EU sweetens energy plan for France, Italy

20th February 2009, Comments 0 comments

Under the new proposed plans, extra funding will be allocated to the controversial multi-billion-euro energy project package.

BRUSSELS – The European Commission on Thursday proposed extra funding for France and Italy in a controversial multi-billion-euro energy project package, which Germany slammed as "a jumble of national wish lists".

The new plans would reduce funding for projects in Britain and Germany.

In January, the Commission unveiled proposals for a five-billion-euro programme of mostly energy and environmental projects aimed at reducing dependence on Russian gas and stimulating the ailing European economy.

The scheme would improve the potential for pumping gas around the EU and seek to prevent the kind of energy crisis seen in January when a row between Russia and Ukraine resulted in a key gas pipeline to Europe being turned off.

Member states quickly panned the original plans, mainly over funding issues, and Germany's new economy minister Karl-Theodor zu Guttenberg was unconvinced after talks on the new proposals by EU energy ministers in Brussels Thursday.

Zu Guttenberg expressed "scepticism" at the package and said: "I wasn't the only one to voice criticism." The proposals were "a jumble of national wish lists" and there should be real "European projects" instead, he added.

Many ministers said they did not know if the money was really available from the budget, a diplomatic source said.

But Czech Industry Minister Martin Riman, whose country currently holds the rotating EU presidency, said: "They gave it a positive response."

He added however that "each country judged their national projects to be sufficiently important to use up the whole EUR 5 billion."

EU Energy Commissioner Andris Piebalgs said ministers restricted themselves to a consideration of the projects rather than how they will be financed, signalling that the political horse-trading remains to be done.

The European energy ministers did approve an action plan to improve energy security, which has become a hot topic since Russian gas turn off in January

The strategy fixes six key infrastructure projects aimed at diversifying gas sources and supply routes.

Perhaps the most important of these is the "southern gas corridor" to bring in gas from the Caspian Sea or the Middle East, thus avoiding Russia, including notably the planned 3,300-kilometre Nabbucco pipeline passing through Turkey.

Other initiatives include diversifying the supply of liquefied natural gas as well as offshore North Sea wind farms.

The ministers also began discussions on "emergency mechanisms" to prepare for future threats to energy supplies to Europe.

One idea, yet to be thrashed out, is to oblige EU nations to retain strategic natural gas stocks, much more expensive to store than oil.

The revised plans for the multi-billion euro stimulus, include a reduction of funding from EUR 250 million to EUR 200 million in each of five carbon dioxide capture and storage sites in Britain, Germany, the Netherlands, Poland and Spain.

At the same time there would be more money for France and Italy to deal with CO2 transport and storage.

A gas pipeline project between Italy and Algeria was also a newcomer to the EU list, with EUR 100 million worth of help planned.

The matter will now go to a meeting of EU foreign ministers in Brussels on Monday, when the list could be modified again.

In the original proposals, EUR 1 billion was earmarked for extending and upgrading high-speed Internet infrastructure in rural communities, a figure set to be reduced if the extra energy funding is approved.

Another EUR 500 million were to go to projects on climate change, renewable energy, water management, biodiversity and dairy restructuring in rural communities, with all money to come from unused EU budget funding.

Piebalgs said he hoped the process will be finished by May.

AFP / Expatica

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