The New EU Momentum for the Energy Sector

By Romain Seignovert, Associate, MSLGROUP Brussels

At the moment Brussels is all hustle and bustle following the announcement of long-awaited initiatives in the energy sector. This week, the European Commission unveiled its action plan to delay the auctioning of several millions of greenhouse gas (GHG) emission credits in 2013.

It also presented its view on the internal energy market in order to prepare the arena for the future review of state aid mechanisms supporting investments in renewable energies. As we glance back at the recent energy policy developments, we observe that not less than four legislative proposals are currently in the EU pipeline. Here we bring you an overview of the latest announcements and updates in the energy sector. They refer to a wide range of activities, from shale gas fracking, offshore drilling to nuclear safety and biofuel production. If you are interested in consulting us on how these policies impact you, connect with us ? we are glad to share our insights.

Internal Energy Market: a New Communication on Energy Liberalisation

On November 15th, the European Commission said it considers that member states are about to miss the target set by the European Council to achieve an internal energy market by 2014. The Commission plans to use this announcement as a starting point to launch more stringent legislative initiatives, with the aim in particular to reduce state intervention in domestic energy markets. The state aid support in favour of renewable energy could be lowered in the short term.

ETS: a Proposal to Delay 900M of Emission Allowances

The third trading period of the EU Emissions Trading System (ETS) will begin on January 1, 2013 and from that date the distribution of ?greenhouse gas (GHG) emission allowances will be entirely managed at EU level. Facing relatively low carbon prices around ?7/tonne, the European Commission presented on November 14th a proposal with the ambition to delay the auctioning of 900 million GHG emission allowances in the third period, so as to support an artificial growth of carbon prices. The fast-track legislative procedure is expected to last until February 2013.

The European Commission also unveiled on November 14th ?its report on the state of the European carbon market, presenting at the same time new long term propositions to review ?the structure of the EU ETS.?Stakeholders are already concerned about a possible destabilisation of the market and the impact of an increase of carbon prices on their activities.

Biofuels: a Complete Review of the Regulatory Framework

On October 17th, the European Commission unveiled its proposal reviewing the regulatory framework related to the promotion and use of biofuels in the European Union. With this draft Directive, the European Commission intends to shift the emphasis from first generation biofuels made from food crops to second generation biofuels generated from waste, seaweed or grown crops.

The European Commission proposes that a cap should be placed on the development of first generation biofuels limiting at 5% their share in the final energy consumption in the transport sector by 2020. It also intends to put an end to all public subsidies for biofuels after 2020. For more information, read the analysis by MSLGROUP Brussels.

Stricter Rules for Offshore Drilling

The Energy committee of the European Parliament approved on October 9th the draft regulatory framework for offshore drilling, modifying in the process the legal status of the text from regulation to directive (to be transposed into Member States? legislation).

Under the terms of future requirements, companies operating oil rigs offshore will be obliged to submit reports on major dangers and emergency intervention plans before being granted a drilling licence. Companies will furthermore be obliged to provide evidence of an appropriate financial guarantee to cover the liabilities related to their drilling activities.

The Energy committee rapporteur will now start negotiations with the Council to finalise the concluding compromise.

Shale Gas Fracking: Members of the European Parliament Call for Caution

The European Parliament?s environment committee called, on September 20th, for the launch of exploration of oil shale and shale gas in countries to be framed by tough regulatory regimes. The committee members agreed that Member States should be vigilant while waiting for the results which will determine if the EU regulation is necessary. On November 20th, there will be a debate at the EP in Strasbourg on the environmental impacts of shale gas and shale oil extraction activities. The vote on this own initiative report is scheduled for November 21st.

Nuclear Power Plants: Major Safety Investments Required

In October, the European Commission unveiled its final report on the stress testing of European power plants, following a safety review of plants? ability to resist extreme natural occurrences (earthquakes, floods, plane crashes?) and severe technical failures. The European Commission evaluates at between ?10 and ?25 billion the cost of improvements required from the nuclear industry to reach the highest international standards regarding in particular flooding risks, on-site seismic instruments and safety equipment.

This report will be followed in spring 2013 by a revision of the 2009 directive on nuclear safety. Both the European Parliament and the Commission intend to deliver amendments on safety requirements, transparency and cooperation between national safety regulators and the European Nuclear Safety Regulators Group. In 2013, the Commission also plans to present a proposal on insurance and responsibility in the nuclear sector to improve the situation of potential victims in the case of a nuclear accident.

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Romain has worked as a policy officer at the French Regulatory Commission of Energy, within the European and International Department.?He also has experience from internships at the European Commission Representation in France, the German Parliament and the EuroNews TV network. He holds three Master?s degrees in Political Science and European Studies from Sciences Po Rennes in France, the University of Eichst?tt-Ingolstadt in Germany and the University of Salamanca in Spain.

Source: http://blog.mslgroup.com/new-eu-momentum-for-the-energy-sector/

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