The 1997 Kyoto Protocol was ratified by the then 15 EU and subsequently by most EU-27 member states to reduce overall GHG emissions by 8% below the 1990 levels by 2012. As of January 2008, 177 countries plus the EU have ratified the Kyoto Protocol.

The EU objective for renewable energy production is to double the share of renewable energy sources (RES) in total energy production from 6% to 12% by 2010 (then consider interim goal of 15% by 2015) and then to increase it again to 20% by 2020 (the 20 20 20 by 2020 policy). The EU has set an ancillary target for electricity from RES at 21% by 2010 (and consider 15% by 2015) with specific targets for each member country. This is a significant increase from 13.9% in 1997. Primary production of RES in 2004 in the EU was 108.8 million tons of oil equivalent of which only 10% was produced in the 9 Target Countries that are members of the EU. The fact that none of these countries currently meets the EU objective demonstrates their need for additional investment in renewable energy projects. As of the end of 2005, the EU remained at 14% with a 7% gap to the 21% target for 2010. Additional EU objectives include 5.75% transport fuel by 2010 as an indicative target (and consider 8% by 2015) and reaching an overall saving of 9% of final energy consumption over 9 years until 2017.

Canada’s greenhouse gas emissions in 2004 were 26.6% above 1990 levels, resulting in a gap of 34.6% from Canada’s Kyoto target of a 6% reduction by 2012. According to a Canadian government report in September 2006, this gap is growing and policy legislation is requested to meet international and domestic requirements.

To reach the mandated objectives for RES, all of the Target Countries must step up their RES production by orders of magnitude. New generating capacity will be the driver in all Target Countries of LGE and nearly all of that will have to be powered by RES.

As we have recently witnessed by global events, there is a political will to increase the self-reliance on local production of RES well beyond the obligations of EU-driven policies and/or recent accession obligations. A solemn awareness has finally sunk in that the old practice of oil and gas at preferred or offset-based prices from Russia is no longer tenable in Central and Eastern Europe.