2018 tracks progress for sustainability in Energy Community Contracting Parties

Author: Irina Lazzerini, Sustainable Energy Expert, Energy Community Secretariat

When opening the Energy Community homepage, the first information that captures the reader’s attention is the mission of the organization: creating an integrated and sustainable pan-European energy market. And indeed, during the last few years, sustainability has increasingly become a pivotal consideration when designing and adopting new energy policies and legislation in the Energy Community.

As emerging from the 2018 Implementation Report – which can be found here – sustainability is the area of work assessing the largest number of sectoral indicators and sub-indicators. Its implementation score – with an overall 52% and Montenegro leading – is the highest by comparison to electricity (48%), gas (30%) and oil (21%).

Latest progress includes, for example, Albania successfully completing the first renewable energy support auction in the Energy Community for the construction of a 50 MW solar power plant; Kosovo* adopting energy efficiency legislation and establishing an energy efficiency fund; the entry into force of the Large Combustion Plants Directive for existing power plants and the Industrial Emissions Directive for new ones; as well as the adoption of climate recommendations in all Contracting Parties.

Acquis on Climate

The three key pillars of sustainable energy in the Energy Community – namely energy efficiency, renewables, environment, and their respective acquis – have been recently joined by climate, in an effort to include the Energy Community in the global transition to decarbonization and the fight against climate change. Two recommendations on climate action are currently in place in preparation for the introduction of the Regulation on the Governance of the Energy Union.

The first is the Recommendation for Contracting Parties to implement and align their legislation to the Monitoring Mechanism Regulation (MMR) – Regulation (EU) No 525/2013 adopted by the Ministerial Council of the Energy Community in October 2016. It includes a number of important provisions for monitoring and reporting greenhouse gas emissions, such as establishing GHG emission inventories, developing low-carbon development strategies and improving national systems for reporting on policies and measures.

Two recommendations on climate action are currently in place in preparation for the introduction of the Regulation on the Governance of the Energy Union.

Furthermore, in January 2018, following the 15th Ministerial Council of the Energy Community, the Contracting Parties adopted Recommendation 2018/01/MC-EnC on preparing for the development of integrated National Energy and Climate Plans (NECPs), which encourages countries to streamline multiple monitoring and reporting obligations on climate and energy, also fostering regional cooperation and enhancing transparency of all energy actors.

Policy Guidelines were prepared by the Secretariat in cooperation with the European Commission to offer guidance to the Contracting Parties in the process of developing their integrated plans. Bosnia and Herzegovina, Kosovo* and former Yugoslav Republic of Macedonia have officially set up National Working Groups on NECPs, as recommended by the Secretariat. At the same time, work on the technical annex of the plans is already under preparation in Montenegro and Albania, leveraging on assistance provided by GIZ.

Support to the Paris Agreement and the ‘Clean Energy for all Europeans’ package

These two recommendations represent a first important step of the Energy Community into the domain of tackling climate change. Nevertheless, they are not legally binding and therefore do not impose obligations or deadlines on the Contracting Parties.

Also, as reported by the Implementation Report 2018, preparation of climate legislation is progressing slowly in most Contracting Parties and the limited human capacities and technical expertise in the key ministries – as well as the lack of integration of climate policy across sectors – continue to pose a barrier to further progress.

The process of amending the Energy Community Treaty, as agreed during the last Ministerial Council in Skopje on 29 November 2018, opens a new opportunity for climate considerations to be further introduced, starting from including a clear reference to the Paris Agreement, signed and ratified by all Contracting Parties (with the exception of Kosovo*, not yet a signatory party to the UNFCCC), which defines climate change-related reporting obligations for the period after 2020 also by establishing an enhanced transparency framework for action and support.

Limited human capacities and technical expertise in the key ministries – as well as the lack of integration of climate policy across sectors – continue to pose a barrier to further progress

More importantly, the Skopje Ministerial Council adopted the General Policy Guidelines on 2030 Targets for the Contracting Parties of the Energy Community. The Guidelines not only stress the timeliness and significance of a political consensus on 2030 energy and climate targets, but also refer to the inclusion of legislation stemming from the ‘Clean Energy for all Europeans’ package in the Energy Community acquis, namely the recast Renewable Energy Directive, Energy Efficiency Directives, and the Governance Regulation.

Energy Community at COP24 in Katowice highlights challenges and opportunities in shifting to a just, low-carbon transition

At international level, the Energy Community underlined its commitment to tackling climate change by participating to the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) for the second year in a row, this time in Katowice (COP24) and with the Energy Community Secretariat as a fully-fledged observer organization.

On 10 December 2018, the Secretariat, with the support of the Polish Government under the COP24 Presidency, held the side-event Shifting to a low-carbon economy: Just transition pathways in the Energy Community and beyond opened by a keynote speech of COP24 President H.E. Michał Kurtyka. In his speech, Mr Kurtyka expressed his support for the climate action process within the Energy Community as a driver contributing to international climate efforts.

The event – extraordinarily well received and attended by almost 200 COP participants – was chaired by Connie Hedegaard, former EU Commissioner for Climate Action, and featured a debate with representatives of Energy Community Contracting Party ministries in charge of climate and energy, the European Commission, partner organizations (IRENA) and civil society. The key focus was on how to kick-start a viable economic and technological energy transformation in regions with coal mining activities.

The side-event was preceded by a meeting of the Energy Community’s Energy and Climate Committee and the European Commission, which served to exchange information on the first week of negotiations at COP24, coordinate on a number of key items of the Paris Agreement Work Programme, and support Contracting Parties in their climate ambitions and concrete steps forward – one remarkable example being former Yugoslav Republic of Macedonia signing up to the “Statement on Stepping up Climate Ambition” proposed by the High Ambition Coalition.