annual-and-sustainability-report-2014

Strategic direction | Market and business environmentFrameworks and regulationsVattenfall’s operations are governed to a high degree bypolitical regulations and frameworks. The EU’s climate andenergy policies today are largely based on the EU’s so-called20–20–20 targets. These entail that by 2020, renewableenergy shall account for 20% of Europe’s energy production,CO 2emissions shall be reduced by 20% from 1990 levels, andenergy use shall be reduced by 20% compared with 1990through efficiency improvements.New EU targets for 2030In October 2014 the European Heads of States decided on a newenergy and climate framework with new targets for 2030, namely:a binding EU target of a minimum 40% reduction in greenhousegas emissions by 2030 compared with 1990 and a reform of theexisting EU Emissions Trading System (ETS),a binding EU target that at least 27% of energy consumed in theEU shall come from renewable energy sources by 2030, anda non-binding EU target for improving energy efficiency by aminimum of 27% by 2030.The new Climate and Energy Framework for 2030 will be translatedinto concrete legislative proposals, which can be expected to havea considerable impact on Vattenfall’s future operations. These mayinclude the following:Reform of the EU ETS and introduction of a Market StabilityReserve – aimed at reducing emissions of greenhouse gases inthe EUA revision of the EU’s Renewable Energy Directive – aimed atincreasing the share of renewable energy productionAn overhaul of the legislative framework for energy efficiencyIn addition to these are other EU initiatives:The ongoing implementation of the EU’s Water Framework Directive,aimed at safeguarding water quality in Europe’s lakes andwatercourses, will affect Vattenfall’s hydro power generation.Changes in the Swedish Environmental Code that have beenproposed by the so-called hydro power study could result in a newreview of all permits to conduct hydro power operations.The Best Available Techniques Reference Document (BREF) forLarge Combustion Plants, which sets the emission levels forvarious pollutants and serves as the foundation for the IndustrialEmissions Directive (IED).Legislative action in the areas of biodiversity, circular economy andair pollution.Rules governing the European electricity market and the establishmentof a European regulatory framework for efficient use of thecurrent transmission grid, load and generation (network codes).A transformation of the EU Energy Retail Market that was kickedoff by the European Commission in early 2015.Work under way at the national levelIn all of Vattenfall’s markets, various national rules and regulations arebeing updated in an effort to enhance the transition to future energysystems, such as “Energiewende” in Germany, the Dutch Energy Dealin the Netherlands, and the Electricity Market Reform (EMR) in theUK. Discussions are focused above all on future levels of supportfor various energy sources, on how to foster security of supply andefficiency, on achieving climate targets and on conceivable new waysof organising the energy market. In Sweden, a broad-based energycommission will be studying the conditions for a long-term sustainableenergy policy.Vattenfall Annual and sustainability report 2014 15