What leeway does the Danish Presidency of the EU Council have on energy efficiency?

On 1 January 2012, the Danish presidency of the European Union Council began, for 6 crucial months. Denmark’s Prime Minister, the elegant Helle Thorning-Schmidt (below), presented the presidency’s program to the European Parliament during last week’s plenary session (video of the speech).

Helle Thorning Schmidt Danish PM

Photo: European Parliament (Creative Commons)

Is it necessary to remind that Denmark takes over the EU Council presidency at a time of great uncertainty, with one absolute priority, coordinating the way out of the Eurozone crisis? Is it also necessary to “rub it in”, so-to speak, and say that every other Danish priority will be overcast by the Eurozone crisis?

 

The irony of the Danish position is that their presidency comes at the crossroads for the EU on the way to the EU 2020 Strategy objectives, with upcoming discussions on the Multi-Annual Financial Framework (MFF) for 2014-2020.

The EU has committed to increase its energy efficiency by 20% by 2020, but is only on track to meet half of this objective; 8 years to the deadline, it will take a lot of political will to succeed. It is therefore vitally important that Denmark manages to move the talks forward on the Energy Efficiency Directive, to try and reach a first reading agreement with the European Parliament. On the other hand, financing is a key hurdle in energy efficiency talks and Europe will probably have to be very creative on energy efficiency financing during the MFF 2014-2020 talks (via the Future Cohesion Policy, the Horizon 2020 Programme, and potentially the pilot EU project bonds), otherwise the EU will simply miss the target.

There was a sigh of relief from proponents of energy efficiency at the end of the Polish presidency, Poland who usually does not lose too much sleep when the energy efficiency agenda is stalling, and who therefore focused primarily on energy infrastructure. Despite the context, Denmark should be a different story, and at least the (cautious) commitment is there on paper: “The presidency will engage in a targeted effort to secure the adoption of initiatives for promoting energy efficiency, where the energy efficiency directive will be a key priority.” Read the Danish Presidency programme

Logo chosen by Denmark for its 2012 Presidency of the EU Council

But just how much room for manoeuver do they have?

Not much, for the Council is committed to block any measure they will deem having budgetary impact in the Energy Efficiency Directive (see latest Council draft), thus jeopardizing a first reading agreement on the directive. Negotiations will be tough on the energy efficiency directive, therefore Denmark will try to create room for maneuver by tying them to the Energy 2050 Roadmap in the presidency’s program.

The other thorny issue for the Danish presidency will be the financing of energy efficiency investments. Here again, it seems plausible that Denmark will seek an agreement that will secure both investments from the private sector and the earmarking of EU funds towards achieving the 20% energy savings target. As for provisions which aim at forcing Member States to earmark funds for energy efficiency, they don’t really stand a chance, even more so in the current context.

With empty government coffers and a lot of sensitivity in the Council, Denmark’s approach seems to be to work on securing a solid framework and a long-term path for investors. In our view this means that the Presidency will attempt to 1) coordinate talks between the Energy Efficiency Directive and the 2050 roadmap (cf. Euractiv’s point last month); 2) try to bargain for binding targets with the argument that it will secure long-term private sector investment in energy efficiency technologies whilst allowing Member States to adopt specific measures; 3) drop the binding 3% renovation rate for public buildings for a commitment to address renovation of existing buildings in a separate piece of legislation.

Will the Danish presidency manage to secure a deal on the Energy Efficiency Directive? They are managing expectations but certainly haven’t turned their backs on the idea; now let’s see what the Council’s mood is in the New Year!

 

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