The European Commission presented, on Wednesday 18 May, the final version of its REPowerEU plan aimed at meeting the major challenge of moving the European Union away from dependence on Russian fossil fuels by 2027 while maintaining the EU’s energy security and pursuing the objectives of the European Green Deal.
This plan of nearly €300 billion (see EUROPE 12955/4) includes a communication to promote energy savings, a European strategy for solar energy and a series of initiatives and recommendations on energy efficiency, renewable energy, renewable hydrogen as well as biomethane.
In particular, the Commission is proposing legislative changes to raise the EU’s renewable energy and energy efficiency targets (see EUROPE 12951/3) and to speed up the licensing of renewable energy projects (see EUROPE 12949/2).
However, the Commission also plans to replace some of Russia’s fossil gas by diversifying the EU’s gas and liquefied natural gas (LNG) supply sources.
“While most of the Russian gas will be replaced by renewables and savings, we will need to secure around 50bcm of LNG and 10 bcm of pipeline gas annually from non-Russian sources”, said the EU Commissioner for Energy, Kadri Simson.
She also said the Commission hopes to reach a political agreement for LNG deliveries with other partners before this summer (following agreements already reached with the US and Canada - see EUROPE 12919/2).
Towards new gas infrastructures?
Doing without Russian gas imports altogether will therefore require “limited additions of gas infrastructures”, says the communication detailing REPowerEU, while noting that this is a conclusion drawn from a “regional assessment of additional gas infrastructure needs”.
Besides these additional gas infrastructures, the Commission also counts on some gas projects included in the fifth list of EU ‘projects of common interest’ (PCIs).
This list consists of a number of European cross-border energy infrastructure projects that are considered to be priorities and are therefore eligible for European funding (see EUROPE 12915/30).
While some of these, such as the GIPL pipeline linking Poland and Lithuania and a new LNG terminal in northern Greece have recently been completed/launched (see EUROPE 12946/29), others have not yet started.
Concerns over the ‘Green Deal’
In view of the Commission’s plans for gas diversification, there are concerns that ‘REPowerEU ‘ will not reinforce the European Green Deal but will instead run counter to it and lead to unnecessary investment.
This is particularly the case for the Greens/EFA group in the European Parliament, but also for environmental NGOs such as Greenpeace, Friends of the Earth Europe and Food & Water Action Europe.
“While we acknowledge some specific gas infrastructures may be needed, especially in eastern Europe, we have concerns on the building timeframes of these new and sometimes competing pipeline projects, which likely lead to over capacities, lock-in (in gas) or stranded assets and potentially being completed late”, said the Finnish MEP, Ville Niinistö, on behalf of the group during a debate in Parliament on Friday.
Raphaël Hanoteaux, gas policy advisor for the think tank E3G, agrees: “On the one hand, REPowerEU accelerates the European Green Deal, but on the other hand, it fails to disrupt our fossil gas habits. This inconsistency sets the EU up for a messier and costlier transition than necessary”.
Food & Water Action Europe points to a study by Artelys, which found that new gas infrastructure is not necessary for the EU to move away from Russian gas.
Together with members of the US Congress and Senate, MEPs have therefore sent a letter to Commission President Ursula von der Leyen and US President Joe Biden calling for an end to “funding, exploration and permitting for new fossil fuel infrastructure”.
These climate concerns are further reinforced by other elements of REPowerEU, in particular the proposal to allocate to the Recovery and Resilience Facility (RRF) - the budgetary instrument of the Next Generation EU recovery plan - an additional €20 billion from the auctioning of carbon allowances from the Market Stability Reserve (MSR) of the EU Emissions Trading System (ETS).
Like E3G, Mr Niinistö considers that this injection of additional allowances into the carbon market could lead to an increase in emissions.
The Parliament’s rapporteur on the ETS review, Peter Liese (EPP, Germany), on the other hand, called the proposal “a good idea” that “will dampen the price in this difficult period without jeopardizing the climate target”. However, he is opposed to the transfer of revenues into the RRF.
Another source of concern is that the ‘REPowerEU’ Communication states that “some of the existing coal capacity could also be used longer than originally planned with a role for nuclear power and domestic gas resources as well”.
Wanting to reassure, the Commission’s Executive Vice-President in charge of the ‘Green Deal’, Frans Timmermans, stressed that the climate impact of maintaining coal would be counterbalanced by the accelerated deployment of renewable energies and biomethane.
“On balance, I hope we will have even a plus in terms of our emissions reductions, but I do not expect us to end up with more emissions”, he added.
Asked about the risk that the acceleration of the renewable energy permit process foreseen in REPowerEU would lead to a neglect of environmental protection, Mr Timmermans acknowledged that there is a “tension between some of the things we want to do in terms of reducing emissions and in terms of protecting our natural environment and the urgency of replacing fossil fuel with other fossil fuels”.
See the ‘REPowerEU’ Communication: https://aeur.eu/f/1pc
See the Artelys study: https://aeur.eu/f/1qg
See the letter : https://aeur.eu/f/1QY (Original version in French by Damien Genicot)