Local view for "http://purl.org/linkedpolitics/eu/plenary/2008-06-18-Speech-3-250"
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"en.20080618.23.3-250"2
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"Madam President, for me each day starts with a routine check of oil prices, and in recent times the news has been more or less in one direction: oil prices are getting higher and higher. Over the last three years, prices for oil in US dollars have more than tripled. For the EU, with a 37% share in energy consumption coming from oil, it is easy to understand the actual and potential impact of the high oil prices on our economies and citizens.
The effects on the most vulnerable groups must be mitigated in the shorter term, where necessary through social measures. Support to the poorest households can be justified and needed, but needs to be targeted. At the same time we should be very cautious as regards changes in the taxation regime. Experience has shown that such measures, whilst in many ways politically very attractive, in fact only make the longer-term transition to dealing with high energy prices and saving carbon more difficult. It is far better to target help where it is really most needed.
In terms of further developing the EU’s long-term approach to meeting the challenge, our existing energy policies are viewed by many as a ‘world leader’. The Commission has always insisted that its recent climate and energy package had the combined objectives of sustainability, security of supply and competitiveness, a fact becoming clearer by the day.
Let me recall in more detail the most important elements of these policies, already in place or under examination in this House: the draft directive guaranteeing 20% renewables in our final energy consumption by 2020; the new rules to expand and strengthen the EU’s Emissions Trading System (ETS), ensuring that we meet our target of a 20% greenhouse gas reduction by 2020 and establishing the ETS as driver for change; the proposal for reducing CO
emissions from cars and the Fuel Quality Directive that will oblige oil suppliers to progressively reduce their CO
and energy consumption in the products they sell; and, most importantly, the Energy Efficiency Action Plan, covering all sectors, at all levels, from the International Partnership for Energy Efficiency Cooperation to the Covenant of Mayors at the local level, to specific measures such as labelling of consumer goods or requirements for the energy efficiency of buildings.
Practically all the measures mentioned in the Energy Efficiency Action Plan are cost effective at USD 60 per barrel of oil.
This represents a start, but we need to do more. The Commission will therefore continue the work at international level, notably constructive dialogue between the main oil-producing and consuming countries, such as the Jeddah meeting which will be convened this week in Saudi Arabia, or the EU-OPEC dialogue next week. It will scrutinise the functioning of the oil and petroleum markets in the European Union and make suggestions for possible further policy action in the second Strategic Energy Review later this year. It will assist oil-importing developing countries to mitigate short-term impacts of high fuel and food prices and to bring about structural improvements in their energy efficiency performance and the use of alternatives fuels. It will lead efforts in an increased drive for energy efficiency.
This will remain my highest priority. This means better legislation internally in the EU. It also means pushing for a more effective international energy efficiency partnership, which was adopted last week at the G8 Energy Ministerial in Japan on the initiative of the European Union.
The existing legislation on energy efficiency and the improvements that I will table over the coming months on buildings, labelling and minimum product standards are truly important, but have to be seen as only one of many measures needed. The real challenge is the effective implementation of energy efficiency policies at national, regional and local level throughout the European Union. The Commission will play a greater role in assisting Member States in meeting this challenge.
I shall mention biofuels, because this issue is often discussed. In the Draft Renewables Directive we translate the commitment of the European Council to ensure that 10% of EU transport is powered by renewable fuel by 2020 into practice. It should be noted that this 10% can be covered by biofuels or electricity from renewable sources, or by increasing energy efficiency in the transport fleet.
I am convinced that the EU can and must generate the biofuels that it uses in a sustainable and responsible manner and not affect global food-production levels. This can be done in a sustainable way by using previous set-aside land in the EU, improving land yields in a sustainable way, investing in technology for second generation biofuels, and working together with developing countries to ensure that biofuels complement food production and not replace it. With such an approach, the development of alternative clean transport fuels must be part of the EU’s response to the challenges of oil prices and climate change.
The European Union will need to continue its international efforts and its dialogue with its main partners. The G8 last week and the Jeddah meeting on oil prices this weekend show that the issue tops the political agenda. We should use the credibility we are building and lead international action to exploit energy efficiency potentials and clean energy production around the globe, and enable the functioning of global efficient and trustworthy commodity markets.
We have a constant decrease in our own production – and it is still substantial – but we have this decrease since the late 1990s. A continuing increase in imports consequently makes our oil dependency high and the amount that we are paying for buying energy resources is increasing all the time.
However, action starts at home, and a renewed push for renewable energy and energy efficiency is beneficial not only for the climate but also for our economy.
There is an energy future for all of us. This future will most likely be organised around different patterns of production, consumption and behaviour. As with climate change, action is needed now and the Commission is fully involved in this.
This has a direct effect on our citizens and businesses. Increased oil prices create inflation and that impact can be noticed already. The contribution of energy to the increase in the price index in the fourth quarter of 2007 averaged 0.8% in the euro area. This means direct, tangible impacts on households and on a lot of economic sectors, not least those who cannot pass on the price of energy to the final consumer.
The increase in prices of motor and heating fuels for households between April 2007 and April 2008 exceeded by far the overall growth of consumer prices. As an example, the prices of transport fuels rose on average by 12.7% as opposed to the inflation average of 3.6%. Our most vulnerable citizens are again amongst those most affected.
Back in September 2005, I was already talking to you about rising oil prices and I presented a five-point plan. Since then we have been working out a whole series of new proposals to begin to reply to the challenge of high and growing oil prices: on energy efficiency, on cars, on fuel quality, on renewable energy. As a result of these policies, we can expect a gradual decrease in oil consumption in the EU over the coming years. We now have roughly more or less stable consumption in the last three years and the beginning of the switch to cleaner, more efficient transport that uses renewable energy sources.
Whilst more needs to be done, and certainly we should not underestimate the problems resulting from high energy prices for our citizens, particularly the most vulnerable households as well as many businesses, this already provides a good basis on which to further develop the best possible policy response to the challenge. Indeed, the fact that oil prices have continued to rise does not mean that our policies have failed. I am convinced that without our ambitious climate and energy goals the situation would be even more difficult. But it is clear from the latest trends that we need to further step up our efforts.
So let me now consider the long-term factors affecting the oil market. Put simply, we are leaving the era of cheap oil, and cheap energy in general. Global energy demand is growing and the International Energy Agency estimates that it could increase by more than 50% by 2030. In particular, emerging economies are consuming more and more energy.
On the other hand, it is far from clear whether there will be sufficient oil production to satisfy global demand. Experts say that geologically there are still enough resources underground for the next 40-50 years. As the International Energy Agency has stated, it is far from certain whether the producing countries have the ability or willingness to step up production to meet seemingly inevitable and long-term continued increases in global oil demand.
The era of cheap energy is over, at a time when in any event we have an absolute obligation to future generations to move to clean, carbon-free energy sources for heat, power and transport due to climate change. This is the challenge facing us. This requires a clear response. But, before coming to the long-term and medium-term measures, I would like to mention some short-term steps alleviating the impact on consumers."@en1
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