Two years later: taking stock on the Energy Union

Two years later: taking stock on the Energy Union

Nicoló Sartori | Senior Fellow and Head of the Energy program at the IAI
Share
Despite multiple objectives, such as the low-carbon mobility strategy in Europe, the European Energy Union continues along its difficult path. One strong point lies in European diplomacy, specifically, in the strengthening of its partnership with the United States

Two years after the launch of the Energy Union – presented by the European Commission on February 25, 2015 – the integration and transformation process of the energy sector in Europe proceeds without major hitches, albeit without that driving force that Brussels believed and hoped to impose with its ambitious initiative. The presentation of the second report on the "State of the Energy Union" offers an opportunity to assess what is working, and what is not, in the EU’s attempt to adopt a clearer, more consistent and effective energy policy.

The key issues: ambition and implementation

The #energyunion lacks ambition. The goals for #2030 are too small compared to the #decarbonization established by the #ParisAgreements

The Commission has certainly been acknowledged to have worked hard these past two years, presenting a considerable number of proposals, contained in its proverbial legislative "packages". Of specific relevance is its attempt to reform the ETS, the proposal of a strategy for low-carbon mobility in Europe, and the review of the directive on polluting emissions on a national level.
However, the impact of the enormous amount of work produced in Brussels does not seem to be in line with the radical paradigm change promised with the launch of the Energy Union in 2015. On the one hand, it seems to lack a bit of ambition: if we consider, for example, the criticism towards the goals on emissions to 2030, considered too small (and even insufficient) compared with the decarbonization trajectories established by the Paris Agreement.
On the other hand, the implementation of European energy measures remains uncertain: despite Vice President Sefcovic having presented 2016 as a year of "delivery" for the Energy Union, the same Commission report outlines how its actual state of progress is still uncertain, in terms of the proposals to be approved together with the Council and Parliament, the existing legislation to be implemented, and the enforcement of the regulations on competition and state aid.

As regards the decarbonization polices, despite the emphasis placed by Brussels on its global leadership in the matter, the momentum of the Energy Union and the related advancement of the EU seem less determined than anyone would expect.

Strengths and weaknesses

The report on the "State of the Energy Union" places specific emphasis on the resilience and external dimension of the energy policy, highlighting the importance of European diplomacy in terms of both energy and climate. In addition to the results obtained, the Commission emphasizes the EU’s strategic objectives, including the strengthening of its energy partnership with the United States and the enhancement of the regional and global European leadership on energy transition.
The ambition on the international level must, however, be accompanied by a real change of pace internally: the convergence process and the creation of the single energy market – initially planned for 2014 – two years after the launch of the Energy Union, has not yet definitely taken shape. In fact, international fragmentation remains strong, as demonstrated by the repeated infringement proceedings initiated by the Commission against Member States. It is hoped that the desired strengthening of the ACER, one of the innovations proposed under the Energy Union, may at least party help to put a process, that is still too far from reaching the European goal, back on track.
As regards the decarbonization polices, despite the emphasis placed by Brussels on its global leadership in the matter, the momentum of the Energy Union and the related advancement of the EU seem less determined that anyone would expect. Although Europe remains the point of reference for energy transition – thanks to its gradual reduction in consumption and related emissions, improved efficiency, and the growth of RES in the energy mix – the progress recorded is more the result of trends already underway, than of the new initiatives promised by the Energy Union. The EU has recently abandoned its binding targets on a national level to rely on a single European goal, the achievement of which depends on governance mechanisms that are currently uncertain and still in the making.

Under the latest legislative "package" presented in the winter of 2016, the Commission proposed a new Regulation to govern the governance mechanisms within the Energy Union: new rules for ensuring convergence between Member State policies

Despite Vice President Sefcovic having presented 2016 as a year of "delivery" for the Energy Union, the same Commission report outlines how its actual state of progress is still uncertain

x

The importance of governance

In light of these developments, governance mechanisms within the European Union become a crucial element for the future of the European energy policy. Under the latest legislative "package" presented in the winter of 2016, the Commission proposed a new Regulation to govern the matter: new rules are necessary to ensure convergence between Member State policies, towards which, with the abandonment of national targets, a significant transfer of responsibility was introduced, and the objectives established by Brussels to 2030.
The holistic nature of the new "integrated national energy and climate plans" (called for by the Member States to cover, in a single policy document, all dimensions dealt with by the Energy Union), as well as the introduction of regional consultation mechanisms during the preparation stage, should theoretically give the Commission greater visibility on the action of the Member States and a greater ability to adjust the target during implementation. Despite these efforts, the framework proposed by Brussels has at least a couple of critical issues, in terms of both content and process.
The former concerns the great emphasis placed by the integrated plans on renewables and efficiency, and the limited attention (despite the theoretically holistic approach) to the other dimensions, such as security of supply, integration of the markets and technological development. The latter, which is much more important, concerns the actual powers of enforcement in the hands of the European institutions towards key national players: the proposed Regulation presented by the Commission does not, in fact, extend and/or strengthen Brussels’ ability to enforce compliance with the procedures and European goals on energy and climate, rather leaving the implementation of Energy Union policies in the hands of the Member States.