The war next door has put the spotlight on the European Union’s reliance on fossil fuels in general and Russian oil, natural gas and coal in particular.
The EU has kept forward with its Green Deal ambition and accelerated its targets. ‘Going green’ has become part of the EU’s security agenda. Part of the response was to turn elsewhere in what has been dubbed by some a dash for gas, as well as a significant short-term increase in coal-fired electricity. But the conflict has also highlighted the policy solutions that the bloc’s 27 national governments were already negotiating over as part of Europe’s fight against climate change as instrumental to Europe’s security and growth strategy.
Ultimately, on the road to COP27 and beyond, the EU’s answer to geopolitical instability is deeply linked to its response to the climate crisis.
Is the war in Ukraine freezing the EU’s climate ambition?
The war in Ukraine has not halted the EU’s climate ambition, and the bloc remains committed to tackling the climate crisis globally.
Right after the war started, an overwhelming majority of EU ministers called for Europe to push forward with green proposals as quickly as possible, with a significant number of EU countries calling for Europe’s energy transition to be sped up.
“Following the invasion of Ukraine by Russia, the case for a rapid clean energy transition has never been stronger and clearer,” the European Commission wrote back in March. Simultaneously, the EU’s technical and executive arm set out to elaborate an emergency response plan.
Ambition is there, delivery will be the real test, according Lola Vallejo, IDDRI’s climate programme director. “The EU has kept forward with its ambition set out in the Green Deal and has, indeed, accelerated in terms of target even if the delivery is going to be a bumpy road.”
Green measures to tackle the crisis
In May 2022 the European Commission proposed “RePowerEU”, a full package of emergency responses with the aim of reducing the EU’s natural gas imports from Russia by two-thirds by the end of 2022 and in full by well before 2030. Boosting renewable energy and energy efficiency were made key pillars of the proposal. “The Commission is once again turning to the Green Deal, its flagship climate package, as a way to make the most of a crisis”, said Politico Europe journalists at the time in an in-depth analysis piece.
The EU’s action plan strongly bets on renewables and on a just energy transition to be delivered at home and abroad. It includes an increased renewable energy target 45% (from 40%), an increased energy efficiency target of 13%t (from 9% of the binding Energy Efficiency Target under the ‘Fit for 55’ package of European Green Deal legislation), a strong focus on solar with a brand new dedicated EU Solar Strategy to double solar photovoltaic capacity by 2025 and install 600GW by 2030 and a focus on energy efficiency and reducing demand.
Investment needs are expected to be almost 300bn by 2030. Just 10bn of that is going to LNG – in comparison to 113bn on renewables, 56bn on efficiency and heat pumps, 41bn for adapting industry to less fossil fuels. That sends a signal on where the priority is.
At the time of writing, RePowerEU is going through a new financing drive. “We have to increase its firepower” explained European Commission President von der Leyen.
In order to curb the effects of the energy crisis that has hiked up prices in all EU27 countries, the Commission is also working on a series of emergency measures that should relieve Europeans from part of the effects of the higher energy bills. Among these, there was a strong focus on energy efficiency and a mandatory temporary solidarity contribution on the profits of businesses active in the crude petroleum, natural gas, coal, and refinery sectors. “An important aspect is managing this crisis without having a backlash on the EU Green Deal. The emergency energy measures package goes in that direction.”, commented IDDRI’s Lola Vallejo.
The EU and its Member States have not been acting only in emergency mode, though. The EU has also been moving on key policies part of its Fit for 55 package, the package of legislation set to prepare the EU to achieve its -55% GHG target for 2030. Forging ahead with the legislative process, progress here includes a 2035 fossil fuel car ban, laws to strengthen the national emissions-cutting targets for some sectors, and increased natural carbon sinks like forests – all items that the EU wants to fast-track in view of COP27. The revised Renewable Energy (RED) and Energy Efficiency (EED) directives passed a key European Parliament vote in mid September.
Experts including Julian Popov, former Minister of Environment and Water of Bulgaria and gas in Europe expert, have been very vocal in saying that the EU cannot decarbonise fast enough. “Every single kilowatt that is produced from wind or solar – or saved, is a kilowatt that is saved from energy dependency. The energy transition not only reduces the exposure to imported fossil energy, but also develops a very rich toolbox that we can now employ in the crisis.”
What is the future of gas in the European Union?
The EU has already been vocal that natural gas has no viable future in Europe, more recently highlighting the role that increased renewable energy targets could play in replacing gas imports. In existing European Commission outlooks, as a result of “Fit For 55” climate targets, natural gas consumption will decline rapidly by 2030 and beyond – with final EU gas demand expected to decrease by 32%-37% by 2030.
Is the war in Ukraine and sanctions on Russia driving up coal consumption in Europe?
2022 registered a short-term increase in coal-fired electricity. Overall, though, plans in Europe to place a small number of coal plants on temporary standby would have limited impact on emissions and climate commitments, found the think tank Ember.
Analysts foresee a short-term spike in pollution as countries from Germany to Poland, Greece and Italy turn to coal to generate desperately needed electricity – a trend likely to last until the end of the decade. But no country has significantly reversed plans to phase out coal, and Germany even pledged to speed it up. However, little to no gas-to-coal switching took place. It is also worth noting that European Union Member States decided in early April to end Russian coal purchases by August 2022. The EU imported nearly €4 billion ($4.4 billion) worth of coal from Russia a year.
“In the short term, we will need a mix of solutions that are both brown and green,” said Simone Tagliapietra, a research fellow at Bruegel, a Brussels think tank, to Politico. “If we reopen coal-fired power plants, even for one, two years, I think, overall, that’s not going to be a huge problem, if in the meantime, we scale up green solutions.”
Countries planning to burn coal as an alternative to Russian gas could do so “in line with the EU’s climate goals”, Green Deal chief Frans Timmermans said in March 2022.
At the time of writing, 14 GW of coal-fired plants have been placed on standby in Europe. Running at 65% capacity throughout 2023, they would generate 60 TWh of coal-fired electricity, which is enough to power the EU for about one week.
Ultimately, “coal is not making a comeback in Europe, neither is gas” said Ember’s Paweł Czyżak, who argues that they are simply not able to compete against cheaper renewables.
Renewables and energy efficiency driving the European Green Deal
“Renewables are really our energy insurance for the future” stated European Commission President Ursula von der Leyen in a speech in September.
Since March 2022, solar and wind power have produced a quarter of EU electricity, allowing to avoid 70 bcm of gas imports, according to a new study carried out by think tanks E3G and Ember. Nineteen EU countries achieved a wind and solar record, including France (14%), Italy (20%), Poland (17%) and Spain (35%). The record increase in wind and solar compared to last year avoided the need for fossil gas at a cost of €11 billion.
Of the EU’s 27 member countries, 17 have increased their plans to increase renewable energy since 2020, think tanks Ember and the Centre for Research and Clean Air said. If achieved, the countries’ latest plans would see 63% of EU electricity produced from renewables by 2030, up from 55% under their 2019 policies, the researchers said.
In some sectors, the acceleration is obvious, says Politico’s Karl Mathiesen – and heat pumps are the poster child for this. In January, heat pumps accounted for 28 percent of applications for heat system subsidies under a Polish government scheme; by June that jumped to 60 percent. The acceleration is clear also in the Netherlands, Germany, Italy, Finland and Austria.
In August, eight European Union countries bordering the Baltic Sea agreed to increase offshore wind power generation capacity sevenfold – to 20 gigawatts by 2030 – in order to decrease dependency on Russian energy, signalling that the EU and its Member States are acting at deeper, infrastructural levels.
Overshooting the NDC?
While the EU is not fully on track to meet 1.5, says Climate Analytics, the bloc is nevertheless accelerating its energy transition. So much so that it could end up overshooting its -55% GHG by 2030 goal.
Depending on the exact implementation of the REPowerEU plan, and the relative role of coal and gas, LULUCF, or land use, land-use change, and forestry could produce two different scenarios. Excluding LULUCF, EU27 emissions in 2030 could reach 57-58% below 1990 levels). Including LULUCF, the ambition in the REPowerEU plan potentially constitutes a 2030 emissions level of 60-62% below 1990 levels.
