In recent months, Climate Parliament delegations have met with President of the European Commission José Manuel Barroso and Commissioners Almunia (Competition), Geoghegan-Quinn (Research), Hahn (Regional Policy), Hedegaard (Climate), Piebalgs (Development), Potočnik (Environment) and Rehn (Economic and Monetary Affairs).  We will be seeing Commissioner Oettinger (Energy) in October.

 

The MEPs participating in these meetings on behalf of our group in the European Parliament include: our Chairman Sir Graham Watson; Maria da Graça Carvalho, a former advisor to Mr Barroso; former Portuguese Ambassador Ana Gomes; former Environment Ministers Satu Hassi and Sirpa Pietikäinen; Jo Leinen, Chairman of the Environment Committee; and Vittorio Prodi, a distinguished physicist.  They come from four major party groups: the EPP (Christian Democrats), Greens, Liberals and Socialists.

We have been focusing on four key budget proposals for the next Multiannual Financial Framework, which sets the priorities for roughly €1 trillion in spending in the period 2014-20.  We are proposing that the EU should spend:

• €2 billion a year on research and development to help lower the cost of renewables through the Strategic Energy Technology (SET) Plan.  This figure was proposed in 2008 by the European Parliament.

• At least €1 billion a year from the new Connecting Europe Facility (CEF) on building a European supergrid to connect us all to the areas where renewable energy is most abundant.

• At least €10 billion over seven years of the €336 billion in structural funds, to be ring-fenced for what the Commission calls the "electricity highways" that will make up the supergrid.

• At least €1 billion a year of new and additional funding to promote renewables in developing countries.

 

Some points of interest emerging from our discussions:

• Under current plans, the Commission is likely to allocate around €1 billion a year to the SET Plan, and well under €1 billion a year to electricity highways from the Connecting Europe Facility.  The proposed total allocation for the Facility is €40 billion over seven years covering transport, ICT and energy. Within the allocation for energy, grids are competing for funding with gas pipelines.  The supergrid is likely to receive only about 10 percent of the total funding, which is hardly giving it top priority.  Exactly how much the Commission will recommend for each of these areas is still not yet decided, however.  It will be soon, so any input to the Commission on the SET Plan and the CEF in the coming days is very timely.

• DG Regional Policy (which manages the structural funds that aim to improve Europe’s competitiveness and assist poorer regions) is proposing to ring fence €10 billion for cross-border transport links, but not to ring fence anything for cross-border electricity links.

• However, it is still possible that some structural funds will be spent on the supergrid if Member States request it.  A possible example: Greece and Germany are in discussions about a new electricity connection which would enable the export of Greek solar energy to Germany.  This could be supported partly by structural funds.

• The Commission is proposing a substantial allocation of structural funds to energy efficiency and renewable energy (20 percent in the richer regions, 6 percent in the poorer.)  This will double current allocations in these sectors.

• The Commission expects that some Member States will try to cut the proposed allocation for the Connecting Europe Facility, and will resist the proposal for 20 per cent of structural funds in the more affluent regions to be devoted to sustainable energy.  Some Member States are already questioning the Commission's proposed increase in resources for research and development.  It is therefore important that we organise strong support for these proposed budgets in the European Parliament, in national Parliaments and, not least, in the Council among Member States which support renewable energy and the supergrid.

• In recent months, there has been a marked increase in interest among member states, especially in Southeast Europe, in applying structural funds to energy efficiency and renewable energy.  It has been suggested that this might be an interesting by-product of the Fukushima disaster.

• Investors are repeatedly telling the Commission that to invest in trans-European networks they need to see evidence of a long term commitment from the EU and national governments.  This is one reason why the EU budget matters.  Beyond the money itself, EU investment in the supergrid also gives the signal that it is ready to move from talk to action.

• It has not escaped the attention of Commissioners that the most economically stressed EU nations (e.g. Ireland, Portugal, Spain, Italy, Greece) all have the potential to be major energy exporters once a supergrid is in place.  This is one way to help them pay their debts.

• There is strong support in DG Development Cooperation for increasing the development assistance devoted to renewable energy.  Specific amounts will be proposed by the end of the year.

In summary, the Commission as a whole is moving in the right direction on renewables and a Europe-Mediterranean supergrid, but the problem is one of speed and scale.  Of the roughly €1 trillion over seven years being allocated in the MFF, there is still far too little for the transition to a Europe powered by clean energy.  One Commissioner told us that they would have liked to propose more for these areas, but they felt constrained by knowing how much resistance they will encounter among some national governments.  Many of the Commissioners have told us of the importance they attach to having strong support for these priorities in Parliament.

The European Parliament is of course a decision-maker in its own right in the budget process.  It must approve the final MFF.  Perhaps more important, the "basic acts" which allocate the money in more detail under each major heading will be submitted by the Commission by the end of this year.  In agreeing their final shape, Parliament and Council each have an equal say.

One of our next steps is to engage in direct discussions between MEPs and some of the officials drafting the basic acts.  But we must now turn our attention to the Finance Ministers who will be deciding on the MFF.  At a meeting of the Climate Parliament group in the European Parliament last week, it was decided to send a letter to all the EU's Finance Ministers and Energy Ministers highlighting the priorities discussed here.  The letter will be co-signed by a number of MEPs and national MPs from across the political spectrum.

For more on the Climate Parliament's approach to EU budget reform, click here.