Filed under: Fleishman-Hillard Blogs
The EU Emissions Trading Scheme (ETS) is here to stay and stakeholders share a common vision on how to fix it, that was the basic takeaway from a roundtable on carbon market reforms FleishmanHillard hosted along with SSE and Oxera last Friday.
For those whose full time job is not in the EU Energy or Climate field, the ETS is the largest multi-country, multi-sector greenhouse gas emissions trading scheme in the world and the chief instrument for the EU in meeting its emissions reduction targets. However, a huge surplus in allowances has seen prices fall from €20 a tonne in 2011 to €5 a tonne today, reducing incentives to switch from heavily polluting fuels such as coal to cleaner alternatives such as natural gas or renewables, like wind and solar power.
Given the timely nature of the event (At the time of writing, the famous backloading dossier which through the tempera removal of allowances would prop up the carbon price has just received the backing of MEPs in Plenary) it was little surprise that over 40 participants came to FH’s offices to exchange views with the Commission, industry and NGO’s on how best to get the EU’s principal GHG reduction instrument back on track.
What was perhaps a little more surprising was how aligned participants – EU policymakers, NGOs and industry types alike — seemed to be in their thinking on what should be the next steps to fixing the ETS and getting the EU carbon market back in order.
In November 2012, the European Commission, in its ‘”State of the Carbon Market in 2012″ document, presented 6 potential options to reform the EU ETS. At the roundtable it became apparent that a loose consensus was emerging around the following three-step approach, which includes elements of the Commission’s thinking but also a number of new elements that have been introduced by stakeholders in recent months;
Step 1 – Backloading: The backloading of 900 million EUA would be a necessary but far from sufficient first step. The backloading of allowances should prop up prices temporarily above the current €5 a tonne number but will not increases prices to the €25-30 a tonne figure original envisaged by the Commission to stimulate low carbon investment and new technologies. With MEPs having given their support to backloading in a full European Parliamentary vote Tuesday, Member States should do likewise in coming weeks, by approving backloading. The first allowances to be backloaded in 2014 or 2015 depending on what timetable the Climate Change Committee decides Dec. 16.
Step 2 -Early reduction of annual linear factor: This tool is effectively an annual decrease in the amount of allowances in the system and is in line with one of the six options laid out by the Commission. Reducing the supply would push up the ETS price. Participants at the FH event suggested revising the annual linear reduction factor by -1.74% as soon as possible, most likely in 2016 or 2017. Some participants noted that it was possible to even go beyond 1.74% to a more ambitious 2.5% reduction.
Step 3 – Supply adjustment mechanism (SAM): A supply adjustment mechanism would automatically, based on pre-determined rules, adjust the supply of allowances in case of significant deviations in the economic development. The idea of having a supply adjustment mechanism to act as a ‘shock absorber’, independent of political interventions, was first floated by IETA in reaction to the Commission’s stakeholder consultation. Support for this measure has been growing consistently since with DG CLIMA Commission also seemingly supportive.
The main difficulty with the SAM remains how the adjustment mechanism should kick in. It could be a) Emissions-based – simply identify a lower and upper threshold; b) GDP-based – reliant on economic activity and c) ETS allowance Price-triggered – seen by many participants as the simplest option to implement but more politically challenging.
Looking ahead, the Commission will most likely come forward with a proposal on structural reforms of the ETS in January, most likely as part of the large package of policy proposals to be released on January 22; this package is also expected to include a 2030 Climate and Energy framework, a study on the various factors that drive energy prices and a formal Commission view on shale gas (A Commission policy proposal on shale gas also remains a possibility).
Given the legislative timeline, the proposal introduced in January will not be finalized in this Parliament, but will rather seek the endorsement from Member States at the European Council summit in March.
As one participant noted at the FH roundtable: given the huge oversupply of allowances in the ETS today, without the possibility of reform, the price of ETS allowances would actually be closer to zero rather than the current €5 a tonne level. The €5 a tonne price represents investors’ confidence, however thin, that policymakers can introduce meaningful reform to a collapsing market.
After the Commission shows its hand in January, all eyes will be looking at the Council in March to demonstrate that the political will exists at the highest level to reform the ETS.
December 12, 2013
Party hats out.
The European Commission informed the world Wednesday that at least 20% of the European Union’s budget for the next 2014-2020 funding period will be spent on climate-related projects and policies.
Says Connie Hedegaard, the EU’s climate watchdog honcho, in the Commission press release: ”Today is an incredibly important day for Europe and for the fight against climate change….This is a major step forward for our efforts to handle the climate crisis…”
And: “This underscores yet again Europe’s leadership in the fight against this crucial challenge. I believe the EU is the first region in the world to mainstream climate action into its whole budget.”
Hedegaard’s gushy tendencies and legacy-craving aside, there a few points here to consider.
First, the tone-deaf question: With European and Eurozone unemployment, take your pick, still at record levels, economic growth still limping along and deflation in Europe now a creeping threat because of the aforementioned, is the Commission’s, Hedegaard’s, chest-beating on EU climate change ‘leadership’ something people in Europe really care about right now?
Secondly, sentient beings are generally already aware that climate change abatement is a high EU policy priority – the only one actually where alignment exists between Member States — and that the EU and European nations have enviably produced all sorts of meaningful and important policies to decarbonize Europe. But chest-beating on an almost daily basis about it, as Hedegaard does, is desperate.
Worse for Hedegaard and Company is that the ritual of telling the world how the EU, representing a mere 10% of global emissions, ‘leads’ on climate change is often a quiet picture, with a self-designated leader with no one following from behind.
Third, what matters most actually, though, comes down to outcomes, not inputs of how much cash your throwing at the important problem, and the chest-beating.
A couple of examples are instructive: Despite being the engine of the continent’s renewable energy spending, Germany is still expected to see carbon emissions rise this year by 2%, while carbon emissions in the U.S. are falling (from a high base, of course) and near a 20-year low.
Electricity from the dirtiest fossil fuel, coal, is filling the gap in Germany for the series of natural gas power plants closed the past two years from the unintended consequences of Germany’s uber spending on solar and wind power; meanwhile, the long-told story of America’s jackpot with shale gas has resulted in the shuttering of dozens of coal plants and falling emissions there and tanker-loads of of cheap coal exports to Europe, among other places.
If Europe wasn’t mired in recession, its emissions would be higher by any measure. And many Europeans probably would hope, quietly, that carbon emissions actually begin to rise again in the continent as a bloc as an indication that economic conditions are improving.
To paraphrase the tired saying: speak lightly, Hedegaard and Company, but carry a big stick.
By Spencer Swartz
November 20, 2013
Who said Brussels is boring?
We talked about the vote in the Parliament earlier this week already and we were waiting for the European Council conclusions. Well, Heads of States and Government have just declared that “the timely adoption of a strong EU General Data Protection framework is essential for the completion of the Digital Single Market by 2015.”
As some of us know, a draft text prepared by the Council was suggesting the adoption next year of the regulation. While the wording “next year” was already quite vague as a deadline (before or after the EP elections?), the text officially adopted today removes a deadline entirely thus showing the reluctance amongst member states to commit to a firm timeline.
And now, what’s next? The Parliament wants to enter negotiations with Council and Commission to wrap up the text next year. I feel that besides Poland and France there is no other member state that really wants to rush the legislation. We know that industry has been calling for a deeper discussion given the complexity of this dossier. This week I saw a few reactions from civil society groups and activists and, funnily enough, they now somehow agree with industry by saying that the legislation should not be rushed (they complain about the secrete tripartite negotiation that could allow to adopt the text).
The final interesting bit of info is that the rapporteur Albrecht stated during this week’s press conference that the European Parliament will hold a plenary vote in April (TBC) on the regulation, either on the text adopted in committee or on the compromise text emerging from the trialogue (if they reach a deal). To me this means the following: if Albrecht is reelected during next year’s EP elections he might regain the role of rapporteur on the data protection dossier. This means that, should the EU Institutions have to start looking at the dossier again in 2014, the European Parliament will already have its official report that then the Council will have to deal with. Stakeholders’ reactions to the LIBE text have not been that positive so this means that we will stick to the text we have seen adopted.
October 25, 2013
Any regular reader of this blog knows that we tend to take ourselves pretty seriously. I mean, we’re serious consultants with serious work to do and serious policy areas to ponder! We’re passionate about the issues of the day that will affect our work, our clients, and life in general out there in the wild blue yonder; whether it be how the German elections could impact the direction of energy policy, or how the twittersphere is chiming in on Europe.
We’re also passionate about cake. Yes, you read that correctly, cake: the edible foodstuff that is sweet and moist and can be blamed for ever-expanding waistlines of office workers, worldwide.
Now it seems, as the resident baking enthusiast here at FleishmanHillard (and instigator of semi-regular, now infamous ‘cake competitions’), I’ve begun to get a bit of a reputation. So when colleagues spotted an opportunity to form a team to participate in the BritCham Great Brussels Charity Bake Off competition, they knew exactly who to call. We pulled together a team of bakers (me, Jane, Sandrine, & Maria Chiara), gave ourselves a name “FHun in the Oven” (apparently makes Brits chuckle – thanks James), and decided to bake a good ol’ fashioned Hummingbird Cake – a specialty of this famous London bakery (Like a carrot cake, but not. See the recipe below).
After some fun Sunday-evening adventures (Batter tasting! Bowl licking! Icing-testing!), and one happily-averted mishap that almost ended with the top layer of our cake on the pavement of Rue Goffart, we were feeling pretty good (read: in a sugar-induced coma) about our handiwork…
…Until we started checking out the twitter feed #BxlBakeOff and saw the seriousness with which our competitors clearly take themselves.
The competition was fierce and I mean fierce. 24 cakes. There were cakes with squirrels and acorns fashioned out of chocolate-covered macadamia nuts…
There were orange-frosted Halloween themed cakes that tasted like my childhood and were adorned with creepy little edible marzipan bats & rats!
There was even a cake depicting an EU legislative timeline! I mean, these people really do EAT, breathe and sleep their work! Needless to say, our humble little hummingbird cake, despite its deliciousness, found itself a little out of its league amongst the worthy competitors.
The winner was a 3-layered cake, with each layer representing a color of the Belgian flag. It was wrapped in a Belgian flag banner, covered in what I think was chocolate ganache, and had a 3D edible version of The Grand Place atop its chocolate & edible-flower be-carpeted self. Hmpf. I know it’s hard to believe. I didn’t get a picture, so recommend checking out Judge Emma Beddington’s instagram’d capture for photographic evidence. She has also written, in hilarious fashion, about her experience as a judge in a post on her own blog, Belgian Waffle – and it’s well worth a read (plus there are more pictures!)
Ok, so we didn’t win this time. And we’re not sore losers. (No really, we’re not!) But now that we know what we’re up against, well let’s just say: challenge accepted!
Roll on November, where ‘Pie’ features as the next competition category….and watch this space for further tales of our competitive baking adventures!
*All pictures shown in this post were taken by me, Lindsay Hammes, with handy-dandy blackberry
The Hummingbird Bakery’s eponymous cake
What you’ll need:
300 g caster sugar
300 ml sunflower oil
270 g peeled bananas, mashed
1 teaspoon ground cinnamon, plus extra to decorate
300 g plain flour
1 tsp bicarbonate of soda
½ tsp salt
½ tsp vanilla extract
100g tinned pineapple, cut into small pieces
100 g shelled pecan nuts (or walnuts) chopped, and whole, to decorate* (we used both, pecans in the cake, walnuts on top)
3 20cm cake tins, base-lined with greaseproof paper
250g cream cheese
100g unsalted butter
600g icing sugar, sifted
Preheat the oven to 170 C/325 F/Gas 3.
Put sugar, eggs, oil, banana and cinnamon in a freestanding electric mixer with a paddle attachment (or use a handheld electric whisk) and beat until all the ingredients are well incorporated (don’t worry if the mixture looks lightly split.) Slowly add the flour, bicarb soda, salt and vanilla extract and continue to beat until everything is well mixed.
Stir in the chopped pineapple and pecan nuts by hand until evenly dispersed.
Pour the mixture into the prepared cake tins and smooth over with a palette knife. Bake in the preheated oven for 20-25 minutes, or until golden brown and the sponge bounces back when touched. Leave the cakes to cool slightly in the tins before turning out onto a wire cooling rack to cool completely.
In a separate bowl, beat icing sugar & bitter together in a freestanding electric mixer with paddle attachment (or use a handheld electric whisk) on a medium slow speed until the mixture comes together and is wel mixed. Add the cream cheese in one go and beat until it is completely incorporated. Turn the mixer up to medium-high speed. Continue beating until the frosting is light and fluffy, at least 5 minutes. Do not overbeat, as it can quickly become runny.
When the cakes are cold, put one on a cake stand and spread about one quarter of the cream cheese frosting over it with a palette knife. Place a second cake on top and spread another quarter of the frosting over it. Top with the last cake and spread the remaining frosting over the top and sides. Finish with pecan nuts and a light sprinkling of cinnamon.
October 16, 2013
Frau Merkel won big in Germany’s federal elections on Sunday, but not big enough; and that has negative implications for German energy policy.
Merkel’s third time around as German Chancellor will require a grand coalition that produces the typical lowest common denominator style decision-making that such coalitions bring. That doesn’t bode well for the decisive action required to address Germany’s outstanding energy issues, namely, runaway electricity costs and the future of shale gas development.
Merkel personally won commandingly, of course, with her Christian Democrat conservatives increasing their share of the vote by eight percentage points to around 42 percent, as Der Spiegel reported, but not enough for an absolute majority.
Further, her pro-business, junior coalition partner, the Free Democrats, failed to garner the necessary 5% share of the vote threshold needed to stay in parliament. Absent an absolute majority, that leaves Merkel dependent once again facing the need to join forces with the Left: the Social Democrats, whom she depended for her coalition in her first chancellorship in 2005, or(however remote the chances) the Green Party.
The SPD and its Green Party partners have a majority in the Bundesrat, the second house of parliament where the 16 federal states are represented, as the Financial Times reported Monday, meaning, all major legislative items will have be taken on the basis of compromise.
So how might decision making-by-grand-committee translate for German energy policy? Expect big changes to correct the country’s unwieldy renewable energy policy? Expect shale gas exploration to be given a clean go ahead (without a raft of new regulatory requirements)? I wouldn’t bet on either.
RISING POWER COSTS AND SHALE
Beset with some of Europe’s highest power costs, Germany’s ambitions for a quick and big shift to wind and solar power has become economically unsustainable, as we’ve heard in spades in recent months. High energy prices are not, intrinsically, a bad thing altogether if they occur over time. They help reduce wasteful consumption, which is good both for ultimately keeping a lid on prices and for environmental stewardship, and incentivize investment.
But because of overly generous subsidies to wind and solar generators, German residential power prices have spiked some 70% since 1998, making them among the highest in Europe, behind only Cyprus and Denmark, according to EU data Bloomberg cited in a story last week; in 2014 alone, the renewable surcharge that will be added to consumer power bills is projected to rise 20%.
Last week, Germany’s BDI, which represents the country’s biggest companies who are worried about Germany’s competitive position in Europe and against the U.S. because of high energy costs, called on Merkel to eliminate the costly feed-in tariff subsidy that guarantees wind and solar generators above-market payments for 20 years under Germany’s renewable law.
Thus, what Germans are becoming loathe to realize is that the process of switching off all of the country’s nuclear reactors by 2022 and leaning heavily on wind and solar power to plug the gap is not actually a short term, low-cost endeavor. Ripping up energy infrastructure that took decades to put into place actually requires decades to replace in order to make the switching and transition costs palatable and acceptable across society.
It will also take decades and many multiple billions of euros to build all the needed transmission infrastructure to wheel power from Germany’s north, where all the country’s wind and solar generators have been built, to Germany’s industrial south where the demand is. Ambition requires real-world pragmatism.
Killing the feed-in tariff seems unlikely for various political and economic reasons. For starters, the SDP loves it and so do the Greens, even if they acknowledge costs need to be contained somehow. The Christian Democrats and Social Democrats agree that Germany’s feed-in tariff law needs to be reformed, but they differ sizably on how to do it, as online German solar portal, SolarServer, recently observed.
With the election behind her, Merkel will come off the fence on shale gas, an issue she’s generally been silent on. But even if her pragmatic ways lead to a thumbs up for shale gas, her coalition partners and the German people are bound to have other thoughts. An absolute majority for Merkel and the Christian Democrats would have presented her with a mandate to make the case for shale gas to the German public, without having to placate Leftist coalition partners.
Hydraulic fracturing, the method employed to extract shale gas, has been used in Germany to initiate extraction of conventional but very tough to tap oil deposits since the 1960s – without incident. Yet, despite shale gas risks being obviously manageable based on the industry’s long track record, German public and political opinion on the Left (and even for some on the Right)has been staunchly opposed to shale gas development because of environmental concerns. And the post German election period is unlikely to change that sentiment, at least in the short term.
Squaring those energy issues through the inherent consenusal nature of the grand coalition that emerges in Germany, whatever its composition, will be a very tall task. Lowest common denominator decision-making poses a natural barrier against the type of decisive political actions required to meaningfully iron out Germany’s renewable energy fiasco and to open up a new avenue for energy supply security in shale gas.
Thus, the fortunes of the dirtiest of all fuel sources, coal, will continue to flourish in Germany. Coal remains abundant and cheap — especially as weak wholesale power prices, triggered by subsidized renewables, push more and more pricier gas-fired power generation out of operation. That is why coal’s share in the German power mix is expected to stay above 50%, more than any other source, in the forseeable future, according to industry analysts.
September 23, 2013
In a matter of weeks, the European Commission is expected to roll out new guidelines around state aid for energy and environmental matters that may, through verbal gymnastics, green-light Member States’ legal ability to put financial support behind nuclear power.
On Tuesday, the European Commission announced a fresh agreement with the International Atomic Energy Agency to reinforce its long-standing nuclear safety cooperation with the nuclear watchdog agency. Or, in other words, to reinforce the type of policy cover needed to make it more palatable and possible for Member States, like the U.K. to give financial support to nuclear power.
Nuclear power plants, just over 130 of them in 14 EU Member States, reliably generate (unlike wind and solar) about 30% of Europe’s electricity, according to Commission data, and do so while keeping carbon emissions at a minimum. A 1000-MW nuclear power facility will operate, in practice, very close to that nameplate capacity in terms of capacity utilization over its multi-decade life. A solar farm, however, with say 10 MW of nameplate capacity will, in practice, only normally utilize around 2 to 4 MW of its capacity over its lifetime on average because of intermittency.
But, as the story goes, nukes have been under renewed, knee-jerk assault in places like Germany and Austria since the 2011 Fukushima accident in Japan resulting from the tsunami, which caused significant nuclear equipment failures at the Fukushima facility and ultimately led to harmful radioactive material releases.
The agreement signed Tuesday is a confidence-boosting measure aimed at demonstrating that some prudent policy and industry changes are required to address legitimate public safety concerns following Fukushima. “There is a clear need to reinforce the nuclear safety cooperation with the IAEA and to make it more structured, in particular in the current context after the Fukushima accident,” according to the memorandum of understanding inked between the Commission and the IAEA.
The agreement covers a number of “priority” areas, including nuclear safety (safety standards, installation safety, regulatory issues, safe management of spent fuel and radioactive waste) and emergency preparedness and mutual assistance.
The EU/IAEA announcement also came the same day that EU Competition Commissioner Joaquin Alumnia said the College of Commissioners will be having an “orientation debate” in coming weeks about the U.K.’s move to build much-needed new nuclear generation capacity with state aid support in order to plug a projected widening power capacity gap in the U.K. in the coming years.
While not providing many specifics on the U.K. case, Alumnia told a group of business executives that “the situation today is different” regarding state aid support for nuclear power, in that the EU has ambitious climate abatement and pressing energy supply security goals.
Indeed, the three key dimensions to EU energy policy — competitiveness, sustainability and security of supply — are all headed in the wrong direction with no real signs of changing:
- Gas-fired power generation — which meets around a quarter of all power demand in Europe — is down some 25% in Europe since 2010, according to Eni, because of distorted wholesale power markets triggered by cheap, over-subsidized solar and wind power;
- Carbon emissions are rising from increased coal-fired power generation caused by weak U.S. gas prices, and despite poor, recession-induced European energy demand and despite ever increasing amounts of over-subsidized wind and solar power generation in Germany and elsewhere (the share of coal rose above 50% in the German power mix in the first half of 2013, according to Commission data); and,
- European industry continues to see a yawning energy price disadvantage — for natural gas and power – relative to its U.S. competitors.
September 18, 2013
Lambasted by MEPs for its over optimism and lack of new policy proposals, Barroso’s fourth State of the European Union (SOTEU) speech this week did make at least one good call, notably the Commission President’s statement that “Now is the time for all those who care about Europe to speak up”….because speak up they did and for those who hold Europe dear, social media became their soapbox.
In the 12 hours before and after Barroso’s speech, there were 5095 tweets and 64 facebook discussions on the SOTEU.
But who are the Europeans speaking up for Europe and where are they from?
For the most part the older member states proved to hold the most vocal twitterers but their Eastern neighbours were not far behind; Bulgarians and Romanians certainly made their opinions heard amongst the twitterati.
The top 20 tweeters on the SOTEU proved to be a solid collection of media commentators and not surprisingly representatives of the European Parliament. FleishmanHillard’s 2011 European Parliament Digital Trends survey that “61% [of MEPs]consider social networks as effective channels of communication” and this trend appears not to have abated in the years since. Will they go so far as to run their 2014 election campaigns through social media too? We will be watching very closely!
Top 20 SOTEU Twitterers
So what did President Barroso say that inspired Europeans to debate?
Based on a Wordle.net analysis, which highlights the most used terms in a word cloud, the key words in Barroso’s SOTEU cloud this year shows his attention is still very much on the economic stability of the union and tackling the financial crisis. Compared to his 2012 speech, this year Barroso’s cloud paints a more inclusive picture highlighting the importance of member states and citizens of Europe acting together.
What did social media have to say about the State of the Union speech?
SOTEU commentators this year were clearly looking to the future, with their key terms on social media focusing on EU’s budget discussions and the 2014 European Parliament elections. But social media debate also reflected the failure of Europe to stand together as Barroso had hoped. This is nowhere more evident that the tweets surrounding the passionate and somewhat controversial statements made by MEPs in the Strasbourg plenary in response to the SOTEU – notably from Guy Verhofstadt (ALDE, BE) who called for ever closer union and Nigel Farage (EDF, UK) who questioned climate change.
Whatever your perspective on Europe and its togetherness, it is clear that open debate is the only way to find effective answers, and increasingly social media is offering the most accessible platform for discussion.
Hendrik and Lorraine
September 13, 2013
The scheduled European Parliamentary vote Wednesday on biofuels boils down to a couple of main issues; there are others of course, but the two biggies are: to what extent to cap the use of first generation, food-based biofuels in Europe; and whether to legally require the EUR13 billion a year European biofuel industry to account for the potential indirect effects of producing biofuels (the so-called Indirect Land Use Change, or ILUC, issue).
Various Member States, fixated on jobs and economic growth because of the deep Eurozone recession, aren’t enthusiastic about the first issue and even fewer with the second issue (mainly because ILUC is only about trying to predict what could happen[many things in this world], or more aptly put: about non-empirical modeling based on whatever assumptions one wants to make about human decision-making, commodity prices and hundreds of other factors).
So what a final deal might look like on biofuels and ILUC, if one is reached, between the European Parliament and EU Member States, and whether this can be done before this parliament and the European Commission expire next year, will remain the big open questions after tomorrow’s vote.
There’s been a flurry of media articles in recent days recounting all the arguments, studies, and speculation around the EU biofuels issue. All interesting reads.
But more interesting, to detour here, is to briefly consider how the biofuel issue has become framed the way it has in Europe. That framing, a result of NGO doggedness the past several years, being a variant of: biofuels are “worse than oil,” they “jack up” food prices and “take away food from the hungry.” What sentient being, who knows nothing about biofuels, won’t sit up hearing that last line, right? (Even if that line, among others that NGOs peddle in their lobbying campaigns, is fundamentally false on many fronts.)
Early engagement with the policymaker (before an issue becomes an issue); frenetic repetition of messaging using all types of communication channels; tendentious use of academic studies; exploiting the public’s lack of knowledge about biofuels and agriculture issues; speaking with one voice and keeping an eye on the big goal despite disquiet on lesser issues; and always being available to push rent-a-quotes onto the deadline-pressed journalist. These have been among the host of tactical ingredients that NGOs have applied with aplomb to significantly shape what the European Parliament will be voting on tomorrow, and despite NGOs not having very deep pockets.
Such activities have been on display the past week, as NGOs moved into their final lobbying push on the matter.
Yes, industry is making its own push as well, but for them, the ILUC issue has been an uphill battle for several years. NGOs, as always, gained and held first-mover advantage on the issue; and the ethanol and biodiesel industries, fighting for market share, have been divided and have never really been able to forge a common and persistent position — as the NGOs have — and to bury their differences.
Some European producers have also lamely played the childish EU-produced vs non-EU produced biofuel card, apparently forgetting the EU’s own WTO commitments. Really, let’s compete and get on with it.
Industry, for sure, has fought back and that is probably why the EP vote outcome tomorrow will be less bad for them than if the vote had been held two or three years ago (as NGOs had wished). Still, the important conceit remains. Biofuel producers face a smaller, legally designed market in Europe because of new EU policy.
Not addressing a policy issue in its infancy and in a sustained way with the proper strategy, tactics, and resources can often set up the day when you’re fighting to keep a market alive (or at least relevant), in the biofuel case, or fighting for other cherished goods, like your reputation.
By Spencer Swartz
September 10, 2013
Last month, Andrew Wright, interim chief executive of Ofgem, the UK’s government regulator for the electricity and natural gas markets, warned that “Britain’s energy industry is facing an unprecedented challenge to secure supplies” and that as a result, the country now faces a growing risk of power shortages by 2015.
This fear of a critical energy shortage (and its consequences) is trending throughout Europe, leaving Brussels and national governments pursuing policies to secure energy supplies through all available avenues: Britain is looking to “explore and unlock” domestic shale gas potential, Spain (pre-July 2013) strongly supported alternative energy sources such as solar and wind, and Germany’s Energiewende aims to deliver a nuclear-free energy mix. The diversity of these policy choices and others, however, does not inspire confidence amongst Europe’s energy-intensive industries, which see the lack of a comprehensive and enforced EU energy policy as one of the reasons for Europe’s looming energy scarcity.
According to a recent survey conducted by FleishmanHillard, the majority of senior, European, business leaders believe that Europe is likely to face a critical energy shortage within the next five years (74%). Respondents predominantly place the blame at the feet of domestic energy policies in Europe: the shift away from nuclear power, the lack of a comprehensive and enforced domestic EU energy policy, underinvestment in critical energy infrastructure – the list continues. Some consider Europe’s failure to adequately develop foreign sources of energy a significant contributor. Interestingly, results show that this fear of energy scarcity is driving industry positions on Europe’s future energy mix, and that the fear of supply not meeting demand is a causal factor in rising support for increased domestic energy development.
Taking into account political, environmental and/or financial costs, 40% of respondents highlighted that increased domestic resources should be the priority for EU energy policy – this number increases to 70% when including renewables (solar, wind, biofuels, etc.) as domestic energy sources. Increasing foreign energy sources? This came in third at 26%. However, when asked about solutions with the most immediate impact on Europe’s energy problems, traditional imports polled in a very strong second place (44%), ahead of renewable energy (38%) but behind domestic energy sources (70%). The results suggest that while leaders of energy-intensive industries champion new energy sources and are ready to contribute to the transition to a low-carbon economy, they are acutely aware that in the more immediate term increasing foreign energy imports may be a more effective means of ensuring a consistent energy supply.
Europe is under pressure to respond to the “unprecedented” challenges to its energy mix, and key will be ensuring confidence in the stability and competitiveness of the European market. The role of industry in meeting these challenges is undeniable, and thus it will be important for Europe to consult whether it supplies what Europe demands. Following the results of our survey, the pursuit of domestic energy sources, conventional, unconventional and renewable, and completion of the Internal Energy Market would be steps into the right direction.
July 22, 2013
(Photo credit: Wikipedia)
As we set in for the winter months here are some waste residues that can be burned without subsidy or fear of eating up someone else’s much loved feedstock.
5 years ago: we heralded the arrival of the blogactiv platform from Euractiv and asked whether it was the future of the EU blogosphere? According to the Betteridge law of headlines the answer is ‘no’. I daresay the good folks at Euractiv would disagree.
3 years ago: we chuckled all day as an official Commission bio of the new Commissioner for Research was copied and pasted Wikipedia and therefore repeated an untrue rumor about the private life of the new Commissioner. Goes to show getting balance in a story is not all it’s cracked up to be.
1 year ago: The formidable Nick Andrews asked if the ‘leave us alone’ strategy has ever worked for industries under fire. His headline at least answered the question, although he slightly hedged it with a ‘not likely’. Whether you’re the financial services sector, big pharma, the biofuels industry or indeed just energy intensive the last 12 months suggests that Nick’s crystal ball had some truth in it.
November 14, 2012