Brussels Energy Brief - April 2008
April 2008
Full Printable Version in PDF Format
(Adobe Acrobat Reader required, available for free download here)
KEY DEVELOPMENTS
UN Agrees on Timetable for Negotiation on Tackling Climate Change
Benoît Keane
The United Nations has agreed a timetable for negotiations on tackling climate change with a view to reaching an agreement in Copenhagen in 2009. Delegates from 162 countries have agreed to discuss targets in greenhouse gases, emissions trading, financing mechanisms and development of low carbon technology over the next 18 months. The greatest challenge facing negotiators is expected to be to convince high emission countries, in particular the United States, China and India, to sign up to post-2012 targets.
EU Reaches Agreement with Turkmenistan on Gas Supply
Elena Kostadinova
The European Union has reached an agreement with Turkmenistan on the delivery of 10 billion cubic metres of natural gas per year from Turkmenistan into EU markets as of 2009. Although the negotiated amount of gas is small in comparison with the European Union's total annual gas needs of approximately 500 billion cubic metres, the agreement is considered to be an important step in the European Union’s policy of diversifying natural gas supply sources and limiting Member States’ dependence on Russia. The European Union currently relies on Russia for 42 per cent of its gas supplies. Details of the agreement with Turkmenistan are not yet known, but it appears that the European Union intends to transport the gas across the Caspian via a new pipeline and feed it into the Nabucco pipeline, which is still under construction.
EU-Iraq Energy Deal Taking Shape
Patricia Armesto
The European Union is finalising a new energy deal with Iraq following a visit to Brussels by Nouri al-Maliki, the country's Prime Minister. President of the European Commission, José Manuel Barroso, stated that it will soon be possible for the two parties to establish a memorandum of understanding on energy cooperation. The agreements with Iraq follow a pledge made by Turkmenistan to supply the European Union with 10 billion cubic metres of gas per year and are seen as part of a wider effort to diversify the European Union's gas supply.
"Gazprom Clause" in Commission's Proposal for a Third Energy Package Disputed
Juan Gutiérrez and Elena Kostadinova
The European Commission has revealed that a number of EU Member States may not be willing to accept the so called "Gazprom clause" in its proposal for a third energy liberalisation package, which will be discussed by the EU Council in June 2008. The Gazprom clause is a requirement that non-EU companies cannot control transmission systems or transmission system operators, unless: (i) there is an agreement between the European Union and the country in which these non-EU companies are based; and (ii) these non-EU companies can demonstrate that they are not influenced by an operator active in the production or supply of gas or electricity, or by a third country. Member States such as Germany and Austria, which have already secured their gas supply through bilateral agreements, do not appear to be in favour of this clause. Concerns were raised both at EU Council and European Parliament level about whether an overall agreement on the package could be reached.
EESC Hearing Calls for Caution on Biofuels Targets
Jonathan Aitken
On 17 April 2008, at a public hearing on Sustainability Criteria for Biofuels, the European Economic and Social Committee (EESC) urged the European Union's institutions and its Member States to exercise extreme caution when considering the role and use of biofuels. This caution stemmed from the target set by the European Council in March 2007 that 10 per cent of all transport fuel consumption in the European Union should be comprised of biofuels by 2020. This target was incorporated into a draft directive on renewable energies presented by the European Commission in January 2008. In an opinion published on 10 April 2008, the European Environment Agency (EEA) warned that the mass production of biofuels to meet the 10 per cent target could have negative effects including deforestation, escalating food prices and water shortages. Participants at the EESC hearing echoed the concerns of the EEA and called for a thorough analysis of the sustainability criteria that should be linked to biofuels, in order to ensure they do not exacerbate the environmental problems they are supposed to help overcome.
Nuclear Energy: Commissioner Piebalgs Underlines Role of Nuclear in Low Carbon Economy
Speaking at a European Nuclear Assembly conference in Brussels on 15 April, Energy Commissioner Andris Piebalgs highlighted the importance of nuclear energy for the reduction of carbon dioxide emissions. Substantial investment is required by EU Member States to replace ageing nuclear power plants, many of which will reach the end of their lifespan before 2030. The Commissioner noted that, while nuclear energy makes an important contribution to the fight against climate change and security of energy supplies, cooperation is needed between Member States on issues such as the safety and security of nuclear plants as well as the treatment of nuclear waste. To ensure investment, the Commission is looking at ways to deal with difficulties related to licensing, financing and different nuclear liability regimes.
National Energy Efficiency Action Plans: Commission Sends Reasoned Opinions to Greece and Latvia
Geert Dierickx
The European Commission has sent reasoned opinions to Greece and Latvia for failing to submit National Energy Efficiency Plans required by the Energy Services Directive. The purpose of the Directive is to create the conditions necessary for the development and promotion of a market for energy services, and for the delivery to final consumers of other energy efficiency measures. Proper implementation of the Directive will contribute to securing the supply of energy and sustainable development and competitiveness within the energy market. The required Action Plans were due on 30 June 2007 and should reflect the Member States’ strategies on how to achieve their 9 per cent energy savings target by the end of 2016.
ICT Industry Gets Environmentally Friendlier
Yannis Virvilis
The European Information and Communication Technologies (ICT) industry has committed to measure the environmental impact of its products and services in terms of carbon dioxide emissions, in order to contribute to environmental targets endorsed by the European Union. The industry believes that the use of energy saving technologies and the shift from products such as paper to reusable electronic devices, such as digital notebooks, can have a significant impact on the environment. The European Commissioner charged with the Information Society portfolio, Viviane Reding, stated that the Commission is even planning to adopt specific measures to increase the use of ICT against climate change.
Waste Recycling Targets and Energy Efficient Incinerators
Jonathan Aitken
On 8 April 2008 during the second reading in the European Parliament of the revised EU Waste Framework Directive, Members of the European Parliament (MEPs) voted to increase recycling targets and subject waste incinerators to energy efficiency criteria. According to the Parliament's Environment Committee, recycling targets amounting to 50 per cent of the European Union's household waste and 70 per cent of construction waste should be met by 2020. Whilst some MEPs argued that incinerators should only be classed as recovery operations if their principal purpose was energy production, a narrow majority agreed a compromise suggested by the European Commission, that incinerators could be classed as recovery operations if they respect specified energy efficiency criteria.
MERGER NOTIFICATIONS
End March – April 2008
M.5090 - CEZ / MOL / JV (3 April 2008)
M.5004 - GALP ENERGIA ESPANA / AGIP ESPANA (3 April 2008)
MEETINGS
May 2008
Informal High-Level Energy Working Group Meeting (5 May 2008)
European Nuclear Forum (22 – 23 May 2008)
