The European Commission has proposed an outline of a plan to make Europe independent from Russian fossil fuels well before 2030 – starting with gas – in light of Russia’s invasion of Ukraine.
The European Commission said that the new geopolitical and energy market reality forces a drastic acceleration of the clean energy transition and an increase in Europe’s energy independence from unreliable suppliers and volatile fossil fuels.
“Following the invasion of Ukraine, the case for a rapid clean energy transition has never been stronger and clearer. The EU imports 90 percent of its gas consumption, with Russia providing around 45 percent of those imports, in varying levels across the Member States. Russia also accounts for around 25 percent of oil imports and 45 percent of coal imports,” the Commission said.
According to the laid-out plan, named REPowerEU, it will seek to diversify gas supplies, speed up the roll-out of renewable gases, and replace gas in heating and power generation. This can reduce EU demand for Russian gas by two-thirds before the end of the year.
“We must become independent from Russian oil, coal, and gas. We simply cannot rely on a supplier who explicitly threatens us. We need to act now to mitigate the impact of rising energy prices, diversify our gas supply for next winter and accelerate the clean energy transition. The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system. I will be discussing the Commission’s ideas with European leaders at Versailles later this week, and then working to swiftly implement them with my team,” Commission President Ursula von der Leyen said.
“The answer to this concern for our security lies in renewable energy and diversification of supply. It’s hard, bloody hard. But it’s possible. It is time we tackle our vulnerabilities and rapidly become more independent in our energy choices. Let’s dash into renewable energy at lightning speed. Renewables are a cheap, clean, and potentially endless source of energy, and instead of funding the fossil fuel industry elsewhere, they create jobs here. Putin’s war in Ukraine demonstrates the urgency of accelerating our clean energy transition,” Executive Vice-President for the European Green Deal Frans Timmermans stated.
“Russia’s invasion of Ukraine has aggravated the security of supply situation and driven energy prices to unprecedented levels. For the remaining weeks of this winter, Europe has enough gas, but we need to replenish our reserves urgently for next year. The Commission will therefore propose that by October 1 gas storage in the EU must be filled up to at least 90 percent. We have also outlined price regulation, state aid, and tax measures to protect European households and businesses against the impact of the exceptionally high prices,” Commissioner for Energy Kadri Simson added.
Emergency measures on energy prices and gas storage
The Commission’s measures include the possibility to regulate prices in exceptional circumstances and setting out how the Member States can redistribute revenue from high energy sector profits and emissions trading to consumers.
EU State Aid rules also offer Member States options to provide short-term support to companies affected by high energy prices and help reduce their exposure to energy price volatility in the medium to long term. Following consultation on targeted amendments to the Emission Trading System State Aid Guidelines, the Commission will also be consulting with the Member States on the needs for and scope of a new State aid Temporary Crisis Framework to grant aid to companies affected by the crisis, in particular those facing high energy costs.
Gas storage across the EU will be filled up to at least 90 percent of capacity by October 1 each year. The proposal would entail the monitoring and enforcement of filling levels and build in solidarity arrangements between the Member States. The Commission continues its investigation into the gas market in response to concerns about potential distortions of competition by operators – notably Gazprom.
To address the skyrocketing energy prices, the Commission will investigate all possible options for emergency measures to limit the contagion effect of gas prices in electricity prices, such as temporary price limits. It will also assess options to optimize the electricity market design considering the final report of the EU Agency for the Cooperation of Energy Regulators and other contributions on benefits and drawbacks of alternative pricing mechanisms to keep electricity affordable, without disrupting supply and further investment in the green transition.
REPowerEU – eliminate dependence on Russian gas before 2030
Phasing out EU dependence on fossil fuels from Russia can be done well before 2030. To do so, the Commission proposes to develop a REPowerEU plan that will increase the resilience of the EU-wide energy system based on two pillars – diversifying gas supplies via higher LNG and pipeline imports from non-Russian suppliers as well as larger volumes of biomethane and renewable hydrogen production and imports and faster reducing the use of fossil fuels in our homes, buildings, industry, and power system, by boosting energy efficiency, use of renewables and electrification.
Full implementation of the Commission’s ‘Fit for 55′ proposals would already reduce our annual fossil gas consumption by 30 percent, equivalent to 100 bcm by 2030.
With the measures in the REPowerEU plan, we could gradually remove at least 155 bcm of fossil gas use, which is equivalent to the volume imported from Russia in 2021.
Nearly two-thirds of that reduction can be achieved within a year, ending the EU’s overdependence on a single supplier. The Commission proposes to work with the Member States to identify the most suitable projects to meet these objectives, building on the extensive work done already on national Recovery and Resilience Plans.