http://www.euractiv.com/en/opinion/deal-eu-climate-package-year/article-172922

The French Presidency is intent on finalising a deal on the EU's climate 
and energy package by the end of the year, which it says is necessary 
because of the international situation. They have to deal with the EU 
emissions trading scheme phase 3, burden sharing of emission cuts, 
biofuels and carbon capture and storage.

Chris

Deal on EU climate package by year's end?[fr][de]
Published: Tuesday 3 June 2008

The incoming French EU Presidency is confident that it will be able to 
shepherd a deal on the EU's climate and energy package through to 
adoption before the end of the year. But the 'weight' of the legislative 
agenda is unprecedented, and member states' views diverge on a number of 
key points.
Background:

On 23 January, the Commission proposed a series of legislative 
proposals, dubbed the climate and energy package, designed to reduce EU 
CO2 emissions by 20% by 2020. That figure will be upped to 30% if an 
international deal on reducing global CO2 emissions can be reached – a 
condition that was endorsed by EU heads of state during a landmark 
summit in March 2007.

With a major UN climate change conference scheduled for Copenhagen in 
December 2009, EU leaders are keen to reach a deal on the proposals by 
the end of 2008 or, at the latest, by the Spring European Council of 
March 2009, when the end of the current Parliament's tenure will bring 
the EU's legislative machine to a halt.

France, which will take over the EU's six-month rotating presidency from 
Slovenia on 1 July, is preparing what some are calling the "heaviest" 
presidency in EU history (EurActiv 02/06/08).

Climate and energy policy will make up the major part of the 
presidency's work. Paris' ministers and diplomats will need to broker 
compromises between 27 EU member states on a number of key dossiers:

* A review of the EU Emissions Trading Scheme (EU ETS) for the period 
beyond 2012;
* Sharing between member states the 'effort' of reducing EU CO2 
emissions by 20% (possibly 30%) by 2020 in sectors not covered by the EU 
ETS;
* A new framework for the promotion and trade of renewable energies, 
including biofuels;
* A mechanism to finance 12 carbon capture and storage (CCS) 
demonstration plants by 2015, as well as a legal framework for CO2 storage.

Although not directly part of the climate and energy package, the 
presidency will also be required to tackle controversial proposals on 
reducing vehicle CO2 emissions and on further liberalising the EU's gas 
and electricity markets.

Where there's a will...

EU leaders have repeatedly stressed that enough political will exists to 
push through the package before the end of the year. Slovenia's outgoing 
EU Presidency, for example, "has all reasons to believe" the French can 
pull it off, a presidency source said on Monday (2 June).

The "general political will" is there, and there is a "strong incentive 
for all member states" to come to Copenhagen with a solid deal in their 
hands, the source said.

In addition to political will, France's own diplomats may also be 
motivated by sheer obligation, with the EU's international reputation on 
climate change resting to some extent on the shoulders of the presidency.

"We don't have a choice on the energy-climate package because of the 
international calendar," according to a senior French diplomat in 
Brussels. "If we sacrifice Europe's position, we sacrifice a lot of the 
international negotiation because it is Europe which is holding it 
together," the diplomat said.

Meanwhile French Ecology Minister Jean-Louis Borloo has the official 
support of his ministerial colleagues in the future Czech and Swedish EU 
Presidencies respectively, which will take over after France's mandate 
expires on 31 December.

"The three ministers agreed to further the EU internal negotiations on 
the climate and energy legislative package with the aim to finalise the 
negotiations before next year's elections to the European Parliament and 
in the perspective of facilitating the conclusion of international 
negotiations on the post-Kyoto protocol in Copenhagen in December 2009," 
said a 30 May Czech government press statement.

But despite the confidence and apparent goodwill of EU leaders, a number 
of key files in the package remain contentious.

East versus West?

Some of the EU's newer members, for example, are questioning the 
reference year 2005 chosen by the Commission to calculate how each of 
the 27 EU member states will contribute to the EU's promised 20% cut in 
greenhouse gas emissions (EurActiv 02/06/08).

The Slovene Presidency has downplayed the issue. "The idea is not new," 
according to a presidency source. "It is one of the many proposals on 
the desk" of the Council's working groups, the source said.

But the incident points to a divergence of views between the EU's newer 
and oldest members about who should shoulder the greatest responsibility 
for reducing industrial greenhouse gas (GHG) emissions.

Seven EU member states, including Hungary, Latvia, Malta and Lithuania, 
Poland and the Czech Republic, are already taking the Commission to 
court on the grounds that the EU ETS emissions caps being mandated by 
the EU will unduly harm their industries.

The delocalisation debate

The EU's energy intensive industries have also indicated strong 
apprehension over Brussels' climate and energy agenda.

Tightening the 'screws' on the EU's carbon market too much, particularly 
in the absence of an international deal on CO2 reductions, will push 
many factories outside EU borders where their CO2 emissions will be 
'leaked' rather than capped, according to a growing chorus of industry 
voices that is pushing for exemptions to mandatory CO2 permit auctioning 
after 2012 (EurActiv 16/05/08).

The issue is likely to be central to the negotiations over the revision 
of the EU ETS. Most member states are asking the Commission to specify 
which industries might qualify for exemptions earlier than planned, 
according to a detailed briefing noteword prepared by the Slovenian EU 
Presidency.

The Commission has said it will follow-up only by June 2010, following 
the Copenhagen climate conference.

Renewables, biofuels and coal

In addition to high-level political debates on CO2 effort sharing and on 
the role of heavy industry in the EU's carbon market, France will also 
need to finalise the EU's commitment to boosting the level of biofuels 
in its transport mix, with the EU sharply divided on sustainability 
issues (EurActiv LinksDossier).

There are also concerns that the member states will fail to commit the 
necessary funds to get 12 CCS demonstration plants up and running by 
2015, raising the spectre of run-away CO2 emissions from an extensive 
investment in new coal-fired power plants (EurActiv 30/05/08).

Promoting renewable energies may prove to the 'easiest' file for the 
French, although member states' views diverge significantly over the 
modalities of virtual trading in renewable energy certificates.

A busy week

Two Council meetings at the end of this week may provide an early 
indication of progress.

The Environment Council will convene on 5 June, and the Energy Council 
one day later on 6 June. No common positions are expected from the 
Councils since the Parliament has yet to vote on the package, but the 
meetings may shed light on the extent to which member states views 
converge or diverge on key aspects of the package.
Next steps:

* 5 June: Environment Council;
* 6 June: Energy Council;
* July - Dec.: French EU Presidency;
* 16 July: Parliament Industry (ITRE) Committee vote on Turmes' 
renewables report;
* 7 Oct.: Parliament Environment (ENVI) Committee vote on EU ETS review 
and non-ETS effort sharing;
* Oct. (tbd): Vote on Davies' report for CCS legal framework in ENVI 
Committee;
* Dec.: UN climate change conference, Poznan, Poland;
* March 2009: Spring European Council and end of current Parliament 
legislature;
* June 2009: End of Barroso Commission mandate;
* Dec. 2009: UN climate change conference in Copenhagen.

Links
EU official documents

* Commission (DG TREN): EU climate actionexternal

Governments

* Slovene EU Presidency: Preparation of the Council (Environment) 
meeting on 5 June and of the TTE Council (Energy) meeting on 6 Juneword 
(26 May)
* Czech Ministry for Environment Upcoming EU presidencies: France, 
Sweden and the Czech Republic confirmed that they will work closely with 
the aime to finalize the climate and energy legislative packageexternal
* French Presidency of the EU: Websiteexternal
* French Presidency of the EU: Calendar July-DecemberPdf external