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Energy support policies: putting the EU on a low-carbon path?

News Published 15 Dec 2014 Last modified 21 Jun 2016

1 min read

Photo: © Contemplative Imaging

Topics: Climate change mitigation Policy instruments

European countries have increased renewable energy’s share of energy consumption in recent years, in part thanks to support mechanisms for the renewables sector. A new report finds that many energy support policies could be better focused to lead the EU more effectively to decarbonise the energy sector.

‘Energy support measures and their impact on innovation in the renewable energy sector in Europe’ is a new report published by the European Environment Agency (EEA).

Subsidies play an important role in sending signals to the energy market. Support for renewable energy has increased in recent years, while at the same time EU plans to phase out ‘environmentally harmful subsidies’ have received increased attention.

Nonetheless, there are still significant numbers of support mechanisms for conventional energy sources (nuclear and fossil fuels). The report identified 582 support measures in place in 2012 in 32 EEA member countries, 53 % associated with fossil fuels and 41 % with renewable energy. However, the report only compares the financial volume of support for different energy technologies in four target countries: the Czech Republic, the Netherlands, Spain and Switzerland.

Renewable energy support has successfully expanded markets and driven technology development, but some support could be better focused, the report found, helping Europe to promote innovation, stay at the forefront of technology and fully reap the economic benefits of renewables.

A higher carbon price can also drive innovation, the report found. Countries with a higher effective tax rate on carbon dioxide emissions generally have a higher rate of patent applications in renewable technologies.

The in-depth analysis of four case study countries also points to many other factors driving innovation, including political will, pre-existing innovation capabilities, and a high level of investment in research and development for renewable technologies.

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