IN SPRING 2007, EU leaders agreed to a series of headline targets to cut greenhouse gas emissions by 20 per cent by 2020 compared to 2005 levels.
They also agreed to a 20 per cent increase in the use of renewable energy and a 20 per cent cut in energy consumption through improved efficiency. A final decision on how each EU state achieves this goal and pays for it was hammered out yesterday.
Why is it so important?
The EU's credibility as a leader on climate change is at stake. The EU was a leader in getting a deal on implementing the current global Kyoto Protocol agreement to cut CO2 emissions, which runs out in 2012. It now wants to lead the world in reaching a follow-up UN agreement in Copenhagen in 2009 by setting an example for cutting emissions. It has also pledged that if the world follows its lead it will agree cuts in CO2 emissions of 30 per cent by 2020.
Why have the talks in Brussels been so difficult? The technical details involved in creating a cap and trade system, known as the EU emissions trading system (ETS), to enable European industry to reach the headline goals are hugely complex.
This system works by forcing industry to buy emissions credits through an auction process, giving it the right to pollute.
The economic downturn has also alarmed some EU states, which sought concessions to reduce the costs to their industry.
What does it mean for Ireland?
Irish industry must reduce emissions by 21 per cent by 2020 under the package, while the target for CO2 cuts from the agriculture, transport and residential sectors is 20 per cent. Ireland has a target of achieving a 16 per cent share of renewables in the overall energy mix. The commission estimated implementing the package could cost Ireland up to €1 billion a year between 2012 and 2020.
The Government so far though has not put a figure on the cost of the measures.
What were the key compromises at the summit?
The overall "20-20-20 targets" remain but the way states achieve the targets has changed.
Heavy industry will be eligible for free allowances for emissions trading, rather than having to purchase them to prevent "carbon leakage", whereby cement, aluminium and steel sectors relocate outside the EU to escape cuts.
For states relying on coal, such as Poland, the electricity sector will be given a temporary derogation from buying permits.
Twelve states - one of which is Ireland - have been granted additional leeway to invest in green energy projects in developing states to help meet their emissions reduction targets at home.