Businesses push EU Council to build Energy Union on low carbon economy

Author:
Ilario D'Amato
Reading time: 5 minutes
20 March 2015

LONDON: Leading companies are pressing the European Council to lay the foundation of the new Energy Union on low carbon, resilient and affordable energy.

Today, heads of states and government are meeting in Brussel to further discuss this initiative, aimed to “reform how Europe produces, transports and consumes energy,” the draft plan says. In a letter, 22 major businesses are asking these leaders to make the Energy Union the framework to deliver the inevitable transition toward a stable, secure, low carbon economy.

“This letter provides further confirmation that businesses see climate change as a huge economic opportunity,” says Ben Ferrari, Director of Partnerships, The Climate Group. “We know that the low carbon economy is a great market opportunity and we also know that it is the only possible future for sustainable growth. Taking bold measures now will reduce the cost of climate disruption both for businesses and governments, and policymakers must support this smart choice. This is the only way for Europe and the world to make businesses grow with a secure and competitive energy system”.

“Companies are increasingly shifting towards reliable, renewable energy,” says Emily Farnworth, RE100 Campaign Director, The Climate Group. “RE100 demonstrates the range of benefits that forward-thinking businesses are realizing from their commitment to go 100% renewable. Securing an affordable, long-term cost of power is essential and with the cost of renewable energy going down day after day, this is the smart move to make.”

Companies like IKEA, Nestlé and Swiss Re see the benefits of switching to renewable energy. Their story is a success: implementing a 100% renewable strategy has enabled them to seek innovative ways to decarbonise their power supply. More and more companies want to make the switch to renewable power and the Energy Union package offers an opportunity to support this. RE100 is already demonstrating that companies want clean, affordable energy for the long-term – smart policy can accelerate their journey to 100% renewable.

Energy Union

Last month, the European minister discussed in Riga, Latvia, the preliminary steps to ensure security of supply, build a single internal energy market, raise energy efficiencydecarbonize national economies, and promote research and innovation. Two weeks later, the European Commission presented its Energy Union package, containing also its own Intended National Determined Contribution (INDC) toward the Conference of the Parties (COP) in Paris in December.

In particular, the package highlighted the role of energy efficiency, seen “as an energy source in its own right, representing the value of energy saved.” However, last week a series of allegedly leaked draft documents from the European Council were not putting the same weight on this and other climate-related issues, highlighting some concern about the need for energy security.

The letter thus balances these concerns, calling the Council to implement an “effective and forward-looking Energy Union that will deliver major economic benefits to Europe, unlock new markets and opportunities for European business, while providing an affordable and reliable energy supply.”

According to them, the European Commissions’s package is “an excellent first step. The Package shows that Europe is serious about securing and decarbonizing Europe’s energy supplies. In particular, the Commission should be commended for identifying solutions beyond the supply side.”

The business call not only to support such a package, but also “to strengthen it so that it ensures new flows of finance to low carbon infrastructure and reducing energy use.” The role of the private sector will be fundamental to address these issues: “The EU needs to invest over €2.5 trillion (US$2.67 trillion) in energy over the next decade by some estimates, the vast majority of which is needed for capital-intensive low carbon infrastructure, including power generation, storage, networks and energy efficiency.”

Therefore, the companies are calling for an “European Energy Investment Strategy to align existing schemes like the Capital Markets Union and Investment Plan for Europe behind the Energy Union’s goals. It should also create the right environment to catalyze sufficient flows of private capital to low carbon infrastructure.”

An interconnected market

In the conclusions of the meeting, the EU Council backed the EU Commission climate strategy, focusing on “accelerating infrastructure projects, including interconnections in particular to peripheral regions, for electricity and gas to ensure energy security and a well-functioning internal energy market.”

In particular, the EU Council aims to pursue energy security also trough “robust grids, increased energy efficiency and having recourse to indigenous resources as well as safe and sustainable low carbon technologies.”

The Council also wants its members to have “a strong coordinated action through an active European climate diplomacy ahead of the COP21 in Paris”. Europe, which has already submitted its INDC for Paris, is pressing other countries – including major economies – to submit their contributions by the end of March.

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by Ilario D'Amato

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