Media Advisory: Powering ahead: Energy Council discusses the future of the European Green Deal and REPowerEU

Energy transition

 

 

Media Advisory Note

Powering ahead: Energy Council discusses the future of the European Green Deal and REPowerEU

Brussels, 29th May 2024 – 

What is happening: Tomorrow, EU Energy Ministers will meet to discuss the future of the European Green Deal and REPowerEU, while approving the conclusions on sustainable electricity grid infrastructure and formally adopting the decision of the EU’s withdrawal from the climate-wrecking Energy Charter Treaty. Energy Ministers should also follow up on the initiative of 15 Member States who signed a joint non-paper asking for a rapid decarbonisation of one of Europe’s intensive energy sectors, heating and cooling. 

Why is this important: 

The European Green Deal is key for a prosperous Europe

“The European Green Deal and REPowerEU plan have proved to be significant catalysts for pushing forward EU energy and climate policies, setting higher targets and improving frameworks to accelerate the rollout of renewable energy, phase out fossil fuels and lower the EU’s energy demand. The focus of the next policy cycle must now be on delivering prosperity for all by continuing the European Green Deal with a strong focus on a redistributive agenda that ensures the costs are shared fairly and everyone can take advantage of the multiple benefits this transition brings.” – Cornelia Maarfield, Head of Energy at CAN Europe

Delivering the European Green Deal will require a European Social and Green Investment Plan that promotes a socially fair transition, unlocking significant funds of up to €1 trillion by 2030 through a reformed EU Multiannual Financial Framework and a new Investment Fund via joint borrowing. However, adopting a 1.5°C compatible pathway could generate benefits of at least €1 trillion by 2030 for the European Union.

The agreed 2030 policy objectives must be implemented while paying specific attention to a fair and just transition. In that respect, adequately ambitious and strong National Energy and Climate Plans are crucial. Member States now have only a few weeks to submit their final NECP updates in June. With major gaps on energy savings and renewables remaining (as flagged by NGO assessments, the ESABCC and the European Commission as well) there is a urgent need for governments to significantly improve the final plans (as detailed here).

Unlocking Europe’s gridlock

While the Commission’s Grid Action Plan and Council conclusions on sustainable electricity grid infrastructure are welcomed steps towards developing the electricity networks required to support the rapid integration of renewable energy, three key areas require further action: interconnection, financing, and consumers.

Interconnection: In order to integrate more renewables into the grid while boosting its energy security, the EU needs to improve cross-border electricity interconnections. 

Financing: Commitment towards new money on grids is not to be found. CAN Europe’s Wired for Climate Neutrality finds the need for annual investments for energy infrastructure in Europe at €302 billion in 2030, rising to €441 billion in 2040.

Consumers: Rising costs for grids risks negatively impacting consumers. Member States need to support investment while providing solutions to minimise the impact of rising grid charges on consumers, partially the most vulnerable.

“It is welcoming to see that the expansion and modernisation of grids are being recognised by Energy Ministers as an integral component for the EU in reaching its climate and energy goals. Yet, this will require a significant investment on the EU’s part as around 40% of our distribution grids are already more than 40 years old. We need to see a commitment by Energy Ministers for more money to be invested in the EU’s grid and energy infrastructure while making sure not to leave consumers with the bill.” – Thomas Lewis, Grids Policy Expert at CAN Europe

Heating urgently needs to become renewable, accessible and affordable for all 

In recent weeks, 15 Member States emphasised the importance of decarbonising the EU’s heating and cooling sector in a joint non-paper, calling on the European Commission to publish the heat pump action plan without further delay and updating the European Heating and Cooling Strategy from 2016. Both are needed to ensure long-term policy signals, and clarity about the shift from fossil fuels to sustainable and renewable heating & cooling solutions. 

“The EU must prioritise the connection of buildings with locally available heat sources such as geothermal and solar thermal, the deployment of renewables-powered heat pumps, and decarbonised district heating coupled with energy saving measures and ensure that the integration of renewable heating solutions are accessible and affordable for all. Beyond the strategy, Member States need more guidance on the setting up of local heating and cooling plans.” Monica Vidal, Senior Heating expert at Climate Action Network (CAN) Europe. 

A fossil-gas free Europe

The invasion of Ukraine and the subsequent plan to get away from Russian fossil fuels with REPowerEU have profoundly shifted the EU’s gas market and supplies away from Russian fossil gas over to growing imports from Norway and the US. Even though the EU managed to significantly reduce its gas demand by 20% between 2022 and end of 2023 (the trend continues into 2024), the crisis triggered a massive LNG infrastructure overexpansion in direct contradiction with the EU’s projections to reduce gas use by 2030 and 2040.

The next policy cycle needs to ensure a binding and yearly continuation of those successful gas demand reduction measures to achieve a full fossil gas phase out across all sectors by 2035. On top of that a ban on Russian LNG transshipment should be adopted with the 14th sanctions package before the end of June and a ban on imports before the end of the year. 

– ENDS –

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