Brussels, March 17 – Following the Energy Council’s discussions on March 17, CAN Europe stresses that a sustainable and affordable EU energy system cannot be achieved without rapid deployment of renewables and tackling the root cause of high energy prices: fossil fuel dependency.
Action Plan for Affordable Energy
The European Commission’s Action Plan for Affordable Energy (see our reaction here), sets out a clear vision to support the deployment of the cheapest source of energy: renewables. This not only has the potential to decarbonize our economies, but also to increase our energy independence.
However, many of the proposed measures, particularly those intended in the short term, require bold action from Member States, to better design network tariffs, lower taxation on electricity, and implement the revised electricity market legislation and the Fit for 55 package. The discussions at today’s Energy Council shows Member States are not ready yet to fully embrace this vision and act swiftly to favour renewables over fossil fuels and other false solutions.
LNG and fossil gas
A sustainable and affordable EU energy system cannot be achieved without tackling the root cause: fossil fuel dependency. CAN Europe urges the EU to seize the opportunity in the Security of Supply revision and opposes the idea of financing foreign export LNG infrastructure, along the lines of the Japanese model.
The so-called Japanese model, as proposed in the European Commission’s Action Plan for Affordable Energy, proposes using EU or Member States public money (via public banks, export credit agencies) to de-risk private investments for foreign export infrastructure. This approach and agreeing on long term contracts now, is not only uneconomic but also breaches the EU gas package, which mandates an end to long term contracts by 2049. Member States and the Polish presidency should ensure that the upcoming Council conclusions on Security of Supply include mandatory gas saving measures.
Notes:
More info on the Japanese model: JBIC, a Japanese export credit agency (100% owned by the Japanese government), has been giving loans to project investors of LNG terminal projects in the U.S. and other countries, and NEXI, another Japanese ECA, is giving insurance to the loans to the project provided by Japanese private banks. JBIC’s financial support to LNG projects around the world is extensive, in particular in the U.S. JBIC and NEXI are involved in Freeport and Cameron LNG, as the biggest individual financiers in those projects. In the Japanese context, this leads to overcapacity and the need to offload excess LNG supply in the Asian market.
Useful links:
CAN Europe’s key asks on Affordable Energy Action Plan
NGOs urge Commissioner Jørgensen to reject potential EU investments in foreign gas export infrastructures
Climate proof recommendations for the revision of the security of supply framework
