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Legality of draft directive questioned
1 July 2008
Two separate studies, one commissioned by the European Wind Energy Association (EWEA) and the other by renewable energy certificates trading body RECS International, are each questioning the legality of planned EU legislation that will limit trade in renewable energy between countries. In its draft for a renewables directive, the European Commission allows countries to limit trade in so-called Guarantees of Origin (GO) across their borders in the name of national market protection. The two legal opinions argue that attempts to restrict trade would run foul of European primary legislation under the EC Treaty. While EWEA and RECS draw similar conclusions over the legality of limiting trade, the two organisations differ markedly in their solutions to the problem. EWEA insists that member states must be able to regulate GO trade to protect and maintain control of national support systems. This will safeguard market stability which is crucial for meeting the directive's 20% renewables target, says the association's Christian Kjaer. Instead of allowing countries to opt out of GO trade, as the Commission proposes, EWEA favours "opt in" mechanisms such as the statistical transfer of surplus renewable energy between countries, "target accounting certificates," and collaborations between member states to share renewables projects or renewables targets. RECS, meantime, favours free trade in renewable energy certificates, arguing that it will allow Europe to meet its targets in the most cost-efficient way. RECS proposes a "stepwise" opening of renewable markets towards an eventual 80% opening in 2020. This will allow for the gradual development of a single support system, removing the trade barriers that different levels of support represent. "Renewable energy should be produced at places with the best conditions," says Claes Hedenström from RECS. "Member states must be stimulated to start co-ordinating their support systems." Under RECS' stepwise approach, limits on renewables exports will be lifted by 15% every two years. As an alternative to the stepwise approach, countries can form cluster markets with other member states under the RECS plan.
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