SPEECH/07/193


Andris Piebalgs

Energy Commissioner

Towards enhanced cooperation between the EU and the US

Luncheon at the European Institute
Washington, 26 March 2007

Ladies and Gentleman,

Dear friends,

It is a pleasure to be here with you this afternoon and to offer my remarks on what has been exciting developments in energy policy in the European Union and on our strategic cooperation with the U.S.

The European Union recently made an unprecedented step. On 9 March 2007, the European Council – that is the Heads of State and Government of the EU's 27 Member States - agreed on an integrated climate and energy policy, backed up by a detailed action plan. This makes the EU unique across the globe for having binding, regional targets for energy and climate policy.

By so doing, the EU continues to take the leadership in order to build up an international consensus on combating climate change.

This new energy policy is very solidly based on the European Commission's proposals made in January. It reflects a trend which has become increasingly evident in the energy debate in Europe: that an individual Member State cannot tackle today's energy challenges on its own.

This has been warmly welcomed across the EU and across society. That is no surprise to me. I have spent a large amount of time during my tenure as Energy Commissioner consulting Europe's public. An Energy Green Paper last year, a Strategic Review in January this year, and a public opinion poll this month (Eurobarometer) have prompted the same response from Europe's citizens. Our citizens know that changes are needed. They want Europe to tackle climate change. They are ready for more renewables and better energy efficiency. And they also know, importantly, that tackling climate change has a cost, but today's investment in cleaner energy is a price worth paying.

The agreement also demonstrates that the EU can work together effectively – not as a club of individual Member States, but as a real community, with a common cause, a common strategy, and a common programme.

More specifically, the European Council agreed to a following set of headline political targets:

On climate change, the Council established an independent EU commitment to reduce greenhouse gases by at least 20% by 2020, compared to 1990 levels, plus a commitment to extend this reduction to 30% if other developed countries commit themselves to comparable emissions reductions.

On the internal market for gas and electricity, the Council invited the Commission to present proposals to ensure that the European energy market operates as a single entity. The aim is to leave behind the legacy of dominant, vertically integrated incumbents and open the way for new investment, new entrants, and new choice for customers.

On renewable energies, Member States agreed on a binding target of 20% by 2020 with a minimum of 10% for the share of biofuels in overall EU transport petrol and diesel consumption. A new legislative framework will contain provisions on national targets for Member States.

On energy efficiency, the Council agreed that the EU should aim to save 20% of its primary energy consumption by 2020, compared to current projections.

The challenge of turning the EU into a low carbon society is an opportunity, with the potential for important economic and job creating opportunities.

In this context, the Commission will present, before the end of this year, a Strategic Energy Technology Plan, with a long term vision for energy technology development in the EU, focused on delivering clean, efficient, and low-carbon energy. We will also develop a strategy to stimulate projects for the commercial demonstration of carbon capture and storage in gas and coal power stations. Our intention is to have 12 such projects in different parts of the EU by 2015.

Our strategy for biomass technology is also evolving. One of our priorities is to speed up the development of second generation biofuels by supporting new projects for European demonstration plants.

With regard to nuclear energy, the European Council has acknowledged its contribution to security of supply and low emission power production, while reaffirming that it is up to each Member State to decide whether to use nuclear power or not. Here, the EU has a clear role in improving nuclear safety and the management of nuclear waste, notably by funding research.

We are committed to achieving these very ambitious goals but we will have to work hard in the coming months in order to deliver the detailed legal proposals which will translate the decisions of the European Council into concrete results.

In parallel to these domestic priorities, the European Council also called for the development of an external energy policy to be speeded up.

We are all on the same boat facing growth in energy consumption, uncertainty of existing energy supply, and climate change.

According to the International Energy Agency, if the current world energy consumption patterns continue, energy demand would increase by more than 30% by 2030 with the demand for oil alone rising by 41%. During the same period, the world CO₂ output, which accounts for 75% of all greenhouse gases, would increase by 55%.

Given such projections, we are realistic that Europe's ability to tackle climate change and energy security issues alone is limited even with a single market of 500 million consumers. Our efforts will be in vain if other countries do not strive for similar objectives in their national and international political commitments. This is why it is essential that we work together with our global partners, and why, in particular, we need an ever closer cooperation with the United States.

Given the depth of political and economic relationships between the EU and the U.S., it is only sensible that we work jointly toward achieving common objectives in the energy field.

Ladies and Gentlemen,

As you may know, during the EU-US Summit in June 2006 in Vienna, we have agreed to develop a Strategic Energy Cooperation and to advance principles of good practice in global energy markets. The Strategic Energy Cooperation agreement represents long overdue and significant progress in EU-US cooperation in the energy field.

There are numerous channels of cooperation within this framework. We are currently in the implementation phase for many of them. Progress is being made, most notably on energy efficiency, biofuels, energy technologies, and on developing common position vis-à-vis to third countries.

On biofuels, we have just agreed on a work plan looking at aspects such as research and development and regulatory issues. To make biofuels a success story, we need to agree jointly on standards and coordinate our efforts for the research and development of second generation biofuels.

Another significant area of cooperation is on energy efficiency. Here too we have developed an Action Plan that includes, among others, Energy Star agreement and energy efficiency in buildings.

Our cooperation in the area of technology partnerships is also moving along, particularly on issues such as the Methane to Market partnership, on carbon capture and storage, and hydrogen.

We will continue pursuing our joint work on nuclear safety and security under the Euratom-US agreement and on ITER project.

These joint efforts are, of course, noteworthy and a good progress forward. However, the Commission believes that there is opportunity for even further enhanced cooperation in the energy field.

While work on biofuels is important, biofuels alone will not help us address the multitude of challenges we face in the energy field.

Work on energy efficiency is particularly important but here too we should be doing more! Let me remind you that improved energy efficiency alone, according to the IEA, could cut around 20% of current global CO₂ emissions.

To work towards this objective, the EU adopted an Action Plan on Energy Efficiency in 2006 – including 75 measures needed to achieve this objective. The Action Plan includes concrete measures such as accelerated use of fuel efficient vehicles, improved energy performance of existing buildings, and tougher standards and better labeling for appliances, to name a few.

Additionally, the EU is looking to propose an International Agreement on Energy Efficiency to bring the OECD countries and key developing countries, such as China and India, together to agree on common approaches on saving energy. In this undertaking, we would look for the support of the U.S. from the very beginning. American involvement is particularly important, given that an average American consumes twice as much energy as an average European.

While we see increased awareness on climate change on this side of the Atlantic, I believe it is essential that concrete measures are taken at federal level.

Finally, we need to continue developing similar strategies vis-à-vis third countries, including big energy supplier countries such as Russia and the Caspian Sea countries, as well as key developing countries such as India, China, and Brazil. We have agreed to better coordinate ourselves and we should continue with this going forward.

If we want changes in energy policy to take place on a global scale, only coordinated positions and concrete follow-up initiatives will get our message across. We cannot ask developing countries to follow us in this quest if we do not lead by example.

Ladies and Gentlemen,

In conclusion, what the EU is striving to achieve internally and internationally is a set of very significant and far-reaching objectives.

A lot of hard work and tough political decisions still lie ahead. But I am convinced that by joining forces and reinforcing the cooperation between the EU and the U.S. we will be able to address the most pressing issues and influence our common energy situation.

Thank you very much for your attention.