Fighting climate change is a top priority for the EU. In December 2008 the European Union approved the European package "climate-energy". Also known as the "20-20-20" climate strategy, it aims to:
In order to achieve these targets the EU Commission has introduced the following mechanisms and measures:
The RES market started on a voluntary basis in the year 2001 with the entry into force by the Directive 2001/77 promoting electricity produced from renewable energy sources and setting the base of a standard for renewable power: Guarantee of Origin.
The electricity market directive (2003/54/EC) has introduced the electricity disclosure concept where all suppliers of electricity to final customers have to disclose the electricity mix of the electricity supplied.
The RES market has recently been regulated through the implementation of the 2009/ 28/EC Directive amending and replacing 2001/77/EC Directive. The directive requires the EU to increase the amount of renewable energy consumption from the current level of 8.5% to 20% by 2020. This target applies to total energy used in the electricity, heat and transport sectors.
The directive also requires that a minimum of 10% of transport energy must come from renewable sources. In order to achieve the targets set by the directive each member state must submit a national action plan by 2010 describing how they will achieve the 2020 targets and use national support schemes and/or cooperation mechanisms.
National support schemes adopted by different EU Member States are separated into two main support schemes:
The emission market was created through the 2003/87/EC Directive to reduce GHG emissions. Under the EU Emissions Trading Scheme (EU ETS), energy-intensive plants across the EU are able to buy and sell permits to emit CO2. Industries covered by the scheme include:
An emission cap is defined, for each individual plant, via a National Allocation Plan (NAP) submitted by member states and approved by the EC. Companies that exceed their quotas are allowed to buy unused credits from those that are better at cutting their emissions.
The energy efficiency market has been set up through the 2006/32/EC Directive to increase energy saving in Europe, therefore reducing energy consumption.
The white certificates, or energy efficiency credits, are documents certifying that a certain reduction of energy consumption has been attained. In most applications, the white certificates are tradable and combined with an obligation to achieve a certain target of energy savings.
Under such a system, producers, suppliers or distributors of electricity, gas and oil are required to undertake energy efficiency measures. If energy producers do not meet the mandated target for energy savings they are required to pay a penalty. The credits resulting from energy savings interventions are tradable between actors that have or haven’t met their targets.