Energy transition vision
Energy transition vision
More than three-quarters of the EU’s greenhouse gas emissions stem from our energy consumption. It is thus vital to stop burning fossil fuels to limit temperature rise to 1.5°C, the Paris Agreement target.
CAN Europe works for a European energy transition that puts energy efficiency first while switching to a fully renewable energy system. Together with members, academia and experts, we developed our Paris Agreement compatible (PAC) energy scenario. This energy scenario provides a robust, science-based pathway for Europe’s energy landscape. In a bottom-up research process, we reflected both the required emission reductions as well as the potential of energy savings and renewables.
PAC scenario 2.0
We are in the process of updating the existing aggregated PAC scenario for the EU28 from 2020. The EU-wide PAC scenario will be disaggregated to get fully fledged country-specific PAC scenarios for the EU Member States.
These country-specific PAC scenarios describe how Member States can achieve the Paris Agreement’s objective of limiting average global temperature increase to 1.5°C. They also show the ambition needed in view of updating National Climate and Energy Scenarios (NECPs). The updated PAC scenario will also examine the macro-economic benefits of its implementation for both the EU and country-specific levels.
The second phase of the PAC project started in September 2021 and runs until August 2024, for more information on how you can engage in the second phase of the PAC scenario, please click here.
Cut emissions with energy savings and renewables
Given the global climate emergency, the EU can and must increase ambition. The United Nations Emissions Gap Report and the IPCC Special Report on the Paris Agreement’s 1.5°C threshold both indicate the pace of greenhouse gas emission reductions needed. Applying this reduction pace means the EU:
cuts its emissions by at least 65% in 2030 instead of only 40% compared to the 1990 level
gets on a trajectory towards net zero emissions in 2040 instead of 2050
bases its energy supply on 100% renewables in 2040
Besides a swift mobilisation of energy savings potentials, this implies a phase-out of coal by 2030 and fossil gas by 2035. Meanwhile, the growth of Europe’s cheapest energy sources, solar photovoltaics and wind power, allows for tripling the share of renewables.
Circular economy, deep renovation and electrification
In the industry sector, we foresee that the circular economy decreases the raw material demand and makes it less energy-intensive. Industrial processes electrify so that they can use renewable electricity. Only for high-temperature processes, e.g. for steel production, renewable hydrogen will be needed.
The buildings we’re living and working in will undergo a deep renovation wave. Refurbishing 3% of the existing buildings every year cuts final energy demand by roughly two thirds. At this occasion, fossil heating systems will be replaced by electric heat pumps. Alternatively, a connection to a district heat network that distributes renewable heat.
In the transport sector, the remaining passenger cars will be used more efficiently – and they will all be electrified by 2040. This allows to massively increase the use of renewable electricity for mobility needs. Liquid biofuels will only play a niche role. Renewable hydrogen, renewable ammonia and liquid synthetic fuels are introduced in long-distance heavy-freight, shipping and aviation.
CAN Europe also urges policy-makers to prepare the energy infrastructure for 100% renewables through fostering flexibility instead of deepening our dependency on fossil fuels
To ensure we reach net zero emissions by 2040, EU Member States need to phase out fossil fuels and commit to a strong reduction in energy consumption and a transition of our energy system to one that is 100% based on renewable energy sources (RES) by 2040.
The costs of renewables have declined a lot over the last couple of years. Renewable power is increasingly cheaper than any new electricity capacity based on fossil fuels. According to IRENA (July 2020), new renewable power generation projects now increasingly undercut existing coal-fired plants. On average, new solar photovoltaic (PV) and onshore wind power cost less than keeping many existing coal plants in operation, and auction results show this trend accelerating.
Renewables cut our energy system bill. At the same time, renewables help in reducing health costs and environmental damages caused by fossil fuels combustion. While fossil fuels and nuclear power still benefit from direct and indirect subsidies, their external costs are barely reflected in prices.
Renewables build resilient local economies. In contrast to fossil fuels, the mobilisation of local renewable energy potentials increases local value added, e.g. by boosting tax income of municipalities and regions, by creating local jobs and allowing local SMEs to strive. In addition, citizens have an opportunity to participate, be it democratically or financially, e.g. as shareholders of a renewable energy cooperative or as prosumers. Renewable energy sources allow them to deploy and organise their local energy system according to their local priorities and plans.
In the EU, Member States do not only need to increase their ambition level; they also need to prioritise the further elaboration and improvement of national policies that enable increased local renewables deployment.
In 2018, renewable energy represented 18% of energy consumed in the EU (EU28, Eurostat). However, the growth pace of the renewable energy share has slowed down since 2015. The slower RES progress in recent years can largely be attributed to increasing energy consumption across Europe. Although installed renewable capacity has continued to grow, the pace of growth has slowed down as more energy from non-renewable sources is consumed (EEA, 2019). This raises deep concerns about the trajectory towards 2030 which requires a significant reduction of energy consumed and an increase in the deployment of renewable energy.
Moreover, the current 2030 EU RES target is not in line with the Paris Agreement objective to limit temperature rise to 1.5°C. CAN Europe calls for an EU binding target for the share of energy from renewable sources in gross final energy consumption of at least 50% by 2030.
Reducing energy consumption is the most immediate way to reduce greenhouse gas emissions. At the same time energy savings reduce import dependency and enhance energy security. Energy efficiency measures can also create millions of jobs, reduce energy bills, help relieve energy poverty and improve air quality.
The European Union has set energy efficiency targets for 2030, while a series of policies and measures are already in place. They cover different sectors and issues such as buildings, appliances and vehicles.
The 2030 EU energy efficiency target is currently a reduction of energy consumption of at least 32.5%. It was set when the Energy Efficiency Directive (EED), a key piece of the EU energy efficiency legislation, was amended in 2018. As part of the Fit for 55 package, the directive is currently being revised in line with the new greenhouse emission reduction target. The Energy Efficiency Directive recast proposal foresees setting an increased and binding EU energy efficiency target for 2030 and an adjustment of key measures that help achieve the new target in the given timeframe.
Despite declining energy consumption trends over the last 10 years, the change is happening at too little pace. The EU needs to scale up action on energy efficiency. Significant change in the ambition level of the EU`s 2030 energy efficiency target will be necessary to bring the EU on track. CAN Europe calls for at least 45% energy savings by 2030.
The EU energy efficiency target is the only non-binding target in the EU 2030 energy and climate framework. Member States were required to set their own ‘indicative’ national energy efficiency contributions for 2030 in their National Energy and Climate Plans (NECPs). The Commission’s analysis of the 2030 national energy efficiency contributions included in the NECPs indicates a gap to the level of ambition of around 3% towards the 2030 energy efficiency target.
The lessons learnt from the energy efficiency targets point out to the importance of having binding EU and national targets and robust implementation of relevant policies. Europe should aim for higher ambition and stronger measures. Otherwise, the economy and the society will be missing out on the multiple benefits energy efficiency has to offer. This is needed not only to be able to achieve the 2030 targets, but also the long-term climate objectives that are compatible with a 1.5°C world.
As action in the next 10 years will be decisive in reaching the 1.5°C objective, the EU increased 2030 climate target should be complemented by the increase of the 2030 energy efficiency target, which is currently not in line with the Paris Agreement goal.
Check our main asks in our position paper.
To reach climate neutrality by 2050 and even by 2040 as advocated for by CAN Europe and based on scientific evidence, we need to get rid of polluting fossil fuels in our energy system.
While a European wide coal phase out is well advanced, a similar trend and narrative needs to be initiated for fossil gas emitting climate wrecking greenhouse gases such as carbon dioxide and methane. The polluting fuel is hailed by the gas industry and politicians as an indispensable transition fuel. However fossil fuels have no role to play in a future energy system based on renewables and energy efficiency. Members States and the EU should start planning right away for a gas phase out by 2035, and develop phase out plans with intermediate objectives.
CAN Europe’s work on gas focuses on topics such as energy infrastructure and how to avoid that EU public funds are spent on new gas pipelines, plants or terminals. We closely scrutinise the modelling and planning of future energy infrastructure as well as proposed gas projects.
In terms of governance we question the legitimacy of ENTSO’s central role in the modelling and planning of energy infrastructure. These tasks need to be given to an independent and scientific body reflecting and integrating in a fully transparent way all energy solutions needed in a 100% renewables and energy efficient system.
Fossil fuels have no role to play in a future energy system based on renewables and energy efficiency.
Non fossil gases such as hydrogen generated from renewable electricity only will play a role in the future, however their availability needs to be assessed carefully. Renewable energy production needs to strongly increase to cover growing electrification in many sectors as well as renewables based hydrogen production. The strong enthusiasm shown by the gas industry on hydrogen shows its attempt to stay on the gas train by dressing up into a hydrogen-hydra, with a big fossil and a small renewable hydrogen head.
Worrying trends around governance also appear in planning and investment decisions to be taken on the future hydrogen economy. Currently, the Commission communicates a lot about “green hydrogen” based on renewables, however the actors in the driving seat of the “Clean Hydrogen Alliance” stem mainly from the fossil gas industry.
Finally, methane emissions occurring at extraction, transmission and end-use stages contribute significantly to climate change. Alongside a fossil gas phase out, methane emissions should be eliminated by banning venting and flaring and introducing an emission performance standards.
Burning coal for energy fuels climate change, impacts people’s health and prosperity, pollutes the environment, ruins economies by draining resources and crowding-out other economic activities, including accelerated deployment of renewables.
It is one of the main drivers of climate change because coal is one of the most greenhouse gas intensive fuels. Despite this, nearly 40% of the world’s electricity is still generated from coal. Globally, coal causes over 10 Gigatons of CO2 per year and accounts for about 40% of fossil CO2 emissions. In 2017, 15.2% of the EU’s total greenhouse gas emissions came from burning coal.
Running out of time
Phasing out coal is the low-hanging fruit when it comes to scaling up emission reductions in Europe in line with the Paris Agreement. In order to achieve a 1.5°C world, in accordance with the IPCC 1.5 Report, the EU and all OECD countries mustphase-out coal by 2030, at the latest.
If we are to comply with what was agreed in Paris, building new coal plants in Europe cannot be a matter of debate.
Running out of health
Coal’s overall human and ecological toll is staggering. Mining and burning coal causes dangerous emissions such as sulfur dioxide, nitrogen oxide, dust particles and mercury emissions, and contaminates soil, air and water. See our reports Europe’s Dark Cloud and Last Gasp.
Air and water pollution from coal plants knows no borders. As such, coal plants in any one country are a problem for all of us, affecting public health even in countries without coal plants. Please see our Chronic Coal Pollution and Real Costs of Coal: Mugla reports to see how the coal plants in the Western Balkans and Turkey exacerbate this issue.
Running out of money
The coal industry is unable to compete with buoyant renewables, which are cheaper to build, cleaner to operate and more flexible. The coronavirus crisis has shown that coal’s goodbye to Europe is sooner than expected. But numerous subsidies still keep this dying industry alive by pumping billions of taxpayers’ euros. Taking responsibility for the management of coal’s comprehensive and final departure means no more hand-outs to the coal industry. Nor should the public money support other dead-ends in coal regions, such as fossil gas.
All the funding accessible for the coal regions should support a just and rapid transition away from fossil fuels and towards energy efficiency and renewables. It also means all countries with coal regions must immediately design and implement just transition plans for the communities not to be left behind in the required rapid transition for a climate neutrality.
CAN Europe strongly supports the phase out of coal by hosting the ‘Europe Beyond Coal’ campaign secretariat, integrating the coal debate in our regular policy work, and by supporting our members and allies in Turkey and the Western Balkans.
We will fail to achieve climate neutrality if we do not substantially reduce consumption and cut emissions from our homes, offices and the whole built environment. Improving the energy performance of the building stock is a stepping stone in the path towards full decarbonisation, ensuring energy and resource efficiency, enhancing energy security and promoting renewable energy deployment.
The building sector plays an essential role in the energy transition. Buildings consume around 40% of the energy produced and are thus the largest single energy consumer in the EU, while emitting 36% of energy-related greenhouse gas (GHG) emissions. Around three-quarters of the European building stock is energy inefficient and the vast majority will still be standing in 2050. However, current annual energy renovation rates across Europe are extremely low, around 1%, with deep renovations – notably those achieving the highest energy savings – representing just a fraction of it.
7 European buildings out of 10 are energy inefficient.
Therefore, EU-wide energy retrofitting stands as a key action needed not only to mitigate climate change, but also in light of the socio-economic benefits it can bring about. In particular, investing in energy renovation ensures lower energy bills for final consumers, as well as improved health, comfort and indoor air quality, while having the potential to stimulate economic growth and substantial job creation. Through adequate technical and financial support and social safeguards, a better performing building stock can also help to alleviate energy poverty by tackling its root causes.
The Energy Performance of Buildings Directive (EPBD) is the main EU legal instrument which aims at improving the energy efficiency while fostering renewable energy in buildings, in conjunction with the relevant provisions of the Energy Efficiency Directive and the Renewable Energy Directive.
Yet the existing framework is not enough to be in line with the higher EU 2030 climate ambition, not to mention to comply with the Paris Agreement’s commitment. For this reason, under the European Green Deal, the Commission published in October 2020 the so-called Renovation Wave strategy, an action plan of regulatory, financing and enabling measures aiming at boosting rates and depth of renovations over the next decade. Overall, the different actions foreseen, such as the revision of the EPBD to introduce mandatory minimum energy performance standards, should contribute to double the current rate, reducing emissions from buildings by 60% and final energy demand by 14% by 2030.
The EU level of ambition is still inadequate to be in line with the Paris Agreement’s goal of limiting temperature rise to 1.5°C. According to the findings of the PAC scenario, in order to achieve climate neutrality by 2040, final energy demand should decrease by 33% by 2030, implying the need to at least triple current annual renovation rates and to maximise deep renovations.
Energy Charter Treaty
Energy Charter Treaty
A swift transition in the energy sector from fossil fuels to renewable sources is required to mitigate climate change. In the Energy Charter Treaty (ECT), the fossil fuel industry has a powerful tool to block or prolong the phaseout of oil, coal and gas.
The treaty protects all foreign investments in the energy sector, including coal mines, oil fields, pipelines, other infrastructure and power stations. Almost any state measures that harm a company’s profits can be challenged, which can result in the state having to pay millions or even billions in compensation.
Energy firms are using the ECT to slow down the transition away from fossil fuels. For example, UK oil company Rockhopper is suing Italy for banning oil extraction in the country’s coastal waters, claiming more than nine times the sum that the company initially invested. British energy firm Ascent Resources is suing Slovenia for demanding the company carries out an Environmental Impact Assessment before starting gas explorations using fracking. In the Netherlands, two operators of a coal-fired power stations have started legal proceedings under the ECT against the Dutch government’s coal phaseout law, reportedly jointly demanding €1 billion in compensation.
What are our demands?
CAN Europe is calling on European countries to withdraw from the ECT, ideally jointly with all EU Member States and our neighbouring EFTA countries, the UK and Balkan accession states. This should happen as soon as possible because investments taken after withdrawal are no longer protected under the ECT. Given that even today, a majority of new investments in the energy sector are in fossil fuels, not renewable energy, the sooner we withdraw, the fewer fossil fuel investments will fall under the protection of the treaty. This is particularly important to avoid a lock-in in natural gas technologies and infrastructure.
Our Paris Agreement Compatible Energy Scenario shows that gas is not required as a bridge technology but even if one believes that gas is needed, this would only ever apply for a very limited timespan. The ECT, however, would protect these gas investments for the lifetime that the investor could reasonably expect to run his gas plant or infrastructure and would make taxpayers liable to pay for stranded assets.
Withdrawing from the ECT alone is not enough, as the treaty contains a so-called “sunset clause”, which allows existing investors to sue governments for 20 years after they have withdrawn from the ECT. To mitigate this problem, the withdrawing countries should adopt an agreement that excludes investor claims within this group of countries.
Lastly, the EU should stop any attempts to expand the ECT internationally. As things stand, dozens of low and middle income countries, in Africa, Asia and Latin America, are being encouraged to join the ECT. The European Union and Member States should ensure no funds are going towards this expansion process and most importantly, they should oppose the admission of any new members.
Read more in our CAN Europe policy briefing on the Energy Charter Treaty.