GREEN PAPER A 2030 framework for climate and energy policies
Date: 2013-03-27
Institutions: European Commission
Subjects: climate change, competitiveness, economic growth, energy saving, energy supply, reduction of gas emissions, renewable energy, sustainable development

EUROPEAN 
COMMISSION 

Brussels, 27.3.2013  
COM(2013) 169 final 

GREEN PAPER 

A 2030 framework for climate and energy policies 

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GREEN PAPER 

A 2030 framework for climate and energy policies 

1. 

INTRODUCTION 

The  EU  has  a  clear  framework  to  steer  its  energy  and  climate  policies  up  to  2020.  This 
framework  integrates  different  policy  objectives  such  as  reducing  greenhouse  gas  (GHG) 
emissions, securing energy supply and supporting growth, competitiveness and jobs through a 
high  technology,  cost  effective  and  resource  efficient  approach.  These  policy  objectives  are 
delivered  by  three  headline  targets  for  GHG  emission  reductions,  renewable  energy  and 
energy  savings.  There  are  additional  targets  for  energy  used  by  the  transport  sector.  In 
parallel,  the  EU  has  put  in  place  a  regulatory  framework  to  drive  the  creation  of  an  open, 
integrated  and  competitive  single  market  for  energy  which  promotes  the  security  of  energy 
supplies. While the EU is making good progress towards meeting the 2020 targets, creating 
the internal market for energy and meeting other objectives of energy policy, there is a need 
now to reflect on a new 2030 framework for climate and energy policies. Early agreement on 
the 2030 framework is important for three reasons:  

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First, long investment cycles mean that infrastructure funded in the near term 
will still be in place in 2030 and beyond and investors therefore need certainty 
and reduced regulatory risk.  

Second,  clarifying  the  objectives  for  2030  will  support  progress  towards  a 
competitive economy and a secure energy system by creating more demand for 
efficient and low carbon technologies and spurring research, development and 
innovation,  which  can  create  new  opportunities  for  jobs  and  growth.  This  in 
turn reduces both directly and indirectly the economic cost.  

Third,  while  negotiations  for  a  legally  binding  international  agreement  on 
climate  mitigation  have  been  difficult,  an  international  agreement  is  still 
expected by the end of 2015. The EU will have to agree on a series of issues, 
including  its  own  ambition  level,  in  advance  of  this  date  in  order  to  engage 
actively with other countries. 

This framework for 2030 must be sufficiently ambitious to ensure that the EU is on track to 
meet longer term climate objectives. But it must also reflect a number of important changes 
that have taken place since the original framework was agreed in 2008/9:  

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the consequences of the on-going economic crisis;  

the budgetary problems of Member States and businesses who have difficulty 
mobilising funds for long term investments;  

developments  on  EU  and  global  energy  markets,  including  in  relation  to 
renewables, unconventional gas and oil, and nuclear; 

concerns  of  households  about  the  affordability  of  energy  and  of  businesses 
with respect to competitiveness;  

and the varying levels of commitment and ambition of international partners in 
reducing GHG emissions.  

The 2030 framework must draw on the lessons from the current framework: what has worked, 
what  has  not  worked  and  what  can  be  improved.  It  should  take  into  account  international 

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developments and spur stronger international climate action. And it must identify how best to 
maximise  synergies  and  deal  with  trade-offs  between  the  objectives  of  competitiveness, 
security of energy supply and sustainability.  

The  framework  should  also  take  into  account  the  longer  term  perspective  which  the 
Commission  laid  out  in  2011  in  the  Roadmap  for  moving  to  a  competitive  low  carbon 
economy in 2050, the Energy Roadmap 2050, and the Transport White Paper. The European 
Parliament  has  adopted  resolutions  on  each  of  the  Roadmaps1.  These  Roadmaps  were 
developed  in  line  with  the  objective  of  reducing  GHG  emissions  by  80  to  95%  by  2050 
compared to 1990 levels as part of necessary efforts by developed countries as a group. The 
scenarios in these Roadmaps suggested the following key findings: 

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By 2030 GHG emissions would need to be reduced by 40% in the EU to be on 
track to reach a GHG reduction of between  80-95% by 2050,  consistent  with 
the internationally agreed target to limit atmospheric warming to below 2°C.  

Higher shares of renewable energy, energy efficiency improvements and better 
and smarter energy infrastructure are "no regrets" options for transforming the 
EU's energy system.  

For  renewables,  the  policy  scenarios  in  the  Energy  Roadmap  2050  indicate  a 
share of around 30% in 2030.  

Significant  investments  are  needed  to  modernise  the  energy  system,  with  or 
without decarbonisation, which will impact the energy prices in the period up 
to 2030.  

The aim of this Green Paper is to consult stakeholders to obtain evidence and views to support 
the development of the 2030 framework. It begins with an overview of the current framework 
and what has been achieved and then presents the issues where stakeholder input is sought. In 
parallel, the Commission is consulting on issues relating to the international negotiations of a 
new  legally  binding  agreement  for  climate  action  as  well  its  policy  to  enable  the 
demonstration of the carbon capture and storage technology. 

2. 

THE CURRENT EU POLICY FRAMEWORK AND WHAT HAS BEEN ACHIEVED  

Central to the current policy framework are the three headline targets to be achieved by 2020: 
(1) an EU based target for GHG emission reductions of 20% relative to emissions in 1990; (2) 
a  20%  share  for  renewable  energy  sources  in  the  energy  consumed  in  the  EU  with  specific 
target  for  the  Member  States;  (3)  20%  savings  in  energy  consumption  compared  to 
projections. In addition, there are specific 2020 targets for renewable energy for the transport 
sector  (10%)  and  decarbonisation  of  transport  fuels  (6%).  The  framework  also  recognises 
Member  States'  different  energy  mixes,  economic  wealth  and  capacity  to  act,  and  therefore 
includes mechanisms to ensure a fair distribution of effort between them. It includes measures 
to address the risk of carbon leakage and its impacts on energy-intensive industry sectors. It is 
supported by a broad set of Union financial instruments and a Strategic Energy Technology 
plan  (the SET-Plan). Furthermore  the Commission has  proposed revising  the  EU legislation 
on  taxation  of  energy  products  and  electricity2  to  remove  overlaps  between  existing  fiscal 
instruments. The framework for 2020 is complemented by the Energy 2020 Strategy3 which 

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Links to the European Parliament Resolutions and to the Roadmaps are provided in the Annex in the 
section on Key Reference Documents. 
COM(2011) 169 final. 
COM(2010) 639 final. 

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assesses the challenges and measures to ensure a competitive, sustainable and secure energy 
system. 

2.1. 

The 20% GHG reduction target and implementing measures  

The 20% GHG reduction target for 2020 compared to 1990 is implemented through the EU 
Emissions  Trading  System  (EU  ETS)  and  the  Effort  Sharing  Decision  which  defines 
reduction targets for the non-ETS sectors, and its achievement is supported through EU and 
national policies to reduce emissions. In 2011 GHG emissions as covered by the climate and 
energy package were estimated at 16% below 1990 levels. 

The  ETS  delivers  a  uniform  carbon  price  for  large  industrial  installations,  the  power  sector 
and in the aviation sector. It covers more than 10.000 installations and nearly 50% of all EU 
GHG  emissions.  This  uniform  price  ensures  that  climate  goals  are  met  cost-effectively  and 
that  business  across  the  EU  has  a  level  playing  field.  The  carbon  price  is  now  part  of  EU 
businesses' operational and investment decisions and has contributed to substantial emissions 
reductions.  But  it  has  not  succeeded  in  being  a  major  driver  towards  long  term  low  carbon 
investments.  Despite  the  fact  that  the  ETS  emission  cap  decreases  to  around  -21%  by  2020 
compared to 2005 and continues to decrease after 2020, in principle giving a legal guarantee 
that  major  low  carbon  investments  will  be  needed,  the  current  large  surplus  of  allowances, 
caused in part by the economic crisis, prevents this from being reflected in the carbon price. 
The  low  carbon  price  is  not  providing  investors  with  sufficient  incentive  to  invest  and 
increases the risk of "carbon lock-in". Some Member States are concerned with this evolution 
and  have  taken,  or  are  considering  taking  national  measures,  such  as  taxes  for  carbon 
intensive fuels in ETS sectors. There is an increasing risk of policy fragmentation threatening 
the  Single  Market,  with  national  and  sectoral  policies  undermining  the  role  of  the  ETS  and 
level playing field it was meant to create. The Carbon Market Report assesses in more detail 
the functioning of the ETS4. 

The Effort Sharing Decision (ESD) sets national targets for GHG emissions in the sectors not 
covered by the ETS. The aggregate target is a 10% emission reduction at EU level in 2020 
compared  to  2005.  Many  EU  policies,  including  sector  specific  legislation  and  initiatives, 
have  contributed  to  reducing  emissions  in  these  sectors.  They  range  from  policies  that 
improve  CO2  and  energy  efficiency  for  cars,  the  residential  sector  and  energy  consuming 
equipment,  to  specific  waste,  environmental,  agricultural  and  land  use  policies  (see  annex). 
The  implementation  of  policies  to  achieve  the  renewables  and  energy  efficiency  target  also 
contributes to emissions reductions. National targets are distributed between  Member States 
according  to  economic  capacity.  Some  need  to  reduce  emissions  compared  to  2005  whilst 
others are permitted a limited growth in emissions. In aggregate the EU is on track to achieve 
the  10%  reduction  target,  but  significant  differences  exist  between  Member  States.  Half  of 
them still need to take additional measures. Additionally the ESD enables Member States to 
meet  their  targets  flexibly,  be  it  through  the  acquisition  of  international  credits  or  through 
trade with Member States outperforming their targets. 

2.2. 

The renewable energy target and implementing measures 

The  EU  is  making  progress  towards  meeting  the  2020  target  of  20%  renewable  energy  in 
gross  final  energy  consumption.  In  2010,  the  renewables  share  in  the  EU  was  12.7% 
compared to 8.5% in 2005. In the period 1995-2000 when there was no regulatory framework, 
the share of renewable energy grew by 1.9% a year. Following the introduction of indicative 

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Report State of the European carbon market in 2012 (COM(2012) 652). The report consults on possible 
ways of addressing the surplus of allowances in the ETS including a widening of the sectors it covers. 

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targets  (2001-2010),  the  share  of  renewable  energy  grew  by  4.5%  per  annum.  With  legally 
binding national targets growth has increased but needs to average 6.3% per year to meet the 
overall 2020 target. The share of renewables in transport reached 4.7% in 2010 compared to 
only 1.2% in 2005. In the heating and cooling sector, renewable energy continues to grow and 
its  share  should  nearly  double  by  2020.  However,  new  measures  will  be  needed  for  most 
Member  States  to  achieve  their  2020  targets  reflecting  the  scaling  back  of  support  schemes 
and more difficult access to finance in the context of the economic crisis. 
The  Commission  provided  a  state  of  play  on  renewable  energy  in  the  EU  in  20125.  An 
updated progress report is published alongside this Green Paper. Investments in research and 
development,  innovation  and  large  scale  deployment  in  the  sector  have  contributed  to 
significant reductions in the cost of renewable energy technologies. There are key challenges 
associated with large scale deployment such as the full integration of renewables into the EU's 
electricity system in a way that deals with intermittency, and improving co-operation among 
Member States in meeting targets. The coupling of the EU's wholesale electricity markets will 
help to integrate renewable energy into the electricity system as will the roll-out of smart grids 
which provide opportunities to adapt generation, grid control, storage and consumption to the 
changing  situation  on  markets.  However,  massive  investments  in  transmission  and 
distribution  grids,  including  through  cross-border  infrastructure,  to  complete  the  internal 
energy  market  will  also  be  needed  to  accommodate  renewable  energy.  Another  important 
challenge is to ensure over time that renewable energy sources become more cost-efficient so 
as to limit the use of support schemes only to those technologies and areas that still need it. 
Such  schemes  should  be  designed  to  avoid  overcompensation,  improve  cost  efficiency, 
encourage  high  GHG  reduction,  strengthen  innovation,  ensure  sustainable  use  of  raw 
materials,  to  be  adaptable  to  cost  developments  to  avoid  subsidy  dependence,  be  consistent 
across Member States and, in particular with regard to biofuels, ensure WTO compatibility. 

2.3. 

The energy savings target and implementing measures 

The  2020  target  of  saving  20%  of  the  EU's  primary  energy  consumption  (compared  to 
projections made in 2007) is not legally binding for Member States, but significant progress 
has  nevertheless  been  made.  After  years  of  growth,  primary  energy  consumption  peaked  in 
2005/2006  (around  1825  Mtoe)  and  has  been  slightly  decreasing  since  2007  (to  reach  1730 
Mtoe  in  2011).  This  trend  is  partly  due  to  the  economic  crisis  and  partly  due  to  the 
effectiveness  of  existing  policies.  It  is  also  due  to  reduced  energy  intensity  of  EU  industry 
which was 149 toe per million euro in 2010, down from 174 in 2000 and 167 in 2005.  

With  the  adoption  of  the  Energy  Efficiency  Directive  (EED)  in  2012  there  is  now  a 
comprehensive  legislative  framework  at  EU  level.  This  needs  to  be  fully  implemented  by 
Member States. The EED will help to drive progress in this area, although the Commission's 
preliminary analysis suggests that with current policies the 2020 target will not be met.6 The 
lack of appropriate tools for monitoring progress and measuring impacts on the Member State 
level is part of the problem. Another major challenge is to mobilise the funds needed to ensure 
continued progress.  

Since 2009-2010, implementing measures have been adopted under the Ecodesign and Energy 
Labelling Directives on energy related products. These measures reduce the energy demand of 
industrial  and  household  products  leading  to  savings  for  end-users.  Measures  have  been 

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Communication Renewable Energy: a major player in the European energy market COM(2012) 271. 
The  implementation  of  measures  in  the  Transport  White  Paper,  further  ecodesign  measures,  smart 
metering roll-out and smart grid deployment with the resulting demand response should contribute to 
closing the gap. 

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adopted for a number of electronic appliances, including domestic dishwashers, refrigerators, 
washing  machines,  televisions  and  tyres  as  well  as  industrial  products  such  as  motors,  fans 
and pumps. The estimated impact of the adopted ecodesign and labelling measures are energy 
savings in the range of 90 Mtoe in 2020. 

To address the energy consumed in the building stock, in particular for heating and cooling 
purposes,  the  EU  adopted  a  revised  Energy  Performance  of  Buildings  Directive  (EPBD)  in 
2010.  Besides  the  obligation  for  Member  States  to  apply  minimum  energy  performance 
requirements  for  new  and  existing  buildings,  the  Directive  requires  them  to  ensure  that  by 
2021 all new buildings are "nearly zero-energy buildings." However, delays and incomplete 
national measures to implement this directive risk undermining the necessary contribution of 
the  buildings  sector  towards  lower  GHG  emissions  and  reduced  energy  consumption.  The 
cost-effective savings potential in the building sector is estimated to be 65 Mtoe by 2020. The 
EU has supported the development of energy efficient technologies, including through public 
partnerships on energy efficient buildings, green cars and sustainable manufacturing.  

In  the  transport  sector,  the  Regulations  establishing  performance  standards  for  light  duty 
vehicles  have  led  to  substantial  reductions  in  GHG  emissions  reflected  in  the  fleet  average 
CO2 emission of new cars from 172 g per kilometre in 2000 to 135.7 g per kilometre in 2011.  

2.4. 

Security of supply and affordability of energy in the internal energy market 

The 2009 climate and energy package is not the only work stream in this area. In 2009 and 
2010, the EU adopted comprehensive legislation on the internal energy market for electricity 
and natural gas and, in the wake of two gas supply crises, the Regulation on security of gas 
supplies.  As  none  of  the  energy  policy  objectives  can  be  reached  without  adequate  grid 
connections,  the  Commission  has  also  proposed  a  Regulation  on  Trans-European  Energy 
Infrastructure  Guidelines  on  which  political  agreement  has  been  reached  by  the  European 
Parliament  and  by  Council.  It  addresses 
true 
interconnection in the internal market, integration of energy from variable renewable sources 
and enhanced security of supply.7  

infrastructure  challenges 

to  ensure 

Other EU measures, such as the European Strategic Energy Technology plan are in place to 
encourage a technological shift through development and demonstration projects for new and 
innovative  technologies:  e.g.  second  generation  biofuels,  smart  grids,  smart  cities  and 
intelligent  networks,  electricity  storage  and  electro-mobility,  carbon  capture  and  storage 
technologies and next generation nuclear and renewable heating and cooling. In early 2013, 
the  Commission  also  proposed  a  directive  on  the  deployment  of  alternative  fuels 
infrastructure which will be supported by the proposed revision of the TEN-T Guidelines. 

A  number  of  challenges  were  not  addressed  at  the  time  of  the  2009  climate  and  energy 
package.  For  example,  the  necessary  transmission  and  distribution  infrastructure  were  not 
defined.  The  management  challenges  linked  to  the  introduction  of  renewables,  including 
dealing  with  the  variable  supply  of  certain  renewables  (e.g.  wind  and  solar)  were  also  not 
fully considered and the impact of a large number of national support schemes for renewables 
on market integration was underestimated.  

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For  projects  identified  as  projects  of  common  interest  (PCIs),  the  Regulation  introduces  measures  to 
accelerate  permitting  procedures,  including  through  a  maximum  time-limit  and  streamlining  of 
environmental  assessment  procedures.  The  Regulation  also  provides  better  incentives  to  investors 
through enhanced regulatory provisions, and it sets the conditions for EU financial assistance under the 
proposed Connecting Europe Facility. 

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The Third Energy package addressed the issue of how to stimulate competition on the market, 
but did not address the issue of whether the market offered the necessary incentives to invest 
in  generation,  distribution  and  transmission,  and  storage  capacity  in  a  system  with  greater 
shares of renewables. Until renewable energy sources become cost-competitive, the objective 
of a more sustainable energy system must go hand in hand with the need for a fully liberalised 
and integrated energy market capable of mobilising and allocating investment efficiently.  

Important  developments  and  trends  taking  place  inside  and  outside  the  EU  include  the 
growing  energy  import  dependency  of  the  EU  and  the  technological  progress  of  our  main 
competitors, the new supply routes, as well as the rise of new energy producers in Africa and 
Latin America. This will all have an impact on the energy cost and security of supply in the 
EU. 

3. 

KEY ISSUES FOR THIS CONSULTATION 

The  2030  framework  for  climate  and  energy  policies  will  build  on  the  significant  progress 
already  made  in  this  area.  It  must  draw  on  the  lessons  from  the  current  framework  and 
identify where improvements can be made. The experience and views of stakeholders, backed 
up  where  possible  with  sound  evidence,  are  essential  on  four  broad  issues:  targets;  other 
policy instruments; competiveness; and the different capacity of Member States to act. 

3.1. 

Targets 

Fundamental issues  for  a  new 2030  framework  for  climate  and energy policies  relate to  the 
types, nature and level of targets and how they interact. Should the targets be at EU, national 
or sectoral level and be legally binding? There are diverging views on the need for targets and 
types  of  targets.  While  experience  with  the  current  framework  shows  that  targets  provide 
political  momentum,  a  long  term  vision  for  investment,  and  a  benchmark  for  measuring 
progress, some stakeholders argue that the existing targets and policies to reach them are not 
necessarily  coherent  or  cost  efficient,  or  that  they  do  not  take  competitiveness  and  the 
economic  viability  and  maturity  of  technologies  sufficiently  into  account.  The  2030 
framework should recognise the evolution of technology over time and promote research and 
innovation. There is a need, therefore, to assess which targets can best, and most simply and 
cost  effectively,  drive  energy  and  climate  policies  up  to  2030,  and  whether  the  current 
approach  can  be  streamlined  particularly  with  reference  to  the  need  for  various  sub-targets 
such  as those  in the  transport  sector. This analysis  should  also  address  the  issue  of  whether 
having only a GHG emissions target for 2030 would be appropriate, taking into account other 
objectives such as security of supply and competitiveness. 

The  current  climate  and  energy  targets  for  GHG  reduction,  the  share  of  renewable  energy 
sources  and  energy  savings  were  designed  to  be  mutually  supporting  and  there  are  indeed 
interactions between them. Higher shares of renewable energy can deliver GHG reductions so 
long  as  these  do  not  substitute  other  low-carbon  energy  sources  while  improved  energy 
efficiency can help reduce GHG emissions and facilitate attainment of the renewables target. 
There  are  obvious  synergies  but  there  are  also  potential  trade-offs.  For  example,  more  than 
anticipated energy savings and greater than expected renewable energy production can lower 
the carbon price by weakening the demand for emission allowances in the ETS. This in turn 
can weaken the price signal of the ETS for innovation and investments in efficiency and the 
deployment  of  low-carbon  technologies  whilst  not  affecting  attainment  of  the  overall  GHG 
reduction target.  

A 2030 framework with multiple targets will have to recognise these interactions explicitly. It 
should  also  recognise  that  higher  shares  of  renewable  energy  sources  and  greater  energy 
savings will not alone ensure greater competitiveness or security of supply. Dedicated policies 

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will remain necessary and there may also be a need for additional indicators that more directly 
capture these objectives. 

There  is  a  broad  consensus  that  interim  targets  for  GHG  emissions  reductions  will  be 
necessary to reach the aspiration of an 80-95% reduction by 2050. The key issue is deciding 
on the most appropriate level for such an intermediate target. The 2050 Low carbon Economy 
Roadmap  suggests  that  a  40%  reduction  in  emissions  by  2030  compared  to  1990  would  be 
cost-effective.  A  reduction  of  less  than  40%  would  increase  the  costs  of  decarbonising  the 
economy over the longer term. While the roadmaps suggest that GHG reductions of 40% by 
2030 can be achieved without unduly increasing the costs for our energy system, mobilising 
the  funds  necessary  to  cover  the  capital  costs  for  significant  up-front  investments  will, 
however, be a challenge.  

low-carbon 

increasingly  with  other 

The Energy Roadmap for 2050 has shown that the share of renewables in the energy system 
must continue to increase after 2020. A 2030 target for renewables would have to be carefully 
considered as many renewables sources of energy in this time frame will no longer be in their 
infancy  and  will  be  competing 
technologies. 
Consideration should also be given to whether an increased renewable share at EU level could 
be  achieved  without  a  specific  target  but  by  the  ETS  and  regulatory  measures  to  create  the 
right market conditions. The shape of a possible renewables target will depend on (i) whether 
a  target  is  considered  necessary  to  ensure  increased  shares  in  renewables  post  2020  and 
thereby contribute to more indigenous energy sources, reduced energy import dependence and 
jobs  and  growth;  and  (ii)  if  and  how  this  can  be  achieved  without  undesirable  impacts  of 
renewables support schemes on energy markets and energy prices and public budgets. It must 
be established whether objectives on renewable energy can be best met with a new headline 
target  with  or  without  sub-targets  for  sectors  such  as  transport,  industry  and  agriculture, 
and/or  other  specific  measures.  Any  target  or  policy  for  renewables  will  have  to  take  into 
account  the  growing  evidence-base  on  sustainability,  costs,  the  state  of  maturity  of 
technologies and its innovation potential.  

The EU framework for energy efficiency policy has just been updated through the adoption of 
the EED and a review will be carried out in 2014 with respect to the 2020 target. Discussions 
on a 2030 energy savings target must be seen in this context. There are a number of issues to 
consider. First, energy efficiency, and the resulting energy savings, are acknowledged in the 
Energy Roadmap 2050 as a "no-regrets" option for the energy system. While evidence on how 
the  current  system  is  performing  will  not  be  fully  available  until  2014  or  later,  ensuring 
consistency  of  a  possible  energy  savings  target  with  any  other  targets  will  be  essential. 
Consideration will also have to be given to whether progress on energy efficiency would best 
be driven by targets for Member States or by sector specific targets.  

It  will  also  be  necessary  to  consider  if  the  metric  for  such  a  target  should  continue  to  be 
absolute  energy  consumption  levels  or  whether  a  relative  target  related  to  energy  intensity 
would be more appropriate (e.g. energy consumption relative to GDP or gross value added). 
While  an  absolute  target  might  better  ensure  the  overall  savings  objective,  a  relative  target 
might better take into account the dynamics of the EU economy and the reality of economic 
development.  

Unlike  for  GHG  emissions  reductions  and  renewables,  the  current  approach  to  energy 
efficiency is based on a combination of aspirational targets and binding measures. The need 
for EU legislation (e.g. ecodesign framework, the EED, the EPBD) under the 2020 framework 
is  linked,  at  least  partially,  to  the  absence  of  legally  binding  energy  savings  targets  for 
Member States. Any legally binding target for energy savings/intensity would need to leave 
room  for  manoeuvre  for  Member  States  for  meeting  the  target  with  possibly  fewer  binding 

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measures at EU level. However, such an approach would have to take into account that much 
of  the  EU  legislation  which  contributes  to  reduced  energy  consumption  also  plays  a 
fundamental  role  in  creating  the  internal  market  for  these  products  (e.g.  the  ecodesign 
framework).  If  targets  remain  aspirational,  consideration  will  have  to  be  given  to  whether 
current concrete measures are sufficient or whether new measures would be necessary. A key 
issue  will  be  to  what  extent  energy  markets, through the price  signal  and  demand  response, 
will 
including 
behavioural  change  of  consumers,  and  whether  the  ETS  and  its  impact  on  electricity  prices 
will provide incentives for energy savings also in the absence of specific targets or measures. 
The  relatively  low  price  elasticity  of  energy  demand  in  many  important  sectors  of  the 
economy and projected future levels as well as the variability of the ETS price will have to be 
taken into account. 

incentivise  energy  efficiency 

themselves  sufficiently 

improvements, 

3.2. 

Coherence of policy instruments 

The 2020 targets are implemented through policy instruments at EU level which are closely 
related  to  the  internal  market.  Member  States  have  larger  room  for  manoeuvre  when 
implementing EU legislation for renewable energy and energy efficiency, and GHG emissions 
outside  the  ETS  such  as  in  the  road  transport  sector.  This  has  resulted  in  different  national 
approaches  for  renewables  support  schemes,  energy  and  CO2  taxation,  energy  performance 
standards for buildings and other energy efficiency policies.  

A combination of instruments is likely to be needed to address the different policy goals and 
market  barriers.  These  instruments  will  interact  with  one  another  as  described  above.  Some 
stakeholders have criticised the lack of overall consistency between policies because of such 
interactions  and  have  pointed  to  the  need  to  improve  the  cost-efficiency  of  various  climate 
and  energy  measures,  considering  technological  feasibility.  In  addition,  national  measures 
should  not  lead  to  fragmentation  of  the  internal  market.  A  strong  accent  should  be  put  on 
investments  in  infrastructure,  in  particular  in  networks,  that  will  deepen  EU  market 
integration and ensure sustainability, competitiveness and security of supply. 

The  2030  policy  framework  should, 
therefore,  strike  a  balance  between  concrete 
implementing  measures  at  EU  level  and  Member  States'  flexibility  to  meet  targets  in  ways 
which are most appropriate to national circumstances, while being consistent with the internal 
market.  The  current  balance  of  the  approach  between  EU  level  instruments  and  Member 
States  targets/national  instruments  will  have  to  be  assessed  in  more  detail,  including  the 
impacts  of  fossil  fuels  subsidies.  As  before,  the  distribution  of  efforts  will  need  to  be 
considered as well.  

Beyond  regulatory  instruments,  the  EU  also  provides  significant  financial  support  linked  to 
climate  change  and  sustainable  energy,  in  particular  through  Cohesion  Policy,  the  EU 
Research  Programmes,  and  in  the  future  the  Connecting  Europe  Facility.  Climate  action 
objectives will represent at least 20% of EU spending in the period 2014-2020 and therefore 
be reflected in the appropriate instruments to ensure that they contribute to strengthen energy 
security,  building  a  low-carbon,  resource  efficient  and  climate  resilient  economy  that  will 
enhance Europe's competitiveness and create more and greener jobs8. 

Future  access  to  international  credits  after  2020  will  need  to  be  assessed.  The  use  of 
international credits can limit costs but they also contribute to uncertainty on what is required 
domestically, and have contributed to the surplus of allowances in the ETS. Furthermore, EU 

8 

As  decided  by  the  European  Council  at  its  meeting  7-8  February  2013  on  the  Multiannual  Financial 
Framework. 

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industry and governments via the Clean Development Mechanism have subsidised competing 
sectors  especially  in  emerging  economies  such as  in  China,  India  and  Brazil.  Shifting  away 
from  project-based  offsets  towards  emission  trading  and  other  market  mechanisms  might 
better  incorporate  the  different  capacities  of  countries  to  act  on  climate  change  and  support 
progress  towards  developing  a  more  global  carbon  market  with  wide  international 
participation. 

For sectors like shipping and aviation, the policy efforts also include a coordinated push for 
globally agreed standards and policies to effectively deliver global emission reductions. As a 
first  step,  the  Energy  Efficiency  Design  Index  agreed  at  the  International  Maritime 
Organization  entered  into  force  in  2013  and  is  expected  to  slow  the  increase  of  GHG 
emissions from global shipping. 

3.3. 

Fostering the competitiveness of the EU economy 

One  of  the  fundamental  objectives  of  EU  energy  policy  is  to  ensure  that  the  energy  system 
contributes to the competitiveness of the EU economy by ensuring competitive domestic and 
international  energy  markets  and  prices  which  are  internationally  competitive  and  represent 
affordable energy for final consumers. This is especially important for vulnerable households 
and industry sectors that are exposed to international competition and for which energy is an 
important  production  factor.  As  the  role  of  electricity  is  expected  to  increase  during  the 
transition  of  the  energy  system,  electricity  costs  are  of  particular  importance  in  a  2030 
perspective. 

Energy and climate policies can drive demand and growth in the low carbon economy. The 
EU  is  a  frontrunner  in  clean  and  more  energy-efficient  technologies,  products  and  services 
and  eco-technologies  which  together  are  expected  to  generate  some  5  million  jobs  in  the 
period up to 20209. Moreover, many of these policies contribute to reduced air pollution and 
health improvements. At the same time, the policies have been criticised for having a negative 
impact  on  energy  prices,  adversely  impacting  affordability  of  energy  for  vulnerable 
households and the competitiveness of energy intensive sectors even though they may reduce 
industry's exposure to energy costs and improve resilience to energy price peaks. 

While  wholesale  energy  prices  have  increased  moderately  in  the  EU,  there  is  evidence  that 
end-user  prices  of  electricity  for  many  business  and  households  have  increased  more 
significantly in real terms over the last decade. The Energy Roadmap 2050 suggests that this 
trend  will  continue  in  the  future.  Developments  in  international  markets  and  exploitation  of 
unconventional  hydrocarbons  may  lead  to  an  increasing  divergence  of  prices  in  the  EU 
compared  to  those  in  other  major  industrial  economies  such  as  the  USA  where  shale  gas  is 
now  an  increasing  energy  source.  In  2012,  industry  gas  prices  were  more  than  four  times 
lower in the USA than in Europe10. It is clear that this trend is driven by many factors other 
than  the  EU's  climate  and  energy  policies  and  that  EU  wholesale  electricity  prices  are  still 
determined  to  a  large  extent  by  the  price  of  fossil  fuels.  Member  State  decisions  on  tariffs, 
levies and taxes also have a significant impact on end user prices. These factors must be taken 
into  account  when  designing  new  policies.  The  various  drivers  of  national  energy  costs 
including taxation need to be analysed  in  a  differentiated  manner  as  their  impact  on  overall 

9 
10 

Communication Towards a job-rich recovery (COM(2012) 173 final). 
According to IEA data, real electricity prices for industry in Europe (OECD) increased on average by 
38% between 2005 and 2012 while they decreased by 4% in the USA. For households, from 2005 to 
2012 real electricity prices went up by 21.8% in Europe (OECD) and by 8.4% in the USA. IEA "Energy 
Prices & Taxes, 4th Quarter 2012".  

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energy production costs appears to differ greatly. A number of issues need to be addressed in 
this context.  

First, full implementation of the internal market legislation is critical to keep prices in check 
and help meet targets cost-effectively, both by means of increased competition in the market 
and by more efficient use of energy infrastructure (by means of the Network codes).  

Second, there is a need to enable the future exploitation of indigenous oil and gas resources, 
both  conventional  and  unconventional  in  an  environmentally  safe  manner,  as  they  could 
contribute to reducing the EU's energy prices and import dependence. 

Third,  further  diversification  of  energy  supply  routes  could  improve  competition  on  energy 
markets  and  significant  long-term  savings  can  be  achieved  by  investments  in  energy 
efficiency.  Further  deployment  of  renewable  power  generation  must  be  accompanied  by 
improved management of grids, reduced costs and improved performance of technologies and 
continued support for innovation. 

Fourth, concerns have been expressed that the EU's commitment to tackling climate change is 
not fully reciprocated elsewhere, and that this has an impact on competitiveness. At the same 
time, the Union's commitment to reduce GHG emissions by 20% by 2020 contributed to the 
progress made since the 2009 Copenhagen Climate Conference. More than 90 countries have 
now adopted pledges with varying degrees of ambition. The international community has also 
endorsed  the  objective  to  limit  global  warming  to  below  2°C.  In  addition,  several  countries 
are  implementing  or  developing  legislation  for  their  own  emissions  trading  system 
(Switzerland,  Australia,  New  Zealand,  South  Korea,  China  and  several  US  states). 
Notwithstanding  these  developments,  the  EU's  offer  of  a  conditional  target  of  30%  GHG 
reductions has not mobilised pledges and actions that would ensure that aggregate efforts by 
2020 are in line with the 2°C objective. Hence, the crucial need to engage further with third 
countries, and for the Durban Platform to deliver an agreement by 2015 on post 2020. This is 
all the more important given that the EU represents only 11% of global GHG emissions and 
that this share is decreasing so that effective international action is required to tackle climate 
change11.  

Fifth,  in  aviation  and  maritime,  EU  efforts  strongly  pursue  progress  in  the  relevant 
international fora to ensure global participation and a level field.  

Sixth, it is clear that higher ETS prices and policies to expand renewables generation capacity 
by  providing  support  or  preferential  treatment  to  bring  them  to  the  market  could  increase 
electricity  prices.  At  the  same  time,  the  ETS  creates  a  level  playing  field  in  the  EU  and 
minimises  GHG  reduction  costs  in  the  covered  sectors.  The  ETS  also  includes  measures  to 
limit impacts on the competitiveness of energy intensive sectors which are exposed to the risk 
of  carbon  leakage.  These  measures  will  continue  until  2020.  Given  the  build-up  of  free 
allowances  in  industrial  sectors  and  the  access  to  cheap  international  credits,  the  impact  on 
these sectors is likely to be modest at least up to 2020. State aid rules related to the ETS allow 
Member States, as from 2013 to provide compensation for part of the indirect ETS costs for 
the  most  electricity  intensive  sectors.  Furthermore,  environmental  state  aid  rules  currently 
allow targeted exemptions for industry from energy related taxes. The 2030 framework will 
need to consider whether and how this approach should be continued.  

11 

The  prospects  for  a  new  global  climate  agreement  are  dealt  with  in  a  separate  Consultative 
Communication  The  2015  International  Climate  Change  Agreement:  Shaping  international  climate 
policy beyond 2020. 

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Finally  in  designing  a  framework  for  2030  consideration  should  be  given  to  whether  ETS 
related  revenue  could  be  used  to  further  assist  sectors  to  innovate.  At  present  this  option  is 
mainly  driven  through  Member  States'  use  of  auctioning  revenues  within  the  allowed 
boundaries of state aid provision, even though the existing framework does foresee innovative 
Union finance in the form of the NER300 limited to renewable energy and carbon capture and 
storage projects. 

3.4. 

Acknowledging the differing capacity of Member States 

Member States are very diverse in terms of comparative wealth, industrial structure,  energy 
mix, building stocks, carbon and energy intensity, exploitable renewable resources, and social 
structure.  Individual  consumer  groups  have  different  capacities  to  invest  and  adapt.  This 
diversity must be taken into account when developing a policy framework for 2030. Climate 
and  energy  targets  impact  each  Member  State  and  their  citizens  differently  and  options  to 
enable effective cooperation and an equitable sharing of the required efforts will need to be 
assessed as part of the new framework. 

The current energy and climate policy framework reflects the differing capacities of Member 
States  by  sharing  the  effort  of  reaching  Union  climate  and  energy  targets  amongst  the 
Member  States,  with  a  lighter  burden  falling  on  lower  income  Member  States.  Auctioning 
revenues  are  also  partially  redistributed  to  compensate  for  cost  differences.  There  are  also 
cooperation  mechanisms  in  the  Renewable  Energy  Directive  that  enable  renewable  energy 
produced in one Member State to count towards the target of another. However, despite the 
potential  economic  benefits  for  both  sides  this  scheme,  with  the  exception  of  Sweden  and 
Norway,  has  not  been  used  so  far.  To  take  into  account  national  circumstances,  the  Energy 
Efficiency Directive provides a "menu" of flexibilities that Member States can apply to their 
1.5% yearly saving targets including a gradual phase-in of the 1.5% target, exclusion of the 
ETS sector, inclusion of the energy transformation and distribution sector and recognition of 
early action. These flexibilities can be used cumulatively but must not undermine the overall 
energy savings required by the Directive.  

There is a need to consider whether for the 2030 framework, similar distribution tools should 
be  maintained  or  whether,  depending  on  the  ambition  level  and  nature  of  future  targets  and 
measures,  alternative  approaches  are  necessary.  Whilst  possibly  working  against  the 
objectives of the internal energy market, differentiated targets per Member State can improve 
fairness, but can also increase the overall costs to meet the objectives if they are not coupled 
with sufficient flexibility in meeting them, such as trading mechanisms. Any 2030 framework 
will  need  to  consider  if  sufficient  flexibility  exists  between  Member  States  to  allow  cost 
efficient  achievement  of  differentiated  targets.  In  this  context,  it  should  also  be  considered 
that  those  Member  States  where  investments  are  most  needed  and  with  the  most  options 
available  for  cost-effective  GHG  emission  reductions,  renewables  development,  energy 
efficiency  improvements  etc.  often  have  less  economic  capacity  to  take  advantage  of  them. 
Moreover,  some  of  these  Member  States  face  difficulties  in  obtaining  sufficient  support  for 
changes  of  industrial  processes  and  energy  use  that  could  impact  jobs  and  reliance  on 
domestic energy resources. Access to finance for investments, be it through direct funding or 
smart finance, is already part of the toolbox of EU policies12 but may have to be enhanced in a 
2030  perspective.  Such  measures  could  contribute  to  a  fair  and  equitable  sharing  of  effort, 
while  at  the  same  time  facilitate  public  acceptance  and  engage  all  parties  concerned  in  the 
transition to a sustainable, secure and competitive economy. 

12 

For  instance  the  proposed  European  Regional  Development  Fund  for  2014-2020  and  the  Connecting 
Europe Facility. 

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Member State-specific information will need to be prepared and presented as part of the new 
framework  in  order  to  inform  discussions  about  the  equitable  distribution  of  effort  and  to 
ensure that an undue burden does not fall on any Member State.  

4. 

QUESTIONS 

4.1. 

General 

•  Which lessons from the 2020 framework and the present state of the EU energy 

system are most important when designing policies for 2030? 

4.2. 

Targets 

•  Which  targets  for  2030  would  be  most  effective  in  driving  the  objectives  of 
climate  and  energy  policy?  At  what  level  should  they  apply  (EU,  Member 
States, or sectoral), and to what extent should they be legally binding? 

• 

• 

• 

• 

Have there been inconsistences in the current 2020  targets and  if so  how can 
the coherence of potential 2030 targets be better ensured?  

Are  targets  for  sub-sectors  such  as  transport,  agriculture,  industry  appropriate 
and,  if  so,  which  ones?  For  example,  is  a  renewables  target  necessary  for 
transport,  given  the  targets  for  CO2  reductions  for  passenger  cars  and  light 
commercial vehicles? 

How can targets reflect better the economic viability and the changing degree 
of maturity of technologies in the 2030 framework? 

How should progress be assessed for other aspects of EU energy policy, such 
as security of supply, which may not be captured by the headline targets? 

4.3. 

Instruments 

• 

• 

• 

Are changes necessary to other policy instruments and how they interact with 
one another, including between the EU and national levels?  

How should specific measures at the EU and national level best be defined to 
optimise cost-efficiency of meeting climate and energy objectives? 

How  can  fragmentation  of  the  internal  energy  market  best  be  avoided 
particularly in relation to the need to encourage and mobilise investment? 

•  Which measures could be envisaged to make further energy savings most cost-

effectively? 

• 

How can EU research and innovation policies best support the achievement of 
the 2030 framework? 

4.4. 

Competitiveness and security of supply 

•  Which  elements  of  the  framework  for  climate  and  energy  policies  could  be 
strengthened to better promote job creation, growth and competitiveness? 

•  What evidence is there for carbon leakage under the current framework and can 
this  be  quantified?  How  could  this  problem  be  addressed  in  the  2030 
framework?  

•  What  are  the  specific  drivers  in  observed  trends  in  energy  costs  and  to  what 

extent can the EU influence them?  

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• 

• 

• 

• 

• 

How should uncertainty about efforts and the level of commitments that other 
developed countries and economically important developing nations will make 
in the on-going international negotiations be taken into account?  

How to increase regulatory certainty for business while building in flexibility 
to  adapt  to  changing  circumstances  (e.g.  progress  in  international  climate 
negotiations and changes in energy markets)? 

How can the EU increase the innovation capacity of manufacturing industry? Is 
there a role for the revenues from the auctioning of allowances? 

How can the EU best exploit the development of indigenous conventional and 
unconventional energy sources within the EU to contribute to reduced energy 
prices and import dependency? 

How can the EU best improve security of energy supply internally by ensuring 
the full and effective functioning of the internal energy market (e.g. through the 
development  of  necessary  interconnections),  and  externally  by  diversifying 
energy supply routes? 

4.5. 

Capacity and distributional aspects 

• 

How  should  the  new  framework  ensure  an  equitable  distribution  of  effort 
among  Member  States?  What  concrete  steps  can  be  taken  to  reflect  their 
different abilities to implement climate and energy measures? 

•  What  mechanisms  can  be  envisaged  to  promote  cooperation  and  a  fair  effort 
sharing between Member States whilst seeking the most cost-effective delivery 
of new climate and energy objectives? 

• 

Are  new  financing  instruments  or  arrangements  required  to  support  the  new 
2030 framework? 

5. 

SUBMISSION OF RESPONSES TO THE CONSULTATION 

The consultation will be open for until 2 July. For more information on how to contribute to 
this consultation, see: 

http://ec.europa.eu/energy/consultations/20130702_green_paper_2030_en.htm  

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ANNEX  

Background information on energy and climate issues 

1.  LEGISLATIVE  INSTRUMENTS  IMPLEMENTING  THE  HEADLINE  TARGETS  OF  THE  CLIMATE 

AND ENERGY PACKAGE AND MAIN POLICIES SUPPORTING THEIR ACHIEVEMENT 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

(11) 

(12) 

(13) 

(14) 

(15) 

(16) 

(17) 

Directive 2009/28/EC on the promotion of the use of renewable energy and defining 
the 20% renewables target per Member State. 

Directive  2003/87/EC  as  amended  by  2009/29/EC  reviewing  the  EU  emission 
trading  scheme  by  defining  an  emissions  cap  and  harmonising  allocation  of 
allowances to companies. 

Decision No 406/2009/EC (Effort Sharing Decision) defining the targets per Member 
State for GHG reductions in sectors not included in the ETS. 

Regulation  (EC)  No  443/2009  (CO2  &  Cars)  on  CO2  standards  for  new  passenger 
cars 

Regulation (EU) No 510/2011 setting emission performance standards for new light 
commercial  vehicles  as  part  of  the  Union's  integrated  approach  to  reduce  CO2 
emissions from light-duty vehicles 

Directive 2009/30/EC (Fuel Quality Directive) to reduce the life cycle carbon content 
of fuels.  

Directive  2009/31/EC  creating  an  enabling  framework  for  carbon  capture  and 
storage. 

Directive  2012/27/EU  on  energy  efficiency  defining  required  actions  at  Member 
State level 

Directive 2010/31/EU on the energy performance of buildings 

Directive 2009/125/EC on ecodesign requirements for energy-related products, incl. 
standards  

Regulation No. 2006/842/EC on F-gases and Directive 2006/40/EC on F-gases from 
mobile air conditioning  

Directive  99/31/EC  gradually  phasing  out  the  use  of  landfills  for  waste  disposal, 
reducing CH4 emissions 

Directive 1991/676/EEC on Nitrates, contributing to limit N2O emissions  

Directive 2009/33/EC on the promotion of clean and energy-efficient road transport 
vehicles 

Council  Directive  2003/96/EC  restructuring  the  Community  framework  for  the 
taxation of energy products and electricity 

Regulation  1222/2009  on  the  labelling  of  tyres  with  respect  to  fuel  efficiency  and 
other essential parameters 

Regulation  228/2011  amending  Regulation  (EC)  No  1222/2009  of  the  European 
Parliament and of the Council with regard to the wet grip testing method for C1 tyres 

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(18) 

(19) 

(20) 

(21) 

Regulation  1235/2011  amending  Regulation  (EC)  No  1222/2009  of  the  European 
Parliament  and  of  the  Council  with  regard  to  the  wet  grip  grading  of  tyres,  the 
measurement of rolling resistance and the verification procedure 

Regulation  (EC)  No  714/2009  of  13  July  2009  on  conditions  for  access  to  the 
network for cross-border exchanges in electricity and repealing Regulation (EC) No 
1228/2003  

Regulation (EC) No 715/2009 of 13 July 2009 on conditions for access to the natural 
gas transmission networks and repealing Regulation (EC) No 1775/2005  

Decision  on  accounting  rules  and  action  plans  on  greenhouse  gas  emissions  and 
removals resulting from activities related to land use, land use change and forestry. 

2. KEY REFERENCE DOCUMENTS  

A Roadmap for moving to a competitive low carbon economy in 2050 

http://ec.europa.eu/clima/policies/roadmap/index_en.htm 

Energy Roadmap 2050 

http://ec.europa.eu/energy/energy2020/roadmap/index_en.htm 

White Paper: Roadmap to a Single European Transport Area – Towards a competitive 
and resource efficient transport system 

http://ec.europa.eu/transport/themes/strategies/2011_white_paper_en.htm 

Roadmap to a Resource Efficient Europe 

http://ec.europa.eu/environment/resource_efficiency/about/roadmap/index_en.htm  

Structural  reform  of  the  European  carbon  market:  the  first  report  on  the  state  of  the 
European carbon market in 2012 

http://ec.europa.eu/clima/policies/ets/reform/index_en.htm 

Making the internal energy market work 

http://ec.europa.eu/energy/gas_electricity/internal_market_en.htm 

Renewable Energy: a major player in the European energy market 

http://ec.europa.eu/energy/renewables/communication_2012_en.htm  

European Parliament Resolution on a Roadmap for moving to a competitive low carbon 
economy in 2050 

http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2012-
0086&language=EN&ring=A7-2012-0033  

European  Parliament  Resolution  on  the  White  Paper  on  a  Single  European  Transport 
Area 

http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2011-
0584&language=EN&ring=A7-2011-0425  

European Parliament Resolution on the Energy Roadmap 2050 

http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P7-TA-2013-
0088&language=EN&ring=A7-2013-0035 

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