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RR RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHBS #0809/01 0681620
ZNR UUUUU ZZH
R 091620Z MAR 07
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RHEHNSC/NSC WASHDC
RHEHAAA/WHITE HOUSE WASHINGTON DC
RUEAEPA/HQ EPA WASHDC
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

UNCLAS SECTION 01 OF 02 BRUSSELS 000809 
 
SIPDIS 
 
WHITE HOUSE FOR CEQ, DOE FOR SWIFT AND ROSSI, ERA FOR CHASE, AGS FOR 
O'KEEFFE 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ENRG ETRD SENV EUN GM
SUBJECT:  EUROPEAN COUNCIL ADOPTS BINDING TARGETS FOR CO2 REDUCTION 
AND RENEWABLES 
 
¶1.  SUMMARY.  On March 9, the European Council endorsed an 
integrated climate and energy policy in an effort to limit global 
warming to 2 degrees C above pre-industrial levels.  It called for 
targets to limit CO2 emissions by 20% by 2020 and to adopt an 
overall binding goal of 20% of renewable energy for the EU as a 
whole by the same date.  The final draft is the result of compromise 
among more environmentally active countries who sought binding 
targets on renewable energy and others, led by Poland, which argued 
reaching the renewable targets would be too expensive.  By focusing 
on EU average targets, Germany mitigated individual country 
resistance to binding targets, which if not met, could possibly lead 
to court action and fines.  The Commission has committed to tabling 
country specific plans by the third quarter of 2008, to be agreed 
with individual member states.  In what Chancellor Merkel termed 
"ambitious but realistic targets," the Council agreed to 17 
different measures on energy in all, ranging from 10 percent binding 
targets for biofuels to an increase of 20 percent in energy 
efficiency by 2020.  The measures, endorsed by European Commission 
President Barrosso, British Prime Minister Blair and French 
President Chirac, were heralded as "historic," marking the 
beginning, according to Chirac, of "green Europe."  END SUMMARY. 
 
SPECIFIC TARGETS 
---------------- 
 
¶2.  The final conclusions on energy and climate change reached by 
the European Council on March 8 - 9 echoed the draft COREPER 
conclusions released on February 20.  The main issue of contention 
was Germany's push for 20 percent binding target for renewable 
energy for the EU as a whole by 2020.  This met resistance from 
France and other member states, mainly from the former East bloc. 
According to Chirac, France sought to broaden the definition of 
renewables to encompass "non-carbon based energy sources," with a 
subtarget for renewable energy.  Germany and other states resisted 
this move.  The compromise left open the question of Member States' 
individual energy mix but did not broaden renewables to include 
other CO2 friendly sources such as nuclear.  By focusing on an 
average target of 20 percent for the EU as a whole, the Council 
sidestepped, at least for a time, the sacrifices individual 
countries will have to make.  Acknowledging the difficulties ahead, 
Barosso said the Commission would table country specific plans by 
the third quarter of 2008.  He declined to outline which penalties 
would apply to countries who did not meet these targets.  Instead, 
he emphasized the country plans would be agreed upon with the 
individual Member States and would include enforcement mechanisms. 
Merkel admitted the country plans could be contentious, but 
emphasized that major changes in policy begin with specific steps 
and the commitment to a binding target on renewables is "historic." 
She also sidestepped the question of the cost of such measures. 
 
¶3.  On biofuels, the Council also agreed to a 10 percent binding 
target for all member states by 2020.  The binding character of the 
target is subject to production being sustainable and second 
generation biofuels being commercially available and competitive. 
The Council committed itself to a nonbinding target of 20 percent 
energy efficiency savings by 2020 and called for an international 
agreement on energy efficiency. 
 
¶4.  In addition to a 20 percent target in reduction of greenhouse 
gases from 1990 levels by 2020, the Council adopted a target of 30 
percent greenhouse gas reduction by 2020, if other OECD countries 
also agreed.  This last measure was seen by most as a public 
relations ploy aimed at encouraging the U.S. to discuss post-Kyoto 
emission targets. The European Parliament had called for even 
stricter targets, in a move considered by many calculated to apply 
pressure on Member States that opposed the adoption of binding 
targets.  On March 8, President of the European Parliament 
Poettering, announced his support for hard targets of 30 percent 
reduction in CO2 emissions by 2020.  Poettering also endorsed a 
binding goal of 25 percent of renewable.  In calling for higher 
targets than the Council, Poettering said his role was to "push the 
envelope" and challenge the Member States that are hesitant to 
embrace policies to combat climate change.  Poettering called for 
Europe to lead the way on climate change.  He noted the positive 
benefits a leadership position could have for the economy and for 
job creation.  Poettering rejected the trade-off of the debate over 
ecology vs. economy, stating Europe's commitment to ambitious CO2 
reduction targets and renewable energy would only help it in the 
long run.  At the same time, he noted the necessity of involving 
other major economies, e.g., China, India and the U.S., in this 
strategy. 
 
 
INTERNAL ENERGY MARKET 
 
BRUSSELS 00000809  002 OF 002 
 
 
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¶5.  The Council adopted a comprehensive energy action plan for the 
period 2007-2009 based on the Commission's energy policy for Europe. 
 The policy calls for further integration of the internal European 
market for gas and electricity to increase competition and decrease 
consumer prices.  The Council did not support the Commission's 
proposal to completely unbundle energy generation from distribution 
networks met.  Instead, it called for "greater separation of energy 
generation and distribution" based on independently run network 
operating systems.  This position, the result of a compromise 
endorsed by Germany and France, is interpreted as support for a 
measure to allow energy companies to retain ownership of energy 
supply systems, while placing them under the operation of regional 
energy operators.  The Council also endorsed strong, independent 
energy regulators with a "cross border" perspective, as well as a 
customer's energy charter.  Moves for further harmonization of 
national regulators, improvement of integration of regional grids, 
and increased transparency in energy markets were generally not 
controversial. 
 
¶6.  In a nod to the concerns of Poland and the Baltics, the energy 
plan includes a statement of solidarity for member states on the 
issue energy security in times of crisis.  This echoed the comments 
of the new President of the European Parliament, Hans-Gert 
Poettering on March 8 that relations between Member States must take 
priority over relations with third parties.  The Council also 
endorsed diversification of energy supplies and transit routes and 
an analysis of gas storage facilities within the EU.  While not 
mentioning the Energy Charter specifically, it also calls for the 
finalizing of an agreement on energy with Russia.  The plan calls 
for establishing an Energy Observatory within the Commission.  The 
plan 
 
PREPARATIONS FOR THE G-8 
------------------------ 
 
¶7.  The plan also calls for strengthening a partnership and on 
energy with the U.S., Brazil, China, and India, focusing on green 
house gases, energy efficiency, renewables and energy technologies 
such as carbon capture and storage.  This was further endorsed by 
both Merkel, Barroso and British Prime Minister Blair that the work 
of the Council on energy should lay the basis for energy discussions 
within the context of the G-8 ministerial in June. 
 
 
GRAY