Download Europe`s energy policy and the third industrial revolution

SPEECH/07/580
José Manuel Barroso
President of the European Commission
"Europe's energy policy and the third
industrial revolution"
Loyola de Palacio energy conference
Madrid, 1 October 2007
Dear Ana,
President of the Instituto de Empresa,
Minister,
Ladies and gentlemen,
It is a great honour to be invited to close this conference, dedicated to a woman,
and above all to a friend, who achieved so much in her tragically short life.
Loyola de Palacio was a courageous and forward-looking politician who realised,
earlier than most that energy would become one of the key strategic issues of this
century. She did so much to equip Europe with the tools it needed to act effectively
in this field. This conference will stand as a fitting tribute to her many achievements.
Perhaps most importantly, I think she would have enjoyed it enormously. I, like all of
you, miss her passionately held and brilliantly argued opinions on energy – but not
just energy!
I'd like to focus my remarks on the role energy has played for many years in
transforming our societies.
Nearly two and a half centuries ago, British weaver James Hargreaves invented the
Spinning Jenny, and the First Industrial Revolution began. The Age of Steam
transformed societies, creating new ways of working, travelling and communicating.
One hundred years later, German inventor Nicolaus Otto devised the internal
combustion engine, and the Second Industrial Revolution began. The Age of Oil led
to huge strides in science, medicine and transport, and created prosperity on a
scale unimaginable to previous generations.
But we have become increasingly aware that this progress has come at a high price.
It has led to a massive increase in carbon emissions around the world. This is slowly
changing our atmosphere, with great repercussions for our climate.
According to the Intergovernmental Panel on Climate Change, the global
temperature rose by 0.7°C in the 20th century. Recent estimates by the IPCC show
that, without action on climate change, temperatures could rise by as much as 4.7°C
by the end of this century.
The latest reports also show that certain regions of Europe are likely to be seriously
affected by temperature increases, with increased droughts here in Spain, for
example.
Another problem is that oil and other hydrocarbons are a limited resource, and our
own internal reserves are dwindling. Today we import around 50% of our energy. By
2030 that will be nearer 70%, if we continue with current policies.
At the same time, with the rise of new economic giants like China and India, global
demand for these hydrocarbons is increasing, and will continue to do so – by around
60% by 2030, according to the International Energy Agency, if we do not act. This
is pushing fuel prices to ever greater heights – particularly oil, which hit a record
high of $80 a barrel last month [Sep 07].
So Europe is being exposed to increasingly intense competition for global energy
resources from other countries, and is becoming ever more dependent on oil and
gas imports from geopolitically uncertain regions. This, I fear, is going to be
increasingly unsustainable.
But there is hope on the horizon. I believe we are now standing on the brink of a
Third Industrial Revolution: the Low Carbon Age. We are not there yet. But once
again, it is Europeans who are leading the way.
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Like the previous industrial revolutions, this will be driven by technology and new
forms of energy. It will also transform our societies in ways we cannot yet imagine.
With its emphasis on renewable energy and a transformation to a low carbon
economy, this revolution will help us to strike a major blow in the fight against
climate change. At the same time, it will improve Europe's energy security, and
decrease geopolitical tensions.
Our road towards the Third industrial revolution began two years ago at an informal
European Council in Hampton Court.
It was at that meeting that Europe's leaders backed the Commission's call not just to
complete the internal energy market, but to develop a long-term, coherent energy
policy for Europe as a response to the new challenges arising through globalisation.
This means a new policy approach which considers the issues as a whole: both use
of energy and the security and diversity of supply. It means linking energy policy to
other policies, notably on climate change.
The Commission Green Paper which followed set out a blueprint for such an
'integrated' European energy policy. It received full political backing from the Heads
of State and Government in March 2007. Since then we have been busy laying the
groundwork for Europe's low-carbon energy future. A future that reinforces Europe’s
competitiveness, safeguards our environmental objectives and ensures our security
of supply.
With this objective, the Commission proposed its energy package in January, which
set out the tough goals and targets we want to achieve.
Despite its complexity, the underlying objective of the package was clear: to
accelerate the transformation of Europe into a low carbon economy. To substantially
increase, over time, the amount of zero or low carbon energy we use in Europe, and
by doing so, take a lead in ushering in the Low Carbon Age.
This ambition was nailed home with an achievable headline target: to reduce EU
greenhouse emissions by at least 20% by 2020 compared with 1990 levels - a target
that we are keen to increase to 30%, if other developed countries join us.
Thanks to this package, the architectural plan for Europe's transformation is now
clear, and rests on five pillars:
- First, we must increase our energy efficiency, saving 20% of our energy, as I
mentioned earlier.
- Second, we must substantially increase the amount of energy we use from
renewable sources, tripling renewable energy use to 20% by 2020.
- The third pillar involves substantially increasing the amount of clean hydrocarbons
we consume. Great technological advances are being made to reduce the carbon
emissions from hydrocarbons – for example through the capture and storage of
carbon dioxide. In this context, I would single out in particular the importance of
coal; it is a relatively cheap fuel, and available in Europe. But it is also very dirty. So
it is important to accelerate the advance of clean coal technologies.
- Fourth, we must develop the single energy market. Our energy security lies in
integration, not isolation.
- Finally, strengthening the EU’s carbon market, which already covers 50% of our
energy emissions and represents a market value of more than €20 billion.
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I also believe that the Member States cannot avoid the question of nuclear power.
There has to be a full and frank debate about the issue. It is not the EU's role to
decide for Member States whether they use nuclear energy or not. But the EU can
make a contribution in related areas, for example on research and on safety.
The last step taken in our road has been the adoption of the Commission package
on internal market for electricity and gas. This represents the first concrete
legislative building blocks for turning this architectural plan into a reality.
I won't go into the details, as my Commissioners have already done an excellent job
in that regard. But by insisting on the separation of production and supply from
transmission networks; by facilitating cross-border energy trade; by promoting crossborder collaboration and investment; by increasing solidarity and transparency – this
proposed legislation would be a decisive step towards an open and fair internal
energy market.
This would mean real consumer choice and fairer prices. It would promote
sustainability by stimulating energy efficiency and guaranteeing that even smaller
companies – and I'm thinking in particular here of those that invest in renewable
energy - have access to the energy market.
A truly competitive market would also ensure greater security of supply, by
improving the conditions for investments in power plants and transmission networks,
which in turn will help avoid interruptions in power or gas supplies. It also has the
capacity to help us in tackling climate change.
Getting to this point will be hard work. I understand the resistance in some quarters
to our proposals. Moving to a more competitive market is always a challenge,
particularly in a complex and strategic sector like energy. But – not least in Loyola's
memory! – the Commission will not shrink from its duty to push this issue forward.
But Loyola, I know, would also have recognised that in creating a genuine single
European energy market, we cannot simply stand by and watch third country
companies come in and rebundle what we have unbundled. The hard-earned
rewards of this progress, which I have just outlined, are simply too important.
So the proposals also include a challenge to our partners around the world: you are
welcome to enter our market, as long as you play by the same rules as our
companies and as long as you play by the same rules in your own market.
In other words, we will protect our newly liberalised market. It is not protectionist to
protect competition!
Looking to the immediate future, the Commission will complete its legislative
proposals to implement our energy and climate change package this December.
Drawing on extensive consultation, the Commission will put forward a revised
emissions trading scheme, propose a new Directive on the promotion of renewable
energy and outline how each Member State should achieve the greenhouse gas
reduction targets that were endorsed in March. As transport continues to be a major
contributor to C02 emissions, the Commission will also present legislative proposals
to cut these emissions in the automobile sector.
Ladies and gentlemen,
As the birthplace of both the First and Second Industrial Revolutions, Europe took
spectacular leaps forward in progress and prosperity that left the rest of the world
struggling to keep up.
By creating the right conditions for an open and competitive energy market, by
investing in research and innovation in green technologies, I believe that Europe is
poised to do the same thing again.
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I would like to finish by underlying again the role and contribution of Loyola de
Palacio to the work that we – myself and my colleagues Neelie Kroes and Andris
Piebalgs – have just presented to you. This contribution is recognised today by the
creation, at the European University Institute, of a Chair on Energy named after
Loyola de Palacio.
This chair pays tribute to her dedication as Commission Vice-President for Energy
and Transport, and will promote research in a domain where, as we have seen
today, Europeans will have to make strategic choices and where the economy,
security, technological innovation and regulatory policies are all linked.
Finally, Loyola was undoubtedly a convinced and fervent pro-European. Indeed, she
worked for Europe right until the end: in her very last days, she was chairing the
group of experts on the external dimension of the trans-European networks, and we
will miss her immense contribution to that.
But there are two specific tributes which we pay to her memory today.
The first is small but deeply personal: Loyola was finalising a Compact Disc of
European music before she died. The Commission has now finalised the editing of
that and you have all I hope received a copy of that.
The second tribute is enormous and professional: the way Europe and the
Commission are now put "Energy" at the centre stage of the European integration
project. This is, I am convinced, the best way to honour Loyola's legacy.
Thank you.
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