Following Glasgow COP26’s ambitious net-zero corporate claims (the Glasgow Climate Pact), its enhanced call for action over non-CO2 greenhouse gases (such as methane), and the significant advances on Article 6 market and non-market mitigation scenarios, COP27 has a vivid legacy for which to be accountable. This year’s COP is moreover embedded into a sense of global distress led by the War in Ukraine and other relevant geopolitical scenarios (e.g., tensions over China-US relations, Brazilian elections), which could shape the future of multilateralism in climate negotiations.

In parallel, environmental reports continue calling for urgent action to redirect the stability of our Planet below levels of dangerous interference for future generations. UNEP’s “Emissions Gap Report”, WMO’s “Provisional State of the Global Climate 2022” and WWF’s “Living Planet Report” bring evidence of the Planet’s poor performance and raise awareness on the need for higher ambition in Nationally Determined Contributions (NDCs) and countries’ action both on mitigation and natural capital conservation (e.g. enhanced pressure on Loss and Damage funding).

In the 2022 edition of the FSR Climate Conference, this policy roundtable will reflect on the achievements, shortcomings and take-home messages from COP27 in Sharm El Sheikh, Egypt. The discussion will touch upon challenges and opportunities of decarbonisation pathways within the current context of geopolitical tensions over resources, trade, and socially just transitions.

Watch the recording:

Host:

• Simone BORGHESI (EUI & University of Siena)

Chair:

• Jos DELBEKE (EUI & KU Leuven)

Speakers

• Karen PITTEL (ifo Institute & University of Munich)
• Jacob WERKSMAN (DG Climate Action)
• Angela CHURIE KALLHAUGE (Environmental Defense Fund)

Check out the programme of the conference

Register here

We are often told that a hydrogen grid is essential if Europe wants to reach its climate targets. Such claims are often based on modelling with strong fixed assumptions.

In this FSR Insights event, Tom Brown, TU Berlin, examines results from a highly-detailed energy system model that endogenises as many choices about energy supply and infrastructure as possible. The presentation explores trade-offs between electricity grid expansion and hydrogen networks, as well as between e-fuel imports and domestic production.

While energy trade is always cost-optimal, there are many near-optimal solutions with attractive properties of resilience, lower land usage and less infrastructure lock-in. The FSR Insights rounds off with a discussion of the benefits of open energy modelling for infrastructure decision-making.

Hosts

Leonardo Meeus | Florence School of Regulation (FSR)

Lucila de Almeida | FSR & Nova School of Law

Keynote Speaker

Tom Brown |TU Berlin

Discussants

Christine Brandstätt | Copenhagen School of Energy Infrastructure

Tim Schittekatte|FSR and MIT

Read these recent publications ahead of the event:

Marta Victoria, Elisabeth Zeyen, Tom Brown, ‘Speed of technological transformations required in Europe to achieve different climate goals’, Joule, 2022

Fabian Neumann, Elisabeth Zeyen, Marta Victoria, Tom Brown, ‘Benefits of a Hydrogen Network in Europe’, preprint under review, 2022

FSR Regulatory Policy Workshop Series 2022-2023

This Workshop intends to review the state of the art with respect to measures aimed at promoting or mandating energy savings and with the approach to energy demand rationing.

For this purpose, the Workshop, after an opening part, will be divided into two Sessions:

• Session I, in the morning, will focus on measure to promote or mandate energy savings, with particular focus on the extent to which these measures have been designed to achieve the highest level of savings at the lowest social costs;
• Session II, in the afternoon, will aim to review how planning for rationing has been approached in the different jurisdictions.

For more info, download the full programme

Event under Chatham House rules. Please do not tweet speakers’ names

Many countries look at carbon pricing as part of their climate policy mix. A key development is the emergence of the voluntary carbon market (VCM); a debate is raging about how to improve its environmental credibility. The VCM should facilitate credible investments in carbon removals and the transfer of clean technologies across the globe. Will this lead to a significant increase in market volume? Could voluntary and regulated carbon markets converge? Is a future global carbon price possible?

Date: Tuesday 15 November

Time: 9:30 – 10:30 EET

Location:  EU Pavilion

Speakers are:

• Jos Delbeke, EUI
• Jan Cornillie, EUI
• Mashael AlShalan, AEON
• David Rademacher, E.ON
• Andrea Abrahams, IETA
• Richard Newell, Resources for the Future

Register here to attend the event.

The event presented here is organised by members of the Delegation of the European University Institute to COP27, not FSR directly. 

To meet the ambitious goals of the Paris Agreement, developed and developing economies will need to decarbonize at a fast pace. The ability to channel finance to mitigation activities will be essential in this process. Facilitated by financial institutions, countries need to establish frameworks governed by clear rules to ensure emissions get effectively reduced. Among other mechanisms, pricing carbon is key in achieving an ambitious and just transition in both developed and developing countries. It can also generate income to address equity issues.

This COP27 event will take place on Friday 11 November 2022, at 16:45-18:15 EET in the Room Amon of the UNFCCC Pavilion, and will be live-streamed on Youtube.

The official side event is co-organised by PIK Potsdam, EUI, ICAP and MCC Berlin.

Watch the streaming here:

Chair, introduction and conclusions

• Johan Rockström, PIK

Moderator of the discussion

• Jos Delbeke, EUI

Discussants:

Part 1: Carbon pricing, state of play globally

• Simone Borghesi, EUI and University of Siena
• Stefano De Clara, ICAP
• Martin Hession, European Commission

Part 2: Carbon pricing, climate finance perspectives in developing countries

• Silvie Kreibiehl, IPCC AR6 WG3 Finance Chapter CLA
• Dora Benedek, IMF
• Bernice van Bronkhorst, World Bank (tbc)

Part 3: Discussion with the presenters and Q&A with the audience

Check out the presentations:

• Stefano De Clara, ICAP – Emission trading worldwide
• Simone Borghesi, EUI – Carbon pricing and the social acceptability of climate policies

The FSR Energy Union Law Area is pleased to announce the next edition of its biannual update on recent and pending energy case law at the Court of Justice of the European Union (CJEU). This event will offer a comprehensive overview of the most significant energy cases since the last case law update, which took place in June 2022.

In this briefing, Dr Adrien de Hauteclocque, Head of Cabinet of the President of the General Court and Professor Leigh Hancher, Director of the FSR Energy Union Law Area, will discuss highlights from the latest case law.

The cases that will be discussed include:

• C-46/21 P – ACER v Aquind (Opinion of Advocate General Campos Sánchez-Bordona)
• T-631/19 – BnetzA v ACER
• C-721/20 – DB Station & Service
• C-348/20 – Nord Stream 2 v Parliament and Council
• T-793/19 – Tirreno Power v Commission,
• T-794/19 – Set v Commission
• C-578/21 P – Irish Wind Farmers’ Association and Others v Commission
• T-469/20 – Netherlands v Commission
• T-101/18 – Austria v Commission
• Joined Cases C-702/20 and C-17/21 (Opinion of Advocate General Rantos)
• C-470/20 – Veejaam and Espo (Opinion of Advocate General Rantos)

The event will also include a discussion of energy law cases currently pending before the Court.

More on ECJ Case Law

If you want to catch up on earlier CJEU developments, you can watch the recordings of our sessions from June 2021 here, December 2021 here, and June 2022 here.

Energy Union Law & Policy

FSR Energy Union Law area provides a forum for critical discussion and independent analysis of the developments in EU energy law and policy. Our activities are aimed at professionals from national energy regulatory authorities, European and international institutions, energy-focused law firms, consultancies and energy utility companies.

Faced with rapid urbanisation, growing population and increased electricity demand, African countries must radically transform their energy systems to address challenges faced by utilities. Power utilities in Africa are in a vicious cycle of financial deficit and exhibit poor technical performance, with the consequence of an insufficient investment in electricity supply infrastructure, poor system reliability and low access rates.

What are the priority areas for Africa in preparation to meet the climate and development goals? How can mini-grids and regional power pools help address Africa’s energy access needs and what is the role of natural gas in Africa’s energy mix?

FSR faculty members Jean-Michel Glachant, Christine Juta and Elias Zigah will discuss these issues with Ignacio Pérez Arriaga.

Host

Jean-Michel Glachant  

Guest Speaker 

Ignacio Pérez Arriaga| Interim Director African School of Regulation 

Discussants

Christine Juta| FSR 

Elias Zigah| African School of Regulation 

Agenda

Opening remarks and introduction

Speaker: Ignacio Pérez Arriaga

Discussion with Christine Juta and Elias Zigah

Q&A with the audience

Electricity is used for railway traction. With the 4^th Railway Package, traction current became excluded from the Minimum Access Package to be provided by the Infrastructure Managers (IMs) and was declared an additional service that could be acquired from third parties or even directly generated by the Railway Undertakings (RUs) themselves. It is, however, still common in many Member States to have the IMs as the only providers (the so-called “intermediaries”) of electricity for traction, be it for legal or for technical reasons. The question of traction current has recently gained attention because of the decarbonisation imperative on the one hand and the rise in electricity prices on the other. Overall, there seems to be a need for clearer regulation.

In the context of their corporatisation, railway operators were unbundled and their electricity generation, if they had any, was often sold to electricity generating companies. Most IMs now buy electricity on the market, even though some of the IMs still generate their own electricity or a portion thereof. With increasing electricity prices IMs are forced to manage their electricity portfolio more proactively (futures, hedging, etc.). Some of the IMs are even considering going back into the generation business be it in order to reduce price risks or in order to take advantage of renewables generation along their infrastructures. There might even be opportunities for IMs to sell electricity, for example for charging electric vehicles at railway stations. This raises the question as to how far IMs can go in terms of energy management and generation, thus the need for regulatory certainty. In particular, there is a need to clarify the interface between railway and energy regulation.

Against this backdrop, the 22^nd Florence Rail Forum will bring together European and national policymakers, regulatory bodies, railway undertakings, infrastructure managers, and academics, among others, with a view to examining the following three critical questions:

1. What are the current practices in the different Member States in matters of electricity for traction? What are the foreseen practices in some Member States?
2. What are the technical and legal issues that complexify the matter?
3. Is there a need for clarification, also with energy regulation, and what would be the way forward?

Please note that participation at this event is by invitation only.

Speakers’ presentation slides

Introduction

Matthias Finger – FSR-Transport

Alberto Oeo Pizarro – IRG-Rail

Alberto Pototschnig – FSR-Energy

Session A

Judith Böhler-Grimm

Christian Wolf – German Federal Network Agency

Florian Baentsch – DB Energie GmbH

Session B

Patricia Miranda – OUIGO

The European Union Foreign Subsidies Regulation will enter into force at the end of 2022. From September 2023 onwards, companies carrying out concentrations (mergers and acquisitions and JVs where one of the parties has a global turnover exceeding €500 million), or involved in procurement procedures above €250 million, will have to inform the European Commission about ‘financial contributions’ such as subsidies, the tax break that they received from non-EU governments, which exceed relative low thresholds.

This important new piece of legislation is intended to ‘level the playing field for EU companies, competing with undertakings from third companies. It will pose major substantive and procedural challenges for all energy companies, whether EU or from abroad.

During this policy debate, Christof Schoser, the Head of Task Force Third- County Subsidies at the European Commission’s Directorate-General for Competition will present the regulation on foreign subsidies and explain how it is intended to work in practice – notably how companies should prepare to comply with the notification obligation.

Mr Schoser will also highlight how the Commission might interpret the notion of a distortive effect on the EU internal market.

Energy companies already need to start preparing for this Regulation now, and this is a unique opportunity to hear first-hand how they should do so.

Programme:

Introduction and moderation

Christopher Jones | Florence School of Regulation (FSR)

Keynote presentation

 Christof Schoser | European Commission

 Discussant:

Ilaria Conti | FSR

Marzia Sesini | FSR

FSR Climate is pleased to announce its 8^th Annual Conference on the Economic Assessment of European Climate Policies to take place online on Thursday 1 and Friday 2 December 2022.

The conference will cover the main climate-related existing policies at the EU, national, international and sub-national levels. It will include three sessions on Environmental taxation, Emissions trading, and Energy Transition. In addition, the conference will comprise a keynote speech from Mar REGUANT (Northwestern University), and a policy session focused on the key outcomes of COP27.

The FSR Climate Annual Conference will be held online through Zoom Webinar.

Chair: Simone BORGHESI (FSR Climate/EUI & University of Siena)

Thursday 1 December

10:00-12:15 | Session – Environmental taxation

• Till REQUATE (Kiel University) – Commitment Timing to Environmental Policy and the Adoption of Low-Pollution Technologies: An Experiment [abstract] [slides]
• Adrien FABRE (CIRED & ETH Zurich) – Fighting Climate Change: International Attitudes Toward Climate Policies [abstract] [slides]
• Santiago RUBIO (University of Valencia) – Climate Clubs, Border Carbon Adjustment, and Trade Wars [abstract] [slides]
• Lucy NAGA (Durham University) – Kantian Preferences and Dirty Goods within the Ramsey Model of Optimal Taxation [abstract]

14:15-15:45 | Policy Session on the outcomes of COP27

• Jos DELBEKE (STG/EUI & KU Leuven)
• Karen PITTEL (ifo Institute & University of Munich)
• Jacob WERKSMAN (DG Climate Action)
• Angela CHURIE KALLHAUGE (Environmental Defense Fund)

More info here.

16:00-17:00 | Keynote Speech

• Mar REGUANT (Northwestern University) – Successes in the renewable expansion: learning from Spain and Chile  [abstract] [slides]

Friday 2 December

10:00-12:15 | Session – Emissions trading

• Misato SATO (London School of Economics) – Carbon Leakage, Consumption, and Trade [abstract] [slides]
• Marie RAUDE (EconomiX) – Firms in the EU ETS: a categorisation based on transaction behaviour [abstract] [slides]
• Johanna CLUDIUS (Öko-Institut) – An ETS-2 for buildings and road transport: Impacts, vulnerabilities and the role of the Social Climate Fund [abstract] [slides]
• Michael PAHLE (PIK – Potsdam Institute for Climate Impact Research) – Fit for climate neutrality? The EU carbon market in 2030 and beyond [abstract] [slides]

 14:00-16:15 | Session – Energy transition

• Pedro LINARES (Comillas Pontifical University) – How much storage do we need for the energy transition?  [abstract] [slides]
• Thomas DULAK (Université Libre de Bruxelles) – The dog that didn’t bark: the reaction of financial markets to the court ruling in Milieudefensie v. Royal Dutch Shell plc. [abstract]
• Elena VERDOLINI (EIEE & University of Brescia) – Policy choice, timing and stringency and the direction of innovation [abstract] [slides]
• David RAPSON (UC Davis & Federal Reserve Bank of Dallas) – The Electric Ceiling: Limits & Costs of Full Electrification [abstract] [slides]

 16:15-16:30 | Conclusions

The event is organised by EUI with the support of EAERE.

Past editions of the FSR Climate Annual Conference:

FSR Climate Annual Conference 2021

FSR Climate Annual Conference 2020

FSR Climate Annual Conference 2019

FSR Climate Annual Conference 2018

FSR Climate Annual Conference 2017

FSR Climate Annual Conference 2016

FSR Climate Annual Conference 2015

This FSR Insights event will host the editors of the forthcoming second edition of the “Capacity Mechanisms in the EU Energy Markets” book to discuss how and why the book is intended to serve as a point of reference for regulators and policy-makers on how to design optimal capacity mechanisms in Europe.

Since the first edition of the edited book “Capacity Mechanisms in the EU Energy Markets” (Oxford University Press, 2015), these mechanisms have become a fact of life in member states’ energy markets and one of the hottest topics in the broader European regulatory debate. Concerned about the security of electricity supply, national governments are implementing subsidy schemes to encourage investment in conventional power generation capacity alongside already heavily subsidized renewable energy sources.

With the increasingly connected European electricity markets, the introduction of a capacity mechanism in one country not only tends to distort its national market but also may have unforeseeable consequences for neighbouring electricity markets. As these mechanisms are adopted by member states with limited supra-national coordination, as well as consideration for the cross-border impact, they tend to cause severe market distortions and put the future of the European internal electricity market at risk.

The “Capacity Mechanisms in the EU Energy Markets” book will take stock of the experience so far about how capacity mechanisms work and what consequences they have for the European internal electricity market. In particular, it will:

1. provide a cross-disciplinary view on capacity mechanisms, combining legal, economic and policy perspectives;
2. include a detailed overview of national capacity mechanisms and their implications for the EU internal market;
3. take a European approach, recognizing the need to understand the nature of market failures which are likely to occur in the European electricity markets;
4. offers an outsider’s view on the current developments in Europe, including contributions of recognized extra-EU energy experts.

Before the event, watch the video pills

Host and moderator

Lucila de Almeida | Florence School of Regulation (FSR) and NOVA School of Law

Speakers and book editors

Leigh Hancher | FSR and Tilburg University

Adrien de Hauteclocque | FSR and Court of Justice of European Union

Kaisa Huhta | University of Eastern Finland and Centre for Climate Change, Energy and Environmental Law

Małgorzata Sadowska | ACER (TBC)

Discussants

Paolo Mastropietro | Comillas Pontifical University

Charles Verhaeghe | Compass Lexecon

Related material

Podcast on “The European Commission’s state aid decision on the Belgian capacity mechanism” by Kaisa Huhta and Leigh Hancher.

This webinar will discuss the options for designing a possible mechanism for a wholesale gas price cap. Oliver Koch from the European Commission will give an overview of questions which are being discussed among the European Union (EU) Member States – the state of play, followed by opinions from leading academics and think tanks.

The question of whether and how the EU should install a price cap for natural gas markets is at the top of the EU’s political agenda. Recent prices, around 1000% of the price of gas in 2020, with its knock-on effects on electricity markets, is causing hardship for citizens and business, with energy-intensive industry curtailing production, which threatens supply chains, and employment and is stoking inflation.

The situation is serious. On 30 September 2022, the EU adopted a regulation on an emergency intervention to address high electricity prices requiring Member States to adopt a cap on market revenues of infra-marginal generators and a profit clawback on oil and gas companies.

However, these measures partially treat the symptoms of high gas prices and are not the cause. They will only raise a fraction of the revenues that the Member States would need to properly subsidise citizens and industry over the coming two to three years, and they do not affect the underlying cause of high gas prices.

There is little surprise that many EU Member States are asking the European Commission for a proposal on a gas price cap. Little wonder, however, that other countries, previously reliant on Russian gas, are cautious. Once a price cap is installed, and thus no price competition exists between EU customers, how to ensure that available gas goes to the citizens and industries that need it most?

Programme:

Introduction and moderation

Christopher Jones | Florence School of Regulation (FSR)

Keynote presentation

 Oliver Koch I European Commission

 Discussant:

Alberto Pototschnig | FSR

Ilaria Conti | FSR

Bernd Weber | EPICO

Oscar Arnedillo | NERA Economic Consulting

Conclusions

Andris Piebalgs | FSR