The EU leadership has agreed to a draft energy plan that aims to kill the whole proverbial flock of birds with one stone. In theory, the policy will increase the use of renewable energy, decrease carbon emissions, diversify the use of biofuels and help Europe reduce its reliance on Russia by 2020. It is creative and ambitious — and only the first step in Europe's new energy policy.
Some detail-fudging by German Chancellor Angela Merkel, the current holder of the EU presidency and host of the ongoing EU heads-of-government summit, appears to have successfully paved the way to an EU-wide agreement on a bold new energy policy. Under the terms of the deal, the European Union as a whole aims to reduce its carbon emissions by 20 percent, increase its use of renewable fuels to 20 percent of its total energy demand, use biofuels for 10 percent of transport demand, and most critically, reduce total EU energy demand by 20 percent. All of this is scheduled to take effect by 2020, and all is in addition to any progress that implementing Kyoto reductions has already achieved. The reductions sound extremely sharp because they are, but Merkel has put forward a rather flexible method of attaining the goals. The binding targets will be achieved on an EU-wide basis rather than on a country-by-country basis, allowing richer states with more experience in renewable energy — Denmark for example — to shoulder more of the burden. The biggest hang-up in the negotiations has been a desire by a few states — led by France and Finland — to classify nuclear power as an alternative fuel, a move staunchly opposed by non-nuclear states Ireland and Austria. Merkel's compromise was to blur in a new draft text between "alternative" and "low-emissions" technologies and insert fresh text that clearly makes a country's energy mix its own concern and not Brussels'. That move appears to have mitigated objections from both sides and paved the way to a formal agreement. Other provisions would then be easily agreed upon, including one on pledging EU states to assist each other in maintaining security of supply, unity on negotiating with external energy suppliers and the development of an infrastructure to cushion Europe in the case of any supply shocks. This document does far more than simply give Europe a green energy policy. The reduction of carbon emissions, the supply security, the increased alternative energy use and the overall reduction in energy demand clauses all serve a double purpose: political insurance. The Europeans, in particular the former Warsaw Pact states, fear the Russians are beginning to use energy exports to Europe as lever to gain influence over European policy. In essence, Russia is using its energy riches as a political tool. This essentially has led the Europeans to use the publicly attractive rhetoric of going green to achieve energy security. Reducing total energy demand by a fifth — and then mandating that at least a fifth of the remainder has to be from locally generated renewable sources as well as diversifying into low-carbon energy — will take a huge bite out of European dependence on any particular petroleum supplier. Additionally, a network of infrastructure that can shuttle energy supplies back and forth across the union in case of disruption will be able to cope with disruptions resulting not just from acts of God, but also from acts of Moscow. Had such a system been in place in January 2006 or January 2007, Europe would not have felt the pinch of the Russian-Ukrainian natural gas tussle or the Russian-Belarusian oil spat. The union can now get down to the nitty-gritty of two additional steps. The first is to diversify the sources of Europe's remaining petroleum imports. Austrian energy firm OMV is leading the charge at building a natural gas line from the Middle East, and France's Total is working to construct fresh facilities to import liquefied natural gas. This process will be costly and time-consuming, but for states like Poland that are a bit touchy about all things Russian, it will be a task eagerly attacked. The second task will be the politically tricky one. Remember that the agreement will not spread the changes evenly across the union. It is up to the European Commission to propose — by September — specifically how to divide up the burden. Massaging away that little spoiler will require something a lot more creative than Merkel's technical blurring.