On the 6th of April,
2009, the EU Council
of Ministers adopted
the energy and
climate change
package with the aim
of meeting the EU's
overall
environmental target
of a 20% reduction
in greenhouse gases
and a 20% share of
renewable energy in
the EU's total
energy consumption
by 2020.
Six legal acts
adopted by the
Council:
(a)
Directive on the
promotion of energy
from renewable
sources
The share of
renewable sources in
the EU's total
energy consumption
is to be increased
to 20%. Biofuels and
bioliquids will be
counted as renewable
energy when they
meet certain
criteria which
relate to
biodiversity,
protection of rare,
threatened or
endangered species
and ecosystems and
greenhouse gas
emission savings.
These criteria would
have impact on palm
oil biofuels
produced by Malaysia
and exported to the
EU.
(b) Revised
Directive on
environmental
quality standards
for fuels
It sets the target
of a 10% reduction
by 2020 in
greenhouse gas
emissions produced
during the
life-cycle of fuel
production used in
transport. Member
states are required
to transpose the
directive into
national law by the
end of 2010.
(c)
Directive
establishing a
revised EU Emissions
Trading Scheme (EU
ETS) in energy
intensive sectors
The Directive
introduces the
possibility of
limiting auctioning
for a number of
sectors exposed to
the risk of “carbon
leakage" (where
investments and
production have
moved to third
countries with
"lower environmental
standards") should
the international
negotiations on
climate change in
Copenhagen in
December 2009 do not
lead to a new
international
agreement on climate
change. The
Commission will
determine the list
of sectors by 31
December, 2009.
(d)
Directive on effort
sharing
The Directive sets
binding emissions
targets for EU
member states in
sectors not subject
to the EU Emissions
Trading Scheme.
The aim is a 10%
reduction in these
emissions by 2020.
(e) Regulation
on carbon dioxide
emissions by new
passenger cars
The legislation sets
the first legally
binding standards
for emissions by new
passenger cars,
effective 2012 by
gradually bringing
down emissions to
130g CO˛/km
by 2015.
Manufacturers can
improve their fleet
emissions
performance by
including eco-
innovations or by
producing ultra low
emission cars.
(f) Directive
setting up a
regulatory framework
for carbon capture
and storage
The Directive is
intended to make the
deployment of the
technology to
capture and store
carbon dioxide in
the EU possible.
Sweden, which will
assume the EU
Presidency on the 1
July, 2009, plans to
put the issue of
climate change as
one of its main
priorities. Other
positions taken by
the EU in the
negotiations for
climate change
include:
pushing to halve
tropical
deforestation by
2020 and halt
global forest
cover loss by
2030;
setting targets
for reducing
emissions from
international
aviation and
shipping; and
building an OECD -
wide carbon market
by 2015 by linking
the EU emissions
trading system
with compatible
cap and trade
systems being set
up in other
industrialised
countries.
The climate change
package adopted by
the EU can directly
or indirectly affect
Malaysian
companies. The
inclusion of the
aviation sector,
which involves
imposing a cap on
carbon dioxide
emissions for all
planes arriving or
departing to/from EU
airports, will cause
the operational
costs for Malaysian
airlines operators
to increase.
