Looks at the emerging policy framework for bioenergy in the light of the EU's 2030 climate and energy targets

1. ENERGY UNION PACKAGE,
AGRICULTURE AND IRISH
FARMING
Alan Matthews
Professor Emeritus of European Agricultural Policy
alan.matthews@tcd.ie
Presentation to the IrBEA 2016 Annual Conference
Dublin, 3 February 2016

2. The question
• Why bioenergy is important
• Plays a critical role in meeting Ireland’s RES and decarbonisation
targets to 2020 and Energy Union objectives to 2030
• Contributes to bio-economy, circular economy and rural
development strategies
• Key for further develoment is availability of sustainably-
produced biomass
• What developments in EU policy will influence future of
Irish bioenergy? (presentation does not discuss Irish
policy under development)
• Renewables targets and governance
• Accounting for emissions from the AFOLU sector
• The sustainability debate
• Implications for Irish agriculture
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3. EU biomass supply and demand, tonnes
Source: SCAR 4th Foresight report, 2015
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4. Expected trend in bioenergy demand in EU
Source: JRC, Scarlet et al, based on NREAPs
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5. Renewable energy mix in 2005 and 2020
The share of bioenergy in EU gross final energy consumption will
increase from 5.0% in 2005, 8.5% in 2012 to almost 12% in 2020,
Source: JRC, Scarlet et al, based on NREAPs
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6. The Energy Union: process 2014-2015
January 2014 Commission proposal for 2030 climate and energy policy
framework COM(2014)15
February 2014 European Parliament Resolution on 2030 climate and
energy policy framework
October 2014 European Council agreement on the 2030 Climate and
Energy Policy Framework
February 2015 Commission Climate and Energy Package
COM(2015)80
March 2015 European Council conclusions
Submission of INDC to UNFCCC prior to COP21
November 2015 Commission, State of the Energy Union 2015
COM(2015)572
November 2015 Energy Council Conclusions on the governance system
for the Energy Union
December 2015 European Parliament Resolution on Energy Union
UNFCCC Paris COP21 Agreement
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7. The process – 2016 on
March 2016 Commission ”to assess the results of COP21..., in
particular in view of the 2030 climate and energy
framework and to prepare the next steps”.
Mid-2016 Commission legislative proposal on the Effort-Sharing
Decision
Commission legislative proposal on inclusion of Land
Use, Land Use Change and Forestry (LULUCF) into the
2030 Climate and Energy Framework
Autumn 2016 Commission proposal for revised Renewable Energy
Directive
(Consultation period closes 10 Feb 2016; Bioenergy
sustainability policy will be covered by a separate
consultation)
2018 Renewable Energy Roadmap for period after 2020
2017-19 Review of the Environment and Energy State Aid
Guidelines promised
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8. 2030 Climate and Energy Framework
Source: Froggatt and Hadfield 2015
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9. Targets for 2020
• EU Climate and Energy Package 2020 20/20/20
• 20% reduction in GHG emissions compared to 1990
• 20% share of renewable energy in the energy mix by 2020
• 20% improvement in energy efficiency compared to forecasts for 2020
• Renewable Energy Directive I (2009)
• Mandatory national targets (10-49%) consistent with a 20% share of
energy from renewable sources by 2020
• Mandatory national targets of 10% share of energy from renewable
sources in transport by 2020
• ILUC decision 2015 – maximum 7% from crop-based biofuels
including crops grown as main crops primarily for energy purposes,
• Advanced fuels ‘sub-target’
• Revised Fuel Quality Directive (2009)
• Reduction of the greenhouse gas intensity of the fuels used in vehicles
by 6 % by 2020 compared to 2010
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10. Targets for 2030
• European Council
• a binding EU target of at least 40% domestic reduction in
greenhouse gas emissions by 2030 compared to 1990
• Non-ETS reduction target of 30% compared to 2005 distributed by
MS on the basis of relative GDP per capita, with caveats
• A binding EU target of at least 27% for the share of renewable
energy consumed in the EU in 2030 (to be reviewed by 2020
having in mind an EU target of 30%).
• An indicative target at the EU level of at least 27% is set for
improving energy efficiency in 2030 compared to projections of
future energy consumption based on the current criteria.
• No EU target for renewable energy in transport after 2020 (14-16%
contribution required)
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11. Are 2030 targets settled?
• European Parliament
• Wants binding 2030 climate and energy targets of at least 40 %
reduction in CO2 emissions, at least 30 % for renewables and 40 %
for energy efficiency, to be implemented by means of individual
national targets
• Parliament has also called for extension of transport fuel targets
after 2020
• Parliament can influence outcome through co-decision on revised
Renewable Energy Directive expected later this year
• Review in light of COP21 Agreement ambitions
• No real appetite for this among Member States
• Commission Communication on follow-up expected in March
• Incorporation of LULUCF into targets
• Will this be additional or contribute to the ‘at least 40%’?
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12. The emerging energy governance system
• How to ensure Member States work ambitiously and
collectively to reach the 2030 Energy Union targets?
• Question addressed by the energy governance regime
• Some clarification at the Nov 2015 Energy Council
• Essential component will be National Energy and
Climate Plans ('National Plans') to be adopted by each
MS, followed by Progress Reports on implementation
• Intended to allow constructive dialogue between the
Commission and the Member States; and
• Monitoring and evaluation based inter alia on key
indicators
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13. AFOLU sector in the 2020 package
• AFOLU emissions regulated under two different pillars in
2013-2020 period
• Agricultural GHG emissions under the ESD national targets
• LULUCF emissions covered under Kyoto Protocol second
commitment period (KP2), but not taken into account in ESD
national target
• LULUCF emissions accounted for differently under Kyoto Protocol
to the way they are reported in UNFCCC inventories.
• New KP2 rules on LULUCF accounting were incorporated into and
extended in the EU’s Decision on LULUCF accounting rules in
2013
• Under KP2, MS must ensure that LULUCF sector does not
generate net debits when accounting for all emissions and
removals in the sector. If net debits arise, these must be
compensated.
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14. Climate policy and agriculture
• More stringent emissions targets to 2030 will
focus more attention on need to reduce
agricultural emissions
• Supply-side versus demand-driven reductions
• Increasing efficiency – “sustainable intensification”
• Substituting for fossil fuel energy emissions – bioenergy
• Carbon sequestration in soils, forests, agro-forestry
• Changing diets and reducing food waste
• Policy design to incentivise emission reductions
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15. The CAP and bioenergy
• The Common Agricultural Policy does not provide direct
support for the production of biomass for bioenergy
• But farmer retains Pillar 1 Basic Payment on afforested land
• Indirect incentive in arable areas through Ecological Focus
Area requirements for Pillar 1 greening payment
• Individual trees, agro-forestry, short-rotation coppice, afforested land
• Perennial energy crops not counted as part as arable area for crop
diversification purposes
• Rural Development Programmes
• Support for investments in biomass processing, distribution and
renewable energy infrastructure
• Support for producer groups involved in biomass supply chains
• Investments to mobilise wood and forest residues for energy
generation
• Research financing
• Future of CAP after 2020
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16. AFOLU in 2030 climate targets
• Including agriculture, forestry and other land use (AFOLU)
to take into account the multiple objectives of this sector
• Three options under consideration
• Option 1 — LULUCF pillar: Maintain non-CO2 agriculture sector
emissions in a potential future Effort Sharing Decision, and further
develop a LULUCF sector policy approach separately;
• Option 2 — Land use sector pillar: Merging the LULUCF and
agriculture sector non-CO2 emissions into one new and
independent pillar of the EU’s climate policy;
• Option 3 — Effort Sharing: Include the LULUCF sector in a
potential future Effort Sharing Decision.
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17. A new bioenergy sustainability policy
• Will cover biofuels but also solid biomass and biogas in
heat and power
• Will ensure robust and verifiable greenhouse gas
emissions savings,
• Will address direct and indirect impacts, including on
carbon stocks, and including sustainable land
management.
• Integrated either into RED II or a stand alone instrument
but part of the renewable energy policy framework.
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18. Key messages
• Although EU policy framework to 2020 in place, many
open questions still for 2030 framework
• Is there the political will to fix the broken ETS?
• Member state GHG reduction targets waiting for ESD proposal
• Policy framework for renewables not fully clear until National Plans
due end-2019
• Biomass availability will be influenced by treatment of AFOLU
sector in 2030 climate policy framework
• Biomass availability will also be influenced by new sustainability
criteria, may determine eligibility for public support under state aids
guidelines
• MS policy decisions will be crucial in implementation
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19. Implications for Irish agriculture
• CAP remains the key policy environment for Irish
agriculture
• Bioenergy – ‘Room to grow’ with great potential
• Yet profitability at farm level remains an issue
• The policy regime is critical
• Markets on their own will not deliver the necessary
incentives
• Public policies should be ‘technology-neutral’
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