In December 2018 the Regulation on the governance of the energy union and climate action entered into force. This Regulation asks Member States to draw up an energy and climate plan (NECP) for achieving their national climate targets among other things. At the end of the year the final plan will have to be submitted to the European Commission. This article provides an overview of the most important measures.


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 What is the Governance of the Energy Union?

This Regulation is the overarching instrument on the basis of which the European Union aims to achieve its energy and climate targets for 2030. It lies at the basis of the national energy and climate plans (NECP), for which each Member State has to draw up a first draft by the end of 2018. Given the importance of a long-term vision, the new regulation stipulates that the plans must be cover a 10 year period. The energy union consists of five dimensions: security of supply; the internal energy market, energy efficiency, decarbonization and research, innovation and competitiveness.  These needs to be reflected in the plans. To reach the overall target of 32% renewable energy by 2030, the Regulation stipulates that the European Union EU needs to reach 18% of the target by 2022, 43% by 2025 and 65% by 2027. It was also agreed to set 3 reference years for energy efficiency: 2022, 2025 and 2027. The Regulation amends a number of existing Directives and replaces the Regulation on the monitoring and reporting mechanism for greenhouse gas emissions and other relevant climate information from 2013. In addition, the Regulation provides for reporting under the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Convention. 

Why this regulation?

This Regulation was created to meet the need for a reliable and transparent governance and long-term planning. It was therefore decided to introduce 10-year plans. The Regulation should contribute to an improvement of the implementation of the Energy Union. This should provide a more stable investment climate and thus more certainty for investors. It also intends to encourage cooperation between Member States and to reduce administrative burdens. Finally, the Regulation should ensure a more consistent reporting to the European Union. 

Implementation by the European Commission

The European Commission has to deliver a number of products on the basis of the Regulation, which can be divided as requirements on the Energy Union report, a long-term strategy, the inventory of greenhouse gas emissions and a number of supporting analyses. Below is an overview per product:

 Energy Union report
In order to monitor the implementation of the Energy Union, the European Commission is asked to publish an annual State of the Energy Union report and an Energy Union progress report every two years. A Union progress report on reductions of greenhouse gas emissions must be drawn up every two years as well. Finally, a progress report on 2030 climate and energy objectives from the European Commission to the European Parliament and the European Council is expected six months before the global stocktaking of the progress of the implementation of the Paris Agreement of the UNFCCC (art. 14).

 Long term strategy
In April 2019, the European Commission had to deliver a long-term strategy to reduce greenhouse gas emissions. Approval of this strategy is scheduled for the fourth quarter of 2019. The strategy examines different scenarios for achieving the climate targets for reducing greenhouse gases in line with the UNFCCC's Paris Agreement. This concerns both the 2050 target of an 80-95% reduction in greenhouse gas emissions and the UNFCCC target of limiting the global temperature increase to 1.5°C and 2°C max. The strategy should also include a long-term strategy for methane emissions. Finally, the European Commission should carry out an evaluation of the national long-term strategies to see whether they are sufficient to achieve the objectives.

 For more information on the state of play of the European long-term strategy, click here.

 Greenhouse gas inventories for the Union
The Kyoto Agreement and the Paris Agreement of the UNFCCC require annual reporting of greenhouse gas emissions. The Regulation on the Governance of the Energy Union asks the European Commission to set up a national inventory system for these emissions by January 1st, 2021. This should lead to proposals for the improvement of these inventory systems. In addition, the European Commission must evaluate the data from the national inventories by 2027 and 2032.

 Supporting analyses
The Regulation on the Governance of the Energy Union also asks the European Commission to carry out a number of specific analyses. For example, an analysis of the non-CO2 effects of aviation is expected by January 1st, 2020. This should include a proposal on how best to deal with the effects. In addition, the European Commission must set up a Renewable energy financing system by January 1st, 2021.

 For an overview of the requested reports, click here (NL) or here (FR) for the Agoria Climate Calendar.

 Implementation in Belgium

For each Member State, the Regulation on the Governance of the Energy Union also specifies a number of obligations concerning the preparation of a National Energy and Climate Plan (NECP), the results achieved in the 2020 climate objectives, a long-term strategy, the amount of national greenhouse gas emissions and a number of specific reports. In Belgium, implementation is both a regional and a federal responsibility depending on the subject matter. In practice this means, for example for the Energy and Climate Plan (NECP), that each region and the federal government draw up their own plan, which is then integrated into a national energy and climate plan (NECP) for Belgium. Below a brief description of the various products requested:

National Energy and Climate Plan (NECP)
Each Member State is asked to draw up a plan for achieving the climate objectives for a period of 10 years. This plan replaces the National Energy Efficiency Action Plan (NEEAP) of the Energy Efficiency Directive (EED) via article 54 and the National Renewable Energy Action Plans (NREAPs) via the revised Renewable Energy Directive (RES) of 2018. In addition, the long-term renovation strategy as specified in the Energy Performance of Buildings Directive (EPBD) of 2018 will have to be added to the NECP (art. 53). This plan is based on a number of dimensions: decarbonization (incl.  renewable energy), energy efficiency, energy security, internal energy market and research, innovation and competitiveness.

For each NECP a draft has to be made first. The European Commission then provides feedback on this draft within six months, after which a final version will have to be submitted before the end of the same year. In 2023 a member state must submit a draft update of the NECP to the European Commission, unless it can provide good arguments as to why this is not necessary. The final version of this update must then be submitted one year later. Finally, by March 2023, Member States should prepare an integrated climate and energy progress report in which they report on progress in the five dimensions of the NECP. This process is repeated every 10 years, with the exception that the (draft) update of the NECP must be delivered in January instead of June. Concerning the integrated climate and energy progress report there seems to be an inconsistency in regulation due to which it is unclear for example whether a progress report is due on the NECP of 2021-2030 as soon as the NECP of 2031-2040 is drafted. This will need to be reviewed by the European Commission (therefore this report has been indicated in figure 1 as to be confirmed (TBC)).

 

Figure 1: Example of the reporting cycle for the National Energy and Climate Plan (NECP) (source: Agoria)

Reporting around 2020 targets
Member States should provide information by 30 April 2022 on the extent to which they have met the 2020 climate targets in terms of energy efficiency and renewable energy. The European Commission will make an analysis of this data by 2023.

 Long term strategy
Member States are asked to draw up a long-term strategy with a perspective of at least 30 years. This should include information on greenhouse gas emissions, energy efficiency, renewable energy and sector specific information on the energy system, industry, transport, agriculture and land use (LULUCF). The first version should be delivered on January 1st, 2020. It has to be updated every five years. A second version must then be delivered in 2029, after which the process repeats itself every 10 years.

Reporting of greenhouse gas emissions
Member States and the European Union must submit an inventory of their greenhouse gas emissions to the UNFCCC by April 15th of each year. The requirements of the Regulation are consistent with this requirement; from 2021 onwards, a report on the approximated emissions will have to be submitted annually as well as a report on the provisional and final emissions from 2023 onwards. In addition, the preliminary and final inventories for Land Use, Land Use Change and Forestry (LULUCF) emissions must be reported in 2027 and 2032. Finally, from 2021 onwards, a comprehensive report on greenhouse gas emission policies and projections will have to be drawn up every two years. This report shall include a description of how greenhouse gas emissions are to be reported within the Member States.

Specific reports
Finally, a number of specific reports are requested from the Member States. For example, from March 15th, 2021 onwards, reports will have to be submitted every two years on the actions taken on climate adaptation. Climate adaptation focuses on those measures aimed at mitigating the effects of climate change. As of September 30th, 2021, an annual report should be drawn up on the financial and technological support provided to developing countries. From July 31st, 2021, an annual report on the safety of emission rights must be submitted. Finally, from March 15th, 2021, an annual report must be drawn up on the oil supply and the environmental impact of oil and gas-related activities. The latter requirements originate from Directives 2009/119/EU and 2013/30/EU.

Click here (NL) or here (FR) for an overview of the climate reports submitted by Belgium. For an overview of the requested reports per year, click here (NL) or here (FR) for Agoria's Climate Calendar.

 Setting of climate targets

A number of objectives have been set at European level concerning the reduction of greenhouse gas emissions, renewable energy, energy efficiency and the interconnection of electricity. For renewable energy, this is a binding target with a distribution among the Member States. This distribution is determined by the formula in Annex II of the Regulation on the Governance of the Energy Union. For Belgium, this equates to 25% in 2030. The targets for greenhouse gas emission reductions are laid down in a separate regulation (EU) 2018/842 , also known as the Effort Sharing Regulation (ESR). For Belgium, this target represents a reduction of 20% by 2020 and 35% by 2030. In Belgium, these objectives are further subdivided by region.

 For an overview of all the targets set for 2020, 2030 and 2050, click here (NL) or here (FR) for Agoria's Climate Calendar.

 Scenarios if reports are not in order

The Regulation calls on the European Commission to carry out regular reviews of the progress of the Energy Union and specifically of the Member States objectives. If a Member States do not make sufficient progress in their National Energy and Climate Plan (NECP) or in achieving the climate objectives, the Regulation states that the European Commission may take measures at Union level or exercise its powers at European level to ensure that these objectives and targets are achieved jointly (art. 33 and 34 of the Regulation on the Governance of the Energy Union).

New Committees & e-platform

The Regulation establishes two new committees and an e-platform (art. 44 and 28). Both committees are composed of experts from Member States. Below is a brief overview of their activities.

Climate Change Committee
This committee provides support for the development of implementing acts, which may be required under the activities of the Regulation. The Regulation specifically mentions support in the reports on climate adaptation, financial and technical support to developing countries and auctioning revenues. In addition, the committee can provide support to the design of the reporting of greenhouse gas emissions in line with the Paris Agreement, the evaluation of the national inventory systems and the implementation of an evaluation of the greenhouse gas emission inventories by the European Commission.

Energy Union Committee
This committee provides support in the development of implementing acts around the progress reports on the National Energy and Climate Plan (NECP) and the setting up of a European financing mechanism for renewable energy.

 E-platform
In order to reduce the administrative burden on Member States and stimulate cooperation, the European Commission intends to set up an e-platform. It is intended that this platform will be based on the platforms and tools that already exist at the European Environment Agency (EEA), Eurostat, the Joint Research Centre and experience gained in the Eco-Management and Audit Schemes. 

Next steps

At the end of 2018, Belgium had already submitted a first draft of the National Energy and Climate Plan (NECP).   The European Commission published its feedback and recommendations on this draft in June 2019. The regions and the federal government are now working on the final version of the plan, which will then be merged into a final Belgian energy and climate plan by the National Climate Commission in the fourth quarter of this year. This is followed by a biennial update and evaluation of which the first will have to be delivered in 2023.

For a complete overview of all commitments per year, see Agoria's Climate Calendar here (NL) or here (FR).

 Relevant links