The Vienna Forum on European Energy Law – Webinar 2

The Vienna Forum on European Energy Law

The Vienna Forum on European Energy Law is an annual joint initiative of the FSR Energy Union Law Area and the Energy Community Secretariat which aims to bridge the gap in energy debate between the EU and Energy Community. This year, for the 8^th edition of the forum, we will be moving online with four webinars across four weeks, focused on the solidarity principle, the European climate law, carbon pricing, and the role of the private sector in the energy transition. To discuss these topics, we will bring together a panel of experts for a roundtable debate and a live Q&A session with our audience.

Webinar 2

The European Climate Law: Fit for Purpose?

Watch the recording:

On 4 March 2020, as part of the European Green Deal, the Commission adopted a proposal for a European Climate Law as part of the European Green Deal strategy in an effort to strengthen measures toward reaching climate neutrality in the EU by 2050. An amended version of the proposal was issued on 17 September 2020, in line with the new 2030 Climate Target Plan, with a new EU-wide net greenhouse gas emissions reduction target of 55% by 2030 compared to 1990 levels. These new measures would have significant repercussions for EU targets and policies across the field as well as ramp up political pressure on Member States to develop more ambitious national targets.

What does this newly adopted proposal involve? What are the main controversies surrounding it? Are the proposed legal tools appropriate? Is the proposed law fit for purpose? With non-binding national targets for 2030 and in a deeply unstable economic climate, is such an escalation of efforts feasible?

In this webinar, together with a panel of experts, we will discuss the ins and outs of the proposal and its implications, as it enters into the EU legislative process.

Speakers

Introduction Dirk Buschle │ Energy Community Secretariat

Luca de Carli │ DG CLIMA, European Commission

Jürgen Schneider | Ministry of Climate Action, Environment, Energy, Mobility, Innovation and Technology, Austria

Erica Hope | European Climate Foundation

Simone Borghesi | FSR (RSCAS, EUI)

Q & A

Moderation Leigh Hancher | FSR (RSCAS; EUI); Tilburg University; Baker Botts LL

Background to the Discussion

The proposed European Climate Law intends to enshrine the pledge to climate neutrality in EU law, in the form of an EU regulation.

Importantly, while a review of the Governance Regulation will take place to assess whether it is still deemed fit for purpose, the draft climate law is intended to fit within the framework established by the Governance Regulation and surrounding legislation and should be aligned with its reporting and monitoring mechanisms. The Climate Law proposals do not introduce binding national obligations on the 2030 targets, and the 2050 objective of climate neutrality remains binding at Union-level only.

In the Commission’s Impact Assessment,1 which accompanied the proposal for the European Climate Law it noted that, “climate change is a trans-boundary problem. For trans-boundary problems, individual action is unlikely to lead to optimal outcomes. Instead, coordinated EU action can effectively supplement and reinforce national and local action. Coordination at the European level enhances climate action, and EU action is thus justified on grounds of subsidiarity in line with Article 191 of the Treaty on the Functioning of the European Union.”

The legal basis for the proposals are Articles 191 to 193 of the TFEU, which confirm EU competence in the area of climate change; “the European Union shall contribute to the pursuit, inter alia, of the following objectives: preserving, protecting and improving the quality of the environment, promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change.” Note that energy legislation, including the Clean Energy Package, takes a different legal basis – Art. 194 TFEU. Unlike this latter article, Articles 191-3 do not defer to a Member States’ right to determine its own energy mix.

The most controversial element of the proposals surrounds the use of delegated acts.

What are Delegated Acts?

Delegated acts are legally binding acts adopted by the Commission on the basis of a delegation granted in the text of an EU law to supplement or amend non-essential parts of EU legislative acts in order, for example, to define detailed measures. The Commission’s power to adopt delegated acts is subject to strict limits. The delegated act cannot change the essential elements of the law; the legislative act must define the objectives, content, scope and duration of the delegation of power; and the EU Parliament and Council may revoke the delegation or express objections to the delegated act.

According to Art. 290(1) TFEU “a legislative act may delegate to the Commission the power to adopt non-legislative acts of general application to supplement or amend certain non-essential elements of the legislative act.” Essential elements are considered as the rules which are essential to the subject matter envisaged.

Delegated acts are adopted following a consultation with expert groups composed of representatives from each EU country. It is important to note that while the Commission will actively seek out the

advice of experts from Member States, these experts have a consultative rather than a formal role in the decision-making process. Ordinarily, over the course of four weeks, citizens and stakeholders can provide feedback on the draft text of a delegated act. Once the Commission has adopted the act, the EU Parliament and Council generally have two months to formulate any objections. If they do not, the delegated act enters into force. Adopted acts contain an ‘explanatory memorandum’ summarising the feedback received and how it was used.

So, how has the proposal been received?

The initial proposals were met with mixed opinions, and Member States have been split on the proposals. According to the opinion of the European Parliament’s Legal Service from 31 March 2020 on the legality of the use of the delegated acts by the European Commission, issued as a non-paper, the proposal of the Commission goes beyond its competences. The opinion stated that “the Union’s emission reduction targets are indisputably elements which are “essential” to the Union policy on fighting climate change and therefore cannot be a subject to delegated acts”. Further, it states “It is submitted that the trajectory for achieving climate-neutrality by 2050 is an essential element of the proposal for a Regulation on the European Climate Law and delegating the power to the Commission to set out that trajectory is not in line with Article 290 TFEU.” Given that the Commission’s recourse to delegated acts will substantially limit the powers of the European Parliament, as well as the Member States, will this opinion be a factor in maintaining a certain status quo in the process of “creating” further EU energy and climate policy?

Is the use of delegated acts reasonable? Is the Commission overstepping its mark or is it a necessary way forward?

The merits of using delegated acts in the context of such a time-sensitive issue are that they are more efficient and avoid the risk of time-consuming institutional bargaining or one Member State holding another hostage in the process. There is also still democratic oversight – the European Parliament is not entirely side-lined – the European Parliament or Council can object to the delegated act or revoke the delegation of power entirely. There is also the stated consultation process with national experts.

Aside from this issue, some criticisms have also been levelled at the addition of ‘removals’ to the amended proposal with fears that it could be a potential get-out clause. The amended proposal states that “by 2030 greenhouse gas emissions should be reduced and removals enhanced, so that net greenhouse gas emissions, that is emissions after deduction of removals are reduced economy-wide and domestically, by at least 55% by 2030 compared to 1990 levels.” In the first draft proposal, no mention of removals in this context were made. In place of that line, the Commission had promised to “explore options for a new 2030 target of 50 to 55%.” The suggestion is that the 2050 net-zero target would be met via carbon sinks. However, the current 2030 target of 40% emissions reduction compared to 1990 levels does not include offsets. Is the new target thus less ambitious than it appears and more a case of creative accounting? The Commission has responded to the criticisms to state that the baseline for 1990 is also being adjusted retrospectively, meaning there would be no “free” emissions reductions.

There have also been calls by NGOs for an access to justice provision to be added to the draft amendments to the Governance Regulation, in order to allow for challenges to the EU and Member

States should the NECPs and LTSs be deemed inadequate. Articles 5 and 6 of the draft legislation state that the Commission shall adopt relevant measures if the level of ambition is insufficient to reach the targets. However, the assessments of the Commission would not be legally binding, which means they cannot be challenged. What happens if the Commission fails to adopt the “necessary measures in accordance with the Treaties” to rectify these failings? According to Art. 263 TFEU, individuals and NGOs do not have standing to directly challenge acts or omissions before the Court of Justice unless they are the addressees of the measure in question. NGOs must therefore rely on the Aarhus Regulation, which allows them to request a review of the act or omission by an EU institution to adopt an administrative act of individual scope. In the case of a climate law, it would be difficult to demonstrate that the act to be adopted would be of individual scope. There have thus been calls for this barrier to be removed by adding an access to justice provision and for amendments to be made to the Aarhus Regulation.

It remains to be seen how the draft proposals will develop through the legislative process. On 7 October, the European Parliament backed a 60% EU-wide net GHG reduction target by 2030 compared to 1990 levels.

Upcoming webinars

Webinar 3: Carbon Pricing: The Silver Bullet for the Energy Transition?

Monday 30 November 2020: 14.30 – 16.00 CET

Webinar 4: The Private Sector to the Rescue of the Energy Transition

Monday, 7 December 2020, 14.30 – 16.00 CET