According to French State Secretary for European Affairs Jean-Pierre Jouyet, his government’s ambition is to reach political agreement on the whole of the energy package, if possible at first reading, by the end of this year or in the first few weeks of 2009. “This is a key element of the way we want Europe to strengthen its driving role in the international climate negotiations in the run-up to the Copenhagen conference in 2009,” Jouyet told MEPs in Strasbourg before the start of the Presidency.

Despite energy and climate change being a major goal, French President Nicolas Sarkozy has muddied the waters by sharing the same principles behind the climate and energy packages. Spanish Economy Minister Pedro Solbes was very clear on Sarkozy’s proposal: “I don’t think such a measure is a good idea considering that we want to reduce consumption and be more efficient.”

Sarkozy’s bold suggestion raises the question as to whether there will be other surprises during the French Presidency, perhaps even on the promotion of nuclear energy as a low carbon alternative when considering national targets on renewables or CO ₂ emissions. “Low carbon energies will come back at some time,” promised a French diplomat. “But we have to work within the framework of the Commission’s package. Of course, if numerous member states say that there is a very important detail missing in this package, then the French Presidency would listen to this message,” she said.

A whole year has passed since the European Council of March 2007 and its recomendations on continuing liberalisation. The debate intensified following the proposals that the Commission presented in September 2007 on the liberalisation of energy markets and the bulk of the work to be done. But at the current stage of the procedure, member states and the European Parliament are far from seeing eye to eye on the scheme to put in place to promote the liberalisation of the energy market. By opting for full ownership unbundling on the electricity market, on 18 June in the plenary session, MEPs made the opposite choice to the Council. On 6 June, energy ministers made known their preference for an ‘independent transmission operator’ (for both the electricity and gas markets) closely monitored by an independent authority, an option which, contrary to ownership unbundling, will not oblige vertically integrated companies to sell their assets in electricity transport.

Does France have a ‘plan B’ if the Council does not work out a final agreement with the European Parliament on liberalisation of EU energy markets? “Yes, 2012,” said a French diplomat. “It will not be a priority during the five effective months of the French Presidency. It is not just a question of priorities, but of agenda,” she said. “We are constrained by Parliament packing up next year. We would not just lose six months,” warned a UK diplomat.

As for the proposed directive on promoting renewables, France, with a share of 10.3% of renewable energy in its final energy consumption, is not in the very difficult position of member states that have lagged behind in this area. Problems to settle for the French Presidency include the different national targets for each member state, whether to accept proposals by the rapporteur Claude Turmes (Greens-EFA, Luxembourg) to make interim targets mandatory and the kind of renewables trading system to allow. “We are against the system of renewables trading, the so-called guarantees of origin, as proposed by the Commission,” said a German diplomat. France will have to balance German and Spanish suspicion of renewables trading with UK and Dutch enthusiasm. At least France is not as openly committed as it has become on the question ofownership unbundling.

Another key issue to be dealt with during the French Presidency in the energy field are the proposals on carbon capture and storage (CCS). Here the Greeks and Italians may cause the major problems given their geological proneness to earthquakes and fears of having to buy expensive ‘northern’ European CCS technology. “It is important that there are no environment or health aspects,” agreed a German diplomat, who is also against any “automatic” transfer of responsibility for CCS storage sites to national authorities as in the Commission’s proposal of January 2008.

The French Presidency will try to present proposals for energy security, especially on the EU’s relations with major partners like Russia. Security, though, is closely linked to measures such as the so-called Gazprom clause in the energy liberalisation package (as in the Commission’s proposal of 19 September 2007). The French Presidency, in commissioning a report from former International Energy Agency head, Claude Mandil, appears to advocate abandoning the reciprocity clause. This might limit protection of the (liberalising) EU energy market to the strict application without exception of EU rules. French Prime Minister François Fillon, meeting his Russian counterpart, Vladimir Putin, expressed the hope of achieving a partnership agreement with Russia during the Presidency. Fillon wants a strong element of energy cooperation in the agreement. “We think that energy security in Europe is first of all a question of calm relations, trade, and more trusting relations between the EU and Russia,” said Fillon. Such a strategy simply will not please Poland or the Baltic states. “They fear being picked off one by one by the Russians,” explained a British diplomat.

French diplomats appear confident that they have earned the right to be shielded during their six month stint from ownership unbundling by the back door. The Germans, though, were rudely awakened just hours before the Energy Council in February 2008 by the announcement that E.ON would “voluntarily” undertake unbundling of its electricity networks to avoid further Commission competition proceedings. Weeks before the start of the French Presidency, a further announcement was given concerning RWE selling its gas network in western Germany. “It is very strange that non-German quasi monopolies such as Electricité de France and Gaz de France have not yet faced action by the Commission,” said Werner Langen, the leader of German EPP MEPs. Although unlikely, a similarly undiplomatic move by the Commission against France’s energy giants would be a serious blow to French pride during the Presidency.

Key dates are the 3-4 July informal Environment and Energy Council in Paris as well as Energy Councils on 10 October in Luxembourg and on 8 (and possibly 6) December.