Press Releases

European Commission proposes energy and climate change package

Brussels, Belgium, January 29, 2008

The EU needs to cut its greenhouse gas emissions and its dependence on imports of oil and gas. It needs to find new energy alternatives and produce more of its own energy.

What is the proposal of the European Commission?

To solve these issues the EU is setting a target of a 20% share of renewable energy in 2020 (compared to the share of 8.5% today). They would like to divide the effort fairly between Member States and remove unnecessary barriers to the growth of renewable energy (for example, by simplifying the authorisation procedures for new renewable energy developments). Another tool is the encouragement to research and invest in better types of renewable energy (for example, by setting sustainability standards for biofuels).

What are the benefits?

By 2020, the benefits will be:

·Savings of 600 to 900 million tonnes of CO²emissions per year – holding back the rate of climate change and sending a signal to other countries to do the same.

·Reductions in fossil fuel consumption of 200 to 300 million tonnes per year, most of it imported – making energy supplies more certain for European citizens.

·All this will cost €13-18 billion per year. This investment will drive down the price of the renewable energy technologies that will form a growing part of the EU energy supply.

How much will it cost?

Renewable energies today cost more than energy from conventional sources, but with oil prices rising, this may not be the case for long. Many Member States already help consumers out with the extra cost of renewables. However the cost of most renewable energy sources is declining, in some cases quite dramatically. Solar technology for generating electricity is, for example, expected to fall by 50% by 2020. Further promotion of renewable energy is expected to lead to continued decline in prices.

How can the proposal help change behaviour?

More information will be made available to consumers about the different technologies to raise awareness about which heating technologies, electricity supplier or biofuel to choose. Biofuels will be available at almost all petrol stations, except the very small ones. Installers of solar equipment, heat pumps and biomass stoves will be able to obtain certification to assure consumers that quality installation service is provided.

When will the proposal come into effect?

The Directive is expected to come into effect in 2010.

What is the position of the European paper industry?

The European pulp and paper industry welcomes the EU’s lead on climate change but the implementation of the package proposed may impact on the competitiveness of the industry while at the same time relying on it to deliver results.

The European pulp and paper industry is encouraged by the fact that the European Commission has clearly understood the need to increase the amount of biomass on the European markets in order for bio-energy to meet the proposed targets in the directive. It further welcomes the strong focus on resource and energy efficient solutions.

In the directive, member states are asked to actively focus on biomass mobilisation in their action plans and the Commission itself will monitor the development of biomass availability and the impact on the different sectors using biomass.

As the recent studies show, there will be a huge challenge for the EU to provide the biomass needed for biofuel and bio-energy production, making the energy package a land-use issue and important element in the CAP review and reform.

“The European Commission has drafted a proposal which can enable the paper industry to play its part in contributing to the target for increasing the share of renewable energy by 2020.” said Teresa Presas, CEPI Managing Director. “As the largest producer and user of biomass-based energy, we welcome the fact that it goes some way towards reassuring the paper industry that the concerns raised by European Heads of Government at the Spring 2007 Council that any new legislation should avoid potentially damaging effects of support schemes for competing biomass have been addressed”, she added.

Of course there are challenges in the proposal that still need to be clarified for example the sustainability criteria for biomass will not be developed until 2010. This opens up a two tier system where the same raw material – wood – can be used in two different ways, for example to make paper or to make energy, without the same sustainability criteria requirements.