EU energy ministers dilute climate change strategy

EU energy ministers have watered down a strategy to fight climate change, claiming that a one-size-fits-all policy does not work…

EU energy ministers have watered down a strategy to fight climate change, claiming that a one-size-fits-all policy does not work in the energy sector, writes Jamie Smythin Brussels.

The decision is a major disappointment for the European Commission, which has placed global warming and energy security at the top of its political agenda.

However at a meeting in Brussels yesterday, ministers amended the commission's action plan on energy to remove legally binding targets for renewable energy use and add caveats to a goal of 10 per cent use of biofuels in cars by 2020.

Ministers also signalled their opposition to a proposal to force big energy firms to sell off their transmission networks to create more competition in the energy sector and reduce prices.

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Only a small group of countries, including Britain, Denmark and Sweden, strongly supported the commission's favoured option of "ownership unbundling".

However, France and Germany are both bitterly opposed to the plan, which could threaten the dominance of their large gas suppliers such as EON and GDF.

Ireland also opposes full "ownership unbundling", which would force the ESB to sell off its network.

"The Irish market is pretty unique, a bit like Malta, because it is very small and on the edge of Europe," said Minister for Natural Resources Noel Dempsey. "It just isn't big enough to attract the big players . . . we already have independence via Eirgrid."

However, in a presentation to ministers, competition commissioner Neelie Kroes said large energy companies had too much control over markets and current efforts to take the network out of the hands of former state monopolies were "insufficient".

"This state of affairs is undermining our shared objective of ensuring secure, affordable and sustainable energy supplies," said Ms Kroes, who has already initiated legal actions against several EU states for failing to open their electricity markets.

Mr Dempsey said he was disappointed that EU ministers had rejected setting a "legally binding" target of producing 20 per cent of energy from renewables by 2020 and had also watered down a goal using biofuels for 10 per cent of in every state.

He said he hoped that EU leaders would revisit the issue at a summit in March.

However, many member states such as Poland have concerns about the potential costs to industry of meeting any targets that are legally binding. The 10 per cent target on biofuels is only binding as long as sufficient quantities can be produced to make it "commercially available" in what is still a fledgling industry today.