During the reporting period Europe’s energy policy focused on two issues: increasing transparency in the wholesale energy business, and enhancing energy efficiency.

Transparency in the wholesale energy market

On December 28th, 2011, the EU regulation on wholesale energy market integrity and transparency (REMIT) came into force. It is designed to ensure that prices on wholesale energy markets are based on a fair competitive interaction between supply and demand. Above all, it aims to prevent unlawful profits from market abuse. People who have access to insider information on the wholesale energy market are prohibited from taking advantage of this information as of December 28th, 2011. The regulation stipulates that specified information must be published, for example concerning the capacity utilisation and use of facilities to generate and store energy, as well as the consumption or transmission of electricity and natural gas. The interdependency of these markets requires a cross-border market surveillance system. As a result, this regulation assigns major responsibility to both the Agency for the Cooperation of Energy Regulators (ACER) as well as to the national regulatory bodies.

EU energy efficiency directive

On June 14th, 2012, the EU member states agreed on new binding regulations to increase energy efficiency as a means of reducing energy consumption by 20% by the year 2020. The new Energy Efficiency Directive should help the member states to achieve annual energy savings of 1.5%. In exceptional cases, the energy savings targets could be reduced to 1.1% per year. The directive contains a series of important specific measures with which energy savings can be realised, (e.g. renovation of 3.0% of government buildings each year). The directive commits EU member states to define national energy savings targets. The Energy Efficiency Directive was approved by of the European Council on October 4th, 2012. Subsequently the member states have to convert the directive into national regulations beyond January 1^st, 2014.

EU emissions trading

The Director-General for Climate Action, which serves as the climate protection body set up by the European Commission, is currently working on proposals to delay CO₂ auctions in which CO₂ emission certificates for the third trading period (2013–2020) which were not allocated gratis are to be integrated into the Emission Trading System (ETS). In this regard it is planned to withhold a specified number of CO₂ emission certificates, the precise number of which has not yet been defined, at the beginning of the third trading period (2013–2015). Subsequently these certificates will first be made available on the marketplace towards the end of the third trading period (2018–2020). Accordingly, the total volume of certificates in the third trading period will remain the same, but there will be a delay in the actual number put up for auction closer to the year 2020. The number of CO₂ emission certificates being discussed ranges from 400m to 1.2 billion. (In comparison, the entire volume of emissions of all facilities encompassed in the Emission Trading System amounts to about 1.8 billion tons of CO₂ annually.)

On the basis of this measure, the EU Commission hopes to counteract the surplus of CO₂ emission certificates from the second trading period, and the related low certificate prices. The EU Commission holds the opinion that the current prices for CO₂ emission certificates do not constitute sufficient motivation for companies to make investments in low CO₂ emission technologies.

In addition to changing the existing CO₂ auction regulations of the ETS Directive, the EU Commission has already developed a document laying out the first step required to subsequently adapt or make changes to the ETS Directive. The crucial point is that this draft proposal would enable CO₂ emission certificates to be withdrawn from the market at any time but does not stipulate if and when these certificates will be ever again be integrated in the system. A specific legislative proposal on the part of the EU Commission is expected by the end of 2012.