• Sarah-Jane Denton

Exploring the UK draft national energy and climate plan

This article is reproduced by permission of LexisNexis.

Environment analysis: Sarah-Jane Denton, partner at Cleantech Cadre, discusses the UK’s draft national energy and climate plan (NECP) which sets out integrated climate and energy objectives, targets, policies and measures, covering the five dimensions of the Energy Union.

What are NECPs and under which part of the clean energy package are they required?

Under the recently published Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action (Governance Regulation), Member States are required to prepare NECPs which outline how they will contribute to achieving the objectives of the Energy Union and particularly its revised targets, as well as the EU’s commitments to reduce greenhouse gas emissions under the Paris Agreement 2015.

The Governance Regulation is one element of the clean energy package which also includes the recast Renewable Energy Directive 2009/28/EC and the Energy Efficiency Directive 2012/27/EU (EED), published at the same time. Both of these Directives tighten their respective targets—the former requires 32% of all energy consumed by 2030 to be renewable, whereas the latter requires there to be a 32% reduction in energy consumption in 2030 compared with 2007 levels. The measures and policies described in the NECPs must contribute towards the achievement of these targets.

Furthermore, the NECPs will give the European Commission a comprehensive picture of the current state of energy and climate polices and measures in the Member States, including the level of ambition and the degree of progress to date.

The concept of an energy and climate plan is not entirely new—Member States were previously required to submit national renewable energy action plans under the Renewable Energy Directive and national energy efficiency action plans under the EED.

Although the Governance Regulation was not formally published until near the end of December 2018, the first draft NECPs were required to be submitted by 31 December 2018. Seven Member States missed the deadline.

What is a Member State required to include in a NECP?

The NECPs must address the five dimensions of the Energy Union from 2021 to 2030, namely:

• energy security

• internal energy market

• energy efficiency

• decarbonisation and

• research, innovation and competitiveness

The NECP must set out the national objectives for each dimension and the policies and measures which will allow Member States to achieve those objectives. The plan must also comment on the current situation regarding the five dimensions, and the expected impacts of the polices and measures described. The NECPs must be based on robust and consistent data across Member States to allow for fair and accurate comparisons and cumulations when reviewing bloc-wide progress.

How does the draft plan support the five dimensions of the Energy Union?

The Governance Regulation specifies, for each dimension, the information which must be included in the NECP. For example, in relation to the dimension ‘decarbonisation’, Member States must indicate their binding national target for greenhouse gas emissions. Similarly, for the dimension ‘energy efficiency’, Member States must include the end-use energy savings to be achieved in the period. With full oversight of Member States’ efforts in relation to climate and energy with specific reference to these five dimensions, the European Commission can then challenge individual Member States to be more ambitious where necessary to achieve the EU’s overarching goals, as well as challenging them to identify opportunities for cross-border cooperation which could accelerate process towards them.

How does the draft plan draw on current policy, including existing carbon targets, the clean growth strategy, the 25 year environment plan, the second national adaptation programme (NAP) and the third strategy for adaptation reporting power (CAR)?

The UK NECP comments at length on the existing national framework for emissions reduction, climate action, carbon reporting and forecasting, already in place in the UK on account of the Climate Change Act 2008 (CCA 2008). This includes legally binding emissions reduction targets, carbon budgets for a five year period 15 years ahead, and a cycle of climate risk assessment, response and reporting.

The clean growth strategy was published in October 2017 and anticipates many of the demands of the NECP. It covers the government’s plans on renewable energy, low carbon technology and innovation, and reducing greenhouse gas emissions. Targets and measures from the strategy are repeated throughout the NECP and are relevant to all five of the dimensions.

The 25 year environment plan—the ‘sister document’ to the clean growth strategy—is less directly relevant to the NECP, as its focus is more on the natural environment and biodiversity than clean growth. Although the plan states one of its goals to be ‘mitigating and adapting to climate change’, there are few concrete targets and objectives laid down towards this goal. Parts of the plan relating to helping developing nations protect and improve the environment, including assisting countries in preparing and implementing national adaptation programmes, are relevant to the reporting requirements under the Governance Regulation.

The NAP sets out how the government intends to respond to the most urgent risks and make the country more resilient to climate change, following on from the risk assessment published by the Committee on Climate Change in July 2016. The first NAP was published in 2013. The third strategy for climate adaptation reporting (CAR) determines how organisations carrying out a public function or statutory undertakers are required to report on climate impacts and whether the government will use its power to enforce mandatory reporting or permit organisations to report voluntarily. Both the NAP and the CAR are required to be produced by the government under CCA 2008. The policies and objectives detailed in the NAP relate specifically to identified risks including flooding, risks to health from high temperatures, water shortages, food production and emerging pests and diseases, with only a small degree of overlap with the NECP. CAR, on the hand, will provide the government with valuable data on measures and policies being implemented and planned by some of the organisations with the highest potential to impact and be impacted by climate risks. Reporting organisations include airport operators, energy companies, water companies, financial regulators and public bodies.

What several of these national plans and documents have in common is that they have been criticised for being heavy on policy and light on detail which would allow them to be implemented effectively and in good time. The NECP requires specifics, backed up by consistent assumptions, parameters and methodologies. Not just in the UK, environment groups have criticised Member States’ draft NECPs for representing more of a procedural hoop to be jumped through than a strategic driver.

What does the draft plan say about the impact of the planned policies and measures?

The UK expects planned measures to start resulting in modest savings compared with currently implemented or adopted measures, from 2020. The impact is expected to remain modest, in the region of 2-3% further saving on baseline emissions, for the next five or more years. By 2035, implemented, adopted and also planned measures are together expected to result in approximately a 30% saving on baseline emissions, compared with approximately 23% for current measures only.

The draft NECP states that individual policies and measures will be accompanied by their own impact assessment which will analyse carbon savings more comprehensively, with the likely result that the savings from planned measures will increase.

What are the next steps relating to the draft strategy?

The final NECP must be submitted by 31 December 2019. Prior to that, the government must allow a period of public consultation, and include a summary of public views with the final submission. As the government did not consult on the draft plan, it is required to consult on the final plan in order to comply with Governance Regulation, art 10.

The European Commission may provide Member States with country-specific recommendations at least six months before 31 December 2019, including on the level of ambition of objectives and targets, and any additional polices and measures that might be required. These recommendations, however, have no legal effect. Countries must give reasons if they chose not to follow them.

It is not yet clear how the Brexit timetable will impact the procedures under the Governance Regulation. Unless the UK government publishes a statutory instrument to amend the requirements of the Governance Regulation (which, at the time of writing, it has not), the default position is that on exit day it will become part of UK law. The UK would continue to be bound to prepare a plan, albeit to a national body, yet to be determined.

This is not a one-off exercise—Member States must submit new plans for the following ten year period towards the expiry of the current one. Subject to policy changes in the interim, the second NECP will need to be submitted by Member States by 1 January 2029, covering the period 2031-2040.

The Governance Regulation incudes several other requirements for Member States to report regularly to the European Commission, including:

• every two years beginning on 15 March 2023, NECP progress reports (to include information on progress relating to each of the five dimensions, as well as energy poverty and renewable energy)

• every two years beginning on 15 March 2021, on both greenhouse gas policies and projections, and national adaptation actions

• every year beginning on 31 July 2021, on the use of revenues generated by the Member State from auctioning allowances under the EU ETS

• every year beginning on 30 September 2021, on support to developing countries

Sarah-Jane Denton is a partner at Cleantech Cadre, a sector focussed boutique law firm, staffed by senior lawyers who are experts in environmental, climate change and planning law. Cleantech Cadre provides innovative, strategic solutions to help clients deploy cleantech projects, manage risk and environmental liabilities and accelerate the growth of younger ventures.

Interviewed by Barbara Bergin.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.