EU published a Roadmap towards a low-carbon future
On 8 March, the EU Commission issued a communication on a low carbon
emission future: “A Roadmap for moving to a competitive low carbon economy in
2050.” In its communication, the Commission lays out targets for reducing
emissions of greenhouse gases up to the middle of the century.
The roadmap is based on an EU-wide cost-effectiveness analysis and it also
examines cost impacts of emission reduction. According to the Commission,
emissions must be reduced by 80% from the 1990 level by 2050. The roadmap
proposes milestones: 40% for the year 2030 and 60% for the year 2040. The
Commission estimates that the EU will achieve the binding 20% reduction target
and the target for increasing renewable energy set for 2020. By contrast, it does
not seem likely that the target for energy efficiency will be reached. If the 20%
improvement in energy efficiency were achieved, the EU emission reduction in
2020 would be around 25%. The communication does not put forward a
tightening of the 2020 emission goal, but it will still be discussed during the
spring.
According to the Commission, emission reductions must be achieved mainly
through Europe’s own actions. The acquisition of emission reduction units from
outside the EU will be marginalised. Power generation is subject to most
ambitious emission requirements: reduction of greenhouse gas emissions
between 93-99% by 2050. The proportion of electricity of overall energy
consumption is estimated to grow, and it is expected to replace the use of fossil
fuels in transport and in the heating of buildings. Investments in smart electricity
networks are a basic condition for a low carbon energy system. The measures
taken by the energy sector will be examined in detail in the Commission’s Energy
2050 roadmap to be published later this year.
According to the Commission’s calculation, the implementation of the roadmap
will cost EUR 270 billion per year, which corresponds with approximately 1.5% of
EU’s GDP. Major investments are needed in the development of transport, the
energy efficiency of buildings and the construction of smart grids. On the other
hand, an annual savings of EUR 320 billion will be achieved in EU energy costs
within the next 40 years.
The Commission envisages the emissions trading system and the CO2 market
as the primary instrument also in the future. According to the Commission, the
price of CO2 must reach the level of EUR 100-370 per ton or CO2 by 2050.
The aim of the Commission is to use the roadmap for the development of sectorbased policies and programmes. Later this year, the Commission intends to
publish the Energy 2050 roadmap and a White Paper on Transport. The
Commission calls the Member States to set up national programmes for a low-
carbon future. Finland has already in 2009 drawn up its future report on longterm climate and energy policy.
Fortum has drafted its own roadmap on a CO2-free future, to be published as
part of Fortum’s Sustainability Report 2010. The roadmap describes our view of
the energy system of the future and our actions and development work to reach
its aspiration. Fortum’s long-term aspiration is to become a carbon-dioxideemission-free energy and heat company.
The Commission’s proposal is largely in line with Fortum’s
views:
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Greenhouse gas emission reduction needs long-term predictability and
clarity of the targets and means of emission reduction.
The emissions trading system must be the primary instrument for realising
climate goals. Overlapping instruments with the emissions trading system
must be avoided.
The role of electricity in the energy system of the future is emphasised,
and electricity replaces the use of traditional fuels.
A sustainable energy system cannot in the long term be based on
subsidies. A renewable energy promoting scheme based on national
subsidies is not sustainable either economically or from a market
functionality perspective. National and EU actions must support each
other – they must not be incompatible with each other.
Kari Kankaanpää
Sustainability Manager, Climate and Environmental Affairs