European parliamentarians want 20% renewable heat by 2020

Brussels (Platts)--26Jan2006

Members of the European Parliament's energy committee want renewables'
share of the heating and cooling market to at least double to 20% by 2020,
they said in a report  Thursday.

     The report calls on the European Commission to propose a law to promote
heating and cooling from renewables based on the report's recommendations by
Jul 31, 2006.

     The EC said in its biomass action plan published in December that it
plans to propose a renewables heating/cooling law in 2006. "We're about to
start an impact assessment," said an EC official.

     One difficulty from the EC's viewpoint is the legal basis--unlike the
European Union directive promoting renewable power, heating and cooling does
not cross national borders and so is not an internal market issue.

     The EP's report uses article 175 of the EC Treaty, which refers to
measures to protect the environment. The report calls on the EC to set a
'realistic and ambitious EU target' of at least 20% by 2020, with binding
national targets which take into account national differences.

     But member states are unlikely to agree to binding targets in any final
formal EC proposal. They rejected the proposed binding targets in the EC's
draft energy efficiency law last year in favor of indicative, flexible ones.  

REPORT TARGETS SUPPORT INCENTIVES SUCH AS TAX BREAKS, INVESTMENT AID   

     The report also calls for member states to develop action plans showing
how they plan to meet their targets, in a similar style to the ones proposed
in the EC's energy efficiency law. The report supports offering incentives for
renewable technologies which are not yet competitive in an open market. These
could include tax breaks, direct investment aid and regulatory measures such
as mandatory use of renewable plant or combined heat and power in new
buildings or renovations. 

     German socialist committee member Mechtild Rothe, the rapporteur
responsible for guiding the report through the parliamentary process, said
that a new EU law was the only way to enable the EU to meet its indicative
target to have 12% of its energy use from renewable sources by 2010. Two years
ago the EC forecast that the EU would miss this target unless member states
changed their policies toward renewables, particularly toward the poor
performing biomass sector.

     The report is to be voted on by the full EP in March, but has no binding
effects in itself. However, it does give the EC an idea of what the EP's
reaction to any proposal it makes in this area might be. Both the EP and the
Council of member state governments would have to agree the final text of any
such proposal before it could become law.

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