BRUSSELS, Jan. 10 (Xinhua) -- The European Union (EU) on Wednesday unveiled a comprehensive common European energy policy, which highlights the need to secure supply, fight climate change and build a competitive energy sector.
The new energy package, drafted by the European Commission, sets out a number of targets by 2020: a 20 percent drop in the EU's greenhouse gas emissions compared to 1990, a 20 percent share of renewable energies in the energy mix, and improving energy efficiency by 20 percent.
The EU executive seeks to put in place an internal energy market with open competition and effective regulation by January 2009, which could cut costs for citizens and companies, stimulate energy efficiency and investment, and improve security of energy supply.
EU energy giants such as Germany's E.ON could be broken into smaller parts under the proposed "unbundling" plan, which aims to separate networks of production from energy transport and distribution so as to eliminate market discrimination.
If endorsed by EU governments and the European Parliament, the sweeping package will form the basis for new EU energy legislation which is to be translated into national laws.
COMBATING GLOBAL WARMING
The 27-nation bloc should commit to cutting carbon dioxide and other greenhouse gases emissions by at least 20 percent by 2020, setting an example for the rest of the world in the fight against climate change, the commission said.
But the commission would push for an international agreement for all developed countries to cut emissions by 30 percent by 2020.If other countries agree to the 30 percent target, so will the EU.
"I urge the rest of the developed world to follow our lead, match our reductions and accelerate progress towards an international agreement on the global emissions reductions (after the Kyoto Protocol expires in 2012)," said EU Environment Commissioner Stavros Dimas while launching the package.
European Commission President Jose Manual Barroso said he had received encouraging comments in this regard from United States President George Bush when he visited the White House earlier this week.
"We need the U.S. with us, since it is the biggest polluter in the world," he added.
While developed countries should continue to shoulder most of the global effort to reduce emissions over the next decade or so, developing countries, the emissions of which will surpass the developed world in not too distant future, should also step up their efforts, the paper said.
They should start to slow the growth rate in their emissions as soon as possible, and then reduce their emissions in absolute terms from 2020-2025 onwards, it said.
LOW-CARBON ECONOMY
The new policy promotes the production and use of renewable energies, and cleaner ways of power generation from fossil fuels, to cut carbon emissions.
"The time has come to embrace a low-carbon future," Barroso said.
To this end, the commission is planning to increase by half its annual spending on energy research over the next seven years.
The commission called for coordinated development of biofuels throughout the EU and set a binding minimum target of 10 percent for transport biofuels for the bloc by 2020.
The commission will propose new legislation later this year, which will include legally binding targets but allow each EU member state to decide its own renewable energy mix.
EU nations should establish their own action plans outlining specific objectives and sectoral targets for each of the renewable energy sectors -- electricity, biofuels and heating and cooling.
The commission will also seek to remove barriers to the integration of renewable energy sources into EU energy systems and encourage greater transparency, which will allow innovative new players to enter.
The EU's greenhouse gas emissions targets would not be met without a drastic reduction in the emissions from coal and gas-fired power plants, which account for over half of the EU's electricity supply, the paper said.
The EU should offer more incentives and invest more in the development of technologies for clean coal and the capture and storage of carbon dioxide, it said.
The commission proposed a two-stage strategy for the so-called sustainable power generation from coal and gas.
During the period up to 2020, the best available technologies and the most efficient coal conversion processes should be used when replacing or renovating outdated coal-fired power plants in the EU, it said.
New plants built in the period should be designed as "capture ready," prepared for later addition of carbon dioxide capture and storage technologies when these become commercially available.
After 2020, by which time sustainable power generation is expected to be technically and commercially feasible in Europe, "near zero emission" power generation can be systematically used in the EU, the paper said.
The commission will start work later this year to stimulate the construction and operation by 2015 of up to 12 large-scale demonstration projects of sustainable fossil fuel technologies in commercial power generation in the EU.
But the paper treads a neutral line on the contentious issue of nuclear energy.
While noting that "nuclear energy is one of the cheapest sources of low carbon energy that is presently produced in the EU and also has relatively stable costs," the paper insists that "it is for each member state to decide whether or not to rely on nuclear electricity."
The commission, however, says that if nuclear energy reduces in the EU, it must be replaced by other low-carbon energy sources.
SECURE ENERGY SUPPLY
According to projections, the EU's energy import dependence will jump from 50 percent of total EU energy consumption today to 65 percent by 2030.
Europe's energy vulnerability has been made all the clearer by the current oil row between Russia and Belarus, which has disrupted oil delivery to a number of EU countries.
The new plan set out a series of actions to tackle this energy dependence and called for solidarity between member states in the event of an energy crisis.
The EU need to promote diversity with regard to source, supplier, transport route and transport method of energy, it said.
EU states should actively try to bring gas from new regions, set up new gas hubs in central Europe and the Baltic countries, build new liquid gas terminals and invest more in new storage and pipeline capacity.
The EU's management of its strategic oil stocks mechanism and reporting requirements on member states should be reinforced, the paper said.
SINGLE MARKET
On the internal side, the commission proposed to break up national monopolies and strengthen regulation in the energy sector.
To ensure that gas and electricity can flow freely across the EU and consumers are guaranteed fair prices, the EU executive proposed rules against discrimination, including its preferred "ownership unbundling," by which big energy companies would be split between their different activities.
Under the status quo, a company such as E.ON that owns gas fields, pipelines and power stations as well as selling electricity directly to consumers can easily block, for example, a Danish firm from selling wind-generated electricity into Germany, even though the latter is cheaper and greener.
Brussels says the French or German-model energy fortress is holding back EU attempts to combat climate change and drive down consumer prices.
A new single body at EU level, or at least a European network of independent regulators, should be established to ensure EU regulation are fully implemented, the paper said.
The EU should draft new rules to improve market transparency, and ensure common, binding network security standards for the bloc, the paper said.
To protect EU consumers' rights, an Energy Customers' Charter will be launched to protect citizens from unfair selling practices and lower red tape when changing energy suppliers, it said.
