1. ‘Effectively designed measures’

First, Article 3(2) refers to the requirement that Member States shall employ ‘effectively designed measures’ (EDMs) to ‘ensure’ that the renewables target is met. Yet no definition is provided in the Directive of what these might be. No doubt, this is a reflection of subsidiarity and proportionality issues relied upon by Member States during the negotiation process, to preserve that national flexibility which we mentioned above. Similarly, Article 4(1) and Annex VI of the Second Renewables Directive require Member States to specify the measures used to implement the requirements of Articles 13 to 19. So, to some degree, elements of national EDMs are in fact specified by the terms of the Directive. Given the contents of Annex VI and the template Decision, allied with various recitals to the Directive,Footnote ⁵⁹ it is clear that EDMs will have to include support schemes in one form or another.

For the Commission to decide properly whether or not a national measure is ‘effectively designed’ and therefore implements the Directive is clearly no straightforward task. The Commission faces similar problems in other policy areas, especially where these concern environmental protection. The Court has (for these or other reasons) proven to be willing to set more or less objective standards against which the appropriateness of Member States’ national implementing measures can be assessed. A good example of this is the Court’s interpretation of Council Directive 79/209/EEC, the so-called Birds Directive.Footnote ⁶⁰ Under the Birds Directive, Member States are required to designate ‘the most suitable territories’ for the conservation of certain bird species and to take ‘special conservation measures’ to ensure their survival and distribution (Article 4(1) and (2)). Similarly to the obligation to adopt ‘effectively designed’ measures under the Second Renewables Directive, the Birds Directive gives no indication of which criteria must be fulfilled for a territory to be deemed ‘the most suitable’, or what ‘special conservation measures’ should entail. In Santoña Marshes,Footnote ⁶¹ the Court resolved the first of these issues by stipulating that ‘ornithological’ criteria should form the basis of Member States’ suitability assessment of special protection areas (SPAs).Footnote ⁶² This judgment significantly limits Member States’ discretion to the extent that other (eg economic and social) interests may not influence their choice of SPA. The Commission can henceforth pursue a Member State for omitting to classify a territory as an SPA on the basis of relatively objective criteria – something which it succeeded in doing in Santoña Marshes itself. The Court moreover held that Spain had failed to take the ‘appropriate steps’ to avoid pollution or deterioration of the habitats in the area, an obligation listed in Article 4(4) with regard to SPAs, despite the area never having been classified as an SPA in the first place. The principle thus established was confirmed in subsequent case-law, including the famous judgment in Basses Corbières.Footnote ⁶³

Furthermore, in Santoña Marshes, Spain argued that the Birds Directive only set out an obligation to achieve a result (namely the conservation of wild birds), rather than to take specific measures such as preserving, maintaining and re-establishing specific habitats.Footnote ⁶⁴ The Court held that, on the contrary, these obligations existed before any reduction in the number of birds or any risk of a protected species becoming extinct needed to have materialised. It based this argument inter alia on the ecological value inherent in such habitats and the fact that the Directive’s Preamble maintained that a sufficient diversity and area of habitats was in fact ‘essential’ to achieve the result of conserving wild birds.

Considering all of the above, the Court clearly saw fit to restrict the discretion which, from a narrow reading of the Birds Directive, Member States seemingly retained with regard to the conservation of wild birds.Footnote ⁶⁵ Whether or not the Court engaged in ‘environmental activism’, it strengthened judicial control over national implementing measures. In a similar fashion, EDMs appear to be specific measures required by the Second Renewables Directive to achieve the overall result of a renewables target, and are therefore a binding obligation subject to judicial enforcement. Arguing along the lines of the Court’s interpretation of the Birds Directive, one could establish certain objective criteria, derived from the Second Renewables Directive itself, to help assess whether EDMs have been taken and whether they are indeed ‘effective’. Some of these are clearly identified in the Directive itself, such as the provisions concerning support schemes in recitals 22, 25 and 27 and the measures listed in Articles 13 to 19. The subsequent evolution of the Commission’s 2014 Energy and Environmental Aid Guidelines (EEAG) might yet offer further criteria in this regard, although to date they have been relevant only to State aid decision-making.Footnote ⁶⁶

Failing any objective criteria against which the Commission could assess the ‘effectiveness’ of measures to meet the national renewables target, the reference to EDMs may therefore perhaps best be viewed as making an overall point of emphasis. It is possible that EDMs in fact foreshadow the emergence of best practices gleaned from the experience of other Member States and reported to the Commission over the life of the Directive and its indicative trajectory. However, given the early stage of development of a number of the technologies involved, and indeed the support and incentive schemes used to promote them and the difficulties of their interaction with security of supply and market/competition concerns, it may be hard to generate much in the way of hard-edged standards against which to test a Member State’s measures and their design, beyond those details developed under the EEAG for State aid – rather than EDM – purposes.

A parallel can perhaps be drawn here with Directive 2010/75/EU on industrial emissions (the ‘IED’), which replaces, among other things, Directive 2008/1/EC concerning integrated pollution prevention and control (the ‘IPPC Directive’).Footnote ⁶⁷ Best available techniques (BATs) play a crucial role in pollution prevention and control. The legal definition of BATs under both the IPPC Directive and the IED is loosely formulated, leaving considerable discretion to decision-makers to judge ‘which’ techniques should be deemed ‘best’. As a result, questions on the role of BATs focus on how they are determined, and the extent to which they must be (or are being!) relied upon.

Member States, stakeholders and NGOs exchange information on BATs, which results in the drafting of BAT reference documents (BREFs). Despite the collaborative nature of this process, participation in the information exchange appears rather unevenly distributed, as a result of which BATs contain a mix of ‘political’ and ‘technical’ elements.Footnote ⁶⁸ This so-called ‘Sevilla process’, which was named after the location of the European IPPC Bureau’s headquarters, is potentially rife with private interest bargaining. The IED formalises the procedure of the information exchange by way of Article 13(1) and considerably changes the weight given to BREFs, and especially the ‘BAT conclusions’, which are contained in the BREFs (see further below).Footnote ⁶⁹ Importantly, those BAT conclusions are drafted by the Commission and adopted by way of a comitology procedure, made up of Member State representatives (and not the industry) (Article 75(2)). This strengthens the legitimacy of BAT conclusions, which under the older IPPC Directive were simply published by the Commission.

Under the IPPC Directive, BATs were not to be understood as ‘hard standards’. Emission limit values (ELVs), for example, were based upon BATs ‘without prescribing specific technique or technology, but taking into account: the technical characteristics of the installation; its geographical location; and local environmental conditions’ (Article 9(4)). Under the IED, BAT conclusions must be ‘the’ reference for setting permit conditions, allowing only a limited possibility to set conditions on the basis of BATs not described in those conclusions (Article 14(3)–(6)). More significantly, ELVs must be set so that, under normal operating conditions, emissions do not exceed levels associated with BATs as laid down in the BAT conclusions (Article 15(3)). Whilst Article 15(4) of the IED allows for certain derogations, these are heavily qualified and in practice may make it difficult for competent authorities to set ELVs at a lower standard.Footnote ⁷⁰

Despite their non-legally binding character, practice suggests that even under the IPPC Directive some Member States (and especially those with fewer resources to spare on environmental regulation, such as newly acceded Member States) tended to rely heavily upon BREFs in setting their own national rules on standards and techniques. This is hardly surprising, given that the Commission had indicated the need for adequate justifications to set permit conditions less stringent than the benchmarks set out in BREFs – something which it was willing to enforce before the Court (apparently despite the non-legally binding nature of BREFs).Footnote ⁷¹ The move from seemingly ‘soft’ to ‘hard’ standards under the IED is therefore, in practice, less significant than appears at first sight. Moreover, the ‘mandatory’ nature of BAT conclusions under the IED remains subject to various derogations – although their scope appears limited. This – in combination with the fact that reading across from BAT conclusions to actual permit conditions leaves a level of policy discretion – has led to some scepticism regarding the actual distribution of authority under the new IED.Footnote ⁷²

All of this suggests that: first, it may still take some time for EDMs to emerge under the Second Renewables Directive, and the process for their collection at EU level and EU-wide dissemination may take some development; second, that where such EDMs are under development, they will in any case leave significant discretion to Member States in how they develop and design their own domestic regimes for renewables; and, third, that EDMs could be developed under the Second Renewables Directive via the comitology process (see Article 25 of the Directive) and, ultimately, Commission guidelines and even decisions, once sufficient information and experience has been gathered and tested. Still, while this offers greater guidance and some potential levers for the Commission in scrutinising national-level rules and policies, such renewables EDMs seem destined only slowly, if at all, to offer any real enforcement bite in terms of target trajectories and final goals. Unless, of course, that bite can be imported from the State aid field via the EEAG and the GBER;Footnote ⁷³ relying upon the direct effect of the State aid rules, the development of quite significant detail in renewables support mechanism design can offer harder-edged enforcement tools. However, it should be remembered that the focus of the State aid rules concerns justifying the impact of State subsidies that might otherwise distort the competitive process on (here) the energy market. Yet the energy-environmental goal achievement in the sense of renewables targets has a rather different focus, concentrating on the deployment and operation of renewable electricity generation; indeed, it might be argued that until other mechanisms (like the EU ETS) for addressing explicit and implicit subsidies to other generation sources (like fossil fuels) are themselves ‘effectively designed’, there will remain a need to distort that energy market if renewables are to make the contribution to environmental sustainability envisaged by the Second Renewables Directive.

2. The ‘indicative trajectory’

As outlined above, while the final targets (listed in Part A of Annex I) are binding upon Member States, the trajectory specified by the Directive in Part B of Annex I is indicative in nature. The Commission’s original proposal did, however, include an extra incentive to comply with the trajectory, since Guarantees of Origin (GOs) submitted for cancellation in one Member State could only be sold to another Member State subject to the selling Member State having at least met the targets of its indicative trajectory (Article 9(1)).Footnote ⁷⁴ This calculation would have been based on the ‘immediately preceding two year period’ (which would most likely have been the period immediately preceding the transfer, although that remains open to discussion). However, the complexity of a system of trade based solely upon GOs was not to the liking of the European Parliament. Claude Turmes MEP, and Rapporteur for the Parliament’s Industry, Research and Energy (ITRE) Committee, feared that such a system would lead to legal uncertainty and windfall profits.Footnote ⁷⁵ A number of Member States, too, had misgivings about the Commission’s proposal concerning possible GO trading.Footnote ⁷⁶ The final text of the Second Renewables Directive indeed downplays the role of GOs and retains the various new flexibility mechanisms which were furthermore proposed by the European Parliament in its Resolution of 17 December 2008.Footnote ⁷⁷ The final Directive does not carry over the extra incentive for Member States to comply with their interim trajectory so as to be able to transfer GOs to other Member States. Transfers of GOs are still possible, but have ‘the sole function of providing proof to a final customer that a given share or quantity of energy was produced from renewable sources’,Footnote ⁷⁸ but plays no role in a Member State’s compliance with Article 3 of the Directive (which lays down the obligation on Member States to reach their mandatory national overall targets). Neither does the final text include an equivalent mechanism which would make joint projects and statistical transfers subject to compliance with the indicative trajectory.

The indicative, rather than binding, nature of the trajectory was opposed by the European Parliament, which was concerned that there would not be sufficient means to keep Member States on track to meet the EU targets and so wanted to include binding interim targets as well. Indeed, the European Parliament would also have included a direct penalty mechanism which would have seen Member States pay up for not reaching their final and/or even their mandatory interim targets. The finances thus raised would have contributed to a specific fund to be used to boost the development of renewable energy in Europe. It appears that the idea stemmed from the EU’s long-standing practice of using production quotas and levies in the regulation of the internal market,Footnote ⁷⁹ tools which the Committee felt it was time to use in the area of renewable energy sources, given that quotas had already become an instrument of environmental policy.Footnote ⁸⁰ With regard to renewable energy, the European Parliament’s ENVI Committee was of the opinion that EUR 90 per missed MWh of renewable energy would be an appropriate penalty basis.Footnote ⁸¹ However, the final text of the Directive retained the indicative character of the trajectory, and indeed even lowered the renewables share to be achieved by Member States thereunder for the first two two-year phases (from 25 to 20% and from 35 to 30%, respectively).Footnote ⁸²

So, mere failure to follow that trajectory will not amount to a breach of a Member State’s obligations under the Directive. The traction which the trajectory does provide only operates in conjunction with the way in which a Member State’s NREAP must contain effectively designed measures to address the range of sectoral and other issues listed in Article 4 and Annex VI. This is underlined by Article 4(4) of the Directive, which provides that:

As a result, falling behind the schedule of the indicative trajectory triggers an obligation on a Member State to amend and re-submit its NREAP to the Commission; yet no formal ‘final’ decision-making powers are granted to the Commission as a result of any such departure from the trajectory. Presumably, failure to submit an amended NREAP could trigger an enforcement action by the Commission, but beyond that there is explicit no power in the Commission’s hands to adopt a ‘better’ NREAP for the recalcitrant Member State.

This mirrors some of the provisions found in other parts of the EU’s energy and environment acquis,Footnote ⁸³ where the Commission’s final decision-making role was kept either limited or rather un(der)specified. For example, in the first incarnation of the EU’s emissions trading system (EU ETS) Directive,Footnote ⁸⁴ the Commission’s attemptsFootnote ⁸⁵ to reject the final allocation of allowances made under National Allocation Plans for phase II of the EU ETS were ultimately overturned by the Court of First Instance,Footnote ⁸⁶ which ruled that the Commission’s mandate extended only to checking whether the process and criteria used by the Member State were compatible with the Directive. By contrast, the final decision on allowance allocation was reserved to the Member States under the EU ETS Directive.Footnote ⁸⁷ Similarly, under the Third Internal Energy Market legislative package, in some areas the relationship between national government and/or NRA decision-making powers and those of the Commission – when receiving notification of national-level decisions or querying their compatibility with the EU rules – is left unclear. A nice illustration is provided by the position under the Gas Security of Supply Regulation,Footnote ⁸⁸ with regard to national decisions on making gas pipelines compatible with bi-directional flows: under Article 7(5), the Commission may ‘require that the [national] authority concerned amend its decision’ within four weeks, yet there is nothing to confirm that this extends to dictating the substance of that amended decision.Footnote ⁸⁹ If such uncertainties can only be addressed by legal proceedings and a judicial decision (as in the EU ETS judgments),Footnote ⁹⁰ this runs the risk of undermining confidence in the reliability of such systems for guiding the behaviour of private actors, whose contributions – in the fields of emissions reduction, energy market trading and development, and of course renewables development and deployment – are crucial to the success of EU and national policies in the energy-environmental sphere.

Thus, as an interim conclusion, it can be stated that the Commission has many more tools at its disposal under the Second Renewables Directive to monitor, encourage, pressure and cajole the Member States to make progress towards the binding EU targets. Some of these could generate the real prospect of harder-edged enforcement, but their likely reach is relatively limited, especially in the crucial situation where a Member State has made efforts as required by the Directive, but is still falling short of its interim trajectory and risks missing its final, binding targets.

Before moving on to consider how this survey of the provisions of the Second Renewables Directive relates to various possible EU law enforcement techniques in more detail, it is worth asking ourselves whether the notion of binding targets has been used elsewhere in EU law, and whether anything can be learned from their design and operation there.

1. Binding targets in the European airspace

It should be noted at the outset that pickings are fairly slim in the search for the use of binding targets at EU level in other sectors. But EU legislation on air navigation services does also make use of ‘binding targets’, following a somewhat more detailed pattern similar to that under the Second Renewables Directive. Considering that EU law should be interpreted in a consistent manner,Footnote ⁹¹ endeavouring to draw a parallel may help us to shed some light upon the meaning and role of binding targets. We will consider Regulation 691/2010/EU,Footnote ⁹² which sets out binding performance targets concerning air traffic control, pursuant to Article 11 of the European Sky Regulation.

Regulation 691/2010/EU makes use of mandatory (binding) targets: although the targets themselves are set at national level, they still form part of a national action plan which is to be established in line with EU-wide strategy (in this context, fixed EU targets for set performance indicators in set performance areas). It should first be noted that the nature of such targets is to set performance levels to be met, and below which national standards and performance should not drop: thus, such standard-setting mirrors a type of minimum harmonisation, by contrast with the use of targets to provide a pre-set trajectory towards achieving a goal of improving performance levels year-on-year to reach a final binding target. In this sense, the precise function and operation of such binding targets under Regulation 691/2010/EU is thus subtly different from those applicable under the Second Renewables Directive.

Whilst these targets under Regulation 691/2010/EU are ‘binding’, the definition of this term is rather soft. ‘Binding targets’ are defined as ‘a performance target adopted by Member States as part of a national or functional airspace block performance plan and subject to an incentive scheme providing for rewards, disincentives and/or corrective action plans’ (Article 2(f)). The emphasis remains on incentives and disincentives, rather than legal enforcement.

‘Bindingness’ under Regulation 691/2010/EU seems to apply along a sliding scale. A certain level of non-compliance with national targets may trigger a ‘request’ from the Commission to take corrective measures. This is the case where a ‘significant and persistent drop in performance’ is observed, which affects other Member States and/or the entire European airspace.Footnote ⁹³ Considering that the Regulation takes a strict approach to assessing the quality of national performance targets, it would be logical if a similar approach were taken with regard to laggard Member states. National performance targets which fall short of being consistent with, and adequately contributing to, EU targets, will eventuallyFootnote ⁹⁴ trigger a Commission decision, which will require the Member State to take corrective measures.Footnote ⁹⁵ However, it still seems that the final decision on the nature of those correctives will lie with the Member State, which wording forms a nice parallel with the comments made above (in Part V.C of this paper) concerning the EU ETS, the Gas Security of Supply Regulation and, of course, the Second Renewables Directive; although ‘nice’ only in the sense of being consistent in its somewhat vague formulation of these decision-making powers and procedures.

One step further down the sliding scale, Regulation 691/2010/EU introduces ‘alert thresholds’.Footnote ⁹⁶ Beyond these thresholds, which are set at EU level and are logically below the EU target levels, it is to be expected that ‘bindingness’ will really start to bite. In another example of a degree of definitional vagueness, the Regulation only provides information on what happens where alert thresholds are reached due to circumstances unforeseeable at the beginning of the period and which are at the same time insurmountable and outside the control of Member States and the entities subject to the performance targets (ie a force majeure justification may be available to such a Member State). Where this is the case, the EU and/or national targets may simply be revised.Footnote ⁹⁷ If alert thresholds are reached due to other circumstances, it is unclear what the consequences should be and whether the Commission would start enforcement proceedings, although one would expect that at least to be possible (although whether it would be effective quickly to address the problem is perhaps more difficult). Such lack of performance is also likely to amount to a ‘significant and persistent drop in performance’ and could therefore trigger the measures described above.

In any event, it is clear that even under Regulation 691/2010/EU, where targets are explicitly defined as ‘binding’, a degree of uncertainty remains. At best, ‘binding’ targets will trigger legal enforcement where non-compliance is significant, persistent and has an external effect (beyond the borders of the recalcitrant Member State). Nevertheless, a lack of performance remains justifiable in certain limited circumstances of force majeure.

2. Targets and conservation measures in European fisheries

A second and more recent example is to be found in the process of reform of the Common Fisheries Policy (CFP). Whilst the final text of Regulation 1380/2013/EUFootnote ⁹⁸ is of course a compromise, the discussions which preceded that compromise and the initial Commission proposal provide some insight into a different approach to target-setting and enforcement. Moreover, the reforms reflect a move towards the ‘regionalisation’ of the CFP, which sits somewhere between a top-down control mechanism and national decision-making.

The initial Proposal for a Regulation on the CFPFootnote ⁹⁹ aimed to introduce a system in which conservation measures, such as multiannual plans, were adopted at EU level, with the aim of restoring and maintaining fish stocks above levels capable of producing Maximum Sustainable Yield (MSY) (the ‘ultimate’ target, as it were). A multiannual plan was to establish the basis for fixing fishing opportunities and ‘quantifiable targets’ for the sustainable exploitation of stocks and marine ecosystems, defining clear timeframes and establishing safeguard mechanisms for unforeseen developments (Article 11). Quantifiable targets were to be expressed in terms of fishing mortality rates, and/or spawning stock biomass, and stability of catches.

National conservation measures could be adopted in accordance with such a plan, but the wording of the proposed provision was subtle:

On the one hand, the Commission thus proposed a decentralised approach, allowing Member States to adopt the conservation and technical measures necessary to achieve the quantifiable targets set for certain fish stocks at EU level. On the other hand, the Commission also suggested a significant level of centralised control over those decentralised measures: there would be a ‘fall-back mechanism’ for the Commission to adopt delegated acts specifying the conservation measures for fisheries covered by a plan (Article 20). This was to kick in where: (a) Member State conservation measures were deemed incompatible with the objectives of a multiannual plan; (b) Member State measures were deemed not to meet the objectives and quantifiable targets set out in multiannual plans effectively; (c) Member States which could take conservation measures did not do so within 3 months; or (d) certain safeguards were triggered. Moreover, it seemed from the wording of the proposed Article 17(1) that there existed also an alternative option, where the multiannual plan did not allow Member States to adopt any such measures: quaere what the exact role of the Commission would have been in such a case.

Quantifiable indicators for periodic monitoring were to be provided to help in assessing progress in achieving the quantifiable targets – and presumably guide the Commission in its assessment of the compatibility and effectiveness of national conservation measures, which it could do ‘at any time’ (Article 19). Moreover, the Commission proposed to maintain the emergency response mechanism already existing under the current CFP.

The Commission thus approached the ‘target debate’ from a different angle, by avoiding the terminology of mandatory targets and instead focusing on what should happen if the targets were not reached. Given that targets are only as binding as they can be effectively enforced, the quantifiable targets as proposed by the Commission were effectively mandatory in nature.

The European Parliament, in its first reading, kept many of the provisions proposed by the Commission, including an amended version of the fall-back mechanism.Footnote ¹⁰¹ It proposed to give Member States a 3-month period to modify their measures after having been notified by the Commission that their measures were incompatible with, or did not meet the objectives and quantifiable targets of, the multiannual plan in question. Failing that, the Parliament suggested that the Commission should then be able to adopt conservation measures by way of a delegated act, but only after consulting the relevant Advisory Councils and ICESFootnote ¹⁰² and/or STECF.Footnote ¹⁰³

Unfortunately, the fall-back mechanism did not survive its journey through the Council, or at least not in its original form.Footnote ¹⁰⁴ The compromise text upon which the Council and the European Parliament agreedFootnote ¹⁰⁵ remains similar to that of the Commission insofar as conservation measures are taken at EU level, ‘in particular’ in the form of multiannual plans. Multiannual plans shall include quantifiable targets, such as fishing mortality rates and/or spawning stock biomass, as well as clear timeframes to reach those targets. Conversely, the Council deviated from the original proposal by limiting the Commission’s delegated power to supersede Member State conservation measures with its own, and by channelling this possibility through the ordinary legislative process instead.

Following the Council’s proposal, the Commission ‘should only adopt conservation measures through implementing acts or delegated acts where all Member States concerned in a region agree on a joint recommendation’ (Recital 39). The actual provision on what is now called ‘regionalisation’ paints a slightly different picture, however, even in its amended form. Where the Commission is allowed to adopt delegated or implementing acts,Footnote ¹⁰⁶ Member States whose management interests are affected are first given the opportunity to submit joint recommendations – and the Commission must wait until the deadline for them to do so, the period for which will be set out in the conservation measure, has passed (Article 18). But whilst the Commission ‘may adopt’ these measures, by way of delegated or implementing acts, there seems to be no obligation on the Commission actually to do so.Footnote ¹⁰⁷ The extent to which the Commission can deviate from the recommendations will of course be subject to the respective scrutiny procedures for delegated and implementing acts.Footnote ¹⁰⁸ If no agreement is reached, or where the joint recommendations on conservation measures are deemed not to be compatible with the objectives and quantifiable targets of the conservation measures in question, the Commission can then submit a proposal following the ordinary legislative procedure, or under Article 43(3) TFEU if the proposal concerns levies or taxes. This obviously gives the Member States (through their seat in the Council) more input into the final wording of the conservation measure than if the measures were adopted by way of a delegated act (which can be vetoed by the Council, but only by qualified majority).

Additionally, where Member States are given the direct power to adopt measures implementing an EU conservation measure (eg a multiannual plan), they may only do so if all Member States concerned have reached an agreement on those measures. While the Commission shall be ‘associated’ with such decisions and its comments ‘taken into account’, the only enforcement mechanism is for the Commission to ‘request’ a Member State to amend or repeal a measure where that measure does not comply with the EU conservation measure (eg the multiannual plan) (Article 18(8)). This provides another example of the uncertainty surrounding the Commission’s decision-making power and role in such situations; presumably, the Member State(s) concerned may simply decline so to amend or repeal that measure, even in the face of a Commission request.

At first glance, the ‘penalty’ of having a fall-back mechanism for EU (Commission) action has clearly lost some of its bite in the Regulation as adopted. The Commission can no longer adopt delegated acts (or even propose them through the ordinary legislative procedure) to specify conservation measures where Member State measures are ‘deemed not to meet the objectives and quantifiable targets effectively’. However, the Regulation also adds something new, which is that multiannual plans shall include ‘safeguards to ensure that the quantifiable targets are met, and/or remedial action’ (Article 10(1)(g)). This new provision raises two key questions: first, will such ‘remedial action’ end up as part of the Commission’s delegated or implementing powers; and, second, what will be the likely timing of such safeguard or remedial measures? Either way, this formulation may prove to be sufficiently flexible to include a penalty mechanism in the multiannual plan itself.

To summarise, the saga of the latest CFP legislative negotiations teaches us some interesting lessons. First, agreement was reached among the Commission, European Parliament and Council on the need for strong(er) EU-level definition of targets, which are to be treated as binding upon Member States and of a mandatory character. Second, there was an acknowledgement (again across all three institutions) of the need to address the issue of gaps and failings (etc) which come to light during the process of implementing and enforcing a multiannual plan. Third, on the basis of that acknowledgment, agreement was reached on the need to introduce some safeguards and/or remedies to get any given Member State (and thus the EU as a whole) back on track in meeting the goals of that multiannual plan. These developments show that the EU institutions, and crucially the Member States in the form of the Council, are capable of assessing the need for structured goals, monitoring and timely enforcement mechanisms while progress towards final binding targets is still being pursued, with the clear purpose of trying to keep such progress in line with the planned trajectories required. These are three important lessons for the design of future EU-level renewables targets and their enforcement in practice. But it also underlines that building policy consensus in terms of the achievement of the relevant defined goals is crucial to providing the climate within which more fruitful inter-institutional dialogue can be pursued, and clearer, more effective legislative provisions agreed.

1. Penalties

In spite of the use of the word ‘binding’ and the views of the European Parliament, there is no direct penalty mechanism in the Directive for Member State failure to achieve those targets. Moreover, there does not appear to be a penalty for their failure to follow the trajectory closely enough. The proposed mechanism for GOs, mentioned above, was not reinstated in the final text with regard to participating in statistical transfers between Member States (see Article 6 of the Directive). The proposed mechanism for GOs only allowed for the selling of GOs to another Member State if the selling Member State had met the targets of its indicative trajectory, based on the two year period preceding the transfer (Article 9(1) of the Directive).Footnote ¹⁰⁹ The absence of such a mechanism has implications for the credibility of binding targets, both along the indicative trajectory during the process leading up to 2020 and in ensuring that the 2020 target for the EU overall is actually achieved. These concerns have been highlighted in discussion surrounding the next EU-level renewables legislation, which is covered in the concluding comments below (Part VI).

2. Portfolios and related issues

It should also be noted that the Directive does not demand or even encourage the development of a ‘portfolio’ of renewables technologies. Rather, Member States are given the discretion to determine their own energy mix in their implementation of the Directive. This respect for the principle of subsidiarity is also reflected in the wording of Article 194(2) TFEU, the ‘newly’-adopted energy provision which will most likely form the basis for any future version of the EU’s Renewables Directive. Article 194(2) TFEU explicitly states that an EU measure adopted on the basis of that provision should not affect a Member State’s right to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply, without prejudice to Article 192(2)(c) TFEU. However, the extent to which this caveat curtails the scope for the EU to adopt secondary legislation on the basis of Article 194 TFEU is far from clear. It is possible (if not likely) that an EU measure could still affect (eg) a Member State’s choice in determining its energy mix without falling foul of Article 194(2) TFEU, but only up to a certain threshold.Footnote ¹¹⁰ Portfolio targeting is therefore not necessarily excluded from the scope for future EU action.

To a certain extent, the Second Renewables Directive stimulates Member States at least to consider and think about the future development of each and every type of renewable energy technology. According to Article 4(1) of the Directive, Member States are required to set targets, as well as trajectories, for the contribution of renewable energy in the heating and cooling, electricity and transport sectors. These targets and the trajectories for 2010 to 2020 are estimations only. Decision 2009/548/EC establishes an obligatory template to be followed by Member States when drawing up their NREAP. This includes a table, in which Member States must fill out the total contribution (installed capacity, gross electricity generation) which they expect, for each year between 2010 and 2020, from each renewable energy technology to contribute to meeting their binding targets and the indicative interim trajectory. These tables form part of each Member State’s NREAP, and estimations have to be made for each of the above sectors. For example, Member States have to estimate, for each year between 2010 and 2020, how much wind power will contribute in the heating and cooling sector; the electricity sector; and the transport sector (see Tables 10 to 12 of Decision 2009/548/EC). In practice, this exercise amounts to setting a trajectory for the contribution of each renewable energy technology to the overall renewable energy target. Whilst it remains a fact that there is no legal obligation to stick to these predicted numbers, the resulting information is publicly available and provides a useful oversight of which types of technologies are expected to be developed, where and when.

Six months before communicating their initial NREAPs, Member States also had to notify the Commission of the estimated production of renewable energy compared to their indicative trajectory which could be transferred to other Member States, as well as their estimated potential for joint projects, until 2020 (Article 4(3) of the Directive). This reporting obligation on estimated excess production and demand from non-national sources continues every two years until 2020, as part of the general reporting obligations on the Member States by virtue of Article 22 of the Directive. Despite this, the Directive provides little to shed light on the (future) geographical distribution of renewable energy sources in Europe. Whereas Member States must update their NRAEP if their share of renewable energy falls below the indicative trajectory in the immediately preceding two-year period, no such obligation exists where the estimated contribution from a particular renewable technology is not achieved. Even a very large discrepancy between what a Member State planned and what it achieved in each sector would not necessarily trigger a review of the data, unless this would have an impact upon the total share of renewable energy compared to the indicative trajectory. Whilst Member States must submit a biennial report to the Commission, this does not include an obligation to update the estimations made for the contributions from different renewables technologies, with the exceptions of biomass and wastes, residues, non-food cellulosic material and ligno-cellulosic material (although this may be implicit from the report).

In this context, it should be noted that there is much significance in the ability to predict and plan for the geographical distribution of RES-E generation in the future.Footnote ¹¹¹ The location of such generation capacity has implications for: inter-Member State co-operation (between governments in planning, licensing, possible statistical transfers; and between regulators in the co-ordination of their activities, especially concerning the rules applicable to infrastructure: connections, capacity and congestion management, etc); and relations between transmission system operators on both a day-to-day management and a longer-term planning and investment basis. Indeed, the grid investment, strengthening and management required to accommodate significant growth in the connection of RES-E to that grid will raise similar co-ordination questions, and will pose questions concerning the ability of grids and States to raise and/or provide finance for such investment and development.

These considerations are thus somewhat double-edged in nature: on the one hand, they militate in favour of greater cross-border trade to seek the most economically efficient location for new RES-E generation capacity (and the concomitant grid investments required); on the other hand, the need for a degree of predictability to facilitate planning of new construction and investment might encourage some governments, regulators and undertakings to seek to limit cross-border trade in the interests of stability (and the raising of finance required to fund such new investments). Assessing the costs and benefits of these sometimes competing interests and goals is no easy matter, and it may be that fear of the unknown in terms of the possible impacts of increased trade may be valued more highly than the possible benefits of comparative advantage which may flow from increased cross-border trade (both physical trade in electricity and what one might term ‘virtual’ trade in the form of certificates; the latter, of course, currently being essentially excludedFootnote ¹¹² by virtue of the wording of Articles 2(k) and 3(3) of the Second Renewables Directive).

On the other hand, the European Parliament’s ITRE Committee believes that the EU’s mandatory renewables target has undermined investment in carbon capture and storage (CCS), a climate mitigation technology which is crucial to secure a reduction in CO₂ emissions in the near future. The impetus for CCS seems to have waned since Directive 2009/31/EC (the ‘CCS Directive’)Footnote ¹¹³ was passed with so much enthusiasm. The failure of any CCS project to secure funding under the first round of NER300, which had aimed to fund eight CCS projects,Footnote ¹¹⁴ and the continuing low price of carbon emissions have, in combination with the economic crisis in Europe and a general lack of public understanding and support for CCS, undermined efforts to ensure a successful commercial-scale demonstration of CCS in Europe. While a low-carbon transition can be reached with more energy efficiency, renewable energy and carbon-free energy sources, CCS is crucial in the case of continued or increasing use of fossil fuels. Around 60% of global primary energy at present comes from stationary use of fossil fuels, and in any event Europe will remain dependent upon fossil fuels until renewable energy sources can be deployed on a larger scale. In light of the EU’s aim to reduce overall greenhouse gas emissions by at least 80% by 2050, investment in both CCS and renewables deployment are both deemed of importance to keep global temperature rise under two degrees Celsius.

With this important objective in mind, the ITRE Committee has therefore called for a ‘technology neutral’ approach to the EU’s 2030 energy goals, which it believes would create a level playing field and ensure effective competition amongst varying low-carbon technologies.Footnote ¹¹⁵ Interestingly, the ITRE Committee considers such an approach to be in line with Article 194(2) TFEU. Despite our earlier remarks regarding the scope of Article 194(2) TFEU, it may be that – in the ITRE Committee’s opinion – EU-wide portfolio targeting of renewable energy technologies would be too intrusive a measure.

1. Oversight/advisory/regulatory functions

First of all, the relevant Member State government (which could be national or regional, and on some environmental issues even local) could choose to delegate various key functions in the renewables sphere to independent agencies or bodies. Many national schemes, data gathering and accounting are run through the energy national regulatory authorities (NRAs); all of these activities are crucial to building up the picture at national level of how national support schemes are working, and are used to provide detail for the regular Member State reports required on progress with their NREAPs. And insofar as such NRAs have specific functions concerning such issues as whether an installation qualifies for support under a national renewables scheme, there are genuine enforcement roles to be played by the NRAs which have a direct bearing upon pursuit and achievement of the national binding targets.

But it has not, to our knowledge, been the case that such NRAs (or indeed other independent agencies) have been given a stronger role in holding the government to account with regard to such targets, let alone the power to require the government to do things to reach those targets. Perhaps the closest example is the role of the UK’s Climate Change Committee, which is an independent body created to offer ‘a structured, highly visible input of independent expertise into climate decision-making’.Footnote ¹³² It provides strong advice to the government on setting the carbon budget, including the required trajectories and an assessment of actual causes of reductions in emissions. But even this Committee’s advice need not necessarily be followed by government when setting carbon budgets, designing policies and mapping them on to trajectories. So, in the specific context of holding a given Member State to its binding target, such bodies are unlikely to offer a strong enforcement route.

2. Attempts by private individuals to hold national governments to their obligations and policy targets

That being the case, it seems likelier that individuals (including companies, pressure groups, etc) who rely upon or are affected by the government’s renewables policies may prove a more likely source of enforcement attempts in the realm of binding targets. However, again, such litigation seems more likely to involve specific implementing measures and schemes,Footnote ¹³³ and will use the existence of the binding targets as a context to establish the applicability of government duties to consider their achievement and incorporate that into the design of policy, as well as to establish that such measures may fall within the scope of EU law (where that might offer further arguments on grounds of, for example, fundamental rights or general principles of law).

Thus, the UK has seen some recent litigation in the wake of a government proposal retrospectively to change the levels of support to be provided for small-scale renewable electricity generators. In Secretary of State for Energy and Climate Change v Friends of the Earth such proposed changes were held to be ultra vires the scope of the power conferred upon the Secretary of State by section 41 of the Energy Act 2008. This led to subsequent claims for damages against the government on the basis of Article 1 of the First Protocol to the ECHR, which were successful where the contracts that had been signed but later cancelled were sufficiently completed and certain to amount to possessions under that provision.Footnote ¹³⁴ Of course, such court-led or influenced governance brings its own risks too: such case law will inevitably create shocks when a new ruling is handed down, and may appear ad hoc where the focus has to be on a particular set of facts before the court. Markets, investors and businesses may react badly to such shocks, as they try to process the implications of a given judgment, and this can be exacerbated where a case involves a trip to Luxembourg along the way, via Article 267 TFEU.

Ultimately, however, these devices cannot require specific policies to be adopted or abandoned by a given Member State, although it is arguable that they can require something to be done, otherwise the relevant policy gap would not respect the duties imposed upon that Member State by the Directive and (typically also) national implementing law. Similarly, simple failure to meet the binding target at the end of the reference period seems unlikely to generate useful practical arguments under the heading of Member State liability for sufficiently serious breach of EU law. Naturally, whether a failure to meet the target would even be ‘sufficiently serious’ is already a difficult question of assessment within this area, although one supposes that the obligation to reach the target could be construed as one involving no discretion (like the need to implement a directive that was at issue in Francovich itself).

But even if this hurdle were overcome, private parties will still struggle to show any specific loss or damage which was causally connected to the Member State’s breach. Rather, they will have a broad expectation that, had something more or better been done by the Member State on renewables, then they – as undertakings in the field – would have stood to benefit. But such expectations are too vague and general to amount to legitimate expectations of substance or any genuine possession or other legal interest. So this route, too, seems to offer little in the way of genuine target enforcement prospects.