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11 September 2018

The European (Energy) Union at the crossroads


Last February, in his speech on the State of the Energy Union, European Commission Vice-President Maroš Šefčovič set the tone: 2018 would be the “year of engagement”, an intense legislative year where the European Union would adopt instruments and policies to make the Energy Union a reality in 2019. Now that the second semester has just begun, many files remain open: final negotiations on the Clean Energy Package, new ambitions for the reductions of emissions in the transport sector, long-term vision for the decarbonisation of the European economy; the coming months will be decisive for the future of the European climate and energy policy. They also announce the beginning of an uncertain period for Europe with the launch of the campaign for the European elections, scheduled in May 2019, the exit of United Kingdom from the EU and the end of the Juncker Commission. Here is an update on the upcoming big deadlines…

After a first intense round of negotiations after which the European negotiators found last June a compromise on the new Energy Union Governance and the 2030 objectives for renewable energy and energy efficiency, it is now time for the trilogues on the future market design to begin.

Final stretch for the Clean Energy Package

In July, the new Austrian Presidency of the Council of the EU claimed its ambition to close the negotiations by the end of the year. And the stakes are high: reform of the short-term markets, capacity mechanisms, availability of cross-border interconnexion capacities, regulatory framework for demand-side response; the negotiators will have to find common grounds on major issues for the French electricity sector. Ahead of the first trilogue to deal with core provisions, scheduled on September 11th, UFE has published its priorities for the Market Design regulation and directive, and addresses to the European legislators a clear message: it is necessary to set up an appropriate market framework that ensures security of supply in the context of the energy transition.

Preparing the framework for an ambitious European climate policy

This second semester will also be a key moment for the European Union, if it wishes to adopt an ambitious policy to reduce greenhouse gas emissions. Above all, the EU must take an ambitious stance to guarantee that the transport sector contributes effectively to the climate effort. Between May 2017 and May 2018, the European Commission published three legislative packages on clean mobility. However, limited progress has been made in the negotiations in the European Parliament, especially concerning the definition of CO2 emissions reduction targets for light-duty vehicles. In fact, the transport sector accounts for a quarter of European greenhouse gas emissions: it is crucial that European decision-makers support adequate targets for CO2 standards for light and heavy-duty vehicles by 2030. Similarly, UFE calls for increasing the purchase of low-emitting vehicles in the framework of public procurement and public service delegation, and encouraging the development of alternative fuel infrastructures! By reducing air and noise pollution, electric mobility has a key role to play in the fight against climate change. The votes in Environment Committee, of September 10th on CO2 standards regulation and of October 10th on clean vehicles directive, will be decisive.

Beyond the mobility package, the European Commission will publish in November its long-term strategy to reduce greenhouse gas emissions in Europe by 2050. Long awaited, this strategy should provide a vision in the long-run for the European Union to respect its climate commitments in the framework of the Paris agreement. UFE will contribute by October 9th to the public consultation on this long-term strategy: decarbonized and competitive, the French electricity has many assets to make the energy transition a reality in Europe.

Towards a new Europe in 2019

Beyond the legislative agenda, the start of the second semester marks the beginning of period of changes and uncertainties for the European Union. Throughout Europe, political parties are getting ready for the European elections that will take place from May 23rd to 26th, 2019. The outcome of this vote will impact extensively the ability of the European Union to federate around common issues, such as climate change. An unprecedented political composition, with a reconfiguration of political balances between European political parties, is to be expected, with the risk to see a revival of extremist movements.
Likewise, a new European Commission will take place from November 2019. The speech on the State of the Union of the current President, Jean-Paul Juncker, scheduled on September 12th before the Members of the European Parliament in Strasbourg, will set the tone on the last initiatives to be expected from the present Commission.

Lastly, on March 29th, 2019, the United Kingdom will leave the European Union. As negotiations are struggling to progress, delaying to November the likely date of a potential exit agreement, and as the perspective of a “No Deal” grows every day, UFE underlines the necessity to preserve, post-Brexit, a close cooperation framework between the United Kingdom and the EU-27 in energy policy.

Whether on the energy side or more globally on the European scene, collaboration between actors, state or non-state, is essential, as it is in unity and not division that lies the key to economic, industrial, social and climatic success. This topic will be at the heart of UFE’s annual conference, organised on November 29th in Paris: don’t forget to register!

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The Union of the French Electricity Industry is the trade association of the French electricity sector. We bring together companies from the whole value chain of the electricity industry.

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