European Energy Commissioner Kadri Simson highlighted the ‘green’ aspects of the European recovery plan, Next Generation EU, presented on Wednesday, saying the Green Deal “is at the heart” of it, on Thursday 28 May, during an online conference organised by Bruegel.
New instruments.
As the first pillar of the Next Generation EU, the 560 billion euros ‘Recovery and Resilience Facility’ should help “to push towards the clean energy transition and to boost energy efficiency in housing and other economic sectors”, according to the Commissioner.
More specifically, this instrument will provide financial assistance to Member States that request it to enable them to carry out the reforms necessary for economic recovery (see EUROPE 12494/2).
The provision of these funds will not, however, be systematic (see EUROPE 12495/12). In order to benefit from it, Member States will have to present a national recovery plan in line with the EU’s strategic priorities, including the Green Deal.
Thus, in addition to examining the recovery plans in the light of its country-specific socio-economic policy recommendations in the framework of the ‘European Semester’, the Commission will also assess their consistency with National Energy and Climate Plans (NECPs) and National Just Transition Plans.
In doing so, the European institution will ensure “that green transition is in the heart of the reforms”, Simson said. But this may actually be less obvious.
Indeed, on the basis of the assessment of the recovery plan provided by a country, the Commission will provide recommendations, but these will not be binding.
By contrast, an opinion delivered by qualified majority by the Member States in a specific committee of the EU Council (examination procedure) will be binding.
In theory, while the Commission will therefore only be able to encourage countries to align their national recovery plans with the ambitions of the Green Deal, the Member States would have the power to retool a country’s recovery plan if, for example, it is not in line with the EU’s environmental objectives.
Another new development that will contribute to the EU’s climate goals, according to the Commissioner, is the new ‘Strategic Investment Facility’. With a budget of 15 billion euros, this instrument integrated into InvestEU will aim to generate private investment of up to 150 billion euros to strengthen Europe’s strategic value chains.
According to Mrs Simson, these investments will benefit the energy sector in particular, whether it be in support of renewable energy infrastructure and technologies, energy storage technologies or the development of “clean hydrogen” and fuel cells.
However, she did not specify how to guarantee that the private funds thus mobilised will be invested in new energy sources (renewable, hydrogen, etc.) and not in natural gas, for example.
The third new development mentioned by the Estonian: the REACT-EU instrument (see EUROPE 12495/3), which according to her will support green investments, citing in particular the forthcoming ‘Renovation Wave’ initiative (see EUROPE 12484/16), local electricity networks and innovative ‘clean hydrogen’ production solutions.
While the Commissioner did not address the new ‘Solvency Support Instrument’ to urgently raise private resources to support viable European companies in the most affected sectors, regions and countries, the Executive Vice President in charge of the Green Deal, Frans Timmermans, assured on the same day (Thursday) that companies that pollute or have a high carbon footprint will have to produce “green transition plans” in order to receive support under this temporary instrument (see EUROPE 12495/2).
“As an example, transport and agricultural sectors shall be encouraged to put in place green transition plans. The same would be required to companies from sectors covered by the EU Emissions Trading System [ETS]”, said Digital Executive Vice-President Margrethe Vestager at a press conference the following day (see separate news item).
Reinforcement of existing instruments.
Like Mr Timmermans, Mrs Simson also agreed that the proposed strengthening of some existing or already known EU instruments will contribute to the EU’s climate objectives.
The doubling of the amount of the ‘Sustainable Infrastructure’ window of the InvestEU programme will support in particular “renewable energy, interconnections and the Renovation Wave”, the Estonian said.
She also mentioned the proposed increase in the Just Transition Fund (+32.5 billion), which she believes “will allow us much more support to clean energy solutions and energy efficiency projects at the regional level”.
Mr Timmermans, for his part, stressed that strengthening the European Agricultural Fund for Rural Development (+15 billion euros) will help to achieve European objectives for sustainable agriculture and biodiversity.
NGOs not convinced
For their part, the environmental NGOs Friends of the Earth Europe (FoEE) and Greenpeace believe that Next Generation EU contains no real conditionality to prevent Member States from investing in fossil fuels or supporting polluting industries, such as airlines, without social and environmental compensation.
The European Environmental Bureau (EEB), a network of NGOs, in a statement, said the way Member States will use the funds from the ‘Recovery and Resilience Facility’ is “too vague”.
Finally, FoEE and EEB are concerned that support for hydrogen will mainly lead to the production of hydrogen from fossil fuels and not from renewable electricity. Under the term “clean hydrogen”, the Commission refers to hydrogen produced either by electrolysers fuelled by 100% renewable electricity or by natural gas, according to the recent roadmap of its hydrogen strategy (see EUROPE 12494/12).
To consult the various proposals contained in Next Generation EU: https://bit.ly/2AnFUfa (Original version in French by Damien Genicot)