Atlantic Council
Energy and Economic Summit

Luncheon: European Climate and Energy Security Priorities

Miguel Arias Canete,
Commissioner for Climate Action and Energy,
European Commission

Frederick Kempe,
President and CEO,
Atlantic Council

Location: Istanbul, Turkey

Time: 12:15 p.m. Local
Date: Thursday, November 19, 2015

Transcript By
Superior Transcriptions LLC

FREDERICK KEMPE: Good afternoon and welcome. Good afternoon and welcome to you all. I hate to interrupt your wonderful conversations, and I hope you’re enjoying a rich and stimulating summit experience thus far. We’re going to continue the program even while you’re eating and while you’re getting your main course so you have maximum time to hear the commissioner and also to ask him questions before you go to your next session. I know that’s what you always want from these experiences.

So I’m delighted to welcome you to today’s lunch on “Climate and Energy Security Priorities.” We will hear from Energy Commissioner for Climate Action and Energy Miguel Arias Canete. Commissioner Canete’s participation was a highlight last year, and we had a pleasure of hosting him again this February during his first official visit to Washington D.C. Commissioner Canete made his first appearance – his first speech – as commissioner here at this summit. We’re fortunate to have a leader as committed and passionate as Commissioner Canete at the helm of Europe’s climate policy, for the challenges confronting the global community require skillful navigation.

The energy and climate sectors have undergone radical changes in recent years, redefining the status quo and opening doors for a range of scenarios. Through the unconventional hydrocarbon revolution, the United States is now the top producer of oil and gas, fundamentally altering global energy markets and relations between energy producing nations. The non-OECD is now the front-runner dictating the trajectory of energy demand, so you have a whole new world – the U.S. and 4,000 new producers, and the OECD – as the trajectory of energy demand. Thanks to new technology and investments by both the U.S. and Europe, amongst others, the price of renewables is drastically declining and the rate at which we are increasing renewable capacity is skyrocketing.

The Atlantic Council is rooted in the conviction that the transatlantic relationship in this field is probably as important or more important than it’s ever been. And we doubled down in our commitment to greater commitment to energy and climate security through the creation in the past year of our Global Energy Center. And you’re all invited this afternoon at 6:45 – at a quarter to seven – at a reception outside these doors to bring in our new Global Energy Center. We envision a world where energy brings nations together instead of fueling tensions and conflict.

In just one year since the founding of the energy center, it has hosted 42 events in cities from Washington to Singapore. It launched a unique CEO speaker series that showcases private-sector leaders. It’s produced seven major publications, including one on the global implications of U.S. energy independence co-chaired by a Republican and Democratic senator. I look forward to continuing to use this center and our work together as partners tackling climate change and global energy security and access, and key countries as China, India and others.

I’d now like to have your full attention as I invite Commissioner Canete to the stage to provide his keynote speech, after which – after which I’ll moderate a discussion. If I could have your full attention, please.

Commissioner Canete came into his current role after a long and impressive career in Spanish and European politics – serving as a member of the European Parliament; Spanish Minister of Agriculture, Food and Environment; congressman representing Cadiz in Madrid; Minister for Agriculture, Fisheries and Food; and many other distinguished posts. The commissioner is known to be outspoken in his beliefs, masterful in his grasp of nuanced issues, and a skilled leader.

Ladies and gentlemen, please join me in extending a warm welcome to Commissioner Canete. (Applause.)

MIGUEL ARIAS CANETE: President Kempe, distinguished guests, ladies and gentlemen, I am delighted to be here today at the Atlantic Council Energy and Economic Summit. You are widely regarded as one of the most influential networks of global leaders. The work that you do here has a real-world impact. Your papers have shaped policy, and your events has strengthened bonds between our regions. And once again, the theme of your summit shows that you acutely understand today’s challenges. The fact that the title of this year’s summit included the words “global stability,” “resilience,” and “volatile times” reveals how high the stakes are when it comes to climate and energy challenges.

Since last year’s summit, we have seen political tensions erupt on Europe’s eastern border and expose the vulnerability of our excessive energy dependence. And, of course, we are faced with an unprecedented rise in global temperatures that will spark rising sea levels, huge movements of people fueling conflict and instability and a squeeze on resources. That is not something we will just see on our TV screens. It is happening right now in front of our very eyes.

And it is fitting that this year’s summit is in Turkey, a country that is extremely vulnerable to the impact of global warming. Turkey is one of our closest allies in facing up to today’s challenges. Our bilateral cooperation has improved greatly over the years, and Turkey is of course a natural energy bridge between the Middle East and Caspian regions and the European Union energy markets. We have strengthened our alliance with Turkey on the Southern Gas Corridor, and have supported projects both financially and politically to make it happen. We have bolstered the Turkey-European Union High Level Energy Dialogue to improve cooperation on all aspects of energy policy. And on fighting climate change, we are closer aligned than ever before. Turkey has our strong support to make the most of the European Union’s substantial resources to help develop this climate-neutral and climate-resilient future.

The point is that, in volatile times and on questions of global instability, we have to cooperate closely with Turkey and with all of our international partners. And when we do that, we have to make sure that Europe speaks with one voice. That will be or cardinal importance over the next years across three of our key priorities: firstly, securing an ambitious, legally binding climate agreement in Paris that can stand the test of time; secondly, strengthening our energy security; and thirdly, completing a robust energy union.

Allow me to start with Paris and COP21, since it’s only a matter of days before the negotiation begins. That is good, and we have no time to waste. And let me start with a very simple message to those that have any doubts about the perils of global warming. Around the world, people are already suffering the consequences of some of the most extreme patterns of storms, droughts, wildfires and floods that we have ever experienced. There is no time for hesitation. We need to act decisively now if we want to avoid the worst effects of climate change.

Just last week, I was at the last pre-COP ministerial meeting in Paris to try and iron out some of the key political issues that are still dividing some countries. We made some useful progress there, and we now take that momentum into the final stretch of the negotiations. But in the last weeks, I have heard it said that COP21 will be – just be a talking shop and only scratch at the surface of what is needed. Let me make our stance very clear: the European Union will not sign any deal just for the sake of having a deal. We want the Paris conference to conclude an ambitious, robust and binding global agreement that is fit for the future – dynamic and capable of putting us on track towards the internationally agreed objective to keep global warming below two degrees centigrade.

For us, this boils down to three key elements.

First, a long-term goal. A clearly defined pathway will provide a strong long-term signal and set a vision of our destination of travel. Global emissions need to peak by 2020 at the latest, be reduced by at least 50 percent by 2050 compared to 1990 levels, and be near zero or below by 2100. These targets are consistent with the European Union objective of reducing emissions between 80 and 95 percent by 2050 compared to 1990.

Secondly, we need another element – a strong transparency and accountability rules. Any credible deal must include a robust system to track performance and hold countries to account on delivering on their targets. A strong transparency and accountability rules will also allow us to generate trust amongst the parties.

And thirdly, we need another element – an in-built mechanism to strengthen ambition over time. It is essential that countries come together every five years to strengthen emission targets in light of the latest science and progress made today.

The last point is in particular important because the truth is, if you add up each country’s COP21 commitments, it is likely that we will fall short of what is needed to stay below the two degrees Celsius. Up until now, proposed contributions have been made by 167 countries representing around 94 percent of global emissions. We shouldn’t underestimate how huge a leap that is. Remember that under the second commitment of the Kyoto Protocol only 35 countries representing around 12 percent of global emissions currently have targets. And now 167 covering 94 percent of global emissions. Could anyone have imagined the start of a managed – a managed decline of fossil fuels in large parts of the world?

So, yes, it is true that the current contributions don’t quite live up to the two degrees Celsius mark, but they are a clear signal that the world is serious about fighting climate change. The world’s biggest polluters, including Europe, the United States, China and India have made bolder commitments than ever before. And the European Union, who have committed to an at least 40 percent cut in emissions and at least a 27 percent improvement in our energy efficiency, and to have a minimum of 27 percent set renewables in our energy system – all that by 2030.

Beyond the European Union, China’s investment in renewables during the last 10 years has also been remarkable. China has not only become the largest wind electricity producer of the world, and its commitment to renewables has also shown the rest of the world that solar and wind are now low-cost technologies that are available for all countries. These efforts have particular importance because carbon is not a local pollutant. It doesn’t matter whether it’s a coal plant in one part of the world or deforestation in another; the effect on the atmosphere is global. Carbon is a global pollutant, and it needs to be tackled globally. That’s why Paris will be so important.

I believe that our vision for the new global climate deal is ambitious and realistic, inclusive and nondiscriminatory. And it puts the greatest burden on those countries that can and should shoulder it. And with a final push in Paris, that vision has the potential to keep us on track to keep global warming below two degrees.

But we shouldn’t lose sight of how important that will also be for our energy security. Energy security remains a pressing concern for Europe. Let’s not forget that in 2014 the European Union imported 53 percent of its energy with a bill of around 400 billion euro. Ninety-four percent of our transport relies on oil products, of which 90 percent is imported. And the stress test carried out in 2014 showed that a prolonged disruption of Russian gas supplies would have a substantial impact on the European Union, with potentially serious repercussions on both households and businesses.

Finally, while we have committed to move towards a low-carbon economy, Europe will still consume between 380 and 450 billion cubic meters of gas per year by 2017. Natural gas will therefore remain an important component of our strategy to decarbonize our energy mix in the short term. What all of that shows is that now more than ever the diversification of energy sources, routes and suppliers is crucial for our energy security.

The European Union has very clear priorities on this regard, and we our making good progress. One of the primary objectives of the Energy Union is to secure – to ensure a secure and resilient energy supply that reduces overdependence of imports from one single source, supplier or route. To get there we have set ourselves a simple goal: to ensure that each member state has access to three different sources of gas, be it from pipeline gas from different sources or LNG.

Consequently, the European Commission has set up three priorities to achieve the goal of diversification. First, we are striving to intensify works on the Southern Gas Corridor, which will improve the security and diversity of the European Union’s energy supply by bringing natural gas from the Caspian region to Europe. Second, we are committed to further developing a liquefied natural gas market in Europe. And last but not least, we are seeking to relaunch the Euro-Mediterranean Energy Partnership to create a Mediterranean gas hub. The good news is that much of the strategic infrastructure needed is already in place. Our task now is to connect it.

As strategic investments in energy infrastructures are not only compatible with our long-term vision of a low-carbon economy, they are also necessary to advance in our diversification strategy. We have set in motion several projects that will redraw the European Union energy market and increase our energy security. The regional cooperation groups from the southwest Europe – high-level group on one side of Europe – to the Central-Eastern and South-Eastern European Gas Connectivity Group, or to the Baltic energy market in the connection plan have all made great strides in moving forward with infrastructure Europe needs.

The latest example is GIPL – the Gas Interconnector between Poland and Lithuania – formally launched in October. For the first time in the region’s history, GIPL will end isolation of the Baltic Sea region and connect it to the internal gas market.

As I mentioned earlier, the Southern Gas Corridor is now becoming a reality. Work is on track for our first delivery of 10 billion cubic meters per year of gas from Azerbaijan to Europe in 2020 through the Trans-Anatolian Pipeline and the Trans Adriatic Pipeline. TANAP itself was here marked as a project of common interest earlier this year, and that makes it eligible for European Union funding through the Connecting Europe Facility, and a streamlined application for permits and licenses.

The completion of the Southern Corridor and TANAP highlight importance of Turkey as a major energy transit country and as a reliable partner of the European Union. I am confident that, through our joint commitment, the European Union and Turkey can work together towards the realization of a common objective: to bring – to bring Central Asian gas to the European Union and Turkey’s markets.

And just yesterday we saw a series of key infrastructure projects given projects of common interest status in our new list published together with Energy Union Report. From the NordLink electricity cable that will connect Norway with continental Europe, to the Romania-Hungary-Austria pipeline that will open up new gas sources to Bulgaria and Romania, building infrastructure is absolutely central to our energy security.

But beyond pipelines, we also need to put Europe back on the map when it comes to LNG. European energy imports almost halved between 2011 and 2014. The European Union effectively became a residual market, getting what Asian countries do not need or cannot afford. The good news is that that is already changing. The recent decline in LNG prices has made Europe a more attractive proposal. Thanks to the Sabine Pass project in Louisiana, United States LNG could soon be arriving on our shores at competitive prices, which is something that we did not expect even one year ago. And very significant regasification capacity in the European Union ready to accept it.

However, we still lack a strategic vision on how to make the most of our import capacity in a truly integrated internal market. That is something we need to address urgently. In the coming months, we will present a new comprehensive strategy for LNG and storage.

We will develop a clear strategy of how to make Europe an attractive market for key LNG suppliers such as Algeria, Nigeria, Qatar and beyond. That work is part of our broader and ambitious energy diplomacy push. Acting as one, the European Union is now exploring strategic energy partnerships with new potential suppliers or transit countries from Turkey to Algeria, Turkmenistan to Azerbaijan. Over the summer, we brokered an historic comprehensive agreement with Iran on nuclear energy and the lifting of sanctions. This agreement will be crucial for peace and stability in the region. It will also be important for our energy supply, and I look forward to visiting Iran myself this year to help in strengthening that relationship. In addition, we are upgrading the strategic partnership with Ukraine – a country that remains a key transit country for our energy imports.

And let me be clear: energy security is a challenge for the whole European Union, no matter which member states is more vulnerable or exposed. To that end, in the coming months we will seek to strengthen our energy security and cross-border cooperation with three important proposals that will turn the promise of an energy union based on solidarity into reality. We will come forward with a new security of gas supply regulation focusing on strengthened cross-border mechanisms to ensure member states act in a spirit of solidarity in time of crisis. Notably, we will propose common preventive and emergency plans, at least at the regional level. We will present our new comprehensive strategy for LNG and storage. And we will present proposals for a new decision on international governmental agreements to ensure that all agreements are consistent with European Union law and European Union energy security objectives before they are signed. We will propose a new strategy on heating and cooling, as well as a nuclear (illustrative ?) program.

But energy security is a much more broader issue. It is about our climate, our competitiveness, and our sustainability. That was the resounding message from the first State of the Energy Union report that we published yesterday. And in that report, we have highlighted a number of key priorities for 2016 that will help us achieve this goal.

In 2016, we will make (illustrative ?) proposals on a new energy market design to help make the electricity system more flexible and integrated. That will be supported by the progress report on our interconnection targets. In 2016, we’ll be also about implementing our COP21 commitments. We will put forward a proposal for our revised – (inaudible) – for those sectors not covered – not covered by the emission trading scheme in the first half of the year. And to support that later in the year, we plan to put forward our review of renewable energy as well as the energy efficiency legislation.

Ladies and gentlemen – that last point really sums up Europe’s approach on climate and energy. We do not distinguish between our priorities on energy security, on decarbonization, on COP21, or on boosting competitiveness. We see them as mutually dependent. And we see ourselves as mutually dependent on our international partners – (inaudible) – the Atlantic Council and beyond – as we embark on an ambitious cycle during the next 12 months that will define the future of our generation. I look forward to working with you all towards a sustainable future for our planet and our economy. Thank you. (Applause.)

MR. KEMPE: Thank you very much, Mr. Commissioner, for those important comments. They will be put up in their entirety – it’s a very important policy speech ahead of Paris – they’ll be put up in their entirety on the Atlantic Council website,, immediately – really in the next five minutes.

We hear you want to finish some conversations. We’re going to take a 10-minute break, and then we’d ask for your full attention when we come back for a Q&A with the commissioner in 10 minutes. Thank you very much.