EUROPEAN COMMISSION

Brussels, 23.11.2017

COM(2017) 688 final

COMMUNICATION FROM THE COMMISSION

Third Report on the State of the Energy Union

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I.    INTRODUCTION

Europe's transition to a low-carbon society is becoming the new reality on the ground. The Energy Union, one of the ten priorities of this Commission, is creating new jobs, growth and opportunities for investment. Last year's Clean Energy Package for All Europeans 1 and the proposals on low-emission mobility presented in November 2017 were major milestones in this process 2 . Less than three years since the publication of the Energy Union Framework Strategy 3 , the Commission has presented nearly all the proposals needed to deliver on the energy efficiency first principle, support EU global leadership in climate action and renewable energy and provide a fair deal for energy consumers.

This third State of the Energy Union tracks the progress made over the past year and looks forward to the year ahead. Now is the time to mobilise all of society - citizens, cities, rural areas, companies, academia, social partners - to take full ownership of the Energy Union, take it forward and engage in developing the solutions of the future.

The Commission welcomes the strong commitment of the European Parliament and the Council to adopt, as a priority, the legislative initiatives on energy and climate proposed in 2015 and 2016, in line with the Joint Declaration of the three Presidents 4 . The Commission calls on the co-legislators to retain a high level of ambition and coherence between the different proposals.

In the meantime, it is important to continue rapidly delivering a number of enabling measures 5 , to ensure that the transition to a low carbon economy fully contributes to the modernisation of Europe's economy. This will also help Member States to comply with the jointly agreed 2020 and 2030 energy and climate targets and with the wider Energy Union objectives.

Completing the Energy Union requires close cooperation between the Commission, Member States and all segments of society. It is a process of co-creation in which the timely submission by Member States of draft integrated national energy and climate plans for the post-2020 period is a key milestone. Most Member States have started to prepare their national plans, but they all need to make substantial efforts to finalise the draft plans by early 2018. 6 Early submission is crucial to generate investor confidence and certainty for the period after 2020. Having the draft plans by early 2018 is also essential to demonstrate the Union's strong leadership on the global stage.

Global changes in energy production and demand have a significant impact on geopolitics and industrial competitiveness. This poses serious challenges to Europe, but also creates unique opportunities. In this context, the EU wants to step up its role as a global leader in the clean energy transition while providing energy security to all its citizens. Therefore, its ambition to complete and deliver the Energy Union remains high. The work is by no means finished. Showing ambition on issues such as renewables, energy efficiency, climate action and clean energy innovation and ensuring the right price signals in the market, is a precondition to attract investments in modernising the entire economy.

We must therefore accelerate our cooperative efforts and deliver on our commitment to complete the Energy Union by the end of the current Commission mandate. By 2019, the Energy Union must no longer be a policy. It must be a reality.

II.    TRENDS AND POLICY OBSERVATIONS

Europe is moving from a fossil fuels-based energy system to a low-carbon and fully digital and consumer centric one. The main trends observed in recent years have continued and even been strengthened in some areas 7 .

The share of renewable energy in the EU energy mix continues to rise and is on track to reach the 20% target in 2020. In 2015, renewable energy accounted for most (77 %) of the new EU generating capacity for the eighth consecutive year. 8 The cost of renewables is falling, for instance for solar (photovoltaic) 9 as well as onshore and off-shore wind. This is a sign of investors' confidence in technological progress, good policy design and electricity market reforms. 10 In the past, investments in renewables have been negatively affected when Member States applied retro-active measures. In terms of security of supply, renewables have saved an estimated €16 billion in fossil fuel imports (2015 data) 11 .

Figure 1: Renewable energy shares in EU gross final energy consumption vs. Renewable Energy Directive and National Renewable Energy Action Plan trajectories

The decoupling of greenhouse gas emissions and Gross Domestic Product (GDP) has continued, mainly driven by innovation. 12 In 2016, the recovery of Europe's economy led to an increase in industrial and economic activities and an overall increase of 1.9% in GDP. This could have increased greenhouse gas emissions. But instead, emissions decreased by 0.7% overall and even faster (2.9%) in the sectors covered by the EU Emission Trading System. Overall, between 1990 and 2016, the EU’s combined GDP grew by 53%, while total emissions 13 decreased by 23% 14 . In the transport sector, however, greenhouse gas emissions continue to rise.

Figure 2: Changes in EU GDP (in real terms), EU greenhouse gas (GHG) emissions, and EU GHG emissions intensity of the economy (ratio between emissions and GDP) Index (1990 = 100)

Economic growth and energy consumption have also been decoupled. The steadily declining demand for energy in the EU is primarily due to energy efficiency measures in the Member States. Although energy consumption increased slightly in 2015 due to higher economic growth, lower oil and gas prices and a colder winter compared to an exceptionally warm 2014, the long-term downward trend is clear: in 2015, the EU consumed 2.5 % less primary energy than it did in 1990, while GDP grew by 53% over the same period. That said, the EU still needs to reduce its primary energy consumption by 3.1% between 2015 and 2020 to reach its energy efficiency target. 15  

Figure 3: Evolution of GDP and primary energy consumption in the EU 28. Source: Eurostat

The ongoing energy transition feeds into the modernisation of the European economy. For example, patenting activity in clean energy technologies in Europe is increasing. European companies are also increasingly seeking protection for their inventions internationally, proving a growing confidence of their competitiveness in the global energy technology market. The EU ranks second following Japan on international patents.

Figure 4: Trend of EU patents in clean energy technologies. Data source: European Commission/Joint Research Centre (based on data of the European Patent Office).  Data for years 2014, 2015 and 2016 are estimates.

Despite these positive trends, the clean energy transition may be hindered by unfair competition if Member States continue to provide fossil fuel subsidies. These come in many forms, such as direct subsidies to uneconomical coal mines 16 , capacity mechanisms for emission intensive power plants, tax relief for company cars or diesel fuel and similar measures. Fossil fuel subsidies also increase the risk of investing in stranded assets, which need to be replaced before the end of their lifetime. The integrated national energy and climate plans should help to better monitor and assess Member States' efforts to reduce fossil fuels subsidies. The next report on energy prices and costs in 2018 will provide updates on fossil fuel subsidies in the EU.

III.    ASSESSMENT OF PROGRESS

The energy transition should be socially fair, lead to innovation and be based on a future-proof infrastructure, while enhancing security of supply. The European Union's investment instruments and its foreign and development policies underpin Europe's energy transition. In all these areas, considerable progress was made in 2017.

A socially-fair energy transition

The transition to a low-carbon society affects many people, as consumers, workers, employees or energy market participants. While not everybody may benefit from the energy transition in the short term, it will, if carefully managed, ultimately benefit the entire EU economy, by creating new job opportunities, bringing savings on energy costs or improving air quality. Many of the enabling actions under the 'Clean Energy for all Europeans' package are meant to address the difficulties some regions or population groups have in reaping the benefits of the energy transition.

The transition to a low-carbon economy will create new jobs in the energy sector 17 and in the wider economy. This job potential requires new skills and competences. The Commission has therefore just published a call for proposals for Blueprints for Sectoral Cooperation on Skills to address skill needs on clean technologies, renewable energies and in the construction sector 18 . A similar framework for the automotive sector was launched last year To improve the understanding of skill gaps across countries and sectors, the European Centre for the Development of Vocational Training (Cedefop) is undertaking big data analysis based upon real-time interrogation of job vacancies and the first results will be available in 2018.

Energy poverty in the EU affects close to 50 million people. As part of the clean energy package, the Commission has proposed a range of measures to address energy poverty through energy efficiency, safeguards against disconnection and a better definition and monitoring of the issue at Member State level. By the end of 2017, the European Energy Poverty Observatory will publish statistics and reports on an interactive web portal. In the next phase, it will focus on the exchange of information and sharing of best practice among experts and policy makers. A pilot awareness-raising campaign has been launched and will be rolled out in four Member States (Czech Republic, Greece, Portugal, and Romania) in the course of the next year. The campaign focuses on increasing the awareness of energy-poor consumers of their rights and will provide consumers with energy-saving tips and information on low-cost energy efficiency improvements.

The energy transition has a positive impact on the health of many European citizens. Total emissions of pollutants like sulphur dioxides, nitrogen dioxides and particulate matter are decreasing in the EU but air pollution still leads to over 400,000 premature deaths every year. 19 By adopting the National Emissions Ceilings Directive in December 2016 20 , the EU aims to decrease by half the number of premature deaths caused by air pollution by 2030. The energy transition could further reduce toxic emissions and accelerate the improvement of quality of life in many European cities where citizens are confronted with air pollution every day 21 . Smart investments in cleaner transport and domestic heating will also support the economy by reducing health care costs and sickness days caused by respiratory diseases.

An energy transition that innovates

The Energy Union is a major driver of clean energy innovation in Europe and the rest of the world. European companies and innovators should be at the forefront of this movement and gain an early mover advantage for new technologies and business models. This is one of the key objectives of the Accelerating Clean Energy Innovation strategy 22 .

Europe is one of the most innovative regions worldwide, but more efforts are needed to bring these innovations to the market and turn them into growth and job opportunities.

As research and innovation take time, medium-term benefits on the ground depend on immediate preparatory action. Therefore, last year EU funding was scaled up. Cohesion policy supports innovation through smart specialisation (at least €2.6 billion will be targeted to research and innovation in low-carbon technologies 23 ), while Horizon 2020 will deploy over €2 billion in the period 2018-2020, focussing on four key energy and climate priorities: storage, renewables, buildings and (urban) e-mobility. Accounting for bottom-up activities, the total amount may even rise to €3 billion. 24 Furthermore, the budget of the InnovFin Energy Demonstration Projects facility, a financial instrument that supports first-of-a-kind projects on low-carbon energy technologies doubled to €300 million using Horizon 2020 funds and is now also able to channel the additional undisbursed revenues from the NER 300's first call  25 .

Batteries are a strategic part of the innovation priorities defined last November. With increasing performance and falling costs, batteries will be an essential enabling technology for reaching the Energy Union objectives, in particular through applications in electro-mobility and electricity storage. On the financing side, the Commission is ready to mobilise substantial support for batteries and battery cell technology. For this purpose, the Commission is working with the innovation ecosystem, Member States and industrial stakeholders along the full battery value chain to identify priorities and needs, to build an EU Battery Alliance with battery cell manufacturing at its core. The outcome will feed into the Clean Energy Industrial Competitiveness Forum to be held February 2018. This complements regulatory action to remove disincentives to energy storage and promote electro-mobility. Similar joined-up approaches are replicated in other priority areas, such as renewable energy and the decarbonising of Europe's building stock, leading to tangible industrial and economic benefits for Europe.

The Commission is also taking the lead at the global level. In February 2017, the Commission took over the chairmanship of the Mission Innovation Steering Committee from the United States, and took the lead on two innovation challenges: 'Converting sunlight into storable solar fuels' and 'Affordable Heating and Cooling'. As co-organiser of the Mission Innovation summit in May 2018 and the Clean Energy Ministerial the Commission is aiming to give considerable space to non-state stakeholders including businesses, innovators, private investors and cities. This could be done in close cooperation with the Global Covenant of Mayors 31 , which became operational in 2017. At the same time, the European Union is working in partnership with China and Canada to drive clean energy innovation worldwide.

The Commission also remains, on behalf of Euratom, the leading party in the international innovative ITER Project for the development of fusion as a commercially viable energy source 32 .

An energy transition that requires future-proof infrastructure

There will be no energy transition if the infrastructure is not adapted to the needs of the future energy system. Energy, transport and telecommunication infrastructure are more and more interlinked. This trans-sectorial integration will continue, with local networks becoming ever more important in the daily lives of European citizens, who will increasingly switch to electro-mobility, decentralised energy production and demand response. To bring about the next generation of smart infrastructure and optimise the use of existing infrastructure, the Commission encourages project promoters applying for financial support to seek to create synergies between energy, transport and telecommunication infrastructure. The Commission will evaluate how to continue to promote such innovative infrastructure projects in the period post 2020.

The increasing digitalisation of infrastructure already enables smart management of the grid and demand response. The Clean Energy for All Europeans package laid out a coherent framework for demand response that enables smart charging of electric vehicles, gives consumers incentives to charge at times of low electricity prices and empowers distribution system operators to actively manage the grid 33 . The Alternative Fuels Infrastructure Directive resulted in national policy frameworks and supporting actions that the Commission has assessed in detail. To address the shortcomings identified, the Commission proposed, earlier this month, additional actions, including financing of up to €800 million for alternative fuels infrastructure. 34

In the digital age, better protecting our energy infrastructure is of crucial importance. The Energy Expert Cyber Security Platform identified the challenges and the specific needs of the energy sector not currently covered under EU legislation in its report published in February 2017 35 . The Commission has started work with stakeholders under the Smart Grids Task Force on a network code on energy-specific cyber security until the end of 2018. A study has been launched on the risks and prevention of cyber incidents in the energy sector.

At the same time, work to improve the internal energy market integration and security of supply continues. Regional cooperation, which was initially aimed at improving physical infrastructure and its efficient use, is expanding its scope, and covers aspects such as renewables development and energy efficiency. It could further evolve towards joint renewables projects between Member States and respective project promoters or even towards joint longer-term renewables deployment strategies on regional scale.

Nevertheless, despite considerable achievements, it should be stressed that important bottlenecks remain. Four Member States (Cyprus, Poland, Spain and the UK) are expected to remain below the 10% electricity interconnection target in 2020 36 . To address this, the Commission today adopted a Communication on the 2030 electricity interconnection target. It also adopted the 3rd list of Projects of Common Interest. The list includes the key projects needed to reach the objectives of an interconnected internal energy market, in particular those agreed by the four High Level Groups, such as the interconnectors to link the Iberian Peninsula to France and the rest of the EU ensuring the development of renewables, projects in view of the Baltic synchronisation with the European networks, gas projects bringing security of supply and competition to Central/South-Eastern Europe as well as the first projects in view of an integrated North Seas grid.

Beyond physical instrastructure, an interconnected and securly operated energy market also requires better coordination between transmission system operators (TSOs) and ending the prioritisation of internal over cross-zonal exchanges. To provide full flexibility in gas supply, a more efficient use of gas storage facilities and the development of a genuine global liquefied natural gas market will equally be of paramount importance 38 .

The energy transition as an investment opportunity

Completing the Energy Union and speeding up the energy transition bring huge investment opportunities. Therefore, one of the main priorities of the Energy Union in 2017 was to unlock investments. The European Union contributed to this in several ways.

The European Investment Plan has triggered €240.9 billion worth of investment so far through the European Fund for Strategic Investments (EFSI), with the energy sector being the first in terms of the number of approved EFSI operations. The majority of the supported projects are investments in renewable energy, energy efficiency and energy infrastructure 39 .

Member States have also accelerated the use of European Structural and Investment Funds in support of the energy transition: there has been a sharp increase in the selection of projects on the ground in the first half of 2017. Under the low-carbon economy investment priority, about 28% (or €18 billion 40 ) of the budget has been allocated to more than 8,500 concrete projects by the end of June 2017 (compared to 19% by end-2016 41 ) with implementation going on until the end of 2023. 42 . In the transport sector, the Connecting Europe Facility (CEF) for Transport will have committed €22.4 billion by the end of 2017, mobilising about €46.7 billion of overall investments in the EU.

Last year, the Commission also announced the Smart Finance for Smart Buildings Initiative to boost investment in the energy renovation of Europe's building stock 43 . The initiative, being developed in cooperation with the European Investment Bank, will allow Member States to combine different sources of public and private funding in order to provide households and SMEs access to tailor-made refurbishment loans.

Given the huge investment needs in building renovation, private sources of funding have to be mobilised on a much greater scale. To build trust and help project developers and investors better assess the risks and benefits of energy efficiency investments, the De-risking Energy Efficiency Platform (DEEP) was launched in November 2016 by the Energy Efficiency Financial Institutions Group (EEFIG), with the support of the European Commission. 44 It is the largest EU-wide open-source database containing data of over 7,800 projects, showing that energy efficiency is financially attractive. Furthermore, an Underwriting Toolkit for financial institutions was launched in June 2017 to help banks and investors scale up their deployment of capital into energy efficiency by providing a framework for assessing the risks and benefits of such investments 45 .

Another initiative to be launched this year is an advisory platform for urban investments. This platform, under development by the Commission in partnership with the European Investment Bank, will build on already existing structures under the European Investment Advisory Hub. It provides urban authorities acting as project promoters and/or beneficiaries with tailor-made advisory services and financing possibilities.

It should also be recalled that, as part of the revision of the European Union Emissions Trading System for the period after 2020, the Commission proposed an Innovation Fund to support innovation in the power sector and industry. In 2017, the Commission launched a series of sector-specific expert roundtables to appropriately scope this fund. 46 The proposal also includes creating a Modernisation Fund to support lower-income Member States to modernise their energy systems.

Despite all these efforts, more could be done to bring about an investment-friendly environment. Uncoordinated and unpredictable national energy and climate policies reduce investment certainty. Until very recently, only some Member States had climate and energy plans and strategies going beyond 2020. None had a comprehensive plan across the five dimensions of the Energy Union, and only a limited number of governments considered cross-border impacts when defining national policies. Integrated national energy and climate plans will allow to potential investors to take the necessary long-term investment decisions for the post-2020 timeframe 47 .

To meet the investment challenge associated with the energy transition, funding has to be aligned with energy and climate policy goals. Sustainable investment has become one of the new priority actions of the Capital Markets Union. An important initiative was taken in June 2017 with the publication of guidelines to help companies disclose environmental and social information. The Commission launched the High-Level Expert Group on Sustainable Finance to advise it on how to ensure that sustainability is taken into consideration in EU financial regulation and markets practices. The group's recommendations will be delivered in early 2018 48 . Meanwhile, leadership in this domain continues to come from Europe, notably with France issuing the first ever sovereign benchmark green bond (of a record €7 billion) in January. The EIB continues to be the world’s largest issuer of green bonds with an ever-increasing portfolio.

An important decision to facilitate investments in the energy performance of buildings was made in September. A recent Eurostat Guidance on the recording of energy performance contracts in government accounts 49 clarifies the statistical recording of such contracts, including the circumstances in which these contracts are to be recorded off government balance sheets. This will make it easier for municipalities to use energy performance contracts to make public buildings such as hospitals, schools or social housing more energy efficient without a negative impact on public deficit and debt. It will also facilitate the development of a stronger market of energy performance contract providers, including many small and medium-sized companies. A practical guide for practitioners will be issued later in the year.

The external dimension of the energy transition

EU external and development policies are essential to support the clean energy and low-carbon transition globally and to strengthen the EU's energy security and competitiveness.

In 2017, the EU reinforced synergies between its climate and energy diplomacies. In response to the intention of the US Administration to withdraw from the Paris Agreement, the EU reaffirmed its commitment to the global fight against climate change and is strengthening its existing global partnerships. The EU will continue to seek new alliances, from the world's largest economies to the most vulnerable island states. The EU has significantly increased climate finance during last year and provided more than €20 billion to developing countries in 2016 50 .

The EU fully supported the G20 Hamburg Climate and Energy Action Plan for Growth and strengthened cooperation with a number of key partners, in particular in Asia. The EU signed an Energy Work plan with China and a Memorandum of Cooperation with Japan to promote a global market for liquefied natural gas. Strengthening ties with India continued with the EU-India Leaders' Statement on Energy and Climate endorsed on 6 October 2017. The EU also stepped up energy and climate relations with Iran and held the first ever EU-Iran Business Forum on Sustainable Energy.

The EU has been promoting the adoption of an ambitious Greenhouse Gas Emission Reduction Strategy in the International Maritime Organisation to ensure that the international shipping sector contributes to joint global efforts to achieve the goals of the Paris Agreement and continued its work within the International Civil Aviation Organisation to reduce greenhouse gas emissions from aviation.

The emergence of a global carbon market, notably by linking emissions trading systems, is a longstanding goal of the EU. Such a market offers opportunities for further emission reductions while reducing further the cost of climate change mitigation. Proposals for signing and concluding an agreement with Switzerland on linking emissions trading systems are now with Council and the European Parliament. In other parts of the world the EU continues to play an active role as well, both through multilateral initiatives 51 and bilateral activities, in particular by stepping up cooperation with China, which is preparing a nationwide system.

Energy is a major focus of EU co-operation with its neighbours. The priority is on regulatory and market reforms, promoting energy efficiency and the use of renewable energies, building interconnections, fostering security of energy supply, and promoting the highest standards of nuclear safety. In 2017, Ukraine made significant progress on regulatory reforms. It has reformed its policy framework for the electricity market and for energy efficiency. Furthermore, it is setting up a sizeable fund to finance energy efficiency in the residential sector, with financial support from the EU, among others.

The EU also continues to ensure that energy is properly addressed in ongoing and future trade negotiations with third countries. This is crucial to ensure sustainable access to energy on global markets, to enable European companies to take full benefit from business opportunities on export markets and to support the energy transition in third countries through EU knowshow and technology.

The Africa-EU Energy Partnership provides an important framework for sustainable energy co-operation. The EU is also supportive of the African Renewable Energy Initiative 52 . The Commission contributes to the targets and objectives of this initiative, in particular through its blending instruments which use grant funding to unlock public or private sector investment in the renewable energy sector. So far, this has leveraged an estimated total of €4.8 billion for additional renewable energy generation capacity. The Commission also offers direct support to the private sector through the ElectriFI initiative, whose current investment portfolio of about €30 million is anticipated to result at this stage in approximately 88 MW of newly installed renewable energy. Finally, the Commission co-hosted a High Level Round Table on investments in sustainable energy in Africa in April 2017 to boost EU private sector involvement in the African clean energy sector. A Research and Innovation Partnership on Climate Change and Sustainable Energy is due to be endorsed during the November 2017 African Union-European Union Summit.

The EU also continued to strengthen energy security, working with international partners to reinforce global energy markets through transparency and exchange of best practices. In this context, the relationship with the United States remains important and continues to be pursued through the EU-US Energy Council and its working groups.

On 9 June 2017, the Commission adopted a Recommendation to the Council of the European Union to authorise the negotiation of an agreement with the Russian Federation on the operation of the planned Nord Stream 2 gas pipeline. The Commission is seeking an agreement in the Council on a strong mandate, on the basis of which the Commission stands ready to start negotiations with Russia.  The recent proposal for an amendment to the Gas Directive clarifies that pipelines to and from third countries are subject to the common rules for the internal market in natural gas up to the border of Union jurisdiction. International agreements with the third countries concerned will remain the most appropriate instrument to ensure that there is a coherent regulatory framework for the entire pipeline.

IV.    Energy Union – The road to completion

Thanks to progress in 2017, the EU is on track to implement the Energy Union project and deliver jobs, growth and investments. The Commission has tabled most of the legislative proposals necessary to provide a predictable regulatory framework, and enabling actions are being put in place to accelerate public and private investment and support a socially fair clean energy transition. However, further efforts are urgently required to ensure the completion of the Energy Union by the end of the current Commission's mandate in 2019. Therefore, there has to be real progress in adopting the legislative framework, implementing the enabling framework and securing the involvement of all parts of society.

Delivering the legislative framework

In line with the Joint Declaration on legislative priorities, discussions in and between the European Parliament and the Council need to come to a successful conclusion rapidly. The co-legislators have already adopted a Decision on information exchange on intergovernmental agreements between Member States and third countries in the field of energy 53 and a Regulation concerning measures to safeguard the security of gas supply 54 , ensuring better cross-border cooperation and more solidarity in case of crisis. This month, co-legislators also reached a political agreement on the review of the EU Emission Trading System. These examples illustrate the ability of the European Union and its institutions to deliver important achievements, when the political will is there.

The Commission encourages the co-legislators to maintain the overall coherence among the remaining legislative proposals and to keep the ambition high so that the EU consolidates its leadership role in the clean energy transition, in particular on governance, renewables, climate action, energy efficiency and clean energy innovation. This will enable the EU – as part of the 2018 Facilitative Dialogue – to make real progress on its commitments under the Paris Agreement and deliver on the high expectations of Europe's citizens for a clean energy transition.

Delivering the enabling framework

Promoting investment in innovative urban projects, within the overall context of the EU Urban Agenda, will be a priority in 2018. The Commission will work with pioneering cities and regions to support cross-sectoral, innovative projects that can serve as testbeds for new business models and applied technologies. Such innovative projects should be replicated across Europe and globally. The upcoming One Planet Summit in December 2017, the Third Ministerial Meeting of Mission Innovation in May 2018 and the San Francisco climate summit of non-State actors in September 2018 are good opportunities to showcase European leadership in clean energy innovation and the leading role Europe's cities play in it.

The Commission will also intensify its support for carbon-intensive regions in transition, helping them develop short-term solutions and longer-term strategies to drive sustainable economic transformation. This will be achieved by combining the work of the EU country teams for a larger number of Member States and the Multi-Stakeholder Platform on Coal and Carbon-Intensive Regions in Transition which will be set up in December 2017.

Another priority will be to ensure that the efforts by industry are consistent with efforts by policy-makers to support the clean energy transition in strategic sectors such as renewable energy, construction and batteries. The launch of the Clean Energy Industrial Competitiveness Forum will help to drive the process further.

Finally, the Commission will encourage investment into clean energy as a major aspect of economic modernisation in its various investment initiatives such as the Investment Envoys, the Structural Reform Support Service and the European Investment Advisory Hub.

Engagement of all parts of society

The Energy Union will only be successful if all segments of society come together and move in the same direction, as some pioneers have already shown 55 . In the 2nd Energy Union Tour, Vice-President Šefčovič has so far visited 17 Member States, discussing with governments and national stakeholders the state of implementation of the Energy Union. Meetings with young people, citizens affected by the energy transition, inventors, social partners and civil society, mayors and other politicians provide positive examples of how the energy transition is achievable in practice. The Commission will continue to secure the participation of all levels of society, young people in particular, and create stronger connections between European, national and local efforts. It will provide opportunities to launch a transparent and constructive dialogue among all concerned parties on the draft integrated national energy and climate plans which Member States are requested to deliver in early 2018. The Commission will carefully assess these draft plans and report back in its next report on the State of the Energy Union.

V.    CONCLUSION

The Energy Union project has reached a critical juncture. Like the past year, 2018 too should bring important deliverables. The Commission will therefore continue its efforts to implement the enabling actions that bring changes on the ground and tangible benefits to all Europeans. It calls on

·co-legislators to redouble their efforts to reach swift agreement on the legislative proposals. The Commission will do its utmost to facilitate an ambitious and timely outcome.

·the Member States to step up their work on their integrated national energy and climate plans to create predictability for investors and to submit draft plans in time to enable the EU and its Member States to continue demonstrating leadership as part of the 2018 global Facilitative Dialogue on climate. The Commission stands ready to provide further assistance.

·society as a whole and all European, national, regional or local stakeholders concerned to engage actively in the energy transition and contribute to its success.

(1)

See the Communication "Clean Energy Package for All European" (COM(2016) 860).

(2)

COM (2017) 283 of 31 May 2017 and COM(2017) 675 final

(3)

The Energy Union project is one of the ten political priorities of the current Commission: "A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy (COM(2015) 80).

(4)

  http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016C1224(01)&from=EN .

(5)

COM(2016) 860 and its 2 annexes

(6)

See Annex 3 to this Communication on the state of progress towards the national energy and climate plans.

(7)

See detailed Commission reports accompanying this Communication, more detailed policy observations for the five dimensions in Annex 2 to this Communication and the 28 country fact sheets accompanying this Communication, which outline the situation in each Member State, including for air quality. See also the accompanying European Environment Agency Report No 17/2017 Trends and projections in Europe 2017.

(8)

EEA Report No 3/2017: Renewable energy in Europe 2017, https://www.eea.europa.eu/publications/renewable-energy-in-europe-2017

(9)

See the accompanying document "Study on Residential Prosumers in the European Energy Union”, JUST/2015/CONS/FW/C006/0127, Figure 8 at p. 77.

(10)

Previous tender-based support schemes in the period 2010-2015 for offshore wind resulted in final prices between 103.2 EUR/MWh (Horns Rev III, Denmark) and 186.1 EUR/MWh (Dudgeon, United Kingdom). This continuously decreased and the latest competitive bidding process for offshore wind in Germany in April 2017 three winning projects placed a € 0 bid. For PV installations in Germany the support came down from 9.17 ct/kWh in April 2015 to 5.66 in June 2017.

(11)

 Renewable Energy Progress Report 2017, http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52017DC0057&qid=1488449105433&from=EN  

(12)

https://ec.europa.eu/clima/sites/clima/files/strategies/progress/docs/dca_report_en.pdf.

(13)

Excluding land use, land-use change and forestry (LULUCF) but including international aviation.

(14)

According to the approximated inventory for 2016. See "Two years after Paris, Progress towards meeting the EU's climate commitments" (COM(2017) 646 final)

(15)

Final energy consumption is the energy supplied to industry, transport, households, services and agriculture excluding deliveries to the energy transformation sector and the energy industries themselves. Primary energy consumption also includes the latter.

(16)

Member States are allowed to provide closure aid until 2018, to cover the current production losses in the context of the definitive closure of uncompetitive coal mines. Aid to cover exceptional costs in order to alleviate the social and environmental impact cannot expand later than 2027 (Council Decision 2010/787/EU of 10 December 2010 on State aid to facilitate the closure of uncompetitive coal mines).

(17)

While jobs related to the supply of carbon intensive energy sources in the EU decreased by 67.000 from 2008 to 2014, green jobs in the energy sector increased by over 400.000 during the same period (data from Eurostat).

(18)

 The Erasmus+ Sector Skills Alliance call for proposals was published on 25 October: https://eacea.ec.europa.eu/erasmus-plus/actions/key-action-2-cooperation-for-innovation-and-exchange-good-practices/sector-skills-alliances_en  

(19)

EEA report 'Air Quality in Europe - 2017', p. 17.

(20)

Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants, amending Directive 2003/35/EC and repealing Directive 2001/81/EC, OJ L 344, 17.12.2016, p. 1–31

(21)

See Commission Impact Assessment accompanying the proposal for the amended Energy Efficiency Directive, SWD(2016) 405 final, p. 59

(22)

COM (2016) 763 final

(23)

The Commission has established five interregional partnerships for energy innovation (on bioenergy, marine renewable energy, smart grids, solar energy and sustainable buildings); COM(2017)376.

(24)

This includes €15 million for two innovation prizes, on artificial photosynthesis and on batteries.

(25)

NER 300 is a funding programme for innovative low-carbon energy demonstration projects. It is funded from the sale of 300 million emission allowances from the New Entrants' Reserve (NER) set up for the third phase of the EU emissions trading system. EUR 2.1 billion has been allocated to innovative renewable energy projects and CCS projects in 20 Member States. Five projects have not materialized, and related undisbursed revenues are being provided back to market via InnovFin EDP and CEF Debt Instrument.

(26)

  http://www.uia-initiative.eu/en/uia-cities  

(27)

  http://www.covenantofmayors.eu/index_en.html ; see also the accompanying Report Covenant of Mayors in figures: 8-year assessment, JRC 2017

(28)

  https://ec.europa.eu/futurium/en/urban-agenda  

(29)

http://beta.eu-smartcities.com/sites/default/files/2017-09/EIP_Mgnt_Framework.pdf  

(30)

  http://beta.eu-smartcities.com/sites/default/files/2017-09/ShC-EIP%20Humble%20Lamppost%20Mgmt%20F%27rwork%20-%20Component%20Design.pdf  

(31)

  http://www.globalcovenantofmayors.org/ .

(32)

Commission communication on EU contribution to a reformed ITER project (COM(2017) 319 of 14 June 2017).

(33)

In the proposal for a Directive on common rules for the internal market in electricity (recast) (COM (2016) 864 final of 30.11.2016)

(34)

COM(2017) 652 final

(35)

  https://ec.europa.eu/energy/sites/ener/files/documents/eecsp_report_final.pdf  

(36)

Of the eleven Member States below the 10% target in 2017 (Bulgaria, Cyprus, Germany, France, Ireland, Italy, Poland, Portugal, Romania, Spain and the United Kingdom), seven – Romania, Germany, France, Italy, Bulgaria, Portugal and Ireland – are currently implementing projects of common interest that should allow them to reach the 10% target by 2020.

(37)

  https://publications.europa.eu/en/publication-detail/-/publication/8d3b7da2-562e-11e7-a5ca-01aa75ed71a1/language-en/format-PDF/source-31392329  

(38)

See also the strategy proposed by the Commission in 2016 (COM(2016)49).

(39)

Source: EIB-European Commission data as of October 2017.

(40)

Includes the EU support and national co-financing.

(41)

Some of the results by end of 2016 include decisions on over 1,000 MW of additional renewable energy capacity and 130,000 households with improved energy consumption classification.

(42)

To ensure transparency, the Commission publishes updated data on European Structural and Investment Funds, available at: https://cohesiondata.ec.europa.eu/ , including annual reports on progress towards the agreed indicator target values. Further data on implementation for the different areas will be provided in December 2017 with the first European Structural and Investment Funds Strategic report.

(43)

Buildings represent around 40% of final energy consumption and 3 in 4 buildings standing today are inefficient.

(44)

https://deep.eefig.eu/  

(45)

https://valueandrisk.eefig.eu/

(46)

COM(2015) 337.

(47)

A summary indicating the state of play for each Member State in preparing their draft integrated national energy and climate plan is annexed to this report.

(48)

High-Level Expert Group issued its Interim Report in July 2017 and carried out a public consultation until 20 September.

(49)

  http://ec.europa.eu/eurostat/documents/1015035/7959867/Eurostat-Guidance-Note-Recording-Energy-Perform-Contracts-Gov-Accounts.pdf/  

(50)

EU, EIB and Member States climate finance.

(51)

Such as the Partnership for Market Readiness, run by the World Bank, and involvement in International Carbon Action Partnership (ICAP) activities and training.

(52)

Africa-led initiative with the objective to increase Africa’s renewable energy capacity by 10GW by 2020 and mobilise Africa’s 300GW renewable energy potential by 2030.

(53)

Decision (EU) 2017/684, OJ L 99, 12.4.2017, p. 1–9

(54)

Regulation 2017/1938, OJ L 198, 28.10.2017, p. 1–56)

(55)

Such as Bertrand Picard's World Alliance for Efficient Solutions ( http://alliance.solarimpulse.com ) or the Breakthrough Energy Coalition launched by Bill Gates and others at the Paris Climate Summit in December 2015 ( http://www.b-t.energy/ ).

EUROPEAN COMMISSION

Brussels, 23.11.2017

COM(2017) 688 final

ANNEX

to the

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK

Third Report on the State of the Energy Union

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Annex 2 - Policy observations at Member State, Regional and EU Level

National Energy and Climate Plans

·In accordance with the template proposed by the Commission for the National Energy and Climate Plans (NECPs) 1 , Member States have started preparations for their plans for the period 2021 to 2030, which should include national contributions to the Energy Union objectives and the 2030 targets for energy and climate. More than two thirds of Member States have set up a political process for the plans or are in a preparatory phase. More than half have already engaged in public consultation on the plans. More than one third of Member States have indicated to the Commission that they have started work on the analytical basis and on regional cooperation in preparation of the plans.

·Building on the progress made, it is now necessary to step up efforts in the preparation and finalisation of the draft national energy and climate plans.

Energy security

·The EU is making good progress to diversify sources, routes and suppliers of energy; importantly, renewable energy developments between 2005 and 2015 have reduced the need for fossil fuels by more than 10% compared to what it would have been otherwise.

·A number of Member States are still totally or predominantly dependent on supply from one single source or supplier, notably Bulgaria, Estonia, Finland, Hungary, Latvia and Slovakia which are particularly dependent on a single gas supplier (Russia). Some member States are in a similar situation for oil and/or coal as well as for a substantial part of their nuclear fuel supplies.

·The EU's gas supply diversification strategy is based on three main lines of action: i) transparent, liquid and flexible Liquefied Natural Gas (LNG) market, ii) the Southern Gas Corridor, and iii) Mediterranean gas hub.

·New interconnections and LNG terminals, and in particular the Projects of Common Interest (PCIs), have facilitated an improvement of security of gas supply in the last couple of years. Today, an increased percentage of gas demand can be satisfied through alternative infrastructures with only one Member State remaining that could not fully substitute for the disruption of their most important gas infrastructure (i.e. Bulgaria) 2 .

·The completion of the trans-European gas networks must be accelerated further to address the remaining bottlenecks between Member States (e.g. Croatia, Hungary, Romania, Bulgaria and Greece; Portugal and Spain with France; the Baltic States through Lithuania - Poland) and to ensure that consumers and suppliers in all Member States have access to LNG hubs. Europe's supply is affected by global market developments as gas becomes more and more a global commodity. This was demonstrated by last year's decrease in LNG gas imports in Northwest Europe, when cargoes were attracted to the higher-priced Asian markets.

·The Southern Gas Corridor remains a strategic priority project in the context of the European Energy Security and Energy Union strategies. Its timely completion is critical, so that gas from new suppliers can flow to Europe by 2020. The EU continues to actively engage with all the stakeholders involved in the development of the Corridor.

·The recent discoveries of large natural gas fields in the East-Mediterranean region (Israel, Cyprus, Egypt) and the perspectives for even larger exploitable deposits (possibly also in Lebanon) have raised the profile of the region as a gas producer and exporter. It is therefore in the EU's interest to assist the countries in the region in better exploiting their energy resources and to develop mutually beneficial commercial cooperation. 

·As regards electricity, cold weather in most of Europe significantly increased power demand in January 2017. Although major electricity supply disruptions did not occur, several countries imposed export curtailments or explicit export bans, which undermined the confidence in the internal electricity market and security. These events highlighted the need for common rules for preventing, preparing for and handling electricity crisis with more solidarity and transparency. The adoption by the co-legislators of the Commission proposal on Risk Preparedness in the electricity sector is crucial in this respect.

Internal energy market

Electricity infrastructure

·In 2017, seventeen Member States were already above the 10% interconnection target for 2020, whilst several others are very close to it.

·The completion of the trans-European electricity networks must be accelerated to enhance security of supply, manage variability, improve the integration of renewables and further the internal energy market. Additional electricity interconnections and the reinforcement of internal lines are needed to further integrate the internal electricity market in South Western Europe and in Northern and Central Europe (e.g. Germany and Poland), as well as to advance towards the integration of the Baltic States with the European electricity system through synchronization.

Wholesale markets

·Wholesale power markets have further integrated: today, 30 out of the 42 EU borders 3 already participate in day-ahead market coupling. Through more efficient use of interconnectors, market coupling helps increase social welfare across the EU by reaping efficiency gains. Implementing market coupling on all remaining European borders that were still applying explicit day-ahead auctions by the end of 2016 would render a social welfare benefit of more than 200 million euros per year 4 .

·Further integration of markets requires closer coordination with neighbours. Large amounts of electricity interconnector capacities remain unused due to missing coordination between neighbouring transmission system operators and regulators 5 . Examples in various Member States show that coordinated capacity calculation can increase cross-border trade significantly, to the benefit of consumers.

·Many Member States have made good progress in opening up their wholesale markets to competition. The latest example is Finland's revised Gas Market Act, which should open gas market competition when the Baltic-connector project (gas interconnector between Finland and Estonia) is completed. Generally, in Member States where the electricity and gas markets have been opened to competition, this has increased choice and improved security of supply. In other countries, however, market concentration is above EU average and low competition results in higher prices and reduced security.

·Many Member States have not yet fully implemented the necessary rules that allow for competitive and liquid markets, particularly for wholesale gas markets. Furthermore, incumbent undertakings still have significant market power in a number of Member States. Competition enforcement remains key to ensuring open and competitive markets.

·Uncoordinated state interventions increasingly distort market and investment signals, resulting in unnecessary costs for consumers. Adapting support schemes to more market-based models (e.g. through tendering) and opening capacity markets across borders can significantly reduce market distortions, as evidenced in various Member States.

Retail markets and consumers

·In the case of industrial customers, there has been a convergence in retail electricity prices across EU countries over the last couple of years.

·Recently, more Member States have successfully moved away from end-user price regulation (Ireland, Latvia). However, prices for households remain regulated to different degrees in about half of the Member States, which constitutes an obstacle to demand-side participation, retail competition and may discourage investments in energy efficiency.

·Energy poverty should be addressed more effectively at the Member State level. Today most Member States do not define energy poverty in their national legislation. Energy poor households should be better identified and the evolution of energy poverty monitored, in order to allow more targeted action through energy efficiency measures such as long-term building renovation strategies which specifically target energy poor households and social policy measures such as targeted income support.

Energy efficiency and moderation of demand

·There has been significant progress on energy efficiency. Overall primary energy consumption decreased in the post-recession years, showing that economic recovery and growth could be achieved without increasing the demand for energy.

·In 2015, primary energy consumption of the Union was only 3% above its primary energy consumption target for 2020, and the final energy consumption in 2015 was already lower than the target agreed for 2020. However, both primary and final energy consumption grew in 2015 compared to 2014 and are also expected to further increase in 2016, partly due to climate variations and lower fossil fuel prices.

·Collectively, the announced national targets for 2020 are consistent with the EU level of ambition for Final Energy Consumption (FEC) but the gap is now greater for Primary Energy Consumption (PEC).

·Member States are making good progresss in achieving energy savings under Article 7 of the Energy Efficiency Directive. Their collective efforts in 2015 were above the linear trajectory to achieve the required savings for the EU in 2020.

·Accelerating the renovation rate of the EU buildings stock, which account for about 40% of energy use in the EU, is a top priority. Many Member States have put in place ambitious policies to address this need through financing incentives and support schemes, including with the use of European Structural and Investment Funds. In this respect, improving access to attractive financing products to finance building renovations is a key factor to attract more private investment. This has been confirmed by the use of the European Fund for Strategic Investment in this sense with the French region of Île de France successfully securing a long-term loan at a low rate for renovating up to 10,000 apartments.

·Further improvements of energy efficiency in the transport sector are needed in most Member States, including measures promoting a switch to collective transport means and zero- and low-emission vehicles. In this respect, the promotion and support of electro-mobility, including accelerated deployment of recharging infrastructure, should continue to receive particular attention, which is also considered under the proposal for an updated Energy Performance of Buildings Directive 6 .

Decarbonisation

·Most Member States are expected to reach their 2020 targets for the non-ETS sectors under the Effort Sharing Decision. Only a few Member States will need to put in place either additional measures or make use of flexibilities. This is in particular the case for Austria, Belgium, Finland, Germany, Ireland, Luxembourg and Malta. During the 2013-2015 period, Malta exceeded its target. According to preliminary estimates for 2016, Malta, Belgium, Finland and Ireland are likely to exceed their non-ETS targets.

·An important contribution to Energy Union actions comes from revenues that Member States generate from auctioning emission allowances under the European Union emissions trading system (ETS). Member States earned nearly € 15.8 billion from the auctioning of EU ETS allowances over the period 2013-2016. Approximately 80% has been used or is planned to be used for climate and energy purposes. Member States use most of these revenues domestically for renewable energy followed by energy efficiency and sustainable transport.

·In 2016, emissions from sectors covered by the EU Emissions Trading System reduced by 2,9% to 1,75 billion tonnes, below the level that is foreseen for the year 2020.

·The third reduction to auctions as a result of the agreed backloading measure took place in 2016, reducing supply in the EU ETS by 200 million. To address the structural imbalance between the supply and demand for allowances in the carbon market and to render the auction supply in the EU ETS more flexible the creation of a Market Stability Reserve (MSR) was agreed in 2015. As the Market Stability Reserve will become operational in 2019, the Commission published the total number of allowances in circulation for the first time in May 2017, corresponding to 1, 69 billion allowances.

Renewable energy

·Member States will have to maintain, and some will have to strengthen, efforts to reach their 2020 binding targets, as the trajectory becomes steeper closer to 2020. In 2015, the vast majority of Member States had already exceeded their indicative average trajectory for 2015-2016. Only three Member States (France, the Netherlands and Luxembourg) showed 2015 renewable energy shares below their indicative average trajectory for 2015-2016. 11 Member States are already above their 2020 renewable energy target.

·Renewable energy is increasingly addressed in regional cooperation fora such as the Baltic Energy Market Interconnection Plan (BEMIP) and the Central and South-Eastern Europe Gas Connectivity (CESEC) which have been successfully extended to new cooperation areas such as electricity, renewable energy and energy efficiency. Regional cooperation can reap additional cost-effective potential for renewable deployment across the EU, as shown by the recent joint pilot tender between Denmark and Germany.

·Stable and predictable regulatory frameworks are crucial for facilitating cost-effective renewables deployment. Recent successful auctioning tenders for support to renewable energy projects, for example in Denmark, Germany, the Netherlands or the UK, have demonstrated investors' confidence in technological progress, good policy design, and electricity market reforms. Lessons should be learned from such good practices and disseminated across the EU.

·The cost-reductions in renewable energy technologies over the last couple of years are enabling consumers to increasingly produce their own renewable energy and encouraging greater uptake. There are more than 2500 energy communities in the European Union. In Germany, for example, 50% of the generation capacity is owned by private individuals and produces electricity at costs that are competitive with large market actors. Member States should continue existing efforts to ensure that self-consumption of renewable energy is not subject to unnecessarily restrictive conditions.

Local initiatives

·Local initiatives have made essential contributions to the development of renewable energy at the local level, for instance by the residents of the city of Breda in the Netherlands. In fact, more than 7500 cities from the EU countries and beyond are engaged in the Covenant of Mayors initiative; as such, more than 31% of the EU population lives in areas with ambitious climate and energy initiatives.

Research, innovation and competitiveness

·European industry, research institutes and academic innovative actors are overall well positioned in the global energy landscape. With 35% of international patents 7 in renewables, the EU is a leader in low carbon key technology innovation. Significant growth has been seen in climate change mitigation innovations in Europe, which has occurred mostly in the fields of clean energy technologies and transport. Yet more work is needed to quickly and successfully bring these innovations to the internal and export markets and turn them into growth and job opportunities.

·The SET Plan is the European delivery mechanism and the only collective forum for industrial stakeholders, countries and research institutions on clean energy research and innovation to bring the fifth dimension of the Energy Union into fruition. The ongoing implementation process delivers on the targets set for each of the 10 SET Plan Actions and validates the commitments made last year, this being a very important step forward. Nevertheless, Member States need to engage more actively and collectively with research and industry actors to demonstrate concrete collaborative activities that measure up against the targets set for that purpose. In addition, the SET Plan should act as the knowledge hub and support mechanism to the Member States to deliver on their new proposed obligations to plan and report on concrete R&I indicators and competitiveness in the fifth dimension of the National Energy and Climate Plans, under the Governance of the Energy Union proposal.

·The private sector plays a crucial role by ensuring that novel products, technologies and services reach successfully the market place. Public-Private-Partnerships are particularly important under this context, reason why the Horizon 2020 has set aside significant resources for this type of collaboration.

·The Strategic Transport Research and Innovation Agenda (STRIA) 8 , outlines seven transport R&I priority areas for future research and innovation to address the transport sector's decarbonisation. Based on these roadmaps, a governance Member State group will start in November 2017 overseeing the implementation of the key actions, monitor the process and coordinate research activities.

(1) Annex I to the proposal for a Regulation on the Governance of the Energy Union COM(2016) 759 final.

(2) Slovenia cannot fully comply with this rule either but together with Luxembourg and Sweden it is exempted from it.

(3) This includes Austria, Belgium, the Czech Republic, Germany, Denmark, Estonia, Spain, Finland, France, Hungary, Italy, Lithuania, Latvia, the Netherlands, Norway, Poland, Portugal, Romania, Sweden, Slovenia, Slovakia and Great Britain.

(4) ACER/CEER Annual Report on the Results of Monitoring the Internal Electricity and Gas Markets in 2016 Electricity Wholesale Markets Volume October 2017.

(5) See ACER/CEER ANNUAL REPORT ON THE RESULTS OF MONITORING THE INTERNAL ELECTRICITY MARKETS IN 2016, Chapter Wholesale Markets, Sections 3.2/3.3.

(6) COM(2016) 765 final

(7) European Commission/Joint Research Centre (based on data of the European Paten6t Office).

(8) SWD (2017)223

EUROPEAN COMMISSION

Brussels, 23.11.2017

COM(2017) 688 final

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ANNEX

to the

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK

Third Report on the State of the Energy Union

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Annex 3 - State of Progress towards the National Energy and Climate Plans

This document is based on information received from Member States or from Commission sources.

Austria

Austria is at an initial stage regarding the development of the integrated national energy and climate plan (NECP) for the years 2021 to 2030. The Austrian Energy Strategy (2010) is currently under review: in this context Austria is already working on an integrated strategy as a basis for the NECP. A Green Paper was published in June 2016, launching a broad public consultation (online and working groups) that closed in December 2016. The results of the consultation will be considered for the drafting of the White Paper (integrated energy and climate strategy). The analytical base and related scenarios are prepared by the Federal Environment Agency and the Austrian Institute of Economic Research (WIFO).

Targets for the forthcoming integrated national energy and climate plan (such as greenhouse gas emissions reductions, renewable energy, energy efficiency and others) are yet to be decided. A low-carbon development strategy is under preparation.

Belgium

Belgium is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. The country has established a steering group composed of federal and regional representatives from energy and environment ministries; as well as a sub-working group on projections for the development of the analytical base and specific sub-working groups for the five dimensions of the Energy Union. Possibilities for regional collaboration are being explored within the Penta-lateral Energy Forum.

At the national level, a written stakeholder consultation took place on the so-called "energy pact" – preparing a long term global energy vision. A second on-line public consultation is taking place targeting ordinary citizens. A political agreement between the four competent Ministers for energy in Belgium is expected to be reached by the end of 2017 and will form the strategic basis of the NECP for the energy part of the policies and measures. Regional stakeholder consultations also took place ("Stroomversnelling", Flemish Region); "Sommet Air-Climat-Energie" (Walloon Region).

In July 2013 a Federal Royal Decree put forward a Long Term Policy Vision on Sustainable Development, which includes a greenhouse gas reduction commitment of at least 80 to 95% between 1990 and 2050. Similarly, in early 2014, the Parliament of the Walloon Region adopted the “Walloon Climate Decree”, setting reduction objectives for total greenhouse gas emissions at -30% between 1990 and 2020, as well as -80% to -95% between 1990 and 2050. The decree will be instrumented through a new Air-Climate Plan up to 2030. On 28 September 2017, the Walloon Parliament also adopted a climate resolution which, in particular, calls for Wallonia to reduce emissions by -95% by 2050. The Flemish Government adopted a long term energy vision and a low-carbon development strategy for 2050 is under preparation and expected to be adopted in the first half of 2018. The Flemish energy and climate plan is envisaged for the second half of 2018. Finally, the Brussels Capital Region committed to a 30% greenhouse gas emissions reduction by 2025 (compared to 1990). A first integrated Regional air, climate and energy plan is being deployed while work on a 2050 low carbon strategy is well underway. Possible additional measures (2030) will be examined in this context.

Bulgaria

Bulgaria is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. An inter-ministerial working group (chaired and coordinated by the Ministry of Energy) has been set up. The working group intends to involve stakeholders beyond the ministerial level – such as executive agencies with expertise and experience in modelling and projections, the Parliament, non-governmental organisations and others. The working group will identify sensitive areas which will require additional expertise and has approached the Commission with a formal letter of interest for technical and process assistance.

Furthermore, Bulgaria is currently developing its National Energy Strategy to 2030, with a vision to 2050. The intention is to develop this strategy and the NECP in parallel in order to benefit from synergies, common analytical tools and data sources. It also intends to develop a low-carbon development strategy to succeed the Third National Action Plan on Climate Change (NAPCC) for 2013-2020.

Croatia

Croatia is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030.

It has a National Energy Strategy for the years 2009 – 2020 in place which will be revised before the first quarter 2019.

A draft Strategy for Low Emissions Development by 2030 with an outlook by 2050 was submitted to public consultation until July 2017. Once adopted by the Parliament, the Strategy for Low Emissions Development as well as the expected revised Energy Strategy will be used to prepare the integrated national energy and climate plan.

Czech Republic

The Czech Republic is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. This applies both to the institutional arrangements, public consultations, regional cooperation and the development of an analytical base.

Since 2015, the Czech Republic has a State Energy Policy with a time horizon until 2040 and sub-targets. The State Energy Policy addresses four of the five dimensions of the Energy Union: decarbonisation, energy efficiency, internal market and security of supply. Indicative indicators and targets include:

·a 40 % reduction of CO2 emissions by 2030 in comparison to 1990 levels;

·energy savings in 2020 by 20 % against a business as usual scenario;

·a share of annual electricity production from domestic primary sources of at least 80% (renewable energies, secondary sources and waste in electricity account for 18–25%);

·an import dependency not exceeding 65% by 2030 and 70% by 2040.

Moreover, the Climate Protection Policy (as Czech low-carbon development strategy) with greenhouse gas emission reduction targets for 2030 and 2040 has been adopted in March 2017.

Cyprus

Cyprus is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. Cyprus is in a preparatory phase as regards the institutional arrangements, and has undertaken a number of studies serving the long-term planning in the areas of energy and climate. No targets are set yet beyond 2020, but the studies will allow setting national targets and outlining the most cost-efficient policies and measures to achieve those targets. With most studies nearing completion, Cyprus will proceed with the drafting of the National Action Plan for Energy and Climate for the years 2021-2030.

Denmark

Denmark is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. It has yet to start the drafting and carry out public consultations, and is in an initial phase regarding the political arrangements. Denmark nevertheless expects to be able to prepare a draft NECP by 1 January 2018. Working groups have been established with the participation of the Danish Ministry of Energy, Utilities and Climate and the Danish Energy Agency. As regards the analytical part, the Danish Energy Agency has developed a "frozen policy" scenario that will serve as a benchmark when considering new policies and measures. According to the Danish authorities, both the new energy agreement and the non-ETS strategy will, in practical terms, serve as part of the basis for preparing a draft NECP. With regard to regional cooperation, Denmark highlights the good dialogue with the other Nordic countries and the existing cooperation, although it has not been extended yet to the scope of the integrated NECP.

In Denmark, there is an Energy Agreement for the years 2012–2020. A new energy agreement for the period after 2020 is currently under development, but it will probably not be adopted before 2018. In 2017, the Government is planning to prepare a cost-effective strategy for meeting the country's greenhouse gas emissions reduction target in non-ETS sectors during the period 2021–2030.

Estonia

Estonia is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. The institutional arrangements are advanced. Estonia will use both the General Principles of Estonian Climate Policy and the National Development Plan of the Energy Sector as a basis to develop the NECP. On these, Estonia has indicated that public consultation is about to be finalised but public consultation on the NECP is still to be launched.

In the first half of 2017, Estonia approved its low-carbon strategy “General Principles of Estonian Climate Policy until 2050”. It will set a roadmap for Estonia to move towards a competitive low carbon economy and to reduce greenhouse gas emissions in energy, transportation, industry, agriculture, forestry and waste management by at least 80% by 2050, compared to 1990 levels. In October 2017, the Government approved the National Development Plan for the Energy Sector until 2030. Expected outcomes for 2030 are:

·greenhouse gas emissions from energy sector reduced by 70% (base year 1990);

·renewable energy sources: 50% of final energy consumption including statistical transfers to other EU Member States;

·energy efficiency: final energy consumption in 2020 and 2030 at the same level as in 2010;

·primary energy supply: 57.7 TWh.

The National Development Plan for the Energy Sector until 2030 includes also plans for regional cooperation, particularly with Latvia and Lithuania.

Finland

Finland is advanced as regards the development of an integrated national energy and climate plan (NECP) for the years 2021 – 2030, The Finnish NECP will be prepared on the basis of the Government Report on Energy and Climate Strategy for 2030 (autumn 2016), Medium Term Climate Policy Plan (autumn 2017) and other relevant documents. Although further work is needed, the preparation of the NECP is expected to rely on the same institutional arrangements as for previous initiatives. Regarding public consultation, the preparatory stage of the Energy and Climate Strategy for 2030 already involved an extensive web-based public hearing as well as thematic stakeholder seminars. On regional cooperation, the Strategy was discussed at technical level under the auspices of the Nordic Council of Ministers. The development of the analytical base for the NECP is also fairly advanced.

With its Parliamentary Energy and Climate Roadmap 2050 (2014), the Climate Act (2015), the Government Report on Energy and Climate Strategy for 2030 (2016) and the recently adopted Medium Term Climate Policy Plan, Finland has set in place concrete policies and a number of medium-term objectives and targets on a path towards sustainable and low-carbon economy. These include:

·greenhouse gas emissions from non ETS reduced by 39% in 2030 and a minimum of 80 % by 2050 compared to 1990 levels; aiming for a carbon-neutral society.

·phase out the use of coal for energy, with minor exemptions, by 2030;

·renewable energy sources to account for over 50 % of the final energy consumption in the 2020s;

·an increase of the share of biofuels in road transport to 30% by 2030.

France

France is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. France considers that the NECP would require that the existing National Low Carbon Strategy (November 2015) and the Multiannual Energy Programme (October 2016) be included and merged together with the National Energy Research Strategy (December 2016). France is continuously developing its analytical base and updating its scenarios.

The Act on Energy Transition for Green Growth (loi relative à la transition énergétique pour la croissance verte) is in force and forms the legal basis for the Low Carbon Strategy and the Multiannual Energy Programme. Both are to be revised in the forthcoming months and adopted by the end of 2018 (to be noted that the Government's Climate Plan of 6 July 2017 foresees that the future Low Carbon Strategy will aim at carbon neutrality by 2050). Targets include:

·greenhouse gas emissions reduction: 40% in 2030, 75% in 2050 (compared to 1990 levels);

·renewable energy sources: 32% of final energy consumption in 2030;

·energy efficiency: 20% reduction of final energy consumption by 2030 and 50% reduction of final energy consumption by 2050, both compared to 2012.

Germany

Germany is advanced regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030. At administrative level, coordination is led by the Federal Ministry for Economic Affairs and Energy and through regular meetings of dedicated intra-ministerial NECP working and steering groups.

As regards the analytical part of the plan, Germany is continuously developing its analytical base including sector-specific studies, research on projections of the German energy system and on impact assessments as well as studies on the consistency of national and EU data base. In addition, internal preparations have started for the public consultation and regional cooperation.

As regards the political part of the plan, Germany has started to develop national objectives, policies and measures for the five dimensions of the Energy Union, in particular the 2030 targets for energy and climate. The process benefits from synergies with policies and measures that are developed as part of the Climate Action Plan 2050. Coherence with the analytical part is ensured in this process.

Also, the Federal Ministry for Economic Affairs and Energy initiated the external communication on the NECP process towards decision-makers, stakeholders, academia and the broader public, insisting on its role as a vital part of the Energy Union framework strategy.

The German NECP will be informed by several national energy and climate policies such as the German Energy Concept, the National Action Plan on Energy Efficiency, the Climate Action Programme 2020, the Energy Efficiency Strategy for Buildings, the Climate Action Plan 2050, the Green Paper on Energy Efficiency, the discussion paper “Electricity 2030”, and the 6th Energy Research Programme of the Federal Government (7th Energy Research Programme will be passed soon and equally feed into the NECP).

Greece

Greece is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030. Greece is planning to establish a ministerial steering committee and will be supported by technical working groups with the participation of different authorities and research centres institutions, such as the Ministry of Environment and Energy, the Centre for Renewable Energy Sources and Saving (CRES) and others as required. For the analytical base Greece is planning to build on existing data and modelling experience.

No targets for energy efficiency and renewable energy beyond 2020 have been set.

Hungary

Hungary is advanced regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030, having identified already existing initiatives on which the plan can be built, existing indicators and analysis, and remaining gaps. A working group has been created with the relevant departments of the Ministry of National Development. Hungary is continuously developing its analytical base.

Since 2011, Hungary has a National Energy Strategy 2030, which is updated biennially. The Second National Climate Change Strategy for the period 2017–2030 has been adopted in mid-2017, with an outlook to 2050. Greenhouse gas emissions reduction targets are (compared to 2005 levels):

·7% in 2030 in non-ETS sectors and;

·43% in 2030 in ETS sectors.

In its National Building Energy Performance Strategy of 2015, Hungary targets savings of 111 petajoule by 2030, to be achieved in the primary energy consumption of buildings.

Ireland

Ireland is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. The preparation of the NECP has not yet started, however, the first draft National Mitigation Plan was released in March 2017 for public consultation and published in its final form in July. The Plan is intended to be a living document, to which mitigation measures will be added iteratively. It will help inform Ireland’s work towards its NECP. For the development of the analytical base, work in relation to the National Mitigation Plan will also serve for the preparation of the NECP.

The Energy White Paper “Ireland’s Transition to a Low Carbon Energy Future 2015-2030”, the National Policy Position on Climate Change (2014) and the Climate Action and Low Carbon Development Act (2015) provide a policy and statutory basis to pursue transition to low carbon, climate resilient and environmentally sustainable economy by 2050, inter alia through the preparation of periodic National Mitigation Plans (that will cover the period to 2050) and Adaptation Frameworks.

Italy

Italy is advanced regarding the development of an Integrated National Energy and Climate Plan (NECP) for the years 2021–2030. The Italian Energy Strategy (recently presented) represents a first step in the process and will allow deepening the specific national policy measures to fulfil the EU's 2030 targets for energy and climate.

The Energy Strategy has been prepared following a consultation process involving all relevant public administrations, the National Parliament, industries association, research institutes and other Italian stakeholders. The strategy was under formal public consultation until 15 September 2017. After the comments received will have been reviewed, the Strategy will be formally adopted

The strategy is based on the priorities of the Energy Union and goes in the direction of the Commission's proposal for a Regulation on the Governance of the Energy Union. It provides a framework for national policies that, in coherence with European objectives and international commitments, pursue the optimal balancing of three goals: strengthen the competitiveness of EU economy, de-carbonize also through innovation and technology, and ensure security of supply in the changing international scenario with flexibility and diversification. The Italian Government is notably considering: a national renewable energy objective for 2030 of 27% (48-50% for electricity; 28-30% for heating and cooling; and 17-19% for transport with strong focus on biofuels); and the full phase out of coal by 2025-2030.

Latvia

Latvia is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. The political process is expected to accelerate once a National Position paper will have been adopted (currently in inter-institutional coordination). Initial discussions between the Commission and representatives of the Latvian government indicate that support may be requested in preparing the analytical section of the integrated NECP. Specifically, this could include practical recommendations to improve assumptions and modelling input data.

The Sustainable Development Strategy of Latvia until 2030 sets a 45% greenhouse gas emissions reduction target compared to 1990 levels. The Latvian Energy Long-Term Strategy 'Competitive Energy for Society' indicatively informs about renewable energy and energy efficiency targets for 2030:

·renewable energy sources: 50% of renewable energy in gross final energy consumption;

·energy efficiency: reduce average consumption of thermal energy for heating by 50%.

Lithuania

Lithuania is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 –2030, having established an inter-ministerial group. Public consultation and regional cooperation are still in preparatory phase. Lithuania intends to build on existing regional cooperation in the Baltic Energy Market Interconnection Plan (BEMIP). The development of the analytical base is ongoing on the basis of the analysis prepared in 2015 for the foreseen update of National Energy Independence Strategy (2012). Lithuania expects the Baltic Energy Technology Scenario study, of which a first draft will be ready in October 2017, to support the development of the NECP.

Lithuania is currently updating a National Energy Independence Strategy with the targets for 2030 and vision for 2050 (planned adoption at the end of 2017). Renewable energy and energy efficiency targets will be defined in the Strategy. On security of supply, Lithuania can build on the current and future National Energy Independence Strategy (2012 and 2017) and BEMIP Action Plan including various concrete projects.

The Strategy for the National Climate Change Management Policy lays down the targets and objectives for climate change mitigation and adaptation by 2050. Legally binding short-term climate change mitigation targets by 2020 are set in line with the EU climate and energy 2020 framework. The Strategy also lays down indicative medium-term and long term climate change mitigation targets that Lithuania will contribute towards, i.e. the implementation of the EU greenhouse gas emission reduction targets: reducing these emissions by at least 40% by 2030, 60% by 2040 and 80% by 2050, compared to 1990 levels. Upon the adoption of EU legal acts on the implementation of the EU 2030 climate and energy framework, the Strategy will be revised.

Luxembourg

Luxembourg is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 - 2030. Existing national plans are currently being analysed and data is gathered in order to have a more solid and coherent analytical base.

Luxembourg has a new national post-2020 energy strategy under preparation; with finalisation scheduled for the beginning of 2018. Together with the Low Carbon Development Strategies under preparation, the strategy will set electricity, oil, gas, energy efficiency and renewable energy targets for 2030. Luxembourg will build on a number of existing renewable energy and energy efficiency plans and strategies that have a time horizon until 2020 and sometimes beyond.

Malta

Malta is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030, having set up an ad-hoc institutional arrangement for developing the NECP. The analytical base is being developed with ongoing data collection and modelling reviewing.

Malta is participating in the technical support programme financed by the Commission, mainly in relation to technical assistance on integrated climate and energy projections. Moreover, Malta’s request for assistance under the first call of the Structural Reform Support Programme has been accepted. Malta has a Low-Carbon Development Strategy with a time horizon until 2050 under preparation with finalisation scheduled for 2019. No targets are yet set beyond 2020.

The Netherlands

The Netherlands is advanced regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030. It has focussed on the analytical part of the NECP, and is currently in the process of developing the national objectives, targets, policies and measures. Policy advisors and experts from ministries and planning offices and agencies are identifying the available and missing data as well as starting with filling in the proposed format where possible.

The NECP will be based on the Energy Agenda published by the outgoing government, which is currently being further elaborated. The Energy Agenda was adopted at the end of 2016 and focuses on greenhouse gas emissions reductions that are necessary to realise the climate goals agreed in Paris in 2015. Renewable energy and energy efficiency are considered as instruments to reach the goal of 80–95% reduction of greenhouse gas emissions by 2050. In preparation for the Energy Agenda, a dialogue took place with stakeholders. Another element is the Energy Agreement that the Government signed in 2013 with over 40 national stakeholders (business, local governments and non-governmental organisations). Whereas this is focused on the interim 2023 target, specifically for the transport sector it also agreed for 17% reduction by 2030 and underlined the 60% reduction target by 2050.

The new Dutch government has committed to a more ambitious climate policy, which will be laid down in a new Climate Law and an extension of the Energy Agreement to 2030.

Poland

Poland is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030, having an inter-ministerial team in place. The preparation of a draft NECP started in January 2017. The Ministry of Energy is currently conducting different analyses for the purpose of the NECP; the tender for preparation of the analytical part has been launched and simultaneously the proposals of the policies and measures are being prepared.

The Polish Energy Policy until 2030 is in place since 2009. Targets are achieving zero-energy economic growth, i.e. economic growth with no extra demand for primary energy and reducing the energy intensity of the Polish economy to the EU-15 level. The Energy Policy of Poland until 2050 is under preparation, together with sectorial programmes for coal.

Portugal

Portugal is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030. The cooperation between the Ministry of Economics and the Ministry for the Environment was established through the creation of an energy and climate expert group that is working together to elaborate the Portuguese NECP.

Portugal has also worked on the necessary analytical basis. It can build on long-term energy and climate plans and roadmaps, including the Low Carbon Roadmap for 2050, the Portugal Green Growth Commitment and the National Programme for Climate Change 2020/30 set up in 2015 (PNAC 2020/2030). These documents provide 2030 targets including:

·renewable energy: 40% of total final energy consumption;

·energy intensity: from 129 toe/€M of GDP in 2013 to 101 toe/€M of GDP;

·interconnections: 15% electricity interconnection level;

·greenhouse gas emission reductions: 52.7–61.5 Mt CO2 (dependent on the outcome of EU legislative process on EU 2030 climate legislation.

The Portuguese Government announced at COP 22 the national objective to reach carbon neutrality by 2050. To this end, a new modelling exercise with a 2050 horizon is under preparation to identify and analyse the implications associated with cost-effective trajectories, as well as the main decarbonisation vectors associated within the framework of the development of a Roadmap for 2050 Carbon Neutrality in Portugal. This exercise will take place during 2017-2019 with the coordination of the Environment Ministry and will involve relevant stakeholders from different sectors (energy, transport, industry, waste, LULUCF, agriculture, water, etc.). It will form an important contribution for the climate related aspects of the NECP and will feed into the work of the climate and energy expert´s group mentioned earlier.

Romania

Romania is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030. A public consultation is ongoing on the draft revised Energy Strategy that will contribute to the NECP. The development of the analytical base for NECP is ongoing, with the development of reference and policy scenarios.

The Romanian Energy Strategy for 2009 to 2020 is currently under review, in order to cover the years 2016 to 2030, with a view to 2050. Approval is expected in the course of 2018, following an environmental assessment. Targets for renewable energy and energy efficiency remain to be set. Romania has a 2016 National Strategy on Climate Change and growth based on low-carbon economy for the period 2016 - 2020.

Slovakia

Slovakia is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030, having set up a working group for the development of the analytical base of the NECP where all relevant ministries, as well as Regulatory Office for Network Industries, are involved. A range of stakeholders has been involved in consultation of the template of the NECP. Slovakia has asked the Commission for technical support in preparation of the plan. Contacts with the contractor were made in September 2017, overall scope of work is under discussion and in-country meetings with the contractor are expected in autumn 2017.

Slovakia has an Energy Policy (2014) with a time horizon until 2035 and an outlook to 2050. A Low-Carbon Development Strategy is under preparation and expected to be finalised in the spring 2018.

Slovenia

Slovenia is at an initial stage regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 to 2030. It is in the process of establishing an inter-service working group from responsible ministries which will coordinate its preparation.

Slovenia has an Operational Programme for reducing greenhouse gas emissions by 2020 with an outlook to 2030. The Operational Programme sets indicative sectorial targets to reduce greenhouse gas emissions in the non-ETS sectors. In June 2017, the Ministry of Infrastructure published a first document for public debate on the new Energy Concept of Slovenia until 2050. The Concept (still under public consultation) is expected to set an objective to reduce greenhouse gas emissions by 80% by 2050 compared to 1990 and to reach a share of at least 52% renewable energy sources. The draft document also foresees an increase in the share of renewable energy in final energy consumption to 27% by 2030.

The Action Plan for renewable energy with a time horizon until 2030 is under revision. The long-term strategy for mobilising investment in the renovation of the national building stock aims, by 2030, to reduce final energy consumption in buildings by 30 % compared to 2005, to have at least two thirds of all energy used in buildings from renewable sources and to renovate 26 million m2.

Spain

Spain is at an initial phase regarding the development of an integrated national energy and climate plan (NECP) for the years 2021 –2030. As part of the inter-institutional arrangements, the inter-ministerial group created for the development of the Law of Climate Change and Energy Transition and the NECP has already started working, having its first meeting in April. Public consultation on the NECP and regional cooperation are to be carried out. The development of the analytical base for the NECP is ongoing.

So far, there are no national targets for the period after 2020. In July 2017 the Spanish Government launched an expert Commission to be in charge of defining and studying scenarios for the energy transition. It will prepare a report analysing different options for energy and climate policies to achieve the European objectives. The report will be finalised by the end of the first quarter of 2018. Spain is currently reviewing its Strategy for Climate Change and Clean Energy and the Non-ETS Sectors Roadmap 2020, in order to cover a horizon up to 2030. The Spanish Government intends to present in this legislature a Law of Climate Change and Energy Transition; a public consultation has been launched.

Sweden

Sweden is advanced regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030. The preparation is under the responsibility of Swedish Energy Agency. A public consultation is foreseen to take place in January 2018 and the draft NECP is expected to be ready in the beginning of 2018. With regards to regional cooperation, Sweden highlights its generally good dialogue with the other Nordic countries. Sweden has reached a political agreement for a long-term energy policy in June 2016. The proposals from the Parliamentary Energy Policy Commission (January 2017) are:

·100 % renewable electricity production in 2040, but no ban on nuclear;

·energy intensity (TPES/GDP) to be halved 2005-2030;

·prolongation and raised ambition of the electricity certificate system until 2030.

On climate, the Swedish Parliament adopted a national Climate Policy Framework in June 2017. It consists of a Climate Act, new national climate targets and a climate policy council.

Climate targets:

·no net emissions of greenhouse gases into the atmosphere by 2045 and thereafter negative emissions. This means emissions from activities in Swedish territory are to be at least 85 % lower by 2045 compared to 1990 levels. Supplementary measures may count towards achieving zero net emissions, such as increased uptake of carbon dioxide in forests and land, and investments in other countries;

·emissions in Sweden outside of the EU ETS should, by 2030, be at least 63 % lower than emissions in 1990, and by 2040 at least 75 % lower. To achieve these targets by 2030 and 2040, no more than 8 and 2 percentage points, respectively, of the emissions reductions may be realised through supplementary measures; emissions from domestic transport are to be reduced by at least 70 % by 2030 compared to 2010. Domestic aviation is not included in the target since this subsector is included in the EU ETS.

United Kingdom

The United Kingdom is advanced regarding the development of an integrated national energy and climate plan (NECP) for the years 2021–2030. The NECP is expected to include carbon plans covering the five carbon budgets already in place. External stakeholders have been involved in the work to develop a plan for reducing emissions throughout the 2020s.

The United Kingdom has committed to a long-term target to reduce greenhouse gas emissions by 80% of 1990 levels by 2050 within its Climate Change Act (2008). To meet these targets, the government has set five-year carbon budgets. They restrict the amount of greenhouse gases the UK can legally emit in a five-year period.

The UK government also established in 2011 the Carbon Plan, which sets out scenarios on how it will meet the first four carbon budgets. In October 2017, a Clean Growth Strategy was published, setting out a comprehensive set of policies that aim to accelerate the pace of "clean growth", i.e. deliver increased economic growth and decreased emissions, covering the period of the fourth and fifth carbon budgets.