Commission proposes EU 30% energy usage reduction by 2030 evoked discussions

A 30% energy use reduction by 2030 has been suggested by the European Commission. This is part of a set of objectives for 2030 following from existing goals for 2020, in regards to emissions, energy use and renewables.

The 2020 energy efficiency target was set at 20% above 1990 levels, however the commission have admitted that reaching the target is unlikely, and a result just 18% will most likely to be met by 2020.

The right balance has been struck between benefits and costs, along with the target being achievable in 2030 as well as being ambitious at the same time. In October, a meeting will take place to discuss the target level as there has been some debate whether a 30% target rate is too low.

Euractiv claimed a 40% target could be under consideration, but there is no information to say whether the target is binding or not.

There are many different opinions being formed about the proposal by various groups, such as trade associations and pressure groups. European electricity association EURELECTRIC explain that in order to increase the overall cost-effectiveness of reaching the 2030 target, lessons from 2020 need to be taken.

A streamlined approach based around the EU Emissions Trading Scheme (ETS) as a key driver for energy efficiency investments, using an ambitious greenhouse gas reduction target of at least 40% has been called for by the association. Bottom-up regulation focusing on

  • specific actions may be required for demand side sectors, which aren’t vulnerable to price signals. It also supports the electrification of heating/cooling and transport to ensure a more efficient use of energy and allow the decarbonisation of these sectors.

But there has been a warning from the market analysis company Thomson Reuters Point Carbon, who warn that the commission’s framework will lower European carbon prices if it isn’t complemented with the implementation of a carbon Market Stability Reserve – a proposed mechanism to transfer EU ETS allowances to a reserve when they are in excess, and to then release them when the market balance gets tight.

Marcus Ferdinand, Head of the EU Carbon Analysis at Thomas Reuters Point Carbon goes on to explain the European carbon prices would not incentivise the desired amount of reduction in the trade sectors if there were to be lower emissions. There is then also the potential to downgrade the European carbon market from being the central pillar of European climate policy.

The proposed target of 30% would lead to an average carbon price of €15 per tonne between 2021 and 2030 in the lack of a Market Stability Reserve – 19% lower than a scenario that uses current energy efficiency measures.

The energy efficiency goal has been put in a context of energy security for a Europe that relies to a large extent on Russian gas. The Russia and Ukraine conflict has focused throughout on energy security in this setting.

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