  on  the

chapter  dealing  with  the  approximation  of  laws;  the  promotion  of  renewable  energy  on  the

8

basis of articles relating to environmental protection; or the development of gas and electricity

networks in the context of the chapter on trans-European networks.

One  message  of  the  debate  is  to  reflect  on  a  global  concept  of  security  of  supply.    Such  a

policy calls for a long-term anticipation effort, market surveillance mechanisms, policy tools

and reinforced relations with third countries. The Green Paper debate has revealed that at the

very time when the European Union has  the world's most integrated internal energy market, it

is necessary to reinforce the co-ordination of the measures ensuring security of supply.

Annexes :

(1) 

General response to the Green Paper

(2)

Replies to the 13 questions

9

ANNEX I - The Green Paper debate

The  Green  Paper  debate  (30  Nov  2000  –  15  February  2002)  took  place  in  the  many
contributions  received,  in  face-to-face  meetings,  in  the  distribution  of  information,  in
conferences, workshops, seminars, in special parliamentary hearings, in consultations within
and  between  industries  and  associations.  The  Green  Paper  debate  has  also  fed  into  policy
documents produced by several Member States and non-EU countries. This Annex quantifies
some of these activities.

Dissemination and discussions:

– 

– 

– 

– 

– 

around 1000 visits per day to the Green Paper website (Jan 2002), of which around
340 “downloads”;

over 20 000 copies of the Green Paper and 100 000 leaflets disseminated;

over  300  conferences,  workshops  etc  on 
Commissioners and officials, of which 28 in candidate countries;

the  Green  Paper  attended  by

national Green Paper information programmes, with national consultations, national
parliamentary hearings or other events across Member States;

debate  in  European  Community  bodies:  Council  of  Ministers  (initial  conclusions),
European Parliament, Economic and Social  Committee, Committee of  the Regions,
European  Coal  and  Steel  Community  Consultative  Committee,  EURATOM
Scientific  and  Technical  Committee,  EURATOM  Supply  Agency  Advisory
Committee, Energy Consultative Committee

Formal written contributions:

– 

– 

2366 received by the Commission during the consultation period;

wide range of contributors, as follows:

EU  and  Member  States  governments,  EFTA,  energy  policy  advisory  b
parliaments, representatives

Public energy agencies, local government

Energy industries, their trade associations and associated technical bodies

Energy consumer industries, their trade associations and associated technical b

NGOs7 and associations for energy promotion or conservation

Unions, professional and scientific bodies, universities, study groups

33

17

76

30

19

41

6 Some 7000 individuals sent submissions (identical) as part of a Greenpeace cyberaction
7 See footnote 1

10

                                                
Individuals

Total

20

236

The debate in Member States and EU institutions:

All  Member  States  made  written  contributions.  They  generally  welcomed  the  debate,
including  its  long-term perspective and integrated  approach. Most  Member States organised
some form of national public consultation, stakeholder workshop, report by advisory body or
parliamentary debate, supporting a new look at their options in the energy field. For example,
the  EU  Select  committee  in  the  UK  House  of  Lords  undertook  an  inquiry  focused  on  the
Green Paper, with hearings, over several weeks.  The EU Committee in the Danish Folketing
made an contribution. Parliamentary hearings were held in Italy,  Sweden and Spain and the
Green  Paper  featured  in  discussions  in  parliament  in  most  Member  States,  often  with
Commission participation. The Vice-President was invited to participate in several of these.

Public debate and stakeholder involvement was widely encouraged. In Italy, for example, the
Ministry organised a series of nine national discussion days on Green Paper topics, with broad
stakeholder  participation.  In  the  Netherlands,  the  Ministry  organised  discussions  among
experts and stakeholders before preparing their contribution. In Germany, in additional to the
federal  level,  several  Länder  organised  discussions.  In-depth  contributions  were  made  by
technical  bodies  advising  the  government  on  energy  matters,  alongside  the  government
contribution,  in  several  Member  States,  such  as  Spain  and  Ireland.  These  examples  suggest
the  multiplier  effect  of  the  Green  Paper  debate  in  the  Member  States.  Against  this
background, contributions from Member States were generally thorough and detailed.

The contributions indicate areas in which there is clear consensus on the relevance to security
of  supply  and  the  importance  of  finding  the  most  effective  way  forward.  This  applies,  for
example,  to  the  strengthening  of  relations  between  the  EU  and  producer  countries,  and  to
diversification, renewables and energy saving and efficiency. In other areas, the contributions
suggest  differences  of  views  on  the  relevance  of  the  issue  and  the  need  and  scope  for  a
common approach. Nevertheless, all Member States supported the focusing of attention on the
security of supply issue and Green Paper debate.

Council, in its initial conclusions in May 2001, welcomed the Green Paper and the debate and
underlined the need for a long-term strategy at national and EU level for improved security of
energy  supply  in  the  EU.  Council  agreed  that  both  demand  growth  and  supply  dependence
management should be addressed,  as should  the impact  on security of  supply  of  existing  or
planned  policies  and  measures,  notably  the  internal  energy  market.  In  December  2001,
Council  continued  its  examination,  focusing  on  physical  security  of  infrastructures  (after
September  11),  stocks,  and  the  strengthening  of  dialogue  between  the  EU  and  producer
countries.

Security  of  energy  supply  was  one  of  the  areas  included  in  a  follow-up  study  to  the  Nice
European Council, which requested an examination of the arrangements to ensure the security
of  supply  of  certain  strategically  important  products  in  the  EU.  The  Barcelona  European
Council, in its focus both on economic and on energy matters, noted security of energy supply
as an issue.

11

The European Parliament adopted a very thorough Resolution, after extensive work led by Mr
Chichester (PPE, UK) as rapporteur. In the debates in committee and at Plenary, the range of
contributions,  issues  and  stances  was  remarkable.  Consensus  on  some  issues  was
accompanied by divergences of views on others. The Committee on Industry, External Trade,
Research and Energy was the lead committee, the issue was also taken up  and examined by
the Committee on Environment,  Public Health  and Consumer Policy  and the Committee  on
Economic and Monetary Affairs. A public hearing and a hearing with the Vice President were
held.

In its wide-ranging and very detailed Resolution8, Parliament said that security of supply is a
concern and should be given high priority by the Commission, Council and Member States. It
welcomed  the  Green  Paper  as  a  basis  for  discussion.  Parliament  saw  energy  efficiency  and
savings as first priority. It called for the promotion of an “intelligent” approach to energy use,
making  Europe  the  most  energy-efficient  economy  in  the  world.  Members  argued  for
diversity,  notably  in  infrastructure,  renewables  and  indigenous  sources.  They  called  for  a
Treaty for renewables energies. They saw the range of scenarios included in the Green Paper
as too limited, especially as regards the demand side, renewables and cogeneration, and called
for more comprehensive scenarios to be developed. The environmental aspect was prominent
in the Parliament’s Resolution. For example,  the  Parliament supported  a European initiative
for the development of an emission-free coal-fired power station. Views differed on the role
of nuclear energy and how its use should be managed. Stronger relations with producer and
transit countries should be pursued. Cooperation with developing countries should include a
focus on sustainable energy. The Parliament called for an enhanced role for the Commission
in the coordination of national energy policies in the interests of the EU as a whole, as well as
in international diplomacy with producer and transit countries and international organisations,
including  WTO.  While  recognising  the  importance  of  the  principle  of  subsidiarity,  and
specifying areas where national and local administrations should act, they called on Member
States to include in the EC Treaty a Chapter on energy policy.

The Economic and Social Committee, in its Opinion9, welcomed the Green Paper, notably its
long-term  perspective.  They  emphasised  the  significance  of  energy  to  the  economy,  growth
and  competitiveness.  They  recommended  linking  energy  policy  more  closely  to  other  EU
policy  areas,  notably  climate,  research  and  agriculture.  They  emphasised  the  need  for
diversification  and  a  European  framework  for  energy  supply  which  recognises  Member
States’ competences in the energy field. They recommended maintaining the share of nuclear
energy  in  energy  supply  at  at  least  the  present  level,  in  order  to  achieve  greenhouse  gas
objectives.

The Committee of the Regions10 welcomed the attention paid to increasing the contribution of
renewables  in  building  sector.  It  recommended  that  the  contribution  of  nuclear  power  be
evaluated  on  very  wide  and  different  basis  from  other  fuels.  It  favoured  giving  priority  to
demand management and expressed concern at the impact of energy market liberalisation on
demand management. The Committee proposed energy efficiency targets for Member States
accompanied by action plans. They considered fiscal policy to be a necessary tool of demand
management and call for the inclusion of an energy chapter in the Treaty.

Interim report by Commission: issued 3 December 2001, ref: SEC(2001)1962

8 PE:A5-0363/01
9 ESC Opinion
10 CoR Opinion

12

                                                
texts 

Full 
http://europa.eu.int/comm/energy_transport/en/lpi_lv_en1.html

contributions 

available 

are 

on 

of 

the  Green  Paper  website:

13

ANNEX II – Summaries of the contributions by question

Question  1 :  Can  the  European  Union  accept  an  increase  in  its  dependence  on  external
energy sources without compromising its security of supply and European competitiveness?
For  which  sources  of  energy  would  it  be  appropriate,  if  this  were  the  case,  to  foresee  a
framework  policy  for  imports?  In  this  context,  is  it  appropriate  to  favour  an  economic
approach: energy cost; or geopolitical approach: risk of disruption?

Ensuring diversification by energy source, supply countries and supply routes is widely seen
as the key response to growing import dependence.

Contributors  see  a  key  role  for  policy  makers,  notably  in  the  creation  of  a  favourable
investment  climate,  both  within  and  outside  the  EU.  Europe  should  work  to  improve  the
investment  climate  in  third  countries  by  diplomatic  means,  co-operation  agreements  and  by
developing good,  stable  relations. One  goal  should be the reduction in the power  of  cartels.
Diversification  should  also  be  achieved  via  the  market.  Some  contributors  argue  that  open
and competitive markets, free energy prices and market-based instruments are the best way to
ensure the most appropriate  energy  mix and  diversification.  They  look  to the completion  of
the internal energy market, the GATS negotiations and the Energy Charter Treaty.

Some point to the advantages offered by solid fuels and nuclear in the energy supply of the
EU,  providing  reliability  with  stable  prices,  abundance  of  reserves  and  large  diversity  of
suppliers. North Sea reserves of oil and  gas should not be neglected in a security of supply
context,  according  to  some.  The  right  regulatory  framework  is  the  key,  encouraging  rather
than  discouraging  the  necessary  investments.  Some  argue  for  support  of  R&D  efforts  on
unconventional reserves. A minority of contributors argue that the maintenance of a « socle »
of domestic coal production is important for longer-term security of supply. However, others
underline the high costs involved and environmental problems. Monitoring the European fuel
mix  including  dual  firing  capacity  and  risk  management  measures  are  proposed  by  several
contributors.

Comments on a framework policy for imports are often doubtful, noting risks of distortion of
competition,  increased  costs  and  prices,  artificial  discrimination  against  energy  sources  and
restriction  of  consumption,  all  tending  to  reduce,  not  enhance,  security  of  supply.  Among
those  who  support  a  pro-active  policy  at  EU  level,  many  note  that  geopolitical,  economic,
environmental  and  sustainability  aspects  are  interlinked  and  some  argue  for  a  more  radical
approach at EU level to the issue of security of supply.

Some  regard  import  dependence  as  a  normal  consequence  of  the  international  division  of
labour and globalisation, and consider that dependence risks are reduced by mutual trade and
investment  and  by  good  relations  between  producers  and  consumers.  They  argue  that
increased  interdependence  can  be  beneficial  and  that  efforts  towards  a  goal  of  energy  self
sufficiency would harm EU competitiveness and economic welfare. A less optimistic view is
taken by contributors who warn of danger to security of supply in oil and  gas cartel power,
beyond EU control, and of sharply rising global population, bound to increase competition for
limited resources.

Some contributors argue for a fundamental restructuring of the energy sector, notably in the
development  of  renewables,  which,  together  with  feasible  energy  efficiency  gains,  offer  the
prospect of reduced import dependence and of meeting environmental goals. This strategy is
advocated  by  only  a  minority  of  contributors  but  many  contributors  put  forward  a  wide

14

variety  of  actions,  on  energy  demand  as  much  as  energy  supply,  as  relevant  responses  to
growing import dependence.

15

Question  2 :  Does  not  Europe's  increasingly  integrated  internal  market,  where  decisions
taken in one country have an impact on the others, call for a consistent and co-ordinated
policy  at  Community  level?  What  should  such  a  policy  consist  of  and  where  should
competition rules fit in?

Strong  support  is  evident  in  the  contributors  for  the  effective  implementation  of  the
Commission’s  current  internal  energy  market  proposals.  Many  consider  that  the  internal
energy market, if it functions in an integrated and competitive way, should efficiently deliver
secure supply, via a larger market with a variety of suppliers, more flexibility on the supply
and  demand  sides,  more  effective  price  signals,  competition-inspired  efficiency  gains  and
innovation,  etc.  However,  this  represents  an  ideal  situation.  Some  note  that  security  of
electricity  supply  in  particular  is  an  ongoing  concern.  Comments  on  what  still  needs  to  be
done  include  further  development  of  cooperation  among  regulators,  among  TSOs,  more
adequate infrastructure across an enlarged Europe, and attention to investment trends.

Many  comments  relate  to  the  EU  energy  system  as  a  whole  (diversity  of  sources,  value  of
local  sources,  complementary  use  of  different  technologies  etc)  The  EEA  EFTA  States  say
that their part in the internal energy market is not completely recognised in the Green Paper.
The idea of a level playing field is mentioned frequently, mainly understood as access of new
energy service providers  to the  market  and  internalisation of external  costs.  The  EU  role  is
emphasised  here,  especially  competition  and  state  aid  rules,  taxation,  the  Renewables
Directive,  and  EU  frameworks  for  market-based  environmental  instruments,  notably
emissions trading, green or renewables certificates etc.

Some contributors, notably the European Parliament, call for an energy chapter in the Treaty.
Others consider  existing  Community  competences  sufficient.  The  Green  Paper  idea  that  the
internal  energy  market,  along  with  enlargement  and  Kyoto,  are  creating  a  new  context  for
energy policy decisions in Europe, is widely accepted.

Some  contributors  believe  that  the  market,  driven  by  needs  for  short  term  profits,  may  not
accommodate investments for shared or longer-term needs (eg. reserve and new capacities)
and  conclude  that  some  re-regulation  will  be  necessary.  Some  Member  States  regard
themselves  as  responsible  for  safeguarding  a  minimum  generation  capacity.  Some
contributors  hold  that  liberalisation  and  market  forces  may  conflict  with  protection  of  the
environment,  as  well  as  social  justice  and  security  of  supply.  Some  comment  that  social
aspects, including employment effects, deserve more consideration.. A number raise the idea
of  public  service  objectives  for  quality  of  service,  preventing  exclusion.  Some  link  them  to
investments (reserve capacities, diversity etc) and the question of who should be the supplier
of last resort.

Some  contributors  advocate  further  development  of  commonly-agreed  targets,  for  energy
efficiency,  renewables  etc.  Many,  referring  to  the  subsidiarity  principle,  underline  the  need
for flexibility to accommodate national differences as regards climate, traditions etc. Member
States must retain enough freedom to develop appropriate instruments.  Several contributors
note that choices about energy mixes should be left to each Member State

The EU role in external relations, widely supported by contributors as beneficial in the global
market  and  geopolitical  relations,  reflects  also  internal  energy  market  developments  and
enlargement. Several contributors are concerned about the issue of long-term gas contracts,
arguing  that  they  are  essential  for  financing  the  investments  needed  to  secure  supply  from
third countries.

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Question  3 :  Are  tax  and  state  aid  policies  in  the  energy  sector  an  obstacle  to
competitiveness in the European Union or not? Given the failure of attempts to harmonise
indirect  taxation,  should  not  the  whole  issue  of  energy  taxation  be  re-examined  taking
account of energy and environmental objectives?

Tax  harmonisation  is  broadly  supported  for  different  reasons.  For  some,  harmonisation  of
energy  taxation  would  be  helpful  in  the  internal  market,  but  this  should  not  be  at  a  cost  of
increasing  taxation.  Large  energy  consumers  say  that  any  unilateral  EU  increase  in  energy
taxation  would  further  disadvantage  European  consumers,  competing  in  global  markets.
Conventional  energy  producers  argue  that  additional  energy  taxation  would  threaten  the
exploitation  of  indigenous  reserves  of  oil  and  gas,  by  reducing  the  attractiveness  of
investment  in  these  sectors  in  the  EU.  Others  see  harmonisation  as  an  opportunity  for
promoting energy taxes to achieve the higher energy prices which they believe are necessary
in order to encourage  efficiency  and new sources. For them,  energy prices should not drop,
this should not be the main focus of the internal energy market.

The idea of  a  reexamination  of the issue of energy taxation, taking account  of  energy  and
environmental  matters,  is  taken  up  by  many  contributors.  Some  say  that  energy  taxation
should be tackled as part of  the broader  debate on fiscality at EU level. The environmental
angle dominates in most contributions. Among  conventional  energy sectors,  a  differentiated
approach  to  energy  taxation,  reflecting  environmental  impacts  of  different  sources,  is
advocated  by  some  contributors  in  the  gas,  LPG  and  nuclear  sectors.  The  latter  are  among
those  favouring  a  carbon  tax  or  a  Europe-wide  fiscal  exemption  for  zero-carbon  emission
fuels.  Renewables  and  efficiency  supporters  often  favour  an  approach  to  energy  taxation
based  on  a  goal  of  internalising  external  costs.  These  are  normally  understood  to  be
environmental,  but  some  contributors  add  more  general  socio-economic  costs.  Some
contributors  accept  the  principle  of  an  approach  based  on  internalising  external  costs  but
regard the methodologies as not yet sufficiently developed for reliable practical application.

Some see state aids to conventional energies as undermining the potential competitiveness of
new and renewable energies. Many  call for  an end to fossil fuels subsidies. However,  other
contributors argue for state aids for coal production, on the basis of security of supply as well
as social justifications. Some argue that support for a « socle » of domestic energy production,
essentially solid fuels and renewables, is important for security of supply purposes. A broad
range of  contributors  from all  sectors support state  aids  to  renewables  for  a  certain  time,  to
help them to become competitive. Some consider that there is continued justification for such
aid, as long as external costs are not internalised. (See also Q.7)

As  noted  in  the  Q.2  summary,  a  number  of  contributors  see  tax  and  state  aid  policies,  and
more  generally  the  internalisation  of  external  costs,  as  part  of  the  establishment  of  a  level
playing  field  in  the  internal  energy  market,  essential  for  achieving  a  diverse,  innovative
energy market compatible with environmental goals.

Several contributors point to means other than energy taxation and state aids, for levelling
the playing field and achieving energy and environmental goals. The effectiveness of energy
taxation in altering consumer behaviour is doubted by some, pointing to poor price elasticity
of demand, notably in transport. Industry people put forward technological developments and
voluntary commitments as effective ways forward. Some point out that the biggest investors
in  renewable  energies  are  the  conventional  energy  sectors.  Broad  support  for  market-
compatible  approaches  (eg  green  certificates,  emissions  trading)  is  evident  among

17

contributors.  Some  argue  for  holistic  approaches  to  promotion  of  new  sources  and  energy
savings, via agricultural policy, land planning, public transport etc. (See also Q.10)

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Question 4. In the framework of an ongoing dialogue with producer countries, what should
supply  and  investment  promotion  agreements  contain?  Given  the  importance  of  a
partnership with Russia in particular, how can stable quantities, prices and investments be
guaranteed?

Most contributors support the EU’s producer-consumer dialogue and think that it should be
strengthened,  with  all  regions  and  countries,  at  all  levels  –  bilateral,  regional  and
international.  The  scope  of  the  dialogue  should  be  extended,  encompassing  economic
development  and  investment  issues.  Some  argue  that  a  more  adequate  legal  framework  is
necessary and should be established. For some, this should include provision for supply and
investment  promotion  agreements,  to  be  followed  up  by  identification  of  joint  cooperation
projects.  Common  understanding  should  improve,  encouraging  oil  prices  more  compatible
with global economic development.

Contributors  consider  that  the  EU’s  normal  bilateral  political  relations  with  the  relevant
countries should be used as an opportunity to proactively raise energy issues, notably security
of supply. Being more proactive in raising the crucial issues would benefit the EU’s policy for
securing supplies in affordable and not too volatile prices, according to some contributors.

Reflecting  the  importance  of  diversification,  most  contributors  consider  that  political
dialogues  should  be  pursued  with  all  the  relevant  partners.  Russia  is  a  key  partner.  EU
common foreign policy could promote agreement among the countries bordering the Caspian
Sea, the Mediterranean, also Latin America.

Contributors  see  the  establishment  of  political  confidence  as  going  hand-in-hand  with  the
creation  of  the  necessary  conditions  for  promoting  investments.  Geopolitical  and  economic
aspects  of  relations  are  interlinked.  The  promotion  of  investments  in  producer  and  transit
countries  is  particularly  important  for  EU  security  of  energy  supply.  Major  investments  are
involved,  which,  several  contributors  commented,  offer  opportunities  for  developing
mutually-beneficial  interdependence.  For  some  contributors,  growing  import  dependence  is
not per se a major concern, as EU firms may be present in this growing energy production and
trade. Some contributors argue that the promotion of foreign direct  investment  in producing
regions is the corner stone of an approach to increasing energy supply security.

Improvements  in  investment  conditions  in  general,  including  political,  legal,  fiscal  and
financial,  will  help  energy  investments.  Several  contributors  mention  the  WTO  as  the  most
suitable  forum  for  negotiating  commercial  energy  issues.  More  specific  to  energy,  many
contributors  note  the  importance  of  European  Energy  Charter  developments,  including
provisions  on  investments,  trade,  transit,  the  environment  and  energy  efficiency.  Some
concern  is  expressed  about  its  non-ratification  by  Russia.  Several  contributors  comment  on
the “stable quantities and prices” in the text of the question, and understand it as referring to
the calming of speculative movements. Many note that the development of the energy sector
in Russia is essential and that a suitable legal and fiscal framework in Russia is necessary to
facilitate  Western  investments  and  joint  ventures.  Contributors  to  the  debate  underline  that
long  term  agreements  including  production  sharing  agreements  will  play  a  crucial  role  in
achieving the investments needed for reliable, secure energy flows from Russia to Europe.

Some contributors underlined the importance of transfer of technology related to the increase
in  direct  investments  in  energy-producing  countries.  A  number  referred  also  to  the  Joint
Implementation  and Clean  Development  Mechanisms  in  the  Kyoto  Protocol.  It  is  important
that as a consequence of foreign investments, the necessary links are established between the
social actors, such as research institutes, universities, R&D departments  etc.  In this way the

19

positive interdependence becomes more stable and time lasting, contributing to the security of
supply.

Question 5: Should more reserves be stockpiled - as already done for oil - and should other
energy sources be included, such as gas or coal? Should the Community take on a greater
role in stock management  and, if  so,  what  should  the  objectives  and  modalities  be?  Does
the risk of physical disruption to energy supplies justify more onerous measures for access
to resources?

The  diversity  of  approaches  and  policies  in  Europe  is  reflected  in  contributions  on  this
question. Those favouring an extension of oil and gas stock regimes point to deficiencies in
the current system, limited to oil and implemented differently in different Member States. It is
suggested  that  chemical  feedstocks  should  be  included  in  stock  obligations.  Some
contributors  envisage  a  greater  EU  role  in  oil  and  gas  stock  management.  This  would  be
founded on accurate analyses at EU level of risks and economic consequences, notably in the
internal  market.  Adequate  provision  for  this  work  would  have  to  be  made.  Developing  it
further, the elaboration by the Commission of a framework for oil and gas stock agreements
between Member States and/or companies is proposed. Some argue for the constitution of gas
reserves  in  the  form  of  swing  production  agreements.  As  regards  costs,  some  proposals
include  funding  through  the  EU  budget,  burden  sharing  among  all  beneficiaries,  and
maintenance  by  companies  of  fuel  and  generation  capacity  reserves,  possibly  with  fair
compensation from public funds allowed

A number of contributors argue that the long absence of any severe supply interruption in oil
or gas supply is a reflection of massive oil and gas industry investments and diversification.
They note that available oil stocks are sufficient to cover a 10% shortfall over two years and
temporary shortages. As regards gas, some refer to the Commission’s earlier conclusion that
with currently available tools and by filling gaps in infrastructure, many Member States could
withstand their most serious foreseeable supply disruption for more than 12 months. For coal,
although relatively easy to stock and useful as a substitute fuel during supply disruptions, and
for  nuclear  fuel,  contributors  consider  that  the  diversity  of  suppliers  in  the  world  market
obviates  any  need  for  stocks.  It  is  pointed  out  also  that  three  years’  nuclear  fuel  supply  is
already stocked in Europe.

Arguing against extensions of oil and gas stocks régimes, critics say that they could harm the
market. Most industry  contributors  are  not  persuaded of the utility  of  using stocks  for  anti-
speculative  measures or  combating  price peaks,  as  detrimental  to  free  markets  and  optimal
resource  allocation.  Price  peaks  provide  signals  for  investors.  Critics  argue  that  extensions
could undermine long-term relations with exporting countries. They believe that they would
not  be  a  cost-effective  way  of  pursuing  supply  security.  Some  contributors  point  out  that
instruments  already  exist  which  could  considerably  increase  security,  notably  supply
flexibility,  production  swings  and  fuel  switching.  Given  differences  in  the  situations  of
Member States, some say that cooperation could be beneficial.

Some approach the issue of stockpiling more broadly. Some argue for competitive access to
gas storage facilities. Some argue that more storage facilities are needed. Some point out the
potential  of  small  domestic  oil  and  gas  fields.  For  several  contributors,  the  focus  on  fossil
fuel  stocks  is  wrong,  it  should  be  on  increasing  the  share  of  renewables  and  the
implementation  of  demand  side  measures  in  the  market.  Many  note  that  stocks  do  not
address longer-term risks related to growing import dependence.

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Question 6 : How can we ensure the development and better operation of energy transport
networks  in  the  European  Union  and  neighbouring  countries  that  enable  the  internal
market to function properly and guarantee security of supply?

Responses  are  based  on  developments  in  the  internal  energy  market.  Some  look  to  the
implementation  of  current  Commission  proposals,  further  cooperation  in  the  Florence  and
Madrid frameworks,  encouraging investments across Europe. Some  think that a more  open
attitude  to  mergers  within  the  internal  energy  market  would  also  help  investments  and
security of supply.

Concern that the market will not meet needs is evident among some contributors, arguing for
re-regulation. Some argue for public ownership and/or responsibility for networks, especially
the  electricity  grid,  and  an  EU  role,  with  proposals  such  as  making  the  European
Transmission System Operators an EU agency. Others focus on the necessary network “over-
design”, valuable insurance against regional shortages. This relates to the question of reserve
capacities and who should provide and pay for them (see Q.2).

Many  contributors  focus  on  the  further  development  of  physical  energy  links.  The  need  to
promote the construction of interconnectors between some Member States where there is now
congestion  is  widely  acknowledged.  Some  comment  on  the  need  for  improved  networks
within  Member  States  and  regions  as  well  as  between  them.  The  European  Parliament
highlights certain projects of regional character. N-S and E-W gas links should be improved.
The  challenge  of  enlargement  in  terms  of  infrastructure  draws  relatively  few  comments.
There  is  widespread  support  for  TENs:  while  some  Member  States  say  that  only  feasibility
studies  for  TENs  projects  should  be  financed,  other  contributors  argue  that  first  priority
should  be  given  to  expanding  embedded  generation  as  much  as  possible,  with  fewer  long
distance interconnections and smaller transmission losses.

The conditions for investments come up in many contributions. Within the EU, tariffs must
be sufficient to accommodate new investments. Concern is expressed, primarily by the power
industry, about the authorisation of new power plants and transmission lines. It is virtually
impossible  to  have  new  overhead  transmission  lines  accepted,  they  say,  because  of  public
concern  about  health  risks  from  electromagnetic  fields,  ecological  and  visual  impacts.  The
result  is  that  private  companies  will  shy  away  from  such  controversial  investments,  and
security of supply will be threatened.

As regards investments  in neighbouring  countries, many note  the importance  of  the  Energy
Charter  and  the  Transit  Protocol.  Some  argue  that  necessary  investment  in  neighbouring
countries  and  other  important  regions  should  be  promoted,  using  specific  EU  funding  and
EBRD  and  EIB  loans.  For  example,  the  Balkans  is  an  important  region,  restoration  of  the
damaged  transmission  network  in  the  former  Yugoslavia  will  extend  access  to  the  UCTE
network.  Possibilities  to  increase  electricity  imports  and  the  related  infrastructure  questions
are not much addressed by contributors, the debate focusing rather on the need to make sure
that  imported  nuclear  power,  from  Russia  and  FSU  countries,  is  up  to  EU  safety  and
environmental standards.

Gas  companies  argue  that  long-term  agreements  are  essential  for  security  of  gas  supply.
Some  contributors  argue  for  the  development  of  LNG  terminals  to  increase  diversity  of
supplies. Some call for support for R&D on gas pipelines and storage.

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Question 7: The development of some renewable energy sources calls for major efforts in
terms  of  research  and  technological  development,  investment  aid  and  operational  aid.
Should  co-financing  of  this  aid  include  a  contribution  from  sectors  which  received
substantial initial development aid and which are now highly profitable (gas, oil, nuclear)?

This question sparks off many comments in the debate. Most contributors go well beyond the
specific  question  posed,  to  their  views  on  how  far  society  should  go  in  pursuit  of  energy
goals, how this should best be done, at what cost to whom.

For some, the important thing is that a level playing field be established, in which all energy
technologies,  fuels  and  sources  can  compete  fairly.  They  argue  that  this  requires  external
costs, notably of environmental damage, normally borne by society, to be internalised in the
production costs of each energy. Considering that this is unlikely to be achieved in the short
term,  many  justify  ongoing  support  for  renewables.  Others  accept  the  need  for  support  for
renewables to help them to break into the established energy market, but see this as for some
limited  time  only.  A  few  contributors,  sceptical  of  the  potential  contribution  of  renewables,
argue  that  public  support  should  reflect  this.  Many  regard  the  Directive  on  electricity  from
renewables as a step in the right direction.

In  a  similar  vein,  some  believe  that  public  support  should  not  be  limited  à  priori  to
renewables.  A  number  argue,  for  example,  for  support  for  kick-starting  the  commercial
development of clean coal stations. But mainly what contributors have in mind is research and
development  support,  oriented  to  innovation  and  change,  exploiting  the  potential  of  all
energy  technologies,  including  on  the  demand  side.  On  this  point,  some  point  out  that  the
scale of research support for nuclear energy, notably for fusion, is taking away research funds
for renewables and efficiency.

As regards how  this should  be  pursued,  organised  and  financed,  many  contributors  say  that
market-based  instruments  should  be  used  as  much  as  possible,  such  as  emissions  trading,
green  certificates,  Kyoto  flexible  mechanisms.  Others  argue  that  energy  policy  goals  are  of
general public interest and that therefore public support should be raised through the general
tax  system.  Some  think  that  a  levy  or  equivalent,  shared  among  all  electricity  consumers,
could also be appropriate.

The cofinancing idea is approached in various ways. Among those supportive of pursuing the
idea,  some  note  existing  schemes  such  as  one  in  which  power  companies  not  meeting
renewables  targets  pay  into  a  fund  for  the  promotion  of  sustainable  facilities.  Arguments
against the idea include that these sectors already contribute through high energy taxes; that
the effort would be counterproductive  as the sectors are major investors  in  renewables;  that
they did not receive initial development aid as implied; that the nuclear industry has already
paid  back  the  public  support  it  received  via  cheaper  electricity  for  consumers;  that  such
subsidisation  is  economically  inefficient.  On  the  renewables  side,  some  dislike  the  implied
dependence on conventional energy sectors.

Some contributors commented that the financing of support for renewables is a matter mainly
for individual Member States, albeit within an EU framework.

Many  contributors  underlined  the  need  for  a  stable  framework,  including  legal  security,  in
which  the  large  investments  needed  in  energy  systems  and  the  technology  base  can  be
planned and undertaken, over the necessary time scale, typically quite long. Without this, the
development  of  a  diverse,  innovative  energy  supply  and  demand  system  will  be  hampered,

22

the potential of the internal energy market will be underused and  energy  and environmental
goals will be difficult to achieve.

Question  8:  Seeing  that  nuclear  energy  is  one  of  the  elements  in  the  debate  on  tackling
climate  change  and  energy  autonomy,  how  can  the  Community  find  a  solution  to  the
problem of nuclear waste, reinforcing nuclear safety and developing research into reactors
of the future, in particular fusion technology?

Many  contributors  welcome  the  Green  Paper  debate  as  an  opportunity  for  dispassionate
consideration  of  the  idea  that  all  energy  technologies  have  a  role  to  play  in  the  European
energy mix. Most respondents are ready to assess nuclear energy on a comparative basis with
other  energy  technologies  and  fuels  and  to  address  their  roles  in  meeting  energy,
environmental and other objectives.

The  written  contributions  to  this  debate  are  clearly  polarised.  A  less  clear  picture  emerges
from  public  opinion  surveys  (eg  Eurobarometer)  and  investigations  (OPTEM  study)  carried
out alongside the Green Paper debate.

Some argue that nuclear energy makes an important contribution to baseload electricity, with
a  high-quality  product,  abundantly  available,  not  vulnerable  to  fuel  supply  or  price
disruptions.  In  the  energy  mix,  it  can  thus  function  as  a  buffer  against  external  disruptions
(geopolitics, price instabilities, climate) to other energy sources.

Some hold that Kyoto and likely subsequent commitments imply that Europe must retain and
develop the nuclear option. Without nuclear, Europe  cannot  meet its Kyoto commitments at
realistic  cost,  they  argue.  It  and  hydro  are  the  only  large-scale,  CO2-free  options  for
electricity  generation  which  are  also  economically  viable  without  subsidies.  For  some,  the
scale of the climate challenge is such that all realistic options must be kept open. Some say
that nuclear energy should be included in all Kyoto Flexible Mechanisms.

Other  contributors  criticise  the  treatment  of  nuclear  power  issues  in  the  Green  Paper.  They
reject  the  argument  that  nuclear  power  is  essential  for  the  achievement  of  Kyoto
commitments,  seeing  it  as  simplistic,  based  on  a  misrepresentation  of  earlier  studies  and
inconsistent with accepted projections. For some, there is no case, economic or otherwise, for
building  new  nuclear  power  stations.  For  some,  nuclear  power  is  unacceptable  because  the
risks  are  too  great  and  thus  decisions  to  close  nuclear  power  stations  should  be  taken
immediately.  Some  nuclear  supporters  advocate  a  comparison  of  risks  related  to  global
warming and to nuclear power as used in Europe.

As  regards  waste,  some  say  that  technical  and  financial  means  for  final  repositories  are
available,  political  and  public  support  is  needed  to  implement  practical  solutions,  and  the
Commission should support such public and political processes. Some argue that there should
be  a  Europe-wide  economic  and  environmental  optimisation  of  repository  siting.  Research
on  waste  management  is  supported  by  many.  Some  argue  that  the  more  operational  waste
management research should be a matter for those Member States which produce the waste.

On  safety, some  contributors  say  that  harmonised  rules  or  European  standards  are  needed,
others disagree. Many support an EU role in nuclear safety in the enlargement process. Some
advocate strict criteria for the import of electricity from 3rd countries.

Some  contributors  oppose  seeking  solutions  to  safety  and  waste  problems  by  research  into
new reactors, arguing that this ignores other ways of meeting energy-related objectives, will

23

be unreasonably costly and is unlikely to produce results acceptable for human health and the
environment.  Such  criticisms  of  cost  and  likely  benefit  are  applied  by  some  to  fusion
research.  Others  support  research  and  development  of  new  reactor  designs,  including
improvements in safety, flexibility and economic competitiveness. Some argue that European
leadership in civil nuclear technology should be maintained.

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Question  9.  Which  policies  should  permit  the  European  Union  to  fulfil  its  obligations
within the Kyoto Protocol? What measures could be taken in order to exploit fully potential
energy  savings  which  would  help  to  reduce  both  our  external  dependence  and  CO2
emissions?

Contributors are virtually unanimous about the need to reduce greenhouse gas emissions as a
matter of urgency and that this will need additional measures and investment. There is support
for  a  more  strategic  and  multi-facetted  approach  to  tackling  climate  change  using  energy
policy instruments. The need to extend policies to accession countries as quickly as possible
is also stressed.

Energy efficiency and energy demand management are almost universally seen as key tools
for improving energy supply security, reducing import dependence and reducing greenhouse
gas emissions, although the point is also made that the energy saved may not necesssarily be
imported energy. Some comment that far more could be done cheaply and quickly to reduce
energy needs substantially, notably in the buildings sector. The most common proposals are
for incentives, legislation, new taxes and more clean technology investment, including CHP.
Several organisations offer detailed and sometimes quantified action plans aimed at reducing
energy needs, increasing the take up of renewables and using fossil fuels more cleanly.

High  priority  is  given  to  the  European  Climate  Change  Programme,  the  use  of  Kyoto
Flexible Mechanisms and to Member State climate change policies. Many call for the US to
respect its original acceptance of the Kyoto Treaty and would like large developing countries
to  be  covered  by  the  Protocol.  Some  note  that  emissions  reductions  beyond  Kyoto
commitments are likely to be necessary.

The  other  instrument  to  fulfil  Kyoto  obligations  which  receives  unanimous  support  is
renewables  energy  production,  not  only  solar,  biomass  and  wind,  but  also  photovoltaic
(wrongly neglected in the Green Paper, according to some), heat pumps, tidal, wave and mini-
hydro. The energy potential of some wastes is underlined by some contributors. Some prefer
CO2 sequestration, along with clean coal technologies and the production of hydrogen from
gas. Some recommend replacing oil and coal burning by gas; some see nuclear generation as
helping  the  EU  fulfil  its  obligations,  usually  in  combination  with  greater  energy  efficiency
and renewables production. The conventional energy  and manufacturing industries advocate
the use of voluntary instruments while the bulk of other contributors call for legislation.

Investment  in  clean  technologies  is  almost  universally  recommended,  for  both  renewables
and  fossil  fuels,  both  to  implement  existing  technologies  and  to  research  and  develop  new
ones.  In  particular,  many  support  extra  aid  for  renewables,  which  some  justify  by  the
inheritance  of  state  aid  from  which  conventional  sectors  are  alleged  to  have  benefited.
Proposals for carbon taxes, or a new energy pricing system which reflects the external costs of
energy  use,  are  also  frequent.  Finally,  information  and  training  and  higher  norms  for
appliances are seen as ways of encouraging the end user to think about energy use and thus
promote energy savings.  In some  contributions,  the  transport  sector  comes  under  particular
scrutiny.  This  involves  managing  and  reducing  energy  demand  for  transport  generally,  and
specifically for increasing the use of cleaner fuels, including hydrogen and biofuels.

Some  comment  on  what  is  feasible  at  European  level,  what  at  national  and  local  levels.  In
general,  the  European  Union  role  is  seen  as  one  of  facilitating  approaches  at  a  national  or
local level, and of taking a longer term vision, for example by setting a regulatory framework
for energy saving,  setting  -  and monitoring  – targets for  the  EU  as  a  whole  and  developing

25

scenarios  and  prognoses  at  the  EU  level  for  policy  options  and  decisions  at  national  or
international level.

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Question 10: Can an ambitious programme to promote biofuels and other substitute fuels,
including  hydrogen,  geared  to  20%  of  total  fuel  consumption  by  2020,  continue  to  be
implemented  via  national  initiatives,  or  are  co-ordinated  decisions  required  on  taxation,
distribution and prospects for agricultural production?

Contributors are divided on the question of biofuels for transport uses.

Those  who  believe  biofuels  should  be  promoted  put  forward  various  proposals.  A  common
EU programme promoting the development and use of biofuels for transport could be a means
of harmonising support and other measures and incorporating this question into the Common
Agricultural  Policy,  according  to  some.  Some  say  that  the  EU  should  work  for  removal  of
restrictions  in  the  WTO  framework  on  the  growing  of  such  materials.  Some  point  to  the
possibilities of siting this agricultural production in the countries south of the Mediterranean,
contributing  to  local  development  and  reducing  immigration  pressure  on  the  EUs
Mediterranean  Member  States.  A  number  of  contributors  note  the  need  for  harmonised  tax
exemptions for biofuels.

Other  contributors  are  more  guarded  in  their  appreciation  of  the  potential  contribution  of
biofuels and more doubtful about what can be done.

Some  argue  that  they  will  lead  to  an  industrialised,  polluting  agriculture  and  insist  on  the
importance of limiting promotion of biofuels to products derived from agricultural  practices
which are less environmentally harmful and which require less chemical inputs than today’s
agriculture. Doubts are expressed about the likely costs of biofuels. Some say that they would
be more cost-effectively used for heating than for transport purposes.

Some  argue  that  there  is  a  broader  range  of  options  available  to  reduce  fuel  use  in
transportation  and  improve  efficiency  than  those  considered  in  the  Green  Paper,  such  as
pricing  of  vehicles  and  transportation,  and  tax  and  technology  support  to  increase  energy
efficiency.

Several  contributors  comment  on  the  idea  of  a  target.  Some  find  it  wrong  in  principle  and
argue  that  development  should  be  left  to  the  market.  Some  find  the  20  %  target  for  2020
rather  optimistic,  maybe  unrealistic.  Some  caution  that  land  availability  might  cause  a
problem.

The  hydrogen  issue  draws  few  contributions.  Most  of  those  who  address  it  note  that
electricity is needed to produce the hydrogen, hydrogen is only an energy carrier, and if the
electricity is produced from fossil fuels, then there is no increase in security of energy supply.
Some point out that hydrogen can be produced with emission-free nuclear power, others note
renewables as a means. Some advocate natural gas as a source.

27

Question 11 : Should  energy  saving  in  buildings  (40  %  of  energy  consumption),  whether
public  or  private,  new  or  under  renovation,  be  promoted  through  incentives  such  as  tax
breaks,  or  are  regulatory  measures  required  along  the  lines  of  those  adopted  for  major
industrial installations?

Contributors addressing this question largely agree that energy savings in this area could be
achieved cheaply and quickly, and that this should be a priority for future action. The figure
of up to 70% savings is cited in one submission.

A combination of fiscal or financial incentives and regulatory measures is advocated. There
is some support for more research and technological development and greater dissemination
of  existing  technologies  –  timers,  thermostats,  insulation,  CHP,  energy  efficient  lighting,
biomass, heat pumps, and labelling and building design are also considered important. Some
contributions  contain  detailed  proposals  for,  eg,  energy  audits,  mortgage  relief  for  energy
efficiency  investments,  tax  breaks  for  energy  efficient  investments.  Some  stress  the  general
issues of implementing the principle that the polluter pays and the internalisation of external
costs. Some suggestions would make the use of more efficient appliances mandatory, such as
condensing  boilers  or  “A”  label  appliances  and  energy  saving  lighting.  The  role  of
information, training and awareness raising is frequently highlighted.

A  distinction  is  made  in  some  contributions  between  existing  and  new  buildings,  in  which
case, regulations are most frequently recommended for new buildings, whilst substitution of
existing equipment and integration of renewables are given priority for existing buildings.

An  additional  angle  highlighted  in  several  contributions  is  inspection  and  control  of
standards, in order to ensure that equipment works at its most efficient.

Many  contributors  comment  on  how  much  should  or  could  be  done  at  the  European  level.
Most agree that the EU could set targets, possibly a regulatory framework, but most add that
the EU should not get involved in implementation, which should be at the national and local
level.  A  small  number  of  contributors  (particularly  those  opposed  to  regulation)  prefer  to
leave  it  all  to  Member  States.  One  suggestion  is  that  all  Member  States  should  adopt  the
standards in the most efficient Member State.

Although  contributors  addressing  this  question  are  almost  unreservedly  positive  about  the
value of saving energy in buildings, the number of contributors on this question is lower than
on more general questions.   Of the very small number of reservations, there is the observation
that  energy  efficiency  could  only  be  marginally  improved  in  Member  States  with  existing
high levels of efficiency, and that demand will continue to rise, even if efficiency improves.

Overall, the response shows a broad agreement for the current approach from the Community,
providing  that  the  proposals  are  flexible  enough  to  be  adapted  to  the  differing  situations  of
Member States. Contributions provide support for the idea of energy savings in buildings as
an  area  to  be  exploited  further,  given  the  rate  of  improvement  which  can  be  made  and  the
short  pay-back  time  for  most  energy  saving  devices.  They  suggest  that  information,
persuasion and pricing will also be important instruments. Also, the value of individual efforts
needs to be fully demonstrated and, if necessary, rewarded.

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Question 12: Energy saving in the transport sector (32% of energy consumption) depends
on  redressing  the  growing  imbalance  between  road  haulage  and  rail.  Is  this  imbalance
inevitable,  or  could  corrective  action  be  taken,  however  unpopular,  notably  to  encourage
lower  use  of  cars  in  urban  areas?  How  can  the  aims  of  opening  up  the  sector  to
competition,  investment  in  infrastructure  to  remove  bottlenecks  and  intermodality  be
reconciled?

The contributions here tend to focus on two separate problems – growth in road freight, and
desire for personal mobility in towns and longer distance travel.

For the freight issue, railways and maritime/inland waterways are seen as a large part of the
solution  (the  idea  of  reducing  the  need  for  long  distance  freight  transport  is  barely
mentioned).  The  link  between  rail  transport  and  electricity  use  is  highlighted  in  several
contributions.  Some  argue  that  nuclear  generation  must  provide  at  least  some  of  the  extra
demand,  otherwise  greenhouse  gas  emissions  are  bound  to  rise.  Some  support  changes  in
planning  regulations  to  favour  more  sustainable  transport  options  and  promote  more  local
provision of goods.

For  personal  mobility,  a  long  recipe  of  measures  emerges,  with  much  support  for  less
polluting  and  lower  emission  vehicles,  alternative  fuels  and  better  public-private  transport
links. Some call to restrict car use, particularly in urban areas, and to instigate  car pooling,
although they acknowledge that these cannot succeed in isolation and that a broader policy is
needed. Several contributors call for more attention to be given to getting people out of cars
and  onto  their  feet  or  bicycles,  and  to  making  roads  safer  and  more  accessible  for  non-car
users.

Support  for  investment  in  public  transport  infrastructure  comes  mainly,  but  not  exclusively,
from local authorities or agencies. For others, the issue is intermodality of different transport
forms.    The  management  of  public  transport  is  seen  here  as  the  exclusive  domain  of  local
authorities.

Several  contributors  argue  for  a  more  holistic  approach,  comparing  the  various  effects  of
different  options  in  the  particular  situations.  Some  develop  structured  proposals,  on
infrastructure,  compatibility  of  energy  and  transport  policies,  strategies  based  on  reducing
travel  needs,  reallocating  road  space  from  cars  to  public  transport,  strategies  for  reducing
energy  use  in  urban  areas,  intermodality,  a  long-term  strategy  aimed  at  moving  towards  a
hydrogen-based economy, etc.

Several contributors comment on the forecast growth in air travel. There are calls for the full
taxation  of  kerosene.  Some  contributors  would  welcome  more  attention  on  the  modal  split
(road/rail/maritime/inland  waterway).  Others  favour  more  use  of  telematics  in  means  of
transport.

The response to the second half of the question is largely taxation-based. Some point out the
contradiction  between  tackling  rises  in  road  freight  and  tax  reductions  to  the  road  freight
industry to compensate rising fuel prices. Others call for greater taxes on road infrastructure
and the internalisation of external (societal and environmental) costs for transport modes and
fuels.  A  small  number  reject  the  use  of  the  pricing  mechanism  in  favour  of  more  stringent
emissions standards, investment in infrastructure, interoperability etc.

The main area for disagreement is liberalisation of the  railways.  While some see competition
as an instigator for refurbishment and a revival of rail traffic, others argue that this should be

29

done while keeping the railways within public ownership. It is also argued that liberalisation of
the railways will work against moving freight onto the railway.

30

Question 13: How can we develop more collaborative visions and integrate the long-term
dimension  into  deliberations  and  actions  undertaken  by  public  authorities  and  other
involved  parties  in  order  to  evolve  a  sustainable  system  of  energy  supply.  How  are  we  to
prepare the energy options for the future?

There is considerable support for a global and long term approach to the subject of security
of supply – both in terms of looking at the totality of energy supply, not compartmentalising
the  analysis  into  sectors,  and  including  energy  demand  management;  and  in  terms  of
following  the  global  picture,  i.e.  linking  energy  policy  decisions  into  wider  international
developments and broader policy issues, including foreign policy, internal market, transport,
agriculture, environment, education, employment, international poverty issues etc.

A  repeated  argument  is  that  the  forecasts  of  the  Green  Paper  should  be  complemented  by
scenarios reflecting and balancing possible policy  options, e.g.,  an  intensive programme  for
energy saving, a substantial injection of funding for renewables.

Some  argue  for  a  more  panoramic  outlook  for  energy  policy,  which  analyses  the  impact  of
decisions in one sector and in one Member State on another.

There are many calls for a longer term perspective. This is partly to help establish the stable
planning framework needed for the long time-scale typical of energy sector decision-making
and  investments.  It  is  partly  necessary  for  proper  consideration  of  the  interactions  between
policies, examples being the concern expressed by contributors about the compatibility of the
internal  market  and  long  term  energy  supply  contracts,  and  the  fundamentally  important
interaction of energy and environment policies.

Some submissions offer a blueprint for an EU energy strategy. The general argument is that
Europe  needs  a  strategy  which  is  more  forward  looking,  leading  to  a  greater  diversity  of
energy  types  and  sources,  and  more  in  touch  with  new  developments,  including  renewable
and indigenous fuels and moves towards distributed and micro-generation. Such a strategy, it
is argued, would provide the conditions needed for necessary investments in the energy field,
at the industrial and individual level.

In terms of  approach,  a  more  lateral  approach  is  advocated  by  some.  Submissions  call  for
more  general  awareness  raising  on  energy  issues  among  the  population  at  large,  and  in
particular  young  people,  and  for  detailed  strategies  to  combine  incentives,  regulations  and
information  tools  in  the  push  for  greater  efficiency  and  the  wider  use  of  renewable  energy.
The usefulness of setting and monitoring targets is defended by some. Other ideas are to make
better  use  of  domestic  energy  policy,  aid  to  developing  countries  or  strategic  stocks  as  an
instrument  of  the  producer  consumer  dialogue.  There  is  support  for  a  more  interventionist
approach, including tight restrictions on energy-hungry appliances/vehicles and practices and
public awareness raising of the effects of behavioural choices today on quality of life in the
future.

In terms of responsibilities, several respondents draw attention to the need for co-ordination
between  different  levels,  European,  national  and  local/regional.  Representatives  of  local
authorities  in  particular  highlight  their  role  in  realising  strategies  to  reduce  energy  demand.
Although some prefer the status quo, there are in other responses varying levels of support for
more co-ordination or intervention at the Community level. Many support the  international
role of the EU in the energy field, some would like to see it developed further. The possibility
of  a  European  energy  agency  in  order  to  improve  coordination  or  information  provision  is

31

raised,  as  well  as  a  Treaty  article  related  to  energy  policy  (i.a.  in  the  European  Parliament
opinion).

Among  policy  options,  the  areas  attracting  most  attention  are  a)  fiscal,  such  as  the
internalisation  of  external  costs  in  order  to  create  a  level  playing  field  for  all  sources;  b)
markets,  with  calls  for  close  monitoring  of  market  developments,  conditions  for  long  term
planning  by  the  private  sector  and  corrective  mechanisms  and  c)  technology,  including  the
marketing of environmentally  attractive  but initially  uneconomic technologies.  The value of
cost benefit analyses of differing options is mentioned by some.

More radical visions come from some, often based on the widespread use of wind and solar
(photovoltaic) energy in the medium term, combined with a more conservationist approach to
energy. Some foresee a bright future for nuclear, due to its low carbon emissions.

Overall,  the  future  picture  which  emerges  from  the  Green  Paper  debate  is  one  based  on  a
broad policy embracing energy demand and supply, with a clear role for public authorities,
including  at  the  European  level,  and  where  collaboration,  co-operation  and  co-ordination
play  a  large  part  in  improving  the  effectiveness  of  policies  and  programmes.  This  includes
among  Member  States  and  accession  states,  across  different  policy  areas  –  energy,
environment,  transport,  agriculture,  etc,  but  also  with  energy  partners  in  other  parts  of  the
world,  whether  suppliers  or  consumers.  Whether  with  reference  to  scenarios,  commercial
arrangements,  diplomatic  relations  or  consumer  education,  the  response  to  the  Green  Paper
clearly advocates  a long term  and  resolute  vision  aiming  at  secure  and  sustainable  energy
supplies for Europe.

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