EU Nations Move Towards Common Energy Policy

Feb. 15, 2007
Nations agree that bio-fuels should constitute at least 10% of fuels used in new vehicles by 2020.

The 27 EU nations on Feb. 15 moved towards a common energy policy, agreeing on cleaner fuel targets while watering down a proposal to force the break up of the sector into production and distribution operators. The energy ministers agreed at a meeting in Brussels that bio-fuels should constitute at least 10% of fuels used in new vehicles by 2020.

But that 10% target will be subject to bio-fuels being available in sufficient quantities for commercial use, and for the necessary legal changes to be made.

They also agreed to increase the use of renewable energy to 20% of the EU's total energy consumption by 2020. The current level is just 7%. This second objective is non-binding, a fact which will disappoint the European Commission, the EU's executive arm, which first proposed the measures in a wide-ranging policy paper last month aimed at moving the bloc towards a common energy policy.

No agreement was reached on the Commission's proposal to force the "unbundling" of the electricity and natural gas industry into separate production and distribution networks, though they backed the overall objective of an "effective" management separation. EU regulators want to split energy utility groups, in electricity and natural gas markets, into separate production and transmission businesses so as to make networks accessible to companies without their own grids. The "unbundling" of supply and distribution, two functions carried out by monopolistic companies in many countries, is seen as necessary to enable new suppliers to enter national energy markets.

Copyright Agence France-Presse, 2007

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