European commission

Oil lobby undermines EU climate protection efforts

Sascha Rentzing/Tim Altegör, 31 Jul 14
Smart grids, wave energy, geothermal power: The European commission is refusing to put its eggs into one basket. Instead, it is going to distribute EUR 1 billion among 18 renewable energy projects as well as one carbon capture and storage project. Meanwhile the oil industry is looking for ways to circumvent European climate protection measures.

Under the so called “NER300” scheme the funding money is generated from the sale of 300 million emission allowances from the New Entrants' Reserve (NER) set up for the third phase of the EU emissions trading system (EU ETS). Moreover, funding of over EUR 860 million from private sources has been raised according to EU Climate Action Commissioner Connie Hedegaard, who expects the selected projects to contribute eight terawatt-hours (tWh) of renewable energy annually to the European energy mix. While most of the projects, which have successfully applied for funding, focus on bioenergy, there is also one geothermal heat and power plant planned in Strasbourg, a cross-border cooperation between France and Germany. By far the biggest portion of the funding is designated for the most controversial prospective technology: About one third (EUR 300 million) of the total available funding is used for the construction of a carbon capture and storage (CCS) plant in the United Kingdom – allowing for 1.8 million tons of carbon dioxide from a coal-fired power plant near Selby to be permanently stored in the North Sea. However, critics of CCS advise against the use of the technology citing increased risks of earthquakes as well as the potentially uncontrolled release of gas into the atmosphere.

New dynamics with respect to the European energy and climate policy might be provided by incoming Commission President Jean-Claude Juncker. On July 15th the Luxembourg native has been elected by the European Parliament with a clear majority of 422 to 250 votes. Outlining his political vision for his mandate, Juncker said: “I strongly believe in the potential for ecological growth. I therefore want Europe’s Energy Union to become the world number one in renewable energies.” Additionally he proposed a binding energy savings target of at least 30 percent until 2030. Shortly after Juncker’s election the European Commission under his predecessor José Manuel Barroso had issued a similar proposal to European head of states. In stark contrast to Juncker the 30 percent target had been declared voluntary, however. Juncker is set to take over from Barroso on November 1st 2014, subject to the European Parliament approving his list of candidates for the Commission. Germany’s European Commissioner for Energy, Guenther Oettinger, recently announced he would fancy swapping the Commission’s energy department for the post of European Commissioner for Trade, currently held by Belgium’s Karel de Gucht. There, among others, Oettinger would be responsible for dealing with the controversial Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States, which – according to a new study published by several environmental organisations, including Friends of the Earth and Greenpeace, – the oil industry will use as a vehicle to circumvent European climate protection measures. The authors claim that oil lobbying groups are especially concerned about European legislation with respect to crude oil products such as the Fuel Quality Directive passed in 2009 that was meant to cut fuel emissions by six percent until 2020.

It has not come into effect, however, due to successful lobbying on behalf of the powerful oil industry the authors of the study called “Dirty Deals” argue. Among other features the Fuel Quality Directive would render the import of oil extracted from tar sands impossible into the EU. While such a ban would send a strong signal for climate and environmental protection – after all the production of tar sands oil is literally a dirty business – it would also lead to significant economic losses for oil companies, which have spent a combined EUR 112 billion on oil exploitation from tar sands in Canada between 2001 and 2012 – with Europe among the preferred shipping destinations. According to the “Dirty Deals” study the oil lobby internally refers to the directive as an obstacle to trade that must be addressed during the TTIP negotiation – from an EU perspective, this constitutes a formidable obstacle to its legislature.

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