Reference Material

To help readers, various updates on policies, programmes, definitions and so on related to energy efficiency and renewable energy will be added to this page.

1 European Energy Efficiency Policies and Programmes

2 Main European Union Directives Related to Energy Efficiency

3 European Union Directives Related to Renewable Energy

4 Codecision (or ordinary legislative procedure)

5 What is a Carbon Price and Why do we Need One?
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1. European Energy Efficiency Policies and Programmes

The EU has taken a very comprehensive approach to developing a legal framework for energy efficiency. The central goals for energy policy (security of supply, competitiveness, and sustainability) are now laid down in the Lisbon Treaty.  A common EU energy policy has evolved around the common objective to ensure the uninterrupted availability of energy products and services on the market, at a price affordable for all private and industrial consumers, and at the same time contributing to the EU’s wider social and climate goals.

The main categories of legal instruments used in the European Union are:

• regulations: these are binding in their entirety and directly applicable in all Member States;
• directives: these bind the Member States as to the results to be achieved and have to be transposed into the national legal framework;
• decisions: these are fully binding on those to whom they are addressed;
• recommendations and opinions: these are non-binding, declaratory instruments.

For energy efficiency, the main approach taken has been to use directives. Below are the main Directives being used for energy efficiency.  This does not include regulations or decisions that are based on the basic directives.  The list of Directives is large and comprehensive.  It is also continuing to grow and evolve: in June 2011, a new Energy Efficiency Directive was proposed by the EC to help achieve the 2020 target and even more.

The European Union also promotes energy efficiency through the Intelligent Energy Europe Programme, the Covenant of Mayors, and Research and Development.  Intelligent Energy funds non-technical projects for energy efficiency.  The Covenant of Mayors brings together local and regional authorities who voluntarily commit to increase energy efficiency and use of renewable energy sources on their territories. Signatories aim to meet and exceed the European Union 20% CO₂ reduction objective by 2020.

The EU also promotes energy efficiency through over-arching policy strategies, plans and communications.  The most recent Plan was published in March 2011 (for more information go to the eceee website).
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2. Main European Union Directives Related to Energy Efficiency

Energy Efficiency Directive

Council Directive 2012/27/EU on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC

Energy Labelling of Domestic Appliances

Council Directive 92/75/EEC of 22 September 1992 on the indication by labelling and standard product information of the consumption of energy and other resources by household appliances and its amendments and implementing measures (“Energy Labelling Directive”) repealed by:

Directive 2010/30/EU of the European Parliament and of the Council of 19 May 2010 on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products (recast).

Ecodesign of Energy-Using Products

Directive 2005/32/EC of the European Parliament and of the Council of 6 July 2005, as amended by Directive 2008/28/EC of the European Parliament and of the Council of 11 March 2008, establishing a framework for the setting of ecodesign requirements for energy-using products and amending Council Directive 92/42/EEC and Directives 96/57/EC and 2000/55/EC of the European Parliament and of the Council (“Ecodesign Directive”), replaced by Directive 2009/125/EC of the European Parliament and of the Council of 21 October 2009 establishing a framework for the setting of ecodesign requirements for energy-related products (recast).

End-use Efficiency & Energy Services

Directive 2006/32 of the European Parliament and of the Council of 5 April 2006 on energy end-use efficiency and energy services and repealing Council Directive 93/76/EEC  (“The Energy Services Directive”).  This

Energy Efficiency in Buildings

Directive 2002/91 of the European Parliament and of the Council of 16 December 2002 on the energy performance of buildings and its amendments repealed by its recast directive:

Directive 2010/31 of the European Parliament and of the Council of 17 May 2010 on the energy performance of buildings and its amendments (the recast Directive entered into force in July 2010.

Cogeneration – Combined Heat and Power (CHP)

Directive 2004/8/EC of the European Parliament and of the Council of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC of 21 May 1992 on efficiency requirements for new hot-water boilers fired with liquid or gaseous fuels.

This Directive has now been removed and replaced by the 2012 Energy Efficiency Directive.

Transport

Directive 2009/33/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of clean and energy-efficient road transport vehicles

Directive 1999/94/EC of the European Parliament and of the Council of 13 December1999 relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars
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3. European Union Directives Related to Renewable Energy

Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC

Directive 2003/30/EC the European Parliament and of the Council of 8 May 2003 on the promotion of the use of biofuels or other renewable fuels for transport

Directive 2001/77/EC the European Parliament and of the Council of 27 September 2001 on the promotion of electricity produced from renewable energy sources in the internal electricity market.
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4.  Codecision (or ordinary legislative procedure)

One of the important changes introduced by the Lisbon Treaty (or the Treaty of the European Union (TEU) and the Treaty of the Functioning of the European Union (TFEU)) is the fact that co-decision becomes the “ordinary legislative procedure”, i.e. what used to be the exception in decision-making has become the norm for most policy areas.

As defined in Article 294 of the TFEU, the co-decision procedure is the legislative process which is central to the Community’s decision-making system. It is based on the principle of parity and means that neither institution (European Parliament or Council) may adopt legislation without the other’s assent.

For those following the legislative approval, the following terms are used by the institutions of the European Union.

GLOSSARY

“A” item / “B” item: The Council’s rules of procedure lay down that “the provisional agenda shall be divided into Part A and Part B. Items for which approval by the Council is possible without discussion shall be included in Part A, but this does not exclude the possibility of any member of the Council or of the Commission expressing an opinion at the time of the approval of these items and having statements included in the minutes”. An “A” item is therefore a dossier on which an agreement already exists, enabling it to be formally adopted without debate. The items in part “B” of the agenda are scheduled for debate. Similarly, the Coreper agenda is divided into a part “I” (items scheduled without debate) and a part “II” (items scheduled for debate). In addition, the deliberations and decisions of the Council itself under the co-decision procedure are public.

Absolute majority (in the European Parliament): Majority of the members who comprise Parliament. In its present configuration (with 736 MEPs), the threshold for an absolute majority is 369 votes (Note: In the elections in June 2009 which took place on the basis of the Nice Treaty, the number of MEPs was reduced to 736. With the entry into force of the Lisbon Treaty on 1/12/2009, the number will be increased to 754 once the new arrangements have been completed and reduced to 751 for the elections in 2014. Consequently, the numbers necessary to reach an absolute majority will thus change to 378 and 376 respectively). Under the co-decision procedure, an absolute majority is necessary in plenary session when voting on a second reading in order to reject the Council position at first reading or to adopt amendments.

COREPER: Article 16 (7) TEU lays down that “a committee consisting of the Permanent Representatives of the Member States shall be responsible for preparing the work of the Council”.
Coreper plays a pivotal role in the Community decision-making system, where it is a forum for both dialogue (between the permanent representatives and between each of them and their capital) and political control (orientation and supervision of the work of the groups of experts). It meets each week and is in fact divided into two parts:

• Coreper I, comprising the Deputy Permanent Representatives, prepares the ground for the following Council configurations:

• Employment, Social Policy, Health and Consumer Affairs;
• Competitiveness (internal market, industry, research and tourism);
• Transport, Telecommunications and Energy;
• Agriculture and Fisheries;
• Environment;
• Education, Youth and Culture (including audiovisual);
• Coreper II , comprising the Permanent Representatives, prepares for the other configurations:

• General Affairs Council;
• External Relations Council (including European security and defence policy and development cooperation);
• Economic and Financial Affairs (including the budget);
• Justice and Home Affairs (including civil protection).

Coreper monitors and coordinates the work of some 250 committees and working parties consisting of officials from the Member States who prepare the dossiers at technical level.

With regard to the co-decision procedure, Coreper, and particularly its President, is Parliament’s main counterpart.

General approach (in the Council of Ministers): This is an informal agreement within the Council, sometimes by qualified majority, before Parliament has given its opinion on first reading. Such an agreement speeds up work, or even facilitates an agreement on first reading. On the other hand, the Commission gives no definitive undertaking to the Council owing to the absence of an opinion from Parliament. Once the Council has received Parliament’s opinion, the Council prepares a political agreement.

Inter-institutional relations group (GRI) (French acronym): A body within the Commission with the task of coordinating political, legislative and administrative relations with the other institutions and in particular with the European Parliament and the Council. The GRI brings together members from all the Commissioner’s cabinets tasked with monitoring inter-institutional affairs. The GRI meets, in principle, once a week. It handles, more specifically, dossiers dealt with by the Council and the European Parliament which are sensitive from an institutional point of view, some of which come under the co-decision procedure.

Ordinary legislative procedure: formal Treaty term in the Lisbon Treaty to refer to co-decision as set out in article 294 TFEU.

Political agreement (in the context of preparing the Council position at first reading) agreement expressed in principle by the Council, following a vote where appropriate. This agreement contains the guidelines for the future common position and the details are finalised, particularly in terms of the recitals, by the working party, verified by lawyer-linguists, then formally adopted as a common position by the Council at a subsequent session, mostly without a debate. On average, the political agreement comes 3 to 6 months prior to formal adoption of the common position.

Qualified majority (in the Council of Ministers): Since 1 January 2007, the weighting for the number of votes attributed to each Member State is as follows: the threshold for a qualified majority is set at 255 votes out of 345 (73.91 %). The decision also requires a favourable vote from the majority of Member States (i.e. at least 14 Member States). In addition, a Member State may request verification that the qualified majority includes at least 62% of the Union’s total population. Should this not be the case, the decision will not be adopted.

In successive waves of institutional reform, qualified majority voting has replaced unanimity, which is less effective for developing an operational Community policy (risk of veto). With the entry into force of the Lisbon Treaty, the above-mentioned regime will continue until 31 October 2014 (see Article 16 (4) TEU,Article 238 TFEU and Protocol No. 36 on Transitional Provisions).

Rapporteur: The MEP responsible for preparing a report.

Report (Parliament): Under the co-decision procedure, a Parliamentary report prepares Parliament’s position. Drawn up by an MEP chosen from within the competent Parliamentary committee (the “rapporteur”), it basically contains suggested amendments and a statement of reasons explaining the proposed amendments.

Shadow rapporteurs: MEPs who monitor a dossier for political groups other than that of the rapporteur.

Simple majority (in the European Parliament): Majority of the members taking part in the vote. Under the co-decision procedure, a simple majority is required when voting in Parliamentary committee, in plenary on a first reading and, on a second reading, to approve the Council position at first reading and in order to draw up the act in accordance with the joint draft prepared by the Conciliation Committee.

Statement of reasons: text accompanying an act or preparatory act to explain the reasoning behind it. Such texts consist of Commission proposals, opinions of the European Parliament and common positions of the Council.

TEU:Treaty on the European Union (part of the Lisbon Treaty that entered into force on 1 December 2009)

TFEU:Treaty on the Functioning of the European Union (part of the Lisbon Treaty that entered into force on 1 December 2009)

Trilogue / Trialogue (FR): informal tripartite meetings attended by representatives of the European Parliament, the Council and the Commission. Owing to the ad-hoc nature of such contacts, no “standard” format of representation has been laid down, The level and range of attendance, the content and the purpose of trilogues may vary from very technical discussions (involving staff level of the three administrations) to very political discussions (involving Ministers and Commissioners). They may address issues of planning and timetable or go into detail on any particular substantial issue.

However, as a general rule, they involve the rapporteur (accompanied where necessary by shadow rapporteurs from other political groups), the chairperson of COREPER I or the relevant Council working party assisted by the General Secretariat of the Council and representatives of the Commission (usually the expert in charge of the dossier and his or her direct superior assisted by the Commission’s Secretariat-General and Legal Service).

The purpose of these contacts is to get agreement on a package of amendments acceptable to the Council and the European Parliament. The Commission’s endorsement is particularly important, in view of the fact that, if it opposes an amendment which the European Parliament wants to adopt, the Council will have to act unanimously to accept that amendment. Any agreement in trilogues is informal and “ad referendum” and will have to be approved by the formal procedures applicable within each of the three institutions.

Unanimity (Council): Unanimity denotes the obligation to reach a consensus among all the Member States meeting within the Council so that a proposal can be adopted. According to Article 238 (4) TFEU, abstention “shall not prevent the adoption by the Council of acts which require unanimity”. Since the Single European Act of 1987, the scope for unanimity has been increasingly limited. Under the ordinary legislative procedure , unanimity is only required in cases where the Commission cannot accept the amendments introduced into its proposal. Otherwise, the Lisbon Treaty makes provision for unanimity mostly in case of application of the “special legislative procedure”.

The procedure flow chart

The diagram below shows the complex nature of the EU ordinary legislative procedure, revised since the adoption of the Lisbon Treaty.  The co-decision procedure is firmly established as the ordinary legislative process central to the Community’s decision-making system. It is based on the principle of parity, meaning that neither the European Parliament nor the Council may adopt legislation without the other’s assent. A written description of the co-decision procedure is available at the Commission’s website.

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5. What is a Carbon Price and Why do we Need One?

This is good reference material from the Guardian on a carbon price.

A carbon price is a cost applied to carbon pollution to encourage polluters to reduce the amount of greenhouse gas they emit into the atmosphere. Economists widely agree that introducing a carbon price is the single most effective way for countries to reduce their emissions.

Climate change is considered a market failure by economists, because it imposes huge costs and risks on future generations who will suffer the consequences of climate change, without these costs and risks normally being reflected in market prices. To overcome this market failure, they argue, we need to internalise the costs of future environmental damage by putting a price on the thing that causes it – namely carbon emissions.

A carbon price not only has the effect of encouraging lower-carbon behaviour (e.g. using a bike rather than driving a car), but also raises money that can be used in part to finance a clean-up of “dirty” activities (e.g. investment in research into fuel cells to help cars pollute less). With a carbon price in place, the costs of stopping climate change are distributed across generations rather than being borne overwhelmingly by future generations.

There are two main ways to establish a carbon price. First, a government can levy a carbon tax on the distribution, sale or use of fossil fuels, based on their carbon content. This has the effect of increasing the cost of those fuels and the goods or services created with them, encouraging business and people to switch to greener production and consumption. Typically the government will decide how to use the revenue, though in one version, the so-called fee-and-dividend model – the tax revenues are distributed in their entirety directly back to the population.

The second approach is a quota system called cap-and-trade. In this model, the total allowable emissions in a country or region are set in advance (“capped”). Permits to pollute are created for the allowable emissions budget and either allocated or auctioned to companies. The companies can trade permits between one another, introducing a market for pollution that should ensure that the carbon savings are made as cheaply as possible.

To serve its purpose, the carbon price set by a tax or cap-and-trade scheme must be sufficiently high to encourage polluters to change behaviour and reduce pollution in accordance with national targets. For example, the UK has a target to reduce carbon emissions by 80% by 2050, compared with 1990 levels, with various intermediate targets along the way. The government’s independent advisers, the Committee on Climate Change, estimates that a carbon price of £30 per tonne of carbon dioxide in 2020 and £70 in 2030 would be required to meet these goals.

Currently, many large UK companies pay a price for the carbon they emit through the EU’s emissions trading scheme. However, the price of carbon through the scheme is considered by many economists to be too low to help the UK to meet its targets, so the Treasury plans to make all companies covered by the scheme pay a minimum of £16 per tonne of carbon emitted from April 2013.

Ideally, there should be a uniform carbon price across the world, reflecting the fact that a tonne of carbon dioxide does the same amount of damage over time wherever it is emitted. Uniform pricing would also remove the risk that polluting businesses flee to so-called “pollution havens”‘ – countries where a lack of environmental regulation enables them to continue to pollute unrestrained. At the moment, carbon pricing is far from uniform but a growing number of countries and regions have, or plan to have, carbon pricing schemes in place, whether through cap-and-trade or carbon taxes. These include the European Union, Australia, South Korea, South Africa, parts of China and California.

• This article was written by Alex Bowen of the Grantham Research Institute on Climate Change and the Environment at LSE in collaboration with the Guardian

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