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NECPs – Analysis: EU ideals coming up against political realities

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NECPs – Analysis: EU ideals coming up against political realities

by Mike Scott, March 27, 2019

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The European Union is trying to maintain its leadership on climate change with its Clean Energy for All Europeans package, which aims to make the EU climate neutral by 2050. The mechanism for achieving this target is member states’ National Energy and Climate Plans (NECPs).

Climate Change Commissioner Miguel Arias Cañete says the package is the most advanced regulatory framework supporting the clean energy transition in the world.

Environmental groups agree that the NECPs have the potential to turn the Paris Agreement into tangible action, but, as Carbon Market Watch warns, “the overall targets and objectives set forth by the EU climate and energy legislation establish merely a minimum expected ambition level. It is therefore fundamental that individual member states design NECPs that set far more ambitious goals than this required minimum.”

It was not a good start, then, that seven member states – Bulgaria, the Czech Republic, Cyprus, Greece, Hungary, Luxembourg and Spain – failed to submit their draft plans by deadline at the end of last year. Some of them had a good excuse – Spain’s new government, in power for just six months at the time – said that its predecessor had done no work on the plan at all, while Luxembourg’s new environment minister, former MEP Claude Turmes, wanted to comprehensively overhaul his country’s NECP.

Indeed, when Spain did finally submit its plan at the end of February, it was welcomed as “a breath of fresh air” by Iberdrola CEO Ignacio Galán. However, the plan to increase the share of renewables in power generation to 74% by 2030, with a doubling of wind power and a fourfold increase in solar, is under threat from an imminent general election that could see a new government water down the targets.

All of the plans, which the European Commission will review and make recommendations on in June, have now been filed, but as so often, the EU’s lofty ideals are coming up against national political realities.

France’s ambitions – to increase funding for solar and wind to €7bn-€8 billion a year and reduce final energy consumption by 34.4% by 2030 while increasing the proportion of energy coming from renewables to 34% – have been complicated by the gilets jaunes protests. France’s plan was one of those singled out as only partially complete and work is ongoing to update it as soon as possible.

A number of submissions, such as Germany’s and Austria’s, are incomplete and/or insufficient to meet EU targets. Green groups say many plans are merely reporting exercises rather than coherent strategies and some member states are aiming for the EU’s current target of an 80% cut in emissions by 2050, rather than the latest carbon neutrality goal required by the Intergovernmental Panel on Climate Change’s 1.5C report.

Germany’s plan was complicated by its battle to agree a coal phase-out plan and make recommendations on decarbonising transport, as well as infighting in the coalition government. While the environment minister called for an ambitious goal of at least a 95% reduction in emissions by 2050 and capturing and sequestering the other 5%, but many members of the Christian Democrat party have criticised the target amid the country’s coal phase out challenge.

Indeed, leaked documents seen by Euractiv suggest that Germany is now lining up as a coal state, with its more climate-sceptic Eastern neighbours including Poland, Hungary and the Czech Republic to resist calls for carbon neutrality by 2050, in opposition to a group including France, the Netherlands, Luxembourg, Spain, Portugal, Finland, Sweden and Denmark, who back the decarbonisation plan.

Bankwatch says that “Member States across central and eastern Europe continue to do less than their fair share”, with efforts to increase renewables and energy efficiency as part of the energy mix negligible, as in Romania and Slovakia, whose plans include an increase in uptake of renewables from 25% to just 27.9% and 14% to only 18%, respectively.

“In Europe’s most energy-intense economy, Bulgaria has limited potentials gains in energy efficiency, because the NECP is designed to subsidise energy prices, thus disincentivising efficiency investments,” the NGO adds.

Other national plans include:

Greece – increase share of renewables in energy mix to 32%, including 55% of electricity use. Reduced reliance on lignite, use of natural gas for flexibility. Increase energy efficiency by one third. Upgrade or replace 40,000 residential buildings a year. Environmentalists say there is no explanation why Greece should remain locked into using coal and that it does not meet Paris Agreement ambitions.

Ireland – 30% reduction in GHG emissions by 2030, from 2005 levels. Between 15.8% and 27.7% of energy to come from renewables. The draft NECP fails to clarify investment needs to 2030, the European Commission says. To meet its target, Ireland will have to buy carbon credits from other nations that have exceeded their targets.

Italy – Italy’s draft NECP is a comprehensive document,” says Plan Up. “However, the plan lacks ambition and confidence as it (almost) strictly adheres to the three targets mandated in the Governance Regulation: 32.2% renewable energy sources, 32% energy efficiency and 33% reduction in GHG emission by 2030. Italy has the potential to go beyond the minimum required by law, in particular when it comes to energy efficiency and renewable energy. For the time being, Italy is doing no more than ticking the boxes.”

Poland – According to Plan Up, “the Polish NECP is generally short on specific policies, programs and ways to achieve the targets. This makes it quite difficult to reliably assess the extent to which the objectives set out in the plan are feasible and what effects they may have. The government seems sceptical about even reaching the (rather low) target of 7% of emissions reductions, describing it as ‘ambitious’.” Bankwatch points out that Poland’s main decarbonisation plan is more nuclear power, which “even in the most optimistic scenario the nuclear power plant will not go online before 2033, and its economic viability is questionable”.

This sample of plans suggests that many member states are failing to “seize the opportunity the development of an NECP brings, to cover for existing gaps in national legislation, and pave the way for higher ambition,” which the Climate Action Network Europe says is necessary. “All NECPs should also, given the current level of ambition of all EU climate and energy policy is too low to ensure delivery towards the Paris Agreement, include a robust and specific process for how each update of the NECP will be more ambitious than the previous one.”

NECP timeline and consultation process:

  • By 31 December 2018: Member States prepare and submit to the Commission a draft of the NECP
  • By 30 June 2019: The Commission may issue recommendations on the draft plans
  • By 31 December 2019: Member States notify to the Commission their final NECP covering 2021-2030, as well as a summary of the public’s views
  • By 15 March 2023: (+ every 2 years thereafter) Member States shall report to the Commission on the status of implementation of their NECP, including progress on reaching the targets, updates on policies and measures, and projections
  • By 30 June 2023: Member States submit a draft update of the NECP to the Commission or justify that the current plan remains valid
  • By 30 June 2024: Member States shall notify to the Commission a (final) update of the NECPs unless they have justified that the current plan remains valid

Source: Carbon Market Watch

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EU election risk: policymakers should go for real decarbonisation now while efficiency savings can help

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EU election risk: policymakers should go for real decarbonisation now while efficiency savings can help

by Joe Mitton, March 15, 2019

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With elections in May, the balance of opinion in Parliament is a climate policy risk factor on the minds of many in Brussels. The national draft 10-year energy plans, just in to the Commission, project widespread growth in costlier renewables. But populists who see climate as a globalist rather than nationalist-first agenda may prove hard to bring on side with an expensive and disruptive transition. The public will be influenced by climate awareness, leadership and their wallets. The EU’s efficiency-first programme won’t be enough in the long term but while it’s delivering savings there’s a chance to use that to support real decarbonisation. This could be crucial to keep citizens supportive in a more climate-hostile political landscape. Political observer, Joe Mitton considers the opportunities and threats ahead…

EU energy policy has so far accommodated an expanding gas sector, and has tolerated the coal sector, while focusing on efficiency and subsidised renewables. This has helped keep household energy prices relatively low. But as the 2020s dawn, difficult choices will need to be made in order to meet the EU’s carbon reduction goals. Balancing the drive for decarbonisation with the need for public support will become trickier in the next decade.

Recent events show that when prices rise, environmental concerns quickly give way to popular indignation. The gilets jaunes protests started as a revolt against a planned increase in the tax on diesel. Even in environmentally-conscious France, the government had misjudged public willingness to accept a higher fossil fuel tax.

The threat of climate change denialism and “anti-European forces”

First, let us consider the threat that political climate-scepticism could pose to decarbonisation policies if prices rise steeply. At the 5th annual EU Energy Summit last week (5 March), former Polish Prime Minister and former President of the European Parliament, Jerzy Buzek, raised the need for social acceptance of the energy transition. He warned that the transition could be threatened by “anti-European forces”.

Buzek made an important point there. Beyond the simple economics of consumers preferring cheap energy, there are also political forces at work in several countries against energy transition. Some examples:

  • Russia has strong economic and political interests in Arctic resources and in European dependence on its gas exports. President Putin has questioned climate science.
  • Some high-profile pro-Brexit politicians in the UK have argued the planet may be cooling, not warming.
  • The United States’ leadership denies the existence of man-made climate change.
  • In Europe, climate scepticism is popular with right-wing parties such as the German AfD and the Sweden Democrats.
  • The Polish labour union, Solidarity, issued a joint statement with a US climate change denying think-tank, Heartland Institute, rejecting the UN IPCC reports on the risks of climate change. Poland currently relies on 60 percent of its energy from coal.
  • A recent study by Professor Martin Hultman shows a strong correlation between right-wing nationalist views and climate change denialism among Norwegianmen. Among the right-wing, addressing climate change is often viewed as putting global interests ahead of national interests.
  • Australia is very dependent on coal and has climate-sceptic ministers in its government.

Climate change denialism in not a mainstream opinion in Europe yet, but if energy prices go up, more citizens could move to populist parties on the right. In recent German state elections, voters showed increased polarisation. The Greens did very well, but so did the far-right AfD. The same may happen in May’s European parliamentary elections.

More of the same policies?

To date, the EU has accommodated an expanding gas sector and has not picked a political fight with its more coal-dependent Member States. All 28 Member States (even the UK) have recently submitted their draft National Energy and Climate Plans (NECPs) to the Commission. These plans include many laudable proposals for renewable energy sources, but also a continued reliance on gas. Seventeen of the plans say natural gas is necessary to meet the 2030 goals. In Germany, the nuclear and coal sectors will be completely shut down and the Nord Stream 2 gas pipeline from Russia will supply much of Germany’s energy in the next decade.

“the EU needs to help governments such as in Poland and the Czech Republic avoid a public backlash if they decarbonise”

The Commission’s European Decarbonisation Pathways Initiative (EDPI) delivered a report in November 2018. The report includes just one short paragraph on phasing out coal. It says the need for near-term phasing out of coal is “obvious and necessary” but concedes that “such an objective is of course more ambitious and difficult for countries which rely heavily on coal”. This suggests that the EU needs to help governments such as in Poland and the Czech Republic avoid a public backlash if they decarbonise. The report also explains that “from an economic viewpoint”, it makes sense to still use gas while creating negative emissions by other methods.

The report prioritises an “energy efficiency first” principle. Greater efficiency in lighting, heat insulation, energy delivery and storage will lower prices for consumers, after initial investment costs. This achieves both the aims of supporting decarbonisation and being popular, but efficiency has its limits. The popularity of those savings will be an important political asset to offset any price rises from “an increasingly restrictive carbon space”. Particularly because although consideration is given to “an inclusive and just transition”, the report leaves aside the question of the funds required, and who exactly will pay for it.

Towards a citizen-led strategy

Energy efficiency programmes can only reduce carbon emissions so far. Eventually the sources of that energy, no matter how efficient, will need to be renewable and clean. The EU may introduce a “citizen-led” strategy for popular support for its policies. The concept of “citizen-led” policy is already in Commission reports. For EU politicians, the lesson from Brexit has been not to assume that the wisdom of their policies will translate automatically into popular support.

Good progress is being made towards affordable renewables, and eventually for renewables to operate in the market without subsidies. But it remains to be seen whether current policy will deliver the carbon reduction required by the EU’s goals, while also keeping energy prices affordable and keeping citizens supportive.

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Joe Mitton is an independent political consultant, former diplomat and former adviser to the Mayor of London.

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Saudi Arabia raises its solar and wind targets to 60GW by 2030

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Saudi Arabia raises its solar and wind targets to 60GW by 2030

by Arasan Aruliah

January 21, 2019

The Kingdom of Saudi Arabia has made even bigger promises of a renewable revolution before, but little has materialised. Well known as a world leading oil producer, exporter and consumer, it needs to stick to its commitments, and improve on them, if it is to play its part in emissions reductions.

In an interview with the UAE’s state news agency, WAM, Dr. Khalid bin Saleh Al Sultan, President of the King Abdullah Atomic and Renewable Energy City, announced that Saudi Arabia aims to produce 60 GW of renewable energy by 2030, including 40 GW from solar energy and 20 GW from wind and other sources. He explained that Saudi Arabia is working, under the framework of the KSA Vision 2030 and the National Transformation 2020 Programme, on building a sustainable renewable energy sector, along with the “Saudisation of technologies”. In order to find a balanced mix of fossil and alternative energy, achieve growth and prosperity, and reinforce energy security, they will integrate alternative energy into the national energy network.

Promises have been made before. In fact, over the past six years, the Saudis have announced a number of initiatives and investments totalling more than $350bn in renewable energy. But there’s little sign of any construction that matches those ambitions. Fatih Birol, executive director of the International Energy Agency, observes of the Saudi’s intentions, “There has been a lot of stop and go.”

“There has been a lot of stop and go” – Fatih Birol, IEA

The Saudis have certainly been sending mixed signals over its commitment to reversing climate change. In 2013, the government announced its plan to build 54 GW of renewable power and 17 GW of nuclear power by 2032 to cover 40–45% of future electricity production. It then drastically revised down these targets in 2016 to an ‘initial phase’ of only 9.5 GW by 2023. And at COP24, held in Poland back in December, it was one of four countries (the others being the United States, Russia, and Kuwait) that opposed the inclusion of the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on Global Warming of 1.5°C in the negotiating text.

Saudi Arabia had also planned to phase-out of fossil fuel subsidies. However in December 2017 the government announced it would slow down this fossil fuel subsidy phase-out because it needed to lift the economy during difficult periods.

So an announcement to increase renewables generation is a welcome move in the right direction, provided the promise holds. While we wait for more evidence of it actually happening, or another policy reversal, it’s worth looking at Saudi Arabia’s emissions performance so far.

Saudi Arabia’s targets are “critically insufficient”

Climate Action Tracker (CAT) gives a good summary of the performance and projections for different regions and nations across the globe. Their most recent analysis for Saudi Arabia is dated 30th November 2018. It states: “under current policy projections, Saudi Arabia’s emissions [will] be at 1,061–1,117 MtCO2e by 2030—an almost six to seven-fold increase from 1990 levels.” It’s a performance worth their lowest rating possible, “critically insufficient: if all government targets were in this range, warming would exceed 4°C.”

To put the latest 60 GW promise in perspective, CAT comments on an even more ambitious announcement that was made in March 2018. Saudi Arabia and Japan’s SoftBank Groupsigned a memorandum of understanding to build a 200 GW solar plant, the largest single solar project in the world. If the MoU ever became policy and went live it could dramatically lower the emission outlook for the Kingdom. But CAT’s analysis says that if all 200 GW were fully installed, Saudi Arabia may rise above its “critically insufficient” rating, but only into the category “highly insufficient: if all government targets were in this range, warming would reach between 3°C and 4°C.” In other words, it’s not nearly enough.

Rising domestic consumption may yet force Saudi Arabia into renewables

All this is perhaps not a surprise, given the country is one of the world’s leading oil producers, and the national economy is highly dependent on it. Since 1970 oil exports have covered 90% of total government revenues, and contributed more than 35% of GDP.

It also has one of the world’s highest rates of per capita energy consumption, forecast to triple by 2030 when compared to 2010 levels. But domestic consumption itself is putting pressure on them to diversify away from oil and into renewables. As domestic consumption rises, not only do export revenues decline, government spending rises too because domestic oil use is heavily subsidised. Perhaps it is this that will see the Saudis keep their latest promise – and hopefully improve on it.

2030 car emissions target harmful to industry and jobs says Germany

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EXPRESS #2 - December 20, 2018

2030 car emissions target harmful to industry and jobs says Germany

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The EU has agreed to cut carbon emissions from cars by 37.5 percent in a decade. The agreement comes after much opposition from vehicle-producing countries. Germany, with the EU’s biggest auto sector worth over €400bn and home to Volkswagen, Daimler and Mercedes, had warned that tough targets and an unrealistic drive towards more electric cars could harm its industry and cost jobs.

The compromise agreement sets targets for cutting emissions from cars by 37.5 percent and vans by 31 percent by 2030 compared with 2021. There was also agreement on an interim target of a 15 percent cut for both cars and vans by 2025.

“This is an important signal in our fight against climate change,” said Austria’s Sustainability Minister Elisabeth Koestinger. Austria currently holds the presidency of the Council of the EU.

But Brussels-based green lobbying group Transport & Environment said the targets were not high enough. “Europe is shifting up a gear in the race to produce zero emission cars. The new law means by 2030 around a third of new cars will be electric or hydrogen-powered,” its clean vehicles director Greg Archer said. “That’s progress, but it’s not fast enough to hit our climate goals.”

German carmakers led the opposition

German carmakers opposed the new 2030 target, calling it restrictive and unrealistic. “The regulation demands too much while promoting too little,” said the German Association of the Automotive Industry (VDA). The VDA also warned that it would damage Europe’s standing in the international car market and endanger jobs.

The 2030 target will apply across each car manufacturers’ fleets, rather than individual vehicles: high-emission models can therefore be offset with sales of low-emission or zero-emission vehicles, such as battery-run cars. That means the sales of clean vehicles will have to rise sharply, as compared to diesel- and petrol-powered cars. Can it be done fast enough?

EVs have a very steep hill to climb

The historical trend in EV car sales is not looking good in Germany. According to Clean Energy Wire, petrol cars represent 62 percent of all new registrations in Germany, while the share of diesel cars amounts to 33 percent and the share of purely electric cars stands at only 0.8 percent.

Shares of new car registrations in Germany by vehicle type

These figures don’t look good for Germany: a country that is still reeling from a turbulent few years over car emissions. It kicked off with the “dieselgate” scandal in September 2015, when the country’s largest car company Volkswagen was exposed as grossly underestimating the emissions of its diesel cars. Since then, almost all major German carmakers have become implicated.

Daimler shifts up an electric gear

Yet only a week before these new 2030 targets were agreed, German carmaker Daimler grabbed headlines with its promise to spend €20bn on car battery cells.

Daimler Chairman Dr. Dieter Zetsche promised: “We plan a total of 130 electrified variants at Mercedes-Benz Cars by 2022. In addition, we will have electric vans, buses and trucks.”

Daimler says they have already invested billions of euros in the development of an electric fleet and the expansion of their global battery network, and “are consistently pushing forward with the transformation into the electric future of our company”.

By 2022, Daimler’s entire Mercedes portfolio is to be electrified, with alternatives available in every segment. In total, there will be over 130 variants, from the 48-volt electrical system to EQ Boost and plug-in hybrids and more than ten all-electric vehicles powered by batteries or fuel cells. By 2025, sales of battery-electric vehicles are to increase to 15-25 percent of total unit sales, “depending on individual customer preferences and the development of the public infrastructure,” says Daimler. The reference to public infrastructure is a reminder that this must be a national effort, not just the responsibility of the car manufacturers.


Daimler is also investing more than one billion euros in their global battery production network for Mercedes-Benz Cars. The company currently purchases their cells on the world market. Their statement says: “The global battery production network of Mercedes-Benz Cars will in the future consist of eight factories on three continents. The first factory in Kamenz is already in series production and the second factory there will start series production at the beginning of 2019. Two more factories will be built in Stuttgart-Untertürkheim, one at the company’s Sindelfingen site.” Outside Germany the plan is to build factories in Beijing (China), Bangkok (Thailand) and Tuscaloosa (USA).

Wilko Stark, Member of the Divisional Board Mercedes-Benz Cars, Procurement and Supplier Quality, summarises: “With extensive orders for battery cells until the year 2030, we set another important milestone for the electrification of our future electric vehicles of the EQ product and technology brand.”

The starting gun has been fired, and the signals are mixed. Once again it looks like predicting the future success of Europe’s – and Germany’s – electric vehicles depends on who you listen to.

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