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Energy Union

Insufficient proposals on ETS and energy market design, good step forward on energy labelling


The European Commission today presented key components as part of its proposals for an EU energy union. The proposals cover the emissions trading system, electricity markets and energy labelling. Commenting on these proposals, Claude Turmes, Greens/EFA MEP and member of the Industry, research and energy committee, said: 

"We welcome the Commission’s communication on the electricity retail market which intends to give prosumers a bigger role, although the text fails to come up with clear mechanisms to enforce their right to self-generation. 

On energy market design, despite some good rhetoric the Commission is not addressing the most contentious issue: state aids and harmful subsidies to coal and nuclear, which are distorting the market. The new Commission should promote stable, technology-specific support mechanisms for renewables until the internal market is well-functioning. The Commission should make redundant the critique that they are: "soft on coal, blind on nuclear, tough against renewables" and shed light on the true costs of all energy sources.

The proposal on energy labelling, which is one of the most visible and successful of the EU’s climate and energy policies, is a good step forward. It is estimated that labelling and ecodesign rules could save the equivalent of Italy’s annual energy consumption by 2020. The Commission's proposal is a good starting point to ensure the new system is consumer-friendly: the situation today is that nearly all products are rated in the highest energy class which has led to the creation of A+ A++ and A+++ categories. It is today hard to find any appliances on the market with an energy rating below B. This is confusing for consumers, who are unable to make a properly informed choice. In addition, the Commission must also reinforce market surveillance as some suppliers and dealers fail to apply the energy labelling rules correctly. The proposal presented today does not go far enough on this point. A centralised, EU database detailing all the products falling under the scope of the labelling would be our favoured solution."

Green climate change spokesperson Bas Eickhout comments:

"This ETS proposal is about muddling through instead of reforming. The Commission has failed to correct the overly generous carbon leakage criteria and proposes to continue categorizing nearly all industrial emissions under ETS as subject to "significant risk of carbon leakage" despite the lack of evidence. Gift after gift is given to the Central European power sector, while these companies continue to make enormous windfall profits by passing on to consumers costs that were never actually incurred. In addition, the Commission has once again missed the opportunity to permanently remove from the market the massive surplus of allowances that depress the carbon price and risk undermining future climate targets.

Disappointingly, the Commission is also already backtracking on the agreement made during the Market Stability Reserve negotiations and will give industry millions of allowances that were intended for the reserve. By using leftover allowances from the pre-2020 period to top up post-2020 allocations to industry, the Commission is undermining the 2030 greenhouse gas reduction target. The Commission seems to have given up its right of initiative and turned into the secretariat of the European Council."