Green Paper on the security of energy supply

The European Commission addresses the main issues relating to Europe's ever increasing energy dependence: the challenges posed by climate change and the internal energy market, measures relating to the supply of and demand for energy resources, the role of renewable energy and nuclear energy, etc.

ACT

Commission Green Paper of 29 November 2000 Towards a European strategy for the security of energy supply [COM(2000) 769 final - Not published in the Official Journal].

SUMMARY

The European Union's (EU) external energy dependence is constantly increasing. The EU meets 50% of its energy needs through imports and, if no action is taken, this will increase to 70% by 2020 or 2030. This external dependence involves economic, social, ecological and physical risks for the EU. Energy imports account for 6% of total imports and, in geopolitical terms, 45% of oil imports come from the Middle East and 40% of natural gas imports come from Russia. The EU does not yet have all the necessary means to change the international market. This weakness was highlighted by the sharp rise in oil prices at the end of 2000.

One solution recommended by the Green Paper for tackling this problem is to draw up a strategy for security of energy supply aimed at reducing the risks linked to this external dependence.

New challenges

In tackling this problem, the EU will have to face many challenges, and these must be taken into account when drawing up the strategy. The two greatest new challenges are:

• environmental concerns influencing energy choices, most significantly efforts to combat climate change;
• the development of the internal market, which has given a new place and a new role to energy demand and could lead to political tensions, e.g. falling prices could undermine efforts to combat climate change. It is up to our societies to find satisfactory compromises.

A European strategy

Nowadays, energy policy has assumed a Community dimension: Member States are interdependent, both with regard to combating climate change and in terms of the completion of the internal market. However, this has not been reflected by new Community powers. The Community is empowered to intervene in several areas, notably in the internal market, harmonisation, environment and taxation.

Nevertheless, the lack of political consensus on a Community energy policy limits the scope for action. It is worth considering whether it would be advantageous to extend Community powers with regard to energy issues to enable the EU to have more control over its energy destiny. It is not a question of proposing a complete strategy for security of supply, but rather of launching a debate on these issues.

A long-term energy strategy

According to the Green Paper, the main objective of an energy strategy should be to ensure, for the well-being of its citizens and for the proper functioning of the economy, the uninterrupted physical availability of energy products on the market at an affordable price for all consumers, whilst respecting environmental concerns and looking towards sustainable development. It is not a question of maximising energy self-sufficiency or minimising dependence, but rather of reducing the risks linked to this dependence. The energy resources that are being used right now must be taken into account in the debate. The EU relies heavily on fossil fuels such as oil (the dominant resource). This is a problem that must be addressed.

The Green Paper outlines a long-term energy strategy in which the EU is to take action in the following areas:

• Rebalancing its supply policy by taking clear action in favour of a demand policy

There is more room for manoeuvre to address demand than to increase Community supply. An attempt should be made to control the growth of demand, notably by using taxation, for example, to bring about a real change in consumer behaviour.

With regard to supply, priority should be given to combating global warming, for example by promoting new renewable energy sources, using profitable energies to finance their development.

• Assessing the contribution to be made by nuclear energy in the medium term If no action is taken, the contribution of nuclear energy will decrease still further in the future. Whilst assessing the future contribution of nuclear energy, the debate should also look at issues such as global warming, security of supply and sustainable development. Whatever conclusions are drawn, research in the area of safe management of nuclear waste must be actively pursued.
• Providing a stronger mechanism to build up strategic stocks and to secure new import routes for increasing amounts of oil and gas.

RELATED ACTS

Communication from the Commission to the European Council and the European Parliament of 10 January 2007 - An energy policy for Europe [COM(2007) 1 final -Not published in the Official Journal].

With its new energy policy, the EU is moving towards a low-consumption economy based on more secure, more competitive and more sustainable energy. This new European energy policy focuses, in particular, on measures to guarantee security of energy supply.

Council Directive 2006/67/EC of 24 July 2006 imposing an obligation on Member States to maintain minimum stocks of crude oil and/or petroleum products (codified version) [Official Journal L 217 of 8 August 2006].

Member States are required to establish and maintain minimum stocks of oil at a level corresponding to at least 90 days average daily internal consumption in the preceding calendar year.

Communication from the Commission of 11 September 2002 - The internal market in energy: Coordinated measures on the security of energy supply [COM(2002) 488 final - Not published in the Official Journal].

The Commission emphasises that the creation of an integrated energy market will make Member States increasingly interdependent and must be accompanied by coordinated measures to guarantee security of oil and gas supplies. These measure must focus, in particular, on harmonising the organisation of oil stocks and promoting their coordinated use (national storage systems, emergency stocks, intervention criteria), harmonising minimum measures for the security of gas supplies (minimum standards, crisis measures, supply contracts) and organising an energy dialogue between producer and consumer countries.

Communication from the Commission of 26 June 2002 to the Council and the European Parliament - Final report on the Green Paper Towards a European strategy for the security of energy supply [COM(2002) 321 final - Not published in the Official Journal].

The Green Paper, published in November 2000, opened a wide debate within the EU on security of supply. This report details the points raised. Most of the stakeholders who gave their opinion on the proposals in the Green Paper (e.g. Member States and NGOs) were in favour of the main thrust of the strategy proposed, namely the emphasis on controlling demand by, for example, promoting greater energy efficiency.

Given that there is almost unanimous agreement on this approach, the EU has already taken action by adopting:

• Directive 2001/77/EC on electricity production from renewable sources;
• Directive 2002/91/EC on energy saving in buildings;
• Directive 2003/30/EC on promoting biofuels;
• the White Paper to improve management of the transport sector, which accounts for 32% of energy consumption and 28% of total CO2 emissions.

Although the EU has taken steps to promote renewable energy, the action taken so far has proved insufficient. As regards oil stocks, the EU is, to some degree, dependent on oil resources imported from Non-EU Member Countries. The Commission considers it necessary to increase dialogue between the EU and the producer countries in order to improve market transparency and conclude satisfactory supply agreements. The Commission is looking at a new approach that would guarantee greater stability of oil stocks among the EU's Member States. The need for strategic gas stocks should also be considered. Nuclear energy remains an essential part of the debate on security of supply, as the greenhouse gas savings from nuclear energy are equivalent to the emissions from half of the cars on the EU's roads. Opinions still differ on this form of energy, but the nuclear option remains open. The processing and transportation of radioactive waste is one of the main concerns about nuclear energy. The EU has responded to this by making nuclear safety an important issue in negotiations on the accession of the candidate countries and, in the long term, is planning to introduce new measures for the EU as a whole. Harmonisation of taxes still meets with some reservations. However, the Barcelona European Council called for the Energy Taxation Directive to be adopted by the end of 2002. It was adopted in 2003. The internal energy market plays an important role in security of supply, as the legislation establishing it seeks not only to achieve more competitive prices but also to impose public service obligations to ensure that there is no breakdown in energy supply. However, there is a need for a more open market and increased intra-Community trade. The Commission stresses the fact that progress has been made with regard to security of supply but believes that consideration must be given to a global concept of security of supply covering:

• long-term preventive action,
• market surveillance mechanisms,
• policy instruments,
• strengthening relations with Non-EU Member Countries.

Last updated: 02.10.2007