EU energy & environment policies: a competitive advantage for European companies

Implications:

This short and sharp article should be carefully considered by any senior manager worth his salt. “Companies that prosper in an environment of changing climate and policies will tend to be those that are early to recognise its importance and inexorability, foresee at least some of the implications for their industry and take appropriate steps well in advance.”

Such is very much the prevailing view within the European Commission:  though EU climate change policies are being designed primarily to tackle global warming, they will also aim to endow EU companies with the comparative advantage of being amongst the first to devise and to implement innovative energy-saving technologies and practices.

Analysis: One of the main features of the EU comprehensive energy and climate change strategy [presented by the European Commission in early January & due to be adopted by the European Council (i.e. summit of Heads of Government) on 8 & 9 March] has to do with energy efficiency and savings.

In this regard, the objective is to save 20% of total primary energy intensity of output by 2020, building upon two clusters of directives currently being implemented throughout the EU:

·on the energy performance of buildings, of domestic appliances; 

·on power generation & the distribution of electricity, gas, heating and fuels to households, transport and industrial consumers.Furthermore, the new EC policy & legislative proposals set

·a 20% target for renewables in the EU's overall energy mix by 2020;

·an obligation for each member state to have 10% biofuels in their transport fuel mix by 2020;

·a binding target to slash the EU's greenhouse gas emissions by 20% in 2020 compared with 1990 levels (mostly through the European Emissions Trading Scheme).


These various objectives will be supported by a European Strategic Energy Technology Plan to radically re-focus EU R&D efforts on energy saving and low carbon technologies.

The influential Vice-President of the European Commission in charge of Industry, Gunther Verheugen, is currently spearheading discussions, (both within the three main EU institutions and with business representatives), so that the final wording of these rules, however onerous for environmental reasons, may also turn into business opportunities.