At the Energy Council I presented the key findings of Commission's analysis on the main drivers for energy prices and costs. Energy ministers agreed that EU needs to do more to tackle high energy prices and costs through the completion of the internal energy market, notably through the further development of grid infrastructure, new interconnections and a reinforced regional approach. Ministers also underlined the need for a more market- oriented approach on renewables and a more European approach concerning the support schemes. Early agreement and a cost effective approach to the 2030 climate and energy framework is key to give predictability for investments in the energy sector beyond 2020. Ministers emphasized the need to foster energy efficiency and savings and called the Commission to come soon with new proposals in this respect. Guidance from the March European Council is needed and a legislative proposal on energy efficiency should be put forward after the review of the Energy Efficiency directive. I also informed ministers about recent developments in Ukraine stressing its importance as a transit country for the EU gas supply. I explained that, at this stage, the EU gas supply is not at risk mainly because of the high level of stocks in the EU and that in the event of supply disruptions the EU could find alternative sources and use other fuels such as LNG.
Today the Commission has laid down renewed ambitions about climate and energy. Its new policy framework includes a new target of 40% reduction in greenhouse gas emissions below the 1990 level, and an EU binding target for renewable energy of at least 27% to be reached by 2030. A new energy efficiency target will be considered in a review of the Energy Efficiency Directive due to be concluded later this year.
The Commission also proposes a set of key indicators to ensure a competitive and secure energy system. A new governance system will contribute to the definition of Member States national objectives regarding in particular greenhouse gas emissions, renewable energy, energy savings and energy security. Apart from setting new climate and energy objectives, the package tabled today also includes a proposal to reform the EU emissions trading system and a recommendation on shale gas. It is also accompanied by a report on energy prices and costs.
On 17 January 2014, I had meetings with the Russian Energy Minister Alexander Novak in the framework of the EU-Russia Permanent Partnership Council (PPC) on Energy in Moscow. We discussed key topics in the EU-Russia energy relations such as the impact of legislation reforms on both sides and the importance of making progress in strengthening the legal basis of our energy relations. I also encouraged market-oriented reform in the Russian energy sector and favourable conditions for investments by EU energy companies. The Permanent Partnership Council was established within the EU-Russia Energy Dialogue following the 2003 EU-Russia Summit and it aims at bolstering the energy relations by providing political steering to the dialogue on key energy issues of mutual interest.
At the energy working party of 7 January, the Greek Presidency of the Council presented its priorities: definition of a 2030 energy and climate framework, competitiveness and security of supply. They intend to adopt two sets of Council's conclusions: (1) on energy prices, protection of vulnerable consumers and competitiveness and (2) on the value of multilateral frameworks in the international relations in the field of energy (mainly Energy Community, but also UfM, IRENA, Energy Charter and its modernisation). The informal Council of 15-16 May will be dedicated to energy security (Southern Corridor and Eastern Mediterranean) and to the funding instruments for Projects of Common Interest and energy efficiency. The 20-21 March European Council is expected to give guidance on the 2030 framework, following Commission's proposals. The Greek Presidency considers having an orientation debate at the 4 March Energy Council and the 3 March Environment Council. The June Energy Council should follow-up on the result of discussions at the March European Council.
An official signing ceremony was held on 17 December for the final decision to invest more than 18 billion dollars in the extraction of gas from the Shah Deniz II gas field in Azerbaijan. It was earlier agreed that ten billion cubics metres will be delivered directly to Europe every year, starting from the end of 2019. The construction of the TAP pipeline, upgrading of other relevant pipelines and the development of the Shah Deniz II gas field will strongly enhance Europe's energy security by diversifying its energy sources. The signing ceremony was held in Baku in the presence of Azerbaijan's President Ilham Aliyev.