The Future Of Renewable Energy Subsidies In Europe

EU energy ministers are poised to seek "non-binding" guidance from the European Commission on reform of green fuel subsidies as part of a debate on new post-2020 policy goals, according to a draft document.

The cost of renewable energy is divisive, as politicians in Germany, for instance, blame it for high prices that can undermine EU competitiveness compared with the United States, which has benefited from cheap and abundant shale gas.

Other nations, such as Denmark, which tax fossil fuel energy at high rates, have preferred to emphasize energy efficiency to reduce consumption and cut carbon emissions.

A document to be debated today (3 December) by energy ministers from the 27 member states calls on the Commission to present "non-binding guidance on the further improvement of national support schemes".

"Well-targeted and cost-efficient and effective post-2020 support may be needed, which does not cause inefficiencies in cross-border trade of electricity," the draft document, seen by Reuters, also stated.

"There is also a need for the rationalization and the phasing out of environmentally or economically harmful subsidies, including fossil fuels," it said.

The European Union’s three main green energy goals to cut carbon emissions by 20%, increase the share of renewables in the energy mix by 20% and increase energy savings by 20% expire in 2020.

Debate on 2030 targets is underway, with commissioners throwing their weight behind new targets for renewables and carbon cutting in principle, without saying how ambitious they should be.

So far, there has been little mention in public from the policy-makers of an energy savings goal for 2030 after a protracted battle to try to implement the 2020 efficiency target.

Renewable energy campaigners say they are relieved the post-2020 debate has begun and decisions are needed soon to help provide investor certainty.

They want high levels of ambition as global warming gathers speed and non-binding EU road maps state the need for a reduction of between 80% and 95% in carbon emissions by 2050 to limit temperature rise.

The European Renewable Energy Council, the umbrella organization for European green energy, has called for a goal of drawing 45% of EU energy from renewable sources by 2030.  

Last Updated On:3rd December 2012

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