Letter from an official at the Department
of Trade and Industry to the Clerk of the Committee
INDUSTRY/ENERGY COUNCIL: 14-15 MAY 2001
Please see the following post Industry/Energy Council
report as submitted to the HOCESC during the General Election
recess. A formal written PQ has since been submitted.
Energy
An exchange of views and adoption of Council conclusions
on the Green Paper: Towards a European Strategy for the Security
of Energy Supply, and a policy debate on the internal market in
electricity and gas formed the centre-piece of this Energy Council.
On security of supply, the discussion was structured
around a series of questions set by the Presidency: the need for
a more co-ordinated approach; Community level measures that could
be envisaged; the contribution of demand side measures and the
development of new technologies; and the need to reinforce the
dialogue with supplier countries. The UK welcomed the green paper
as a good basis for debate, that market liberalisation was essential
to the improvement of security of supply within the European Union
and that a single market would provide the necessary investment
signals. As far as indigenous resources were concerned the UK
said it would continue to ensure that the North Sea was fully
exploited. The UK supported measures to provide more effective
control of demand, particularly in the areas of energy efficiency
and fuel efficiency and in this respect we welcomed the proposed
directive on energy performance in buildings. In response to the
discussion on use of fiscal measures, the UK recalled that the
reference to fiscal instruments in the green paper did not alter
the requirement for unanimity in fiscal matters. Furthermore,
the UK did not see any need for tax harmonisation measures in
this area. Dialogue with supplier countries was important but
the focus should not be exclusively on Russia. The aim should
be to encourage a sound investment climate in supplier countries
and avoid creating the impression that the EU was in a weak position
by implying that we were desperate for fuel supplies. The Conclusions
were adopted.
On the discussion on the internal market, the UK
welcomed both the draft Directive to accelerae the completion
of the internal market in electricity and gas, and the draft Regulation
on cross-border electricity trading, which should be treated as
a single package. On the draft directive the UK stressed the need
for legal separation of transmission and distribution operations,
regulated third party access, independent regulation and 100%
market opening as soon as possible. We supported the Netherlands'
idea of a workshop to move Council discussion forward quickly.
We also urged the Commission to continue its work on cross-border
tarification and congestion management but at the same time indicated
the need to consider carefully the scope of the proposed Regulation.
We said that public service obligations were best met within an
efficiently functioning cometitive market, as the final version
of the DTI study of the UK's experience (copies of which were
distributed) demonstrates. We supported the general agreement
that the Florence and Madrid processes were useful and that they
should continue but within a more formal legal structure. The
UK also supported the widespread agreement that Trans-European
Energy Networks (TENS) should be exploited further to help solve
potential network problems.
In addition, the Council resolution on a strategy
for integrating environmental aspects and sustainable development
into energy policy was adopted without discussion. The Council
also noted Commission presentations on a new proposal for a Directive
on energy performance of buildings Directive, enhancing Euro-Mediterranean
Co-operation, the Northern Dimension: Energy Sector, and the Energy
Charter Treaty.
Industry
The Council held a debate on the proposed modernisation
of the application of the treaty's competition provisions. There
was good support for the principle of the reforms, although some
caution over legal certainty of the role of competition authorities.
There was general support for measures on structural remedies
and, for allowing the Commission to accept commitments. Structural
remedies allow authorities to remove the underlying incentive
for companies to breach competition law, while the proposed regulation
contains provisions which would make legally enforceable companies'
commitments to the Commission to change practices in order to
avoid a potential infringement. The Commission also presented
its latest annual report on Competition Policy.
There was a discussion on the Commission's White
Paper on Chemicals. The Council stressed the need to maintain
competitiveness in a global industry as well as protect public
health and the environment, and the need for a cost effective,
transparent and flexible regime. The Council highlighted the need
to use the dossier to reinforce the internal market; the importance
of compliance with WTO rules; and the importance of producing
a system that promoted innovation. The Presidency undertook to
pass these messages to the Environment Council.
The Commission presented its fourth report on the
world shipbuilding market, which indicated that the past year
had seen significant growth in new ship orders, mostly to the
benefit of South Korean yards. There was continued evidence of
Korean yards selling below an economically viable level. The Commission
had announced (on 8 May) that failing a bilateral solution with
Korea by 30 June, it intended to launch a WTO case and to propose
a selective subsidy mechanism to defend EU yards. A defence mechanism
should be seen as an exceptional step, and that it was important
that it should be carefully targeted on those sector where there
was direct unfair competition from Korea. The Council adopted
conclusions strongly supporting the intention to launch a WTO
case and noting the intention to propose a new subsidy mechanism.
The Council adopted conclusions welcoming the Commission's
"Go-Digital" initiative, designed to increase awareness
among SMEs of e-commerce and break down the barriers that exist
to their take-up of e-business.
There was a discussion on the proposals to allow
ECSC funds to transfer to the Community when the Treaty expires
in 2002. Member States had agreed at Nice to a protocol to provide
a legal base allowing the ECSC assets to continue to be used for
research to benefit those companies who had contributed to the
assets. The protocol needed to be ratified as part of the Nice
package before formal decisions could be taken, but the Presidency
had taken work forward on some outstanding issues.
Most outstanding issues were resolved at the Council:
apart from a Danish Parliamentary Scrutiny reserve, all Member
States were able to support the texts. The Commission also presented
its latest report on the monitoring of the Article 95 Seel Aid
Cases.
Council adopted conclusions on the integration of
sustainable development and enterprise policy. This recommends
progress towards the integration of environment policy into enterprise
policy, and that a positive environmental approach could reinforce
competitiveness.
16 July 2001
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