Finland’s key goals reached in EU climate and energy package negotiations
The European Council which convened in Brussels on 11 and 12 December reached consensus on the implementation of objectives set by the spring 2007 European Council for the reduction of greenhouse gas emissions and the increase of the volume of renewable energy. The EU leaders also agreed on continuing the ratification of the Lisbon Treaty with an aim of its entry into force by the beginning of 2009.
Climate and energy package
Finland considers the climate and energy package an effective agreement. The EU is determined to continue on the path of tackling climate change. This will strengthen EU leadership in international climate policy and create a solid outline for the Climate Summit to be held in Copenhagen in December 2009.
”It is essential not to compromise on the ambitious objectives. Despite the difficult economic situation, the EU must strive to maintain its role as a leader in the promotion of climate protection. The European Council managed to solve the questions of key importance to Finland, such as the prevention of carbon leakage and the definition of the reference period of emission allowances”, Prime Minister Matti Vanhanen pointed out.
The European Council agreed that it will be possible to determine the emission allowances to be auctioned on the basis of a period consisting of more that just one year (2005-2007). In the original proposal, the reference year was 2005. In Finland, greenhouse gas emissions in 2005 were at an exceptionally low level. This decision is highly relevant for Finland. Finland will be able to auction approximately 20 per cent more emission allowances.
“This is a landmark decision for Finland. It recognises the fact that there is significant annual variation in emissions in Finland resulting, for example, from the use of hydro power”, Prime Minister Vanhanen said.
From Finland’s perspective it was also important that, in order to prevent carbon leakage, energy-intensive export industries get to enjoy special treatment. Carbon leakage refers to a situation where, forced by the strict EU climate policy, heavy industries would relocate outside of Europe. The European Council decided on the criteria for additional costs and trade intensity on the basis of which free emission allowances are granted for sectors qualifying for the computational criteria, such as the forest industry.
Prime Minister Vanhanen stressed that this is a solution that ensures the competitiveness of the forest industry. It was a key priority for Finland to get the carbon leakage decision to cover the forest sector. ”The decision will generate such confidence needed by the forest industry and create good conditions for the sector’s operations in Europe. Many vital export sectors, such as steel, will also get this special treatment. The promotion of the forest sector was left for Finland to do and it was a success", he commented.
An agreement was reached on renewable energy already before the European Council started. Finland got through its key negotiation aims. Finland is to increase the share of renewable energies to 38% by 2020. The central role of the forest sector in the production of renewable energies in Finland has been taken into account in the solutions. Carbon capture and storage was extended to cover renewable energy, for example biofuels. As regards second generation biofuels, wood-based fuel can be doubled in the 10% transport objective. This improves the profitability of second generation biofuel companies using woodchips and peat.
In the consideration of heat pumps, it was noticed that the cold climate in Finland affects the efficiency of heat pumps. The solution achieved allows us to count heat pumps among renewable energy systems in Finland in future too.
Treaty of Lisbon
The discussion on the Lisbon Treaty reached a consensus on the continuation of the Treaty process. On the basis of a proposal by the Irish Prime Minister Brian Cowen, it was decided that Ireland will get sufficient guarantees answering to the worries that came up in the referendum in relation to, for example, Ireland’s traditional non-alignment policy. According to the European Council decision, all Member States will continue to have a member in the European Commission. The Treaty of Lisbon allows this decision. On the basis of the Treaty of Nice, the number of Commissioners was meant to decrease already in 2009. Ireland will now aim to ratify the Lisbon Treaty by the end of October. Prime Minister Vanhanen considered this a good solution that pushes the process ahead. “From Finland’s point of view, it is important that each Member State will continue to have a member in the Commission”, he said.
Economic crisis
The EU leaders considered the Commission’s European Economic Recovery Plan, equivalent to about 1.5% of the GDP of the EU Member States, a good basis for further action. It plan will aim at coordinated measures to ensure employment, consumer confidence and purchasing power. It is, however, necessary to comply with the Stability and Growth Pact and notice that the flexibility is only temporary. ”The European Council proved again that the EU acts decisively to improve the economic situation. It is important for the EU to act in unison in this economic situation”, Prime Minister Vanhanen underlined.
Further information: Riina Nevamäki, Special Adviser to the Prime Minister, EU Affairs, Prime Minister’s Office, tel. +358 9 1602 2055 and Kare Halonen, State Secretary for EU Affairs, Government Secretariat for EU Affairs, tel. +358 9 1602 2180