QREX Conference

Rockhampton, 20 July 2009

Speech by John Richards,
Counsellor,
European Commission Delegation, Canberra

Good afternoon. Margaret, thank you for the introduction, and Mr Muir thank you for your welcome to country. It is a pleasure to be here. Minister, Federal member, speakers, ladies and gentlemen

I'd like to thank QREX for this opportunity to say some words about the European Union's progress towards a low carbon future. This is an area where there is a lot to say because the EU has been at the forefront of moves towards a low carbon economy. However, the EU is not acting and cannot act alone. We are currently in the run up to the Copenhagen meeting at the end of the year, where we are hoping for a global and ambitious post-2012 agreement on the measures needed to combat climate change. So, I should also to like outline what we hope to achieve for the future in a global context.

This is an area where the EU and Australia share the goal of an ambitious, global agreement and we are in close cooperation over a number of important sectors.

These discussions have particular relevance also here in Queensland . The EU is Australia 's largest trading partner for two way trade and by far the largest inward investor in Australia . Coal is Australia 's largest single export to the EU, with 80% of it coming from Queensland . The EU is second only to Japan in terms of Queensland 's coal exports. Australia is also a very important source of supply for nickel and iron ore for the EU.

And as a final introductory point, we are firmly of the view that action on the economy in the wake of the global economic crisis and action against climate change are not alternatives but are part and parcel of a move to smart, sustainable, low carbon growth. Low carbon growth must be the hallmark of the post-crisis economy.

EU policies on climate change and energy

The EU has had an official Climate Change Programme since 2000 and an emissions trading scheme since 2005.

The EU has adopted ambitious internal targets for energy use by 2020. The "20-20-20 initiative" - commits the EU to:

•  First, reducing its greenhouse gas emissions by 20% compared to 1990 levels,

•  Second, increasing the level of renewable energy from about 8% of its energy mix today to 20% and

•  Third, making a 20% improvement in its energy efficiency levels - in other words, reduce its energy consumption by 13% compared to 2006.

In December 2008 the EU's Council of Ministers together with the European Parliament agreed on the legislation needed to make these targets a reality, a remarkable achievement in a very short time. So we now have in place the necessary legislation.

Firstly, it the ETS Directive has been revised to give more clarity regarding the approach that will be followed for the period 2012-2020. The main changes are:

• Coverage will be expanded to cover aviation in 2012 and petrochemicals and aluminium in 2013, as well as two new gases.
• The level of auctioning will increase. With electricity generation it will rise to 100% by 2013, with certain Member States allowed optional and temporary derogations based on explicit criteria. Auctioning in the non trade exposed sector will rise to 70% by 2020, with a goal of 100% by 2027.
• National allocation plans have proved cumbersome and there will be a single EU wide cap based on harmonised rules.

It is worth noting in this respect that the difference in GDP per capita between the poorest EU Member State and the richest is greater than the difference between China and the United States . If the EU can reach internal agreement on concrete measures over such a broad economic disparity, we should take heart that a fair global agreement is equally possible.

Secondly, a new Renewable Energy Directive has been agreed, putting into effect the overall target of 20% renewable energy in the EU's energy mix and 10% of its transport fuel from biofuels by 2020 in the form of legally binding obligations on Member States.

This is ambitious, but it can be done. This has already been confirmed by what has been done in Denmark , Germany and Spain over recent years. Already today, the push to renewable energy in Europe has created over 300,000 jobs in the EU in renewable energy, with a recent British study showing that 1.2 million Britons will be working in green energy jobs by 2020.

An additional element of the EU's renewable energy legislation concerns the need to support the development of alternative transport fuels. This puts a legal obligation on Member States to ensure that 10% of transport fuel comes from renewable energy sources. This means either by using biofuels or other renewable sources such as electric-powered vehicles using renewable electricity.

We have been conscious of arguments that biofuel production can itself have harmful effects. For this reason, no single litre of biofuel sold in the EU should cause - directly or indirectly - hunger or rainforest destruction anywhere in the world.

The third pillar of the 20-20-20 initiative is energy efficiency. Although this is the least glamorous of the various instruments that make up the EU's new energy policy, it remains important. A 20% improvement in the EU's energy efficiency by 2020 can be achieved through cost-effective saving measures and translates into a reduction in energy consumption by some 13% compared to 1990 levels. It will reduce energy imports, boost household incomes, increase the competitiveness of EU industry, and make a huge contribution to reducing our greenhouse gas emissions.

The EU has therefore now adopted a whole series of rules to make a major change in these areas. It has in place, or is tightening up, rules on Buildings, cars, energy labels, and adopted the "eco-design" Directive enabling the rapid adoption of minimum energy efficiency standards for a wide range of products, from TVs, to light bulbs, to washing machines, to motors. Concrete measures on public lighting and stand-by have, for example, already been agreed under this new procedure.

Taken together, including the ETS mechanism, these measures have the potential to make a huge step towards meeting the 20% target.

Carbon capture and storage (CCS)

Fossil fuels in Europe, as in Australia and elsewhere, but notably China , will continue to be part of the mix in the foreseeable future but need also to find a place in a low carbon economy. For these reasons the deployment of carbon capture and storage technologies may assist us in effecting a significant slice of emission reductions. First we have adopted the necessary legislation to give a legal framework for the operation of these technologies within the EU. Second, €300 million in ETS funding will be made available to support the investments in up to 12 CCS demonstration projects in the EU. The European Economic Recovery Pan also allocated €1050 million to CCS demonstration plants within the EU.

And we are actively engaged with our partners in this field. The European Commission and a number of EU Member States are founder members of the Global Carbon Capture and Storage Institute. Nick Otter will speak next and so I will say no more other than to restate our commitment to its very important work.

In addition in March 2005 the EU and China signed an action plan on clean coal, including cooperation on CCS. And in June we set out plans to finance the design and construction of a near zero emissions coal power plant in China to demonstrate CCS technology. The European Commission has earmarked €50 million for the construction and operation phase. Since coal is China 's main energy source and expected to remain so, efforts in this direction are very important.

International negotiations

Lastly, I'd like to turn to the all important ongoing international negotiations culminating in the UNFCCC (1) Copenhagen in December.

In January, the Commission released a communication basically outlining our position and what we think needs to be achieved for a successful conclusion to this meeting.

We think progress is needed in three main areas for a successful outcome:

• Comparable emission reduction targets by developed countries. The communication refers to the IPCC recommendation of a range of 25/40% as being consistent with the 2 degree objective.
• Commitments by developing countries in the region of reductions of 15/30% below business as usual
• New mechanisms to finance low carbon development and adaptation need to be put in place, soundly governed and maximizing effectiveness.

On the question of emissions' trading we think it would be useful for developed economies - Australia , New Zealand , the US and the EU - to work together to create an OECD-wide carbon market. This would allow developed country to achieve their targets with targets with the greatest flexibility and maximum cost effectiveness.

The recent outcomes from the Major Economies Forum, chaired by President Obama, are positive signs in the run up to Copenhagen . In particular, the EU saw its overarching vision to restrain warming to within 2 degrees Celsius from pre-industrial levels confirmed as the objective of all the parties on the basis of scientific evidence. The overall commitment was welcome but it also underscored the need for developed countries to show leadership and for developing countries to show greater flexibility.

In this regard, the roles of the United States and China are very important.

President Obama has shown considerable personal commitment to domestic action and to a successful outcome in Copenhagen . And with the Waxman-Markey bill on the table there is US legislation on the table aimed at reducing domestic emissions by way of a cap-and-trade scheme together with new renewable requirements for utilities, studies and incentives regarding new carbon capture and sequestration technologies, energy efficiency incentives for homes and buildings, and grants for green jobs.

It is also clear China is also taking tackling climate change seriously with ambitious targets to reduce energy intensity under its current 5 year plan.

Time is short but President Obama in his conclusions at the MEF stressed the role of leaders to allow negotiators to seek compromises going beyond their current positions in a number of upcoming meetings including the G20 summit in Pittsburgh .

Australia - EU cooperation

The environment and climate change are both areas where the EU and Australia have strong cooperation. In October last year we adopted the new Australia - EU Partnership Framework, which places strong emphasis on action in both these areas. We exchange views at the official and political levels and have many common positions. We both recognise the urgency of the issue as shown by PM Rudd's statements - perhaps even during - the MEF. Australia is legislating for an emissions trading scheme. We share concerns over tropical deforestation in developing countries. We both believe in the need for research in adaptation and mitigation. We are working together and in coordination to making CCS part of the solution.

Ladies and gentlemen, we all agree that we need a global solution to a global problem. All developed economies, the European Union, the US and Australia , need to show the necessary leadership. Others, including the major emitters in emerging economies, must be prepared to play their part as well.

Thank you.

United Nations Framework Convention on Climate Change

This page updated July 27, 2009