European renewable energy policy framework
The EU Taxonomy is changing the sustainability reporting landscape by defining business activities as sustainable or not. It is making a clear classification system, which up until now has been lacking. This comprehensive framework makes it easier to compare sustainable businesses to unsustainable ones and reduce greenwashing. This article gives clarity in EU sustainability reporting regulations, particularly the EU Taxonomy, and how it may affect sustainability reporting. Full reporting starts in 2023 for participants under the NFRD and in 2024 for participants under the SFDR, as the financial institutions under the SFDR are dependent on the results from the companies in order to report on their own Taxonomy alignment.
On December 11th 2019, the EU launched the European Green Deal (EGD), an ambitious growth strategy that aims to make Europe the first climate-neutral continent in the world by 2050. The EGD spans across all sectors, and to reach the climate neutrality target, all 27 member states of the EU have pledged to reduce their 2030 emissions by 55% compared to their 1990 levels.
The Renewable Energy Directive 2009/28/EC established a common framework for the promotion of renewable energy sources in the European Union, setting mandatory national targets for achieving a 20% share of renewable energy in the gross final energy consumption and a 10% share of energy from renewable sources in transport by 2020.
Guarantees of Origin in REDII
The Directive confirms that Guarantees of Origin have the sole function of proving that the energy was produced from renewable sources. All member states are required to document the origin of electricity produced from renewable energy.
In 2018 the EU approved a new Renewable Energy Directive (REDII), which included text strengthening the system of Guarantees of Origin toward 2030. REDII clearly states that electricity suppliers and consumers of power shall (read: have to) use Guarantees of Origin to document and report renewable electricity claims in Europe.
The Electricity Markets Directive (2009/72/EC) requires European suppliers of electricity to disclose their fuel with regard to CO2-emissions and radioactive waste. The aim of electricity disclosure is to provide consumers with relevant information about power generation and to allow for informed consumer choice not based on electricity prices alone. Guarantees of Origin comprise a change-enabling instrument complying with consumers’ right to information about purchased products, thus supporting EU’s increased focus on the role of consumers in changing energy behaviour.
On 23 October 2015 the European Council agreed on a new climate and energy framework for post-2020. The targets again cover greenhouse gas reductions, renewable energy and energy efficiency.
This roadmap spells out how to create a low carbon economy by 2050, strongly supported by the International Energy Agency (IEA). The Roadmap explores routes towards decarbonising energy systems, including examining scenarios targeting an 80% reduction in greenhouse gases and an 85% decline in energy-related CO2 emissions.
ECOHZ position papers