European Parliament rejects modernization of the energy system

Investments in CHP, energy efficiency and renewable energy is on hold after a vote in the plenary session in Strasbourg earlier today, where the European Parliament rejected the Commission’s highly debated proposal for “backloading”. Thus the European support for modernizing the energy sector has experienced a reversal. Now we have to focus on finding solutions, so that we do not end up with 27 national policies, says Ulrich Bang, director of European Affairs in the Danish Energy Association.

A setback for green investments in Europe. That the brief description of the result can be described. The parliament rejected Connie Hedegaards proposal to backload with 315 votes in favor of the proposal and 334 votes against. By rejecting the vote the parliament says no to giving the Commission a mandate to temporarily delay the sale of 900 million carbon allowances within the next three years.
 
The proposal for backloading would have stabilized the European ETS (Emission Trading Scheme).  When the ETS was designed years ago, the effects of the economic crisis was not taken into consideration and the estimated price per ton was 30 Euro. Recent years’ crisis has resulted in the supply of carbon allowances exceeding the demand.
 
- Today is a dark day for Europe. Dark because the result is heavy investments in coal at the expense of CHP, energy efficiency, and renewable energy. And dark because it is simultaneously a ‘no’ to common European rules. While the coal industry is thrilled about the outcome, it is, unfortunately, a sad day for Danish businesses and exports, says Ulrich Bang, director of European Affairs in the Danish Energy Association.

The consequence of the rejection of the backloading proposal is likely to be that the national governments will have to take a greater responsibility in securing the modernization of the energy system requested by politicians. In other words 27 different energy policy frameworks might be underway, which will be a great challenge when implementing the internal energy market. It will block the enhancements, which the Commission has proposed.

- In order to avoid Europe being “covered in coal dust” it is important that the Commission now addresses the long-termed reforms of the carbon market up to 2030. The outlook for a common EU policy is unfortunately grim until 2017, when a new team of commissioners has been appointed and a new parliament has been elected, says Ulrich Bang.

- Today we are unhappy with the result, but tomorrow we will again look forward and work to secure the modernization of the European energy sector. We must avoid a 20-30 years setback to the time of lignite power plants and unnecessary energy waste. Large parts of the European power plants have to be replaced and without a proper ETS, that calls for political initiatives to ensure that the coal does not gain ground, says Ulrich Bang.

The Commission has announced a proposal to energy and climate goals for 2030 before the end of the year. That will follow the consultations on their green paper about climate and energy politics for 2030. The work on this matter has awaited today’s vote on backloading. Danish Energy Association expects the work to be deferred due to the rejection of the support to the common carbon market in Europe.