European Commission publishes Energy & Climate Summer Package
On July 15, the European Commission released an Energy and Climate Summer Package aimed at modernising Europe’s energy system. The package is a critical element of the European Energy Union strategy, launched last February by the new appointed Commission. The Energy Union strategy intends to create a fully-integrated energy market, to enhance security of energy supplies, to promote energy efficiency, to foster CO2 emissions reduction and to boost energy research and innovation.
The Energy and Climate Summer Package consists of the following set of proposals:
- Review of the EU Emissions Trading System (EU-ETS);
- Innovation of the European electricity market;
- Better supply and market conditions for energy consumers;
- Redesign of the energy efficiency labelling.
The EU-ETS reform sets out a new limit for the overall quantity of CO2 emissions allowed per year, which will decrease by 2.2% from 2021 onwards. The proposal includes an Innovation Fund to support investment in carbon capture and storage, renewable energy and low-carbon innovation in energy intensive industries.
The Innovation Fund will start operating from 2021 and will be funded with the sale of 400 million CO2 emissions allowances, which will sum up to approximately € 10 million when sold. Before 2020, 50 million unallocated allowances from the market stability reserve will be made available to complement existing financial mechanisms that are already supporting innovative low-carbon technologies.
The set of proposals will now pass on to the European Parliament and the Council of the European Union as foreseen in the ordinary legislative procedure.