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News 09 January 2023

Sweden takes over Council of EU Presidency with raft of climate and energy files under its radar

For the third time since joining the European Union, Sweden has taken over on the 1st of January the rotating presidency of the EU Council. For the next six months, the Scandinavian country will be tasked with setting the political agenda and steering the debate among member states, a hard job that has become even harder in the midst of multiplying crises. Among the several challenges on the agenda, Sweden has chosen four overarching topics as the main priorities for its six-month term: security, competitiveness, energy and democratic values.  

Concerning energy, a key file to be processed will relate to the reform of the electricity market, now under discussion for several months already and on which a consultation will soon be launched. As political pressure mounted on the Commission to act on that reform, a draft proposal suggests making renewable energy more reflective of its “true production costs”. Thus, instead of a system in which the price of electricity produced by renewable energies is linked to that of fossil fuel-generated electricity, the new model would first prioritise renewable and nuclear power to meet electricity demand, and only then gas and coal. 

Next to it, several other energy-related priorities will be on the table. One of those is the proposed revision of the Energy Efficiency Directive (EED), initially implemented in 2012 and later amended in 2018. The Directive places an upper limit on the total EU energy consumption, and the Commission’s proposal would set the targets for reducing EU primary and final energy consumption by 2030 by 39% and 36%, respectively. The Committee on Industry, Research and Energy (ITRE) of the European Parliament would set the more ambitious target of 40% for the final and 42.5% in the primary energy consumption. Despite the desire to step up the ambition of the EED, the negotiation process has been slow, including on the energy savings front in which the European Parliament’s proposal is also more ambitious than the Commission’s.  

Moreover, other legislative concerns of recent months have been passed on to the Swedish Presidency, such as the Gas Market Package that could lead to a reduction of natural gas use and the increase of the proportion of renewable and low-carbon gases in the energy system, or the amendments to the Renewable Energy Directive (RED) and the temporary acceleration permitting options to boost the rollout of renewable energy infrastructure. The Energy Performance of Buildings Directive (EPBD), the legal basis for energy efficiency standards in buildings, is also currently being revised as it has become an increasingly relevant topic in the current energy crisis. 

The expectations and hopes for the Swedish Presidency are thus considerably high considering the relevance of these legislative developments that will prove to be crucial in this context and their subsequent impact on the policy outcomes towards the 2030 climate targets and beyond. Hence, Swedish MEPs have highlighted the urgency of appropriate action and guidance from the Swedish Presidency to tackle these paramount issues and to “contribute to significantly raising EU ambitions”, as stated by Alice Kuhnke from the Greens/EFA political group. Highlighting the importance of political responsibility and leadership in these challenging times, other MEPs underscored the connection between the current energy crisis and the EU’s security, which is another priority of the Presidency. In that regard, the role of European companies that provide green solutions is highlighted as a crucial element that can help drive the transition towards a circular economy. To that end, major investments in innovative industries are required, as well as the right regulatory frameworks and policies to attract investments.