European energy masterplan unveiled

The European Commission has officially unveiled its much-anticipated (and much-leaked) energy package, containing cross-continental proposals on how to reach the targets agreed last year. The headline figures are to cut CO2 emissions by at least 20% by 2020 (rising to 30% if global targets can be agreed), and to source 20% of energy supply from renewable generation.

The primary mechanism is the extension of the EU Emissions Trading System (ETS). The first phase of this programme was a less than spectacular success, with too many permits doled out by compliant national governments to favoured power generators. The extended scheme, beginning in 2013, will include full auctioning of permits to the power sector which (economists say) will help maintain a realistic price and thus achieve genuine emission reductions. Auctions will be phased in for other sectors including refineries and aviation.

Revenues from the permit auctions will partly go towards supporting innovation in renewables, carbon capture and storage, and other relevant R&D, managed and distributed on a national basis. As pan-European revenues from the ETS are projected to reach up to Euro50bn a year, this clearly has the potential to give the European cleantech industry a huge funding boost.

The ETS will also be extended to cover greenhouse gases other than CO2 and involve all major industrial emitters. Year-on-year reductions will aim to reduce total emissions under the scheme by 21% from 2005 levels.

Net emission reductions of 10% are meanwhile mandated for industries not covered by the ETS, including buildings, transport, agriculture and waste. National targets vary, depending on the state of economic development, with rich countries facing tougher targets - the UK has a legally binding 16% target while Poland, for instance, is allowed an increase of up to 14% in non-ETS emissions.

The binding target for the share of renewables in energy supply also varies depending on national circumstance - the UK has a 15% target, while Sweden aims for 49%. Trading between nations is allowed - and nuclear doesn't count.

Controversially, the overall renewables target also includes a 10% biofuels target in each member state. The UK Environmental Audit Committee this week called for a moratorium on increasing the biofuel allocation until robust sustainability standards can be put in place. Most crop-based biofuels will have a tough time proving their sustainable credentials - cellulosic and algal fuels have a much stronger case, but are as yet some way from commercialisation.

Another potentially valuable step is that state aid for renewable power generation schemes will now be allowed, so long as it just covers the difference between production costs and market prices. That should help any national government which wants to boost its renewables industry.

It's a decent enough set of proposals, offering plenty of opportunities for cleantech companies. It's questionable whether the targets are tough enough - the stated aim is to cap the mean global temperature increase at 2°C. According to the latest science, that's probably rather naive. But the main thing now is to get the international mechanisms in place, and to develop the cleantech industries, that will allow further necessary reductions to be achieved.

Clean Ventures.

Five Questions for Al Franken

Comedian, satirist, and former talk show host Al Franken is running for U.S. Senate in Minnesota on the DFL ticket (in MN, the Democratic Party is called the "DFL").

Last month, Franken made an appearance at the Crow Wing County/Morrison County DFL summer picnic. I grew up in Morrison County, so I attended and was impressed with the (relatively) huge turnout. I met Al, but more importantly he took the time to answer some questions I sent him via email about renewable energy and Minnesota’s role in the clean tech revolution.

Maria Energia: What specific renewable energy legislation do you want to see implemented at the federal level?

Al Franken: On a macro level, I'd like to implement a national cap and trade for carbon dioxide. This would make the cleanest renewables cheaper than fossil fuels and reward sequestration of CO2 in the form of planting acreage.

I'd like to see more federal investment in pilot projects for renewables. Representative Collin Peterson has put in several pilot projects for cellulosic ethanol that would be conducted here in Minnesota.

When I have said I want an Apollo Program for renewable energy, I'm talking about making these kinds of investments in renewables, including things like tidal and wave power. The United States has to go back to investing in research and development. This means identifying promising technologies and investing in them.

Maria: How would you open up Minnesota's markets for renewable energy investment?

Franken: I would refer you to my previous answer.

Maria: What is Minnesota's biggest renewable energy advantage (i.e. what can we capitalize on in a clean energy revolution)?

Franken: First of all, we grow a lot of corn, the number one feedstock for ethanol. We also grow a lot of soy, which is the number one feedstock for biodiesel. So, obviously, we have had years of experience making both, and our state universities have been doing a lot of the research.

Wind is cleaner, and Minnesota is a very windy state. We’re ninth in the nation. We should really be exploiting that more. Also, I think we should reinvigorate our manufacturing base by building wind turbines in Minnesota. So many of the turbines - the mechanisms that turn the spinning blades into electricity - are made in Europe. Let's make them here.

Cellulosic is only a few years away and we have prairie grasses, which are perennials and have very deep root systems, making them potentially a very sustainable feedstock.

Right now gasified biomass is being used as fuel in ethanol plants. We got a lot of biomass in many forms; for example, forests, especially in the northeastern part of the state, where we don't have wind. As cellulosic technology develops, there is great potential in using our forests, managed in a sustainable way, to add to our arsenal of renewable energy sources.

Maria: What is the role of business, government, and consumers in a clean energy future?

Franken: The government has to find ways of encouraging businesses to make clean energy available and attractive to consumers. Government should take the lead in making green buildings, working in partnership with companies that develop green technologies, and by investing in energy-efficient transportation systems - light rail, commuter rail, etc.

Obviously, tax incentives should encourage businesses to develop technologies and consumers to buy energy-efficient products. This is one of those things where everybody has to work together because it's in everybody's interest.

Maria: What steps have you personally taken to fight global warming or make your life more energy efficient?

Franken: Right now I’m traveling from Duluth to Minneapolis in a hybrid vehicle - my family Ford Escape. I bike to work, when I can. Biking, as Jim Oberstar might say, converts a hydrocarbon economy into a carbohydrate economy. Of course, we recycle.

But the biggest thing I'm doing is running for the Senate, so that when I get to Washington, I can make sure that the things I wrote about in the first four answers can come to fruition.

Crossposted at Maria Energia