The rise and fall of GO trading in European renewable energy policy the role of advocacy and policy framing

The rise and fall of GO trading in European renewable energy policy: the role of advocacy and policy framingMåns Nilsson*, Lars J Nilsson**, Karin Ericsson** * Corresponding author: Stoc

The rise and fall of GO trading in European renewable energy policy: the role of advocacy and policy framing

Måns Nilsson*, Lars J Nilsson**, Karin Ericsson**

* Corresponding author: Stockholm Environment Institute (SEI), Kräftriket 2B, SE 10691Stockholm, Sweden, tel +46-733-309382; email: mans.nilsson@sei.se

** Environmental and Energy Systems Studies, Lund University, Box 118, SE 22100 Lund,Sweden

This paper examines policy processes surrounding the rise and fall of the proposed EU-widepolicy instrument designed to help achieve EU´s renewable energy targets – the trading ofGuarantees of Origin (GO) It discusses its origins and examines factors in the policyprocesses over time leading first to its development and then to its rejection A first analysislooks at the near-term policy-making process before and after the proposal on GO trading inJanuary 2008, focusing on the European law-making institutions and influences of interestgroups and member state governments It then takes a step back and looks over a longer timeperiod at how competing policy frames have shaped the trading debate Results show how astrong internal market frame acted as a primary driving force in the Commission to promotethe GO trading instrument The rejection of the GO trading proposal in the Council andParliament can be largely attributed to the lack of a strong lobby in favour of GO, theaccumulated experience with and institutionalisation of national RES support policies such

as feed-in tariffs, and growing general political concerns for supply security andcompetitiveness The framing analysis show that the rise and fall of GO trading embodies aclassic conflict between the internal market and the member states’ wish to protect nationalinterests

Key words: certificate, trading, European Union

1 Introduction

Since the landmark White Paper of 1997, the promotion of renewable sources of energy(RES) has gradually moved up on the European policy agenda, driven by climate change andsupply security concerns (CEC, 1997) This ever-increasing policy interest led to aparticularly intense period in 2007-2008 In March 2007, the European Council decided on

an overall binding 20% renewable energy consumption target for the EU by 2020, along withtargets of 20% reduction in greenhouse gas emissions, and a 20% increase in energyefficiency Following the decision, the European Commission was requested to elaborate andpresent a proposal for a directive and in January 2008, the Commission presented a draftdirective “on the promotion of the use of renewable sources of energy” (CEC, 2008d) Thisproposed RES directive contained national targets for renewable energy shares, provisionsfor harmonisation of RES policy across the EU through harmonisation and trade in

“Guarantees of Origin” (“GOs”) of renewable energy, and sustainability criteria for biofuelsfor transport The proposed directive was to replace two existing directives: 2001/77/EC onthe promotion of electricity produced from RES and 2003/30/EC on the promotion and use

of biofuels and other renewable fuels for transport (CEC, 2001; CEC, 2003a) The proposalwas processed and revised in the European Parliament and Council during 2008 and finallyadopted in December 2008

This paper focuses on the policy-making processes behind the proposed trading of GOs, asthe main EU-wide policy instrument designed to help member states achieve their respectiveRES targets The basic function of GOs is to certify the renewable origin of energy Underthe proposed system, member states as well as private actors would be able to buy and sellGOs in order to meet targets and obligations on the share of RES in energy supply Hence it

is a flexible mechanism intended to facilitate meeting the EU targets at the lowest possiblecost The idea of GO trading was on the agenda already in the preparations for the 2001directive but was strongly resisted at the time In the preparation of the 2008 proposal, theCommission once again pushed for GO trading Again, it met with considerable resistance

from member states and lobby groups during proposal preparations As the Commission tried

to accommodate the concerns, they made some amendments and qualifications, making it anambiguous proposal which included legal uncertainties After it was put officially forward,subsequent deliberations in the Council and Parliament led to the removal of the tradingcomponent According to the agreement in the Council and the Parliament in December

2008, the GO trading proposal was replaced by a voluntary system whereby a member statecan sell or trade excess renewable credits to another member state based on statistical values

or so-called “statistical transfers”

At first sight this abandonment of GO trading may appear puzzling, in light of a) theincreasing weight given in Europe to the internal energy market functioning andharmonisation of policy instruments, b) the interest in market-based instruments in generaland the relative success of the European Emissions Trading System (ETS) in particular, andc) the support for the mechanism from important industrial actors, notably the large powerproducers At the same time, many important member states have been against GO orcertificates trading ever since the debates surrounding the 2001 directive, due to for instanceuncertainties about whether it would be compatible with the regulatory traditions for RESsupport, and in particular the feed-in tariff (FIT) schemes that many countries have put inplace (18 member states by 2007) (CEC, 2008b) Of course, it may be considered similarlypuzzling that the Commission persisted in pushing for the proposal, being at odds with thecollective will of a majority of EU member states

This paper unpacks key political processes behind the rise and fall of the GO tradinginstrument, from its origins in the sector’s market-based orientation in the 1990s to itseventual rejection in the Council and Parliament in 2008 Our first analysis examines thenear-term preparation of the Commission’s proposal towards tradable GOs in 2007 and early

2008, and its subsequent processing in the Parliament and Council in 2008 The focus here is

on advocacy and policy making in and around the European Commission, the EuropeanCouncil and the European Parliament, including interactions with member states and interestgroups (in particular environmental NGOs, renewable energy interests, and large industry

federations) We also study the often fluent relationships between different interests.However, near-term advocacy influences can only tell a part of the story about the rise andfall of GO trading It has historical roots and connects to important framing developmentsover the last decade Over longer periods, the role of frames and ideas for policy change iswell known Indeed, frames and advocacy are often strongly linked; advocacy is to a largeextent about framing, in other words, attempting to convince policy makers that issue should

be seen in a particular light (Baumgartner, 2007) We therefore hope to shed light on bothshorter term and longer-term explanations to the rise and fall of GO trading as a commonRES policy instrument in the European Union

The paper proceeds as follows Section 2 presents conceptual departure points and keys from existing literature that help us orientate our analysis Section 3 introduces the key features of the proposed directive and GO trading proposal, and what was new about it Section 4

unpacks processes in the Commission, Council and Parliament and their interactions with

lobby groups and member states for and against the GO trading proposal Section 5 traces the framing of the debate about GO trading over time Section 6 discusses and interprets the role

of competing framings, the stakeholder interests and influences, and the battle betweennational interests and European market development as keys to understanding the rise and

fall of GO trading in European RES policy Finally, Section 7 concludes the paper,

summarising the key messages

2 Studying RES policy change from advocacy and framing perspectives

There is a relatively extensive literature on the merits of different RES policy instruments,such as quotas, FIT, and fiscal systems (Haas et al., 2004; Midttun and Gautesen, 2007) Thispaper does not take a position in this debate, but is rather interested in the political processesbehind the instrument selection Relatively little has been published about such processes inEuropean energy policy making, for instance how energy producers and large consumers,NGOs and member states influence European policy making, and what arguments, ideas and

interests have cut the most ice (but see: Jansen and Uyterlinde, 2004; Toke, 2008 and, for thenational level, Nilsson et al., 2004 and Toke and Lauber, 2007) However, studies of otherdomains of public policy development in the EU and elsewhere certainly have generated andapplied enough theory to support such research (Coen, 2005; Mahoney, 2007; Baumgartner,2008)

Our approach aligns with the dominant theoretical approach to lobbying – as strategiccommunication of specialised information It assumes that advocacy groups have policy-relevant information that the policy makers need in order to make decisions, but also thatsince goals and interest diverge, this information tend to be biased in favour of the senders’interests Although “those they are attempting to convince were not typically born yesterdayand fully aware of the various possible dimensions of evaluation.” (Baumgartner, 2007;485), informational advantage is a source of political influence Policy is thus shaped byinformational influences of policy actors within and outside the government Broscheid andCoen (2007) show that the volume of lobby activity tends to be correlated to the informationdemand of the issue at hand They argue that the approach is particularly relevant in EUpolicy studies, as the European institutions more than most national governments aredependent on outside information both on technical aspects and on preferences of actors indifferent member states In fact, climate and energy policy in particular appears to be a goodcase One respondent called the January 2008 package, “the most comprehensive package inthe history of the EU” (interview, Commission official) Its high complexity motivates thepolicy makers to seek information from interest groups, and its political salience andeconomic consequences for key economic sectors in Europe also provide a strong incentivefor interest groups to supply information

Our approach picks up on Baumgartner’s (2007) research challenge of a) being clear about

the range of actors, including government officials, who may play the role of advocates, b) understanding the various venues of policy-making, and c) studying framing processes

systematically This paper examines interest group and member state influence as a term phenomenon, zooming in on developments in late 2007 and 2008 (in Section 4) and

shorter-explores policy framing over a longer term – from the 1990s to 2008 (in Section 5) AsBaumgartner argues, the two perspectives are linked; “lobbyists are framers, so studies oflobbying must incorporate studies of framing, including its limits” (p 486), and “tracing howissues come to be framed […] allow us to explain government response much better than afocus on individual lobbying tactics” (ibid)

Concerning the range of actors, we take a broad definition of those policy interests that try to

shape the policy outcome, expanding the scope from “lobbying” to “advocacy” (Sabatier,1988; Baumgartner, 2007) This broader look acknowledges that not only interest groupsfrom businesses or NGOs, but also official actors, including Brussels bureaucrats andpoliticians and national representatives have differential interests and ideas that theyadvocate in the policy-making process Furthermore, all these groups may ally with interestgroups who share the same goals (Jordan et al., 2004)

Concerning venues of policy making, our approach is to examine influence through two

pathways or levels for interest groups to influence EU policy making (Wettestad, 2008) Thefirst perspective looks at sources of countering interests and conflict within the Europeanpolicy system itself, for instance from competing and contradictory policy agendas betweendifferent services within the European Commission, broader EU political agendas changingover time, or the relative influence of different interest groups in Brussels Following this,

“europeanization” is an important force, with the EU exerting considerable pressure onmember states to harmonise and align their policy frameworks with the overarchingEuropean policy agendas such as the internal market A second “inter-governmentalist”perspective focuses on the member state interests and preferences as determinants ofEuropean politics, and sources of interests are based on for instance pre-existing nationalpolicy traditions and institutions as well as industrial interests that help shape the nationalpositions Following this, the national interest is still the key determinant for how nationalgovernments consider EU policy, and any misfit with the European-driven policy agendamay heavily restrict the policy (Jordan et al., 2004)

Concerning framing processes, a study of longer term changes in the “ideational basis” of

policy has proven to be an important complement to interest-based approaches forunderstanding policy change (Sabatier and Jenkins-Smith, 1999; True et al., 1999) Framing

is one way to define this ideational basis Frames are “…ways of selecting, organizing,interpreting, and making sense of a complex reality to provide guideposts for knowing,analysing, persuading and acting” (Rein and Schön, 1993) Belonging in the ideationaltradition of political sciences, it asserts that policy change –over the longer term – is coupled

to changing perspectives and interpretations of reality (see also Hall, 1994; Sabatier, 1988;for related concepts) Frames shape policy agendas, vertically and through coercion orhorizontally In their study of the EU, Knill and Lenschow (2005) argued that the EU’sinternal market frame exerts a considerable normative pressure on member states to deploycompatible policy instruments At the same time, framing influences may also be of a moreuncoordinated nature, leading to such things as spread across Member States of the FITscheme to promote RES (Busch and Jörgens, 2005)

Frames tend to be stable – an important cause of the status quo or incremental nature ofpolicy making However, policy framing sometimes do change, as a result of influencesacross policy areas, giving rise to frame bridging, alignment or integration (Benford andSnow, 2000; Nilsson, 2005) Feedback about performance (such as progress reports onachievement of greenhouse gas reductions) can contribute to learning that in turn changesframing Also external factors and events contribute to reframing, including events that serve

to focus attention or cast issues in a new light (such as the Russia-Ukraine gas conflict)

Before we dive into the empirical study, a note of caution on our approach is warranted.Arriving at plausible explanations in this web of actors, venues and frames relies on ourability to detect major trends and patterns in an on-going and highly complex reality Thiscompromises our ability to perform a more formalised or quantitative analysis Rather wedepend on interpretations of official policy documents, interest group publications, and

partisan testimony from respondents within and around the policy arena Results shouldtherefore be seen as tentative rather than conclusive; and a basis for further inquiry We haveconducted 15 interviews with Commission staff, country delegates, interest groups andparliamentarians We have used secondary data in publications such as Energy Policy andanalysed staff working papers, position papers and council meeting minutes to infer howdifferent member state and interest group concerns are put forward and addressed

3 The introduction of GO trading in European RES policy

Harmonisation of RES policy in the EU was pointed at already in the 1997 White Paperwhich stated that: “… the Commission is examining closely the different schemes proposed

or introduced by the member states in order to propose a Directive which will provide aharmonised framework…” (p 15) and that; “Such an approach is an important elementtowards the creation of a true single market for electricity.” (p 15) In a subsequent staffworking paper, the Commission put forward demands for harmonisation based on “trade andcompetition-based schemes” (CEC, 1999, p 17)

Directive 2001/77/EC on the promotion of electricity produced from RES was adopted afterseveral years of negotiations involving debates on harmonisation of national supportsystems, country targets, and the definition of RES (Rowlands, 2005) The 2001 directiveintroduced Tradable Renewable Electricity Certificates (TRECs), but the time was not ripefor harmonisation of national support systems and no agreement could be reached at thatpoint (Lauber, 2007) In the 2001 directive, GOs primarily served the purpose of disclosure,i.e to ensure the energy source, and time and place of the electricity production from RES Itwas noted that “This Directive does not require Member States to recognise the purchase of aguarantee of origin from other Member States or the corresponding purchase of electricity as

a contribution to the fulfilment of a national quota obligation” (CEC, 2001, L283/34) Theimplementation of GOs for disclosure in the following years was uncoordinated and in the

absence of standards, different national perspectives led to different specifications for GOs indifferent member states (CEC, 2008c).

After the 2001 directive, the debate on the pros and cons of TRECs versus FIT continued(Haas et al., 2004) Proponents of TRECs emphasised the economic efficiency of the system– the ability to deliver the least expensive green electricity and induce a competitive pressure

on the industry Proponents of FIT emphasised the ability of the system to deliver largevolumes of RES (pointing to Denmark, Germany and Spain) and that support levels can beadapted to the specific support needs of different technologies and contribute to building upnew industry and induce investor confidence as a result of the fully-predictable revenuestream from the fixed price (Fouquet and Johansson, 2008) The Commission argued in 2005(CEC, 2005), as well as in 2008 (CEC, 2008a), that well-adapted FIT regimes were generallythe most efficient and effective support schemes However, this finding continued to becontested by liberal proponents, and it did not stop the Commission from moving ahead withthe GO trading instrument in the proposed new RES directive Modelling exercisesdemonstrated the macro-economic benefits from efficiency increases from GO trading (CEC,2008c), and so the debate raged on

The Commission proposal in January 2008 set a binding target of a 20% proportion of RES

in the overall community energy consumption by 2020, and allocated individual targets toeach member state, ranging from 10% (Malta) to 49% (Sweden) The proposal stated thatmember states would now be obliged to issue harmonised GOs in the production of bothelectricity and heating and cooling1 from RES Trading in GOs were a central mechanism inthe proposal to ensure that the RES targets would be reached in a cost-efficient manneracross the EU The idea was that renewable energy production would be expanded where it

is least expensive and hence it would ensure a cost-efficient attainment of RES targets acrossthe member states Those countries that have scarce renewable resources would, instead ofbeing forced to develop highly expensive solutions on their territory, be allowed to buy GOsfrom another country’s production and count them towards their targets

The proposal however involved a number of prerequisites and qualifications For example,only those countries that achieved their interim targets would be allowed to sell their GOs.Furthermore, member states could choose to opt out of the trade in GOs Legal expertshowever suggested that it was uncertain whether these limitations would comply withinternal market rules, in that the limitation of trade must be proportionate to the object aimed

at, and justified in that the same objective cannot be achieved by another means that is lesshindering of trade (Johnston et al., 2008) As will be shown these constraints andqualifications came as a result of intensive advocacy efforts on behalf of member states andinterest groups that worried about how the system would function with existing FIT systems,what the overarching legal situation would be like once the GO “product” had been created,and how one could continue to support emerging technologies that were yet not competitive

on their own terms (Toke, 2008) In the next section we look closer into these efforts

4 Advocacy and influence surrounding the Commission’s proposal

4.1 The Commission’s RES proposal preparation

The Directorate General (DG) for Energy and Transport (TREN), and its “unit of regulatorypolicy & promotion of renewable energy” developed the RES Directive proposal ByDecember 2007 several drafts had leaked during inter-service consultations It becameapparent to Brussels entrepreneurs that the cause of all the leakages was that the differentDGs had difficulties agreeing (interview, industry spokesperson).2 Disagreements betweenTREN and other DGs surfaced among other things on the relative merits of GO trading andthe national FIT systems, as well as whether the promotion of the internal market shouldtrump the safeguard of national interests and industries DG Competition (COMP) argued infavour of GO trading and was principally against national support schemes – marketefficiency in the internal market being their primary policy concern: “We fear that therenewable proposal becomes terribly inefficient, when you give preferential access [ ] you

do not create an incentive to make the business more efficient” (interview, Commissionofficial) The DG for the Environment’s (ENV), whose primary concern is to promoteeffective and efficient environmental protection, was largely positive to GO trading Ourrespondents assert that TREN came out as the least market-oriented, and this was alsovalidated in our respondent interviews in TREN:

“Predictability and therefore investment stability is not possible in certificate systems In theend we are talking about national citizens’ willingness to pay for renewable technologies[…] I think this is important, and it relates to social cohesion policy and how FITs are reallyimportant parts of the local economy From an economic perspective sure there are losses inefficiency, but from a political science perspective you need to consider this.” (interview,Commission official)

However, earlier unofficial drafts of the proposal contained a more potent and obligatory GOtrading scheme than what ended up in the final proposal For instance the version of 23rdDecember 2007 stated that countries that had not met their interim targets would still not beallowed to impose restrictions on GO trade (Toke, 2008) This suggests that the originalagenda of TREN was more internal-market oriented and favourable to GO trading Toke(2008) asserts that in September 2007, “…anti-feed-in hardliners” within the senior ranks ofthe Commission bureaucracy, including Jos Delbeke (chief architect of ETS), Catherine Day,Christopher Jones, and Peter Vis, had convinced TREN Commissioner Piebalgs to introduce

GO trading (p 3)

The disagreements within the Commission provided a strong incentive for lobbying, and thefinal weeks of proposal preparation up until January 23 when the proposal was formallypublished saw an unprecedented lobby effort from interest groups and member states.Managing the lobby effort became a daunting task for Commission officials One ENVofficial told us “One gets surprised when Birdlife International calls to request a meetingabout GOs” Another one pointed to a well-coordinated lobby; “The lobby has been quite

united we notice I have never seen so many letters, all the way up to Baroso, Dimas, andVerheugen, which unfortunately all get referred to us so we spend all nights answeringletters…always with the same contents.” (interview, Commission official)

During 2007, positions of member states were closely aligned with existing national supportsystems On the pro-GO side were those countries that had implemented TRECs nationally,would depend on GO trade because of scarce renewable resources or otherwise benefit fromsuch trade, including Denmark, Belgium, Italy, Luxembourg, the UK, and Sweden On theanti-GO side we found those countries that had FIT systems nationally This involved inparticular Germany and Spain who, backed by Slovenia and Latvia, warned that GO tradingthreatened the FIT system

The active interest groups can be divided into those in favour, those mildly positive orneutral and those against Most strongly in favour of GO trading were the businessesconcerned with the trade itself, in particular RECS International (Renewable EnergyCertificate Systems), i.e., the association of traders in certificates, and theAssociation of Issuing Bodies (AIB), that represents the interests of certificate systemadministrators, and which tends to liaise with RECS Also in favour of GO trading we findthe major power producers and their associations, in particular Eurelectric Their advocacytended towards an ideological stance based on the internal market logic and Europeanperspective (Eurelectric, 2006) However, they could also benefit from windfall profits fortheir members as the price of the GO would follow the costlier renewable technologies onthe margin (CEC, 2008c) Critical to the continued existence of FIT and favourable to aharmonised trading system, they initially mirrored in particular the positions of power giantssuch as E.ON, RWE and Vattenfall However, the organization does represent morediverging interests in terms of power technologies and nationalities and therefore haddifficulties to form a strong position At the final stages of Commission preparations,Eurelectric put forward a rather nuanced view: rather than arguing forcefully about

harmonisation of instruments their position was that it should be an open choice between FITsystems and GO trading (Toke, 2008).

Also mildly favourable to GO trading, but with an even broader constituency behind it, wasBusiness Europe Due to the broad membership, some members were for and others against

GO trading, and even the national associations were divided on this, but as our respondentstated: “We have to square the circle somehow Here in Brussels we are more pro-GO,because we think the subsidy costs are too high, and trading would be more efficient.” Theassociation moved their position during 2007 just like the Commission did “Particularly wewere first in favour of GOs and wanted to push that, but then […] some members slowed thisprocess down”

What about the energy intensive industry? Their primary focus was on the ETS schemewhich they considered a more critical aspect than GO trading for the competitiveness ofEuropean industry The pulp and paper industry was the notable exception, being intimatelylinked to both bioenergy supply and demand CEPI, their European Association, arguedstrongly against GO trading as they saw rapidly increasing costs for their biomass input due

to competing demand (interview, industry lobbyist) CEPI had earlier used unorthodoxstrategies: for instance they made an impact study within which Commission officials wereworking jointly with industry3 (McKinsey and Pöyry, 2007) This was apparently successful

as the joint work with Commission people seemed to have contributed to building trust andlearning The message came across, and on top of it CEPI became perceived as aconstructive and reliable discussion partner; “Some lobbies are much more aggressive thanothers […] whereas pulp and paper we very much like with their balanced and constructiveapproach” (interview, commission official)

Clearly outspoken against the use of GO trading we find the European Renewable EnergyCouncil (EREC) - the umbrella organisation of the European renewable energy industry,and European Renewable Electricity Federation (EREF) – an organisation for independent

power producers that exclusively produce renewable electricity These groups were

according to a Commission official we interviewed also “very good at getting their pointacross” EREC was against GOs, representing equipment producers and manufacturers thatwould benefit from binding targets, and small producers that would have difficulties dealingwith a liberalised market Alongside these industries advocating against GO trading were themost important environmental NGOs in Brussels, including the European EnvironmentBureau (EEB), IUCN, Climate Action Network, Greenpeace, WWF, and Friends of theEarth The green groups were however not uniformly against GO trading In fact, sometimeseven subunits within NGOs would have diverging interests This lead groups to seek outalliances externally Our Commission respondents noted that the lobbies against GO tradingwere increasingly working through ad hoc forms of alliance-forming between industrialactors, national governments and NGOs This had over the last few years grown to becomeincreasingly important strategies in particular for certain industry branches such as the pulpand paper industry who, for example, cooperated with NGOs on reducing biofuel targets orenhancing the sustainability criteria (CEPI and WWF, 2006) But generally, NGOs and therenewable energy industry associations pushed for keeping the targets in and to stop the GOtrading

The member states and interest groups most critical to GO trading exercised a stronginfluence on TREN’s proposal To accommodate in particular Germany and Spain, theCommission’s proposal introduced an opt-out clause that would allow member states to notparticipate in the proposed GO trading scheme on certain justifications The time pressure toget the proposal adopted before the new EP elections in 2009 played into this decision to put

in the opt-out clause, as this would hopefully reduce the level of controversy in subsequentdeliberations in the Council and Parliament As Toke (2008) put it, “a protracted war ofattrition with the renewable lobby backed by the two EU states with the biggest renewabledevelopments programmes would not help achieve this target [date].” All in all, theCommission’s early push for GO trading and harmonisation had been substantiallydestabilised and watered down in the lobby process, and the resulting compromise proposal

raised many questions about how the GO trading would actually work and whether the out clause would be legally certain As we will see, this uncertainty contributed to a furtherquestioning of the system in the ensuing Council’s and Parliament’s deliberations.

opt-4.2 The Parliamentary reading and Council deliberations

After the Commission presented the proposal in January 2008, parallel processes proceeded

in the Council and the Parliament (EP) The time table was set to come to a parliamentaryconclusion by the end of 2008 and a Council decision in early 20094 In the EP, the proposalwas handled by the Committee on Industry, Research and Energy (ITRE), and the rapporteurwas Green party parliamentarian Claude Turmes They, and other parliamentarians engaged

in the issue were of course also courted intensively by interest groups and member states inthe same way as the Commission in the earlier stage

The parliamentary reading in ITRE moved relatively quickly towards a negative opinion onthe GO proposal Our informants in February 2008 predicted that the GO proposal might notsurvive the EP The rapporteur’s first Memorandum on the issue in May 2008 stated that:

“The triple function given in Article 8 to the GOs – disclosure, support accounting/trade andtarget accounting generates legal difficulties and undermines national support schemes” and

“the concept favoured by the large power producers (e.g Eurelectric) and the traders ofelectricity (EFET) to bring legal certainty by creating an EU wide renewables certificatemarket is not the way forward Such a scheme would not only undermine the existingnational support schemes, but also potentially generate €30 billion in windfall profits fortraders and generators by moving from the technology specific average price supportschemes to a marginal market where the most expensive marginal renewable certificatewould set the price.” (Turmes, 2008, p 2) Finally, in September 2008, the Committeereached an agreement across political parties that the parliament would reject theCommission’s proposal on GO trading Instead, GO would be used purely for verifying