Portugal Could Block EU Climate Deal

Portugal, Spain want 15 percent connection goal; spare Iberian energy stranded by lack of links. Could reduce EU dependency on Russian fuel.

Portugal warned on Wednesday it could block an EU plan to cut greenhouse gas emissions if other states at a summit this week reject a binding target for building cross-border power cables and pipelines.

"We will not support a deal that does not include a binding target because we need to create a stable, predictable regulatory framework in order to attract private investment," Bruno Macaes, Portugal's secretary of state for Europe, told Reuters.

Portugal and neighbouring Spain have large surpluses of renewable energy, produced by the likes of Acciona and Iberdrola (IBE.MC), and spare natural gas imported from a range of suppliers, including North Africa, which could help to reduce the European Union's dependence on Russian energy.

But a lack of connections over the Pyrenees into France means the spare Iberian energy is stranded.

An existing, non-binding target for "inter-connectivity" in the EU energy market has had little effect.

EU leaders are meant to decide on a set of climate and energy policy goals for 2030, which are expected to include a 40 percent cut in greenhouse gas emissions compared with 1990.

They are also likely to set goals to increase the share of renewables - solar and wind power and the like - in the energy mix to 27 percent and to improve energy savings, by insulation and recycling, by 30 percent compared with business as usual.

Talks on Thursday and Friday could prove difficult as some business leaders and nations such as Britain favour just one binding 40 percent goal, while others press for tougher targets and coal-dependent Poland argues it needs financial help if it is to agree to anything at all.

NATIONAL DECISIONS

Early versions of documents prepared ahead of this week's summit included the 15 percent goal on interconnection that Spain and Portugal have sought, but the latest draft seen by Reuters does not.

The European Commission, the EU executive, is keen to complete a single European energy market and has cited conflict between Ukraine and main EU energy supplier Russia as reason to invest in infrastructure that can maximise alternative supplies.

But the 28 member states have clung to the right to make national decisions about which form of energy they use.

Britain, Ireland and Italy, as well as Spain and Portugal, are virtual energy islands with connection capacities of just 3 to 5 percent, according to European Commission figures.

The EU executive says a decade-old, non-binding target of having cross-border connections capable of carrying 10 percent of the bloc's energy has not been met and has had little effect on encouraging the building of new lines.

Lisbon believes setting a higher, binding target would help draw investment into the sector. There was no immediate comment from Spain, though EU officials have said Madrid is also pressing for a deal that improves connectivity.

While formally a new deal on climate change could be approved by a majority vote, officials say it is unlikely such a major decision would be taken without consensus.
 

By Barbara Lewis