The European Commission unveiled the REPowerEU Plan, which is intended to address the suffering and global energy market disruption created by Russia’s invasion of Ukraine.
Ending the EU’s reliance on Russian fossil fuels, which are exploited as an economic and political weapon and cost European taxpayers almost €100 billion per year, and addressing the climate problem are both urgent priorities. Europe can reduce its reliance on Russian fossil resources more quickly by acting as a unit.
To help Ukraine, 85 percent of Europeans say the EU should reduce its reliance on Russian gas and oil as quickly as feasible. The REPowerEU Plan’s actions can help meet this goal by reducing energy consumption, diversifying energy suppliers, and speeding up the deployment of renewable energy to replace fossil fuels in households, industry, and power generation.
For Europe and its allies, the green transition will boost economic development, security, and climate action. The RRF, which supports integrated planning and funding of cross-border and national infrastructure, as well as energy projects and reforms, is at the heart of the REPowerEU Plan. In addition to the huge number of relevant reforms and investments currently in the RRPs, the Commission proposes to make targeted adjustments to the RRF Regulation to incorporate specific REPowerEU chapters in Member States’ existing recovery and resilience plans (RRPs). This approach will be aided by the country-specific suggestions made during the 2022 European Semester cycle.
Energy conservation
The simplest and cheapest method to handle the present energy issue and lower rates is to save energy. The Commission wants to improve long-term energy efficiency measures, such as raising the binding Energy Efficiency Target from 9% to 13% under the European Green Deal’s ‘Fit for 55’ package of legislation. Saving energy today will help us prepare for the next winter’s challenges. As a result, the Commission released an ‘EU Save Energy Communication’ today, outlining short-term behavioral adjustments that may reduce gas and oil demand by 5% and urging the Member States to launch targeted communication efforts aimed at families and businesses. Member states are also urged to employ economic incentives to promote energy conservation, such as lower VAT rates on energy-efficient heating systems, building insulation, and appliances and items. In the event of a significant supply disruption, the Commission will offer recommendations on customer prioritization criteria as well as assist in a coordinated EU demand reduction strategy.
Supply diversification and assistance for our overseas partners
For several months, the EU has been working with foreign partners to diversify supply, securing record LNG imports and increasing pipeline gas delivery. By pooling demand, optimizing infrastructure utilization, and coordinating outreach to suppliers, the newly developed EU Energy Platform, supported by regional task groups, will enable voluntary joint purchases of gas, LNG, and hydrogen. The Commission will explore developing a “joint buying mechanism” to negotiate and contract gas purchases on behalf of participating the Member States as a future step, mirroring the ambition of the single vaccination purchasing scheme. The Commission will also examine legislative measures to force the Member States to diversify their gas supply over time. The Platform will also allow for cooperative renewable hydrogen purchases.
The EU’s new External Energy Strategy will make it easier to diversify energy sources and form long-term partnerships with suppliers, including collaboration on hydrogen and other green technology. The Strategy prioritizes the EU’s commitment to a worldwide green and just energy transition, improving energy savings and efficiency to decrease price pressure, accelerating the development of renewables and hydrogen, and ramping up energy diplomacy, all in accordance with the Global Gateway. Major hydrogen routes will be built in the Mediterranean and the North Sea. The EU will stand with Ukraine, Moldova, the Western Balkans, and Eastern Partnership nations, as well as our most vulnerable allies, in the face of Russian aggression. We will continue to cooperate with Ukraine to maintain supply security and a functional energy sector, as well as pave the path for future electricity and renewable hydrogen commerce, as well as the REPowerUkraine program to reconstruct the energy infrastructure.
Renewable energy deployment is being accelerated
A large scale-up and acceleration of renewable energy in power production, industry, buildings, and transportation would increase our independence, hasten the green transition, and lower costs over time. Under the Fit for 55 packages, the Commission recommends raising the headline renewables target for 2030 from 40% to 45 percent. Setting a higher overall goal will lay the groundwork for additional projects, such as:
A specific EU Solar Strategy to quadruple solar photovoltaic capacity by 2025 and deploy 600GW by 2030 is being developed.
A Solar Rooftop Initiative includes a phased-in legal requirement to put solar panels on new public and commercial buildings, as well as new residential structures.
Heat pump deployment will be doubled, and initiatives to incorporate geothermal and solar thermal energy into the modernized district and community heating systems will be implemented.
A Commission recommendation to address the long and complicated permission process for big renewable energy projects, as well as a specific revision to the Renewable Energy Directive to recognize renewable energy as a public good. Member States should establish dedicated “go-to” zones for renewables, with streamlined and simplified regulatory processes in places with reduced environmental concerns. The Commission is making statistics on ecologically sensitive regions available as part of its digital mapping tool for geographic data connected to energy, industry, and infrastructure to assist in swiftly locating such “go-to” sites.
By 2030, the goal is to replace natural gas, coal, and oil in hard-to-decarbonize industries and transportation sectors with 10 million tonnes of local renewable hydrogen generation and 10 million tonnes of imports. Increased sub-targets for various sectors would need to be agreed upon by the co-legislators in order to expedite the hydrogen market. To guarantee that production leads to net decarbonization, the Commission is also issuing two Delegated Acts on the definition and production of renewable hydrogen. Additional research funding of €200 million has been set available to speed up hydrogen initiatives, and the Commission has committed to completing the evaluation of the first Important Projects of Common European Interest by the summer.
A Biomethane Action Plan outlines methods such as a new biomethane industrial partnership and financial incentives to boost output to 35 billion cubic meters per year by 2030, including through the Common Agricultural Policy.
Reducing the use of fossil fuels in industry and transportation
By replacing coal, oil, and natural gas in industrial operations, greenhouse gas emissions will be reduced, while security and competitiveness will be enhanced. On top of what the Fit for 55 plans call for, energy savings, efficiency, fuel substitution, electrification, and increased absorption of renewable hydrogen, biogas, and biomethane by industry may save up to 35 billion cubic meters of natural gas by 2030.
The Commission will implement carbon contracts for difference to encourage industry to use green hydrogen, as well as particular funding for REPowerEU through the Innovation Fund, leveraging emissions trading profits to aid the transition away from Russian fossil fuel reliance. In addition, the Commission will give technical advice through the European Investment Bank on renewable energy and power purchase agreements. The Commission recommends establishing an EU Solar Industry Alliance and a large-scale skills collaboration to retain and restore technological and industrial leadership in fields such as solar and hydrogen, as well as to assist the workforce. In addition, the Commission will step up its work on key raw material supplies and develop a legislative proposal.
The Commission will present a Greening of Freight Package, aiming to significantly increase energy efficiency in the sector, and consider a legislative initiative to increase the share of zero-emission vehicles in public and corporate car fleets above a certain size, in order to improve energy savings and efficiencies in the transport sector and accelerate the transition to zero-emission vehicles. The EU Save Energy Communication also provides a number of proposals for cities, regions, and national governments that might help to successfully replace fossil fuels in the transportation sector.
A wise investment
Between now and 2027, an extra €210 billion will be needed to achieve the REPowerEU goals. This is a deposit toward our freedom and safety. We can save about €100 billion each year by reducing Russian fossil fuel imports. The business and governmental sectors, as well as the national, cross-border, and EU levels, must contribute to these investments.
The RRF already has €225 billion in financing available to promote REPowerEU. In the framework of REPowerEU, the Commission today adopted legislation and advice for the Member States on how to revise and supplement their RRPs. In addition, the Commission proposes to fund the RRF with €20 billion in grants from the sale of EU Emission Trading System permits now held in the Market Stability Reserve, which will be auctioned in a market-neutral manner. As a result, the ETS not only cuts emissions and fossil fuel usage, but it also raises the finances needed to attain energy independence.
Under the current MFF, cohesion policy would already spend up to €100 billion in renewable energy, hydrogen, and infrastructure to promote decarbonization and green transition initiatives. A further €26.9 billion in cohesion funds might be made available to the RRF through voluntary transfers. An additional €7.5 billion is available to the RRF through voluntary payments from the Common Agricultural Policy. This autumn, the Commission will treble the funds available for the Innovation Fund’s 2022 Large Scale Call to about €3 billion.
The Trans-European Energy Networks (TEN-E) have contributed to the development of a robust and linked EU gas infrastructure. To complement the existing Projects of Common Interest (PCI) List and completely compensate for the eventual loss of Russian gas supplies, additional gas infrastructure worth roughly €10 billion is required. Without locking up fossil fuels, generating stranded assets, or jeopardizing our climate goals, the substitution demands of the next decade may be addressed. Accelerating electrical PCIs will be necessary for the power grid to react to our future requirements. The Connecting Europe Facility will help, and the Commission is issuing a fresh call for ideas with a budget of €800 million today, with a second one scheduled for early 2023.
Background
In light of Russia’s invasion of Ukraine, the Commission suggested the concept of a strategy to make Europe independent from Russian fossil resources long before 2030 on March 8, 2022. On the 24th and 25th of March, EU leaders agreed on this goal and requested that the Commission provide the comprehensive REPowerEU Plan, which was adopted today. The recent gas supply outages to Bulgaria and Poland highlight the need to address Russia’s energy supply dependability.
In reaction to Russia’s aggression against Ukraine’s territorial integrity and growing crimes against Ukrainian citizens and towns, the Commission has enacted five broad and unprecedented sanctions packages. Imports of coal are already subject to restrictions, and the Commission has proposed phasing out oil by the end of the year, which is currently being debated by the Member States.
The European Green Deal is the EU’s long-term growth strategy for achieving carbon neutrality in Europe by 2050. The European Climate Law includes this goal, as well as a legally enforceable promise to cut net greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels. In July 2021, the Commission announced its ‘Fit for 55’ legislative package to fulfill these goals; these ideas will reduce our gas usage by 30% by 2030, with more than a third of the savings coming from reaching the EU energy efficiency objective.
The European Council, on January 25, 2021, requested that the Commission and the High Representative create a new External Energy Strategy. Responding to the energy crisis caused by Russia’s invasion of Ukraine and the existential threat of climate change, the Strategy connects energy security with the global clean energy transition through external energy policy and diplomacy. Ukraine, Moldova, and the partner nations in its immediate neighborhood will continue to receive EU help for energy security and green transformation. The Strategy recognizes that Russia’s invasion of Ukraine has had a worldwide impact on energy markets, hitting developing partner nations in particular. The EU will continue to promote global energy security, sustainability, and affordability.
