COM Communications

 

2022 European Commission Work Programme

 

The European Commission adopts an annual work program setting out its main initiatives for the following year and informs citizens how it will meet and implement its political priorities.

 

The European Commission presented its 2022 work program on 19 October 2021, the result of close cooperation with the European Parliament, the Member States and the EU advisory bodies, setting out the next steps in its ambitious agenda towards a greener, fairer, more digital and more resilient post-Covid-19 Europe.

 

The program contains 42 new policy initiatives; 26 REFIT initiatives; 76 pending priority proposals, where they want the co-legislators to take the fastest measures; 6 proposals that the Commission intends to withdraw within six months. These proposals are in line with the implementation of the Commission's six ambitions, listed in this new work program, namely: A European Green Deal; A Europe fit for the digital age; An economy that works for people; A stronger Europe in the world; Promoting the European way of life; A new push for European democracy. 

 

On energy and climate, the European Commission will present the following new initiatives:

 

• Definition of good practices for the licensing of renewable energies and a Communication on the strategy dedicated to solar energy. This is part of the European Ecological Pact, the transition to clean energy, with a view to accelerating the deployment of renewable energies, which is the best guarantee against price increases such as those we are currently facing;
• A new strategy on international energy engagement that will study new possibilities for the deployment of a clean energy system, promoting energy efficiency and safe and sustainable technologies, gradually moving from the use of fossil fuels to green energy solutions and promoting a fair transition. As part of the continuation of the global energy transition to a stronger Europe in the world, the Commission will promote security of supply, clean technologies and open markets;
• An Action Plan for an accelerated digital transformation of the energy sector, as part of the Commission's ambition for a Europe prepared for the digital age, this action plan aims to ensure the transition to renewable energy sources, connected mobility, smart buildings and an integrated, consumer-center on energy system.

 

The Commission will also present an Action Plan for international ocean governance updating the 2016 international ocean governance agenda. This action plan will address key threats such as pollution, impacts of climate change and biodiversity loss.

 

In this new work program, the Commission has also set out as a priority to follow up on the pending energy and climate proposals that are part of the “Fit for 55” Package presented in 2021 and which are still under negotiation (consult documents of the proposals). The pending priority proposals also contain the Proposal for a Regulation of the European Parliament and the Council on the guidelines for trans-European energy infrastructure and repealing Regulation (EU) No 347/2013 (TEN-E Regulation).

 

The Commission will continue in 2022 to monitor national measures in the context of energy prices and recovery and resilience plans.

 

The Program and its annexes can be found on the European Commission's website.

 

 

FIT for 55 Package

Legislative Proposals of July 14, 2021

 

On July 14, 2021, the European Commission presented a package of legislative proposals to make the EU’s climate, energy, land use, transport and tax policies fit for reducing net greenhouse gas emissions (GHG) by at least 55% reduction by 2030, compared to 1990 levels. Entitled "Fit for 55", this package also includes the revision of existing regulations. These proposals correspond to the legislative tools to meet the targets agreed in the European Climate Law and transform the economy and society.

 

The following proposals are highlighted:

 

• Revision of the EU Emissions Trading System (EU ETS), including its extension to maritime transport, the revision of the rules on emissions from aviation, and the establishment of a separate emissions trading system for road transport and buildings;
• Revision of the Effort Sharing Regulation (ESR) on emissions reduction targets to each Member State in non-ETS sectors;
• Revision of the Regulation on the inclusion of greenhouse gas (GHG) emissions and removals from land use, land use change and forestry (LULUCF);
• Revision to the Renewable Energy Directive (RED II);
• Revision « the Energy Efficiency Directive (EED);
• Revision of the Alternative Fuels Infrastructure Regulation (AFIR);
• CO2 Vehicles - amendment to the regulation setting CO2 emission standards for passenger cars and light-commercial vehicles;
• Revision of the Energy Taxation Directive (ETD);
• Carbon Border Adjustment Mechanism (CBAM);
• ReFuelEU Aviation, for sustainable aviation fuels;
• FuelEU Maritime, for a green European maritime transport;
• Social Climate Fund (SCF).

 

Legislative proposals presented on 15 December 2021

 

To achieve the EU's ambitious climate neutrality targets by 2050, the Commission presented three new proposals to this "Fit for 55" legislative package on December 15, 2021, aiming to promote the decarbonization of the EU gas market, thereby facilitating the uptake of renewable and low-carbon gases, including hydrogen, and reducing methane emissions in the energy sector in Europe. This set of initiatives includes the following legislative proposals:

 

• Proposal for a Regulation on the internal markets for renewable and natural gases and hydrogen;
• Proposal for a Directive on common rules for the internal markets for renewable and natural gases and hydrogen;
• Proposal for a Regulation on reducing methane emissions in the energy sector and amending Regulation (EU) 2019/942.

 

The Commission's proposals aim to create the conditions for a shift from fossil natural gas to renewable and low-carbon gases, biomethane and hydrogen, and strengthen the resilience of the gas system. The main aim is to establish a market for hydrogen, create the right environment for investment and enable the development of dedicated infrastructure, including for trade with third countries. The initiatives also set rules on methane emissions from gas, oil and coal to reduce emissions in these sectors by 80% by 2030 and to trigger action against methane outside the EU.

 

Beyond these additional initiatives, the Commission has also put forward a proposal to revise the Energy Performance of Buildings Directive to reduce greenhouse gas (GHG) emissions from buildings by 2030 and to set out a long-term vision for buildings to be climate neutral at EU level in 2050. This initiative is based on several specific objectives: increasing the rate and renovations of buildings, improving information on the energy performance and sustainability of buildings, and ensuring that all buildings will be in line with the 2050 climate neutrality requirements.

 

The "Fit for 55" legislative package presented on July 14, 2021, together with the proposals presented on December 15, 2021, represent an important step on Europe's decarbonization path and will support the achievement of the goal of reducing GHG emissions by at least 55% by 2030, becoming climate neutral by 2050.

 

 

European Commission report on progress towards the competitiveness of clean energy technologies

 

The European Green Deal presents the overall framework for the EU clean energy policy as a new growth strategy to make Europe the first climate neutral continent in a fair, resource efficient, cost effective and competitive way. To operationalise the climate goals of the European Green Deal, the European Climate Law has established as a political priority to achieve climate neutrality by 2050 and reduce greenhouse gas (GHG) emissions by 55% by 2030, compared to 1990. This policy context is complemented by the release of financial means, including a new EU budget and the NextGeneration EU recovery and resilience package, agreed in 2020, which allows for significant contributions towards the EU's targets, with 30% for climate-related spending. It recognizes the role of research and innovation in achieving these goals by strengthening the research and innovation programme, Horizon Europe, and other funding programmes such as the Innovation Fund and LIFE for the Environment and Climate Action.

 

In July 2021, the European Commission presented a legislative package to deliver the European Ecological Pact, which includes a proposal to revise existing instruments and create new ones. It aims to develop the clean energy system in the next decade by stimulating innovation, investment and creating new market demand in the EU, while ensuring a socially-just transition and cementing the EU's role as a global leader in the fight against the climate crisis. Technological progress in the clean energy system is essential for achieving the EU's climate and energy objective by 2050. The International Energy Agency estimates that while most CO2 emission reductions by 2030 will come from current technologies already on the market, almost half of the reductions by 2050 will come from technologies that are currently at demonstration or prototype phase. The European Commission presented a 2nd report on progress on competitiveness in October 2021 (1st report was COM (2020) 953 final in October 2020), which analyses the current and projected situation of clean energy technologies and provides insight on the clean energy system for EU climate neutrality in 2050.

 

The 2nd report concluded that it will not be possible to meet the goals of the Green Deal without increased public and private research and innovation in clean energy technologies, providing new solutions to achieve carbon neutrality by 2050, while combating biodiversity loss, pollution and natural resource depletion, contributing to growth and jobs in the EU clean energy sector.

 

While the private sector must take responsibility for investment, the EU creates the right regulatory and financial conditions, stimulating demand through measures in the "Fit for 55" legislative package. The Recovery and Resilience Fund, InvestEU and new generation of EU programs under the 2021-2027 budget provide a strong stimulus for addressing challenges by increasing available scale up capital, removing market barriers, and driving policy reforms. While gradually decarbonising the EU energy sector and rolling out clean energy technologies, there is a need to focus on competitiveness, jobs and growth. The EU remains at the forefront of clean energy research, with the declining trend in patenting of clean energy technologies reversing. Globally, the EU has the largest share of green inventions in the climate change technology sector and has a positive trade balance and substantial market share, while maintaining a strong position in the wind industry. In the photovoltaic sector, European manufacturers are showing interest to invest in the EU based on the latest technologies. The EU battery industry is catching up, looking to invest in battery production due to increased demand for Electric Vehicles and change in the EU automotive and recycling industry. The EU heat pump, renewable fuels, smart grids and renewable hydrogen industries are in a good position to benefit from the growing future demand based on expanding markets. The EU's competitive position will depend on technology penetration/development, investments, market and favourable legal framework and progress in other sectors (air and maritime transport), requiring assessment of environmental impacts of technologies and mitigation measures. Increased efforts will be needed to close the gap between innovation and the market.  EU-based climate-related technology start-ups continue to trail behind their counterparts in their ability to scale, thus challenging the EU from reaping the climate and competitiveness benefits generated by EU innovation and to encourage promising companies to move to the US or Asia to gain scale.

 

Although, numerous national and local ecosystems exist, the EU market and regulatory fragmentation hinders growth and lead to different levels of maturity in venture capital ecosystems, posing challenges to entrepreneurs in scaling up technologies. Technology adoption is hindered by permitting, structural barriers, and distortions through international subventions in markets where European companies operate. It is critical to intensify the work on European standards addressing digitisation, reliability, and sustainability to support innovative technologies. The EU must ensure reliable, sustainable and undistorted access to raw materials and resource efficiency, circularity and the use of sustainable domestic raw materials essential to avoid bottlenecks as demand increases. The recent increase in energy prices has made it clear that Europe needs to decrease its energy dependency. The European Commission will continue to monitor progress of the clean energy sector and will further develop methodology for data collection in cooperation with MS to inform policy decisions and contribute to making Europe competitive, resource efficient and carbon neutral by 2050.

 

Consult full report [here].

 

 

Tackling the increase in energy prices: a set of supporting measures

 

The European Commission's communication COM (2021) 660 final, "Tackling the increase in energy prices" of 13 October 2021, provides a roadmap with guidelines for tackling the negative impact of rising energy prices on consumers, particularly the most vulnerable, and on European businesses.

The sharp rise in energy prices is the result of several factors, but mainly due to increased global energy demand, particularly for gas, requiring a swift and coordinated response from the European Union (EU).

This Communication comprises several measures that the EU and Member States (MS) could use to address the immediate impacts of price increases and build resilience against future impacts. Short term measures include emergency household income support, state aid to businesses and temporary tax breaks. In the longer term, the Commission will support investments in renewable energy and energy efficiency, examine possible measures related to energy storage and the purchase of gas stocks, and assess the current configuration of the wholesale electricity market.

 

• Immediate measures to protect consumers and businesses

 

Twenty Member States have taken or are envisaging to take measures, many of them focused on mitigating the impact on the most vulnerable, small businesses and energy intensive industries. Such measures include price caps and temporary tax reductions for vulnerable energy consumers, or vouchers and subsidies for consumers and businesses.

These immediate measures could be partly financed from revenues generated from the auctions of emission allowances, energy price taxes and fees under the European Emissions Trading Scheme (ETS), as well as through environmental taxes. In the current context, being higher than expected the revenues from the ETS can be used to finance unforeseen needs for specific social support. Between September 1, 2020 and August 30, 2021, revenues generated from the auctioning of ETS 16 emission allowances amounted to EUR 26.3 billion.

 

Measures for Member States:

 

• Emergency income support and prevention of grid disconnections: Provide social payments to assist the most vulnerable citizens with energy bills - could be funded with revenues from the EU Emissions Trading Scheme (ETS); and create safeguards to prevent energy grid disconnections and authorize temporary postponement of bill payments.

 

• Taxation: Under the Energy Taxation Directive, exemptions or reductions to tax rates may apply to vulnerable households on electricity, natural gas, coal and solid fuels.

 

• State Aid to Households and Industries :Take targeted support measures to help industries to adapt, in full compliance with the state aid framework, without distorting competition or interfering with the EU ETS; and measures to help all energy consumers, such as direct support for a defined minimum consumption per household or inhabitant.

 

Measures for the Commission:

 

• Enhanced cooperation and EU monitoring: Investigate possible "anti-competitive behaviour" in the energy market; to ask the European Securities and Markets Authority (ESMA), coordinator of national financial authorities, to further monitor developments in the European carbon market; and to improve the international impact of energy to ensure the transparency, liquidity and flexibility of international markets.

 

• Medium term measures

 

COM notes that the transition to clean energy is the best insurance against future price shocks and should be accelerated. The Commission will also support investments in renewable energy and energy efficiency, examine possible measures on energy storage and acquisition of gas stocks, and assess the current electricity market design.

The EU will continue to develop an efficient energy system with a high share of energy from renewable sources. While lower-cost renewable energy sources play an increasingly important role in electricity grid supply and pricing, at times of peak demand there is still a need for other energy sources, notably gas.

In the medium-term structural measures, the increase in the resilience of the European energy system is reinforced. The measures highlighted are to promote the decarbonization of the European economy and to increase the resilience of the European energy system.

 

Measures for Member States:

 

- Support consumer empowerment by providing consumers with information and options on how they can participate in the energy market, for example with quick and easy switching of suppliers;

- Increase consumers' role in the energy market by empowering them to switch supplier, receive advice on how to reduce energy consumption and bills, generate their own electricity and join energy communities.

 

Measures for the Commission:

 

- Support the development of energy storage, as a key flexibility tool, in the short and medium term;

- Explore the potential benefits and design of voluntary joint procurement of reserve stocks of gas of Member States;

- Review the security of supply regulation to make it adequate for the growth of renewable gas uptake and ensure better use and operation of gas storage across the single market;

- Request the Agency for the Cooperation of Energy Regulators (ACER) to assess the electricity wholesale market design against alternative market models and propose recommendations to the Commission, where relevant.

 

• Stepping up investments in green transition

 

Measures for Member States:

 

- Stepping up investments in renewables energy and in energy efficiency, and accelerate renewables auctions and permitting;

- Stepping up investments in trans-European networks, including interconnections, storage and transport and distribution grids.

 

Measures for the Commission:

 

- Issue guidance on accelerating permitting procedures for renewable energy;

- Support Member States to make the best use of EU financial resources in the EU budget and NextGenerationEU;

- Complete the revision of the Energy and Environment State Aid Guidelines, facilitating energy efficiency and renewable investments.

The European Commission has consulted on the appropriate response to the current situation and participated in various discussions on this issue, while also maintaining contact with the industry and international energy suppliers. 

 

Consult the full document [here].

 

Source: European Commission

 

 

Connecting Europe Facility (CEF)

 

The Connecting Europe Facility, established by Regulation (EU) 2021/1153 of the European Parliament and of the Council of July 7, 2021, continues to fund projects in the areas of transport, digital and energy for the period 2021/2027, with a budget of €33.71 billion.

 

 

Recovery and Resilience Mechanism (RRM)

 

The Recovery and Resilience Mechanism was established on February 12, 2021, by Regulation (EU) 2021/241 of the European Parliament and Council, with a budget of €672.5 billion in grants and loans to help mitigate the consequences of the pandemic COVID-19.

 

 

EU Strategy for harness the potential of offshore renewable energy for a climate neutral future

 

Commission Communication COM (2020) 741 final of November 19, 2020 set out the "EU Strategy for harness the potential of offshore renewable energy for a climate neutral future".

It considers that a successful commitment to offshore renewables in Europe, from the North Sea, Baltic, Mediterranean, Atlantic, Black Sea to the seas surrounding the outermost regions of the European Union (EU) can bring major benefits for Europe, ensuring the EU's sustainable energy transition and putting Member States on a path towards climate neutrality by 2050, as well as providing a major contribution to the post-Covid-19 recovery in European industry, putting it in a position of global leadership, forecasting exponential growth over the coming decades.

The Communication on the European Green Deal recognized this potential in contributing to a modern, competitive and resource-efficient economy. The plan to achieve the 2030 climate target outlined why it is important to reduce greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. This will require expanding offshore wind energy, which should require less than 3% of Europe's maritime space and is compatible with the goals of the EU biodiversity strategy.

This strategy sets the expansion of Europe's offshore renewable energy and its use as a priority for the European Union.

To achieve the vision set out in the strategy of deploying 300 GW and 40 GW in energy from renewable sources in all EU sea basins by 2050, it will be necessary to address policy and regulatory challenges and proposals, including maritime spatial planning for sustainable management of space and resources; a new approach to renewable energy and grid infrastructure; an EU regulatory framework for renewable energy in the maritime space; mobilising private sector investment in renewable energy; the role of EU funds; targeted research and innovation to support projects and a stronger value and supply chain across Europe.

The implementation of this strategy proposal will require the collaboration of all stakeholders, Member States, regions, EU citizens, social partners, Non-Governmental Organisations (NGOs) and all sea users, including the renewable energy sector and the fisheries and aquaculture sectors.

 

Consult the full document [here].

 

 

EU Strategy to reduce methane emissions

 

Commission Communication COM (2020) 663 final of October 14, 2020 sets out the "EU Strategy to reduce methane emissions".

Methane is a powerful greenhouse gas responsible for the formation of tropospheric ozone, a potent local air pollutant which itself causes serious health and air quality problems.

The European Union has set reduction targets for all greenhouse gases by 2030, with anthropogenic methane emissions covered by binding national emission reduction targets under the Effort Sharing Regulation. However, there is still no targeted policy for reducing anthropogenic methane emissions.

This Communication sets out a strategy to reduce methane emissions from the energy, agriculture and waste management sectors at EU and international level, defining a comprehensive policy framework combining concrete cross-sectoral and sector-specific actions in the EU, and promoting similar actions internationally. In the short term, it drives voluntary and business-led initiatives to close the gap in terms of emissions monitoring, verification and reporting, and reduce methane emissions across all sectors. The strategy foresees legislative proposals at EU level to ensure contributions to the achievement of the European Union's decarbonisation goals.

These measures will help meet the EU's commitments under the European Green Deal and the Paris Agreement towards climate neutrality, as well as reducing air pollution, which will require strong action by EU Member States, non-EU countries, at EU and international level, and they should support this strategy and cooperate in its development to tackle methane emissions from the energy, agriculture and waste management sectors as a matter of urgency.

 

Consult the full document [here].

 

 

Renovation Wave for Europe – Greening our Buildings

 

 

The "Renovation Wave" Strategy was presented by the European Commission to the European Parliament, Council, European Economic and Social Committee and Committee of the Regions on October 14, 2020.

With this Strategy, the Commission aims to improve the energy performance of buildings, double building renovation rates in the next ten years to increase energy efficiency, reduce EU greenhouse gas emissions and energy poverty, and stimulate economic recovery.

Priority is given to actions aimed at decarbonizing the heating and cooling sector, tackling energy poverty and renovating public buildings such as hospitals, schools and administrative buildings.

The Strategy outlines ways of financing which include direct EU budget support, mobilizing private investment and encouraging green financing, as well as supporting research and innovation. The goal is to renovate 35 million buildings by 2030, supported by funding of €672.5 billion from the Recovery and Resilience Mechanism and this renovation effort is estimated to create 160,000 new construction jobs.

 

A Hydrogen Strategy for a Climate-Neutral Europe

 

Commission Communication COM (2020) 301 final of 8 July 2020, presented to the European Parliament, the European Council, the European Economic and Social Committee and the Committee of the Regions, established the "Hydrogen Strategy for a Climate-Neutral Europe".

According to this Communication, hydrogen deployment in Europe faces major challenges for the private and public sector and Member States, and requires an enabling regulatory framework, new lead markets, research, investment and innovation supported by breakthrough technologies bringing new solutions to the market, a large-scale infrastructure network that only the European Union in cooperation with the EU's third country partners and the single market can provide. In order to implement the ambition of the European Green Deal and based on the new Industrial Strategy for Europe and its Recovery Plan adopted by the Commission, this Strategy sets out a vision on how the EU can turn clean hydrogen into a viable solution to decarbonise different economic sectors while contributing to the achievement of the Sustainable Development Goals and the Paris Agreement.

This strategy was presented simultaneously with the Communication "Powering a Climate Neutral Economy: An EU Strategy for Energy System Integration", which complements it by setting out the opportunities and measures needed to enhance the use of hydrogen in the context of an integrated energy system.

This Hydrogen Strategy for a Climate Neutral Europe brings together different strands of policy action, namely: develop an agenda to encourage investment for the production and use of hydrogen, with the implementation of concrete projects supported by strategic investments in clean hydrogen in the context of the Commission's Recovery Plan, especially through the InvestEU programme; stimulating demand in hydrogen end-use sectors and increasing hydrogen production through the use of policies to encourage sustainable and intelligent mobility, and measures to facilitate the use of hydrogen and its derivatives in the transport sector and to support renewable hydrogen and the development of a Europe-wide terminology and criteria for certification of renewable and low carbon hydrogen, together with the development of an EU-wide pilot scheme for the carbon differentials procurement programme, especially those supporting the production of low-carbon and circular steel and base chemicals; designing a policy framework with support schemes for hydrogen expansion, with market rules and infrastructure, and the need to plan hydrogen infrastructure, including trans-European energy networks simultaneously with the development of market rules enabling hydrogen deployment; promoting research and innovation in hydrogen technologies; the international dimension, by strengthening the EU leadership in international fora on hydrogen technical standards, regulations and definitions, as well as promote cooperation with Southern and Eastern Neighbourhood partners and Energy Community countries, notably Ukraine, on renewable electricity and hydrogen, as well as establishing cooperation on renewable hydrogen with the African Union in the framework of the Africa-Europe Green Energy Initiative and developing a benchmark for euro denominated transactions by 2021.

 

Hydrogen and the Green Revolution

 

Hydrogen can play a key role in addressing the challenges ahead, it can serve as an energy carrier or as a feedstock, and it can be used to store seasonal renewable electricity. Hydrogen has strong potential to facilitate the decarbonization of "hard-to-decarbonize" and energy-intensive industrial sectors, such as steel. In addition, it can be used as a green fuel for heavy transport modes for which currently existing electric battery technologies are impractical.

Through a combination of renewables, smart storage, energy efficiency and flexible grids, it is estimated that clean and sustainable energy can be delivered at scale and at speed. The question is what form of hydrogen is best suited to realize our climate ambition.

Hydrogen is the most abundant element in our universe, but it only represents a small fraction of the global energy mix in the EU. Currently, less than 2% of Europe's energy consumption comes from hydrogen, and it is mainly used for making chemicals products such as plastics and fertilizers. Almost all of hydrogen (96%) is produced from natural gas, emitting significant amounts of CO2 emissions in the process. The challenge will be how to decarbonize hydrogen production.

Fossil-sourced hydrogen from natural gas is often referred to as grey hydrogen and is the most common type currently in use. Low-carbon hydrogen, often referred to as blue hydrogen, is also produced from natural gas, but the CO2 emitted during its production are captured and stored underground, making it a cleaner option with lower emissions. While low-carbon hydrogen can play an important transitional role in replacing grey hydrogen, the cleanest option is renewable hydrogen, often referred to as green hydrogen. It is created by putting renewable energy sources, such as wind and solar power, through an electrolyser and its only by-product is water. Its production is almost emission-free, which is why it is the form of production that generating the most interest (policy makers, scientists and investors).

 

Decarbonising industries

 

The EU is now looking at how to increase the cost-effective production, transport and consumption of renewable hydrogen to use the flexibility and versatility that this energy source offers in driving the clean energy transition.

Energy-intensive industrial sectors that are unable to decarbonise through direct electrification are looking for greener, carbon-neutral energy carriers. Renewable hydrogen offers a promising and realistic prospect for green steel or fertilizers producing in 2030.

In transport, given the limitations and costs of current battery technologies, the aviation, shipping and heavy goods sectors are all searching for carbon-neutral options to power long distance transport.

Renewable hydrogen alongside the electricity sector is increasingly dominated by renewable energy production. It helps provide long-term and large-scale storage of renewable energy and gives the energy system the appropriate flexibility. The storage potential of hydrogen, primarily in salt caverns that are currently used for natural gas storage, is beneficial to the electricity grids as it balances electricity supply and consumption when there is too much or not enough renewable electricity production.

 

Consult the complete document [here].

 

 

EU Strategy for Energy System Integration

 

Commission Communication COM(2020) 299 final of 8 July 2020, "Powering a Climate-Neutral Economy: An EU Strategy for Energy System Integration", sets out a strategy and a set of actions to ensure that energy system integration can contribute to the energy system of the future that is more efficient, resilient, secure and driven by the twin goals of a cleaner planet and a strong and competitive economy.

This Strategy is part of the Member States' recovery plan from the Covid-19 pandemic crisis, which proposes a cost-effective way forward, promotes investments in infrastructure, avoids stranded assets, and leads to lower the cost of bills for businesses and consumers, and is a crucial building block for achieving the 2030 climate targets and climate neutrality by 2050, and establishing Europe's global leadership in innovation, digitalisation, clean energy technologies, the renewable energy sector, system operation and infrastructure planning, and liberalized energy markets.

 

The integration of the energy system will not be the same for all, as Member States start from different positions depending on policy choices and as reflected in national energy and climate plans.

 

This strategy guides efforts by giving citizens a central role in system integration. To remove barriers to energy system integration, the Strategy identifies six pillars: a circular energy system, with the principle of prioritizing energy efficiency at its core; accelerating the electrification of energy demand by taking advantage of a renewable-based energy system; promoting the use of renewable and low-carbon fuels, including hydrogen, for hard to-decarbonise sectors; adapting energy markets to decarbonization and distributed resources; a more integrated energy infrastructure; a digitalised energy system; and a framework that supports innovation.

 

Consult the full document [here].

 

 

Just Transition Mechanism (JTM)

 

As part of the European Green Deal the European Commission proposed in January 2020 a Just Transition Facility (FTF), as a key instrument to ensure that the transition towards a climate-neutral economy takes place in a fair way. While all regions need funding and the European Green Deal Investment Plan addresses them, the JTM provides target support to mobilise around €100 billion in investments over the period 2021-2027 for the most affected regions, to mitigate the socio-economic impact of the transition. This mechanism creates the necessary investments to help workers and communities which rely on fossil fuels and will come in addition to the substantial contribution of the EU’s budget through all instruments directly relevant to the transition.

 

The Just Transition Mechanism will consist of three main sources of financing:

 

1) A Just Transition Fund, which will receive €7.5 billion of new EU funds, coming on top of the Commission's proposal for the next long-term EU budget. In order to tap into their share of the Fund, Member States will, in dialogue with the Commission, have to identify eligible regions/areas through dedicated territorial just transition plans and commit to match the Just Transition Fund with money from the European Regional Development Fund (ERDF) and European Social Fund Plus (ESF+), making available additional national resources. Overall, the funding could amount to between EUR 30 and 50 billion, mobilizing even more investment.

The Fund will primarily provide grants to regions. It will support workers to develop skills and competences for future labour markets, SMEs and start-ups to create new economic opportunities in these regions. It will also support investments in the clean energy transition, in the field of energy efficiency. 

 

2) A dedicated just transition scheme under the InvestEU programme, which will mobilise up to €45 billion of investments and attract private investments mainly in sustainable energy and transport sectors that benefit those regions and support their economies in identifying new sources of growth. 

 

3) A Public Sector Loan Facility (PSLF) with the European Investment Bank, supported by the EU budget, which will mobilise up to €25-30 billion of investments. This facility will be used to provide loans to the public sector, to be used for investments in district heating networks and renovation of building, among others.

 

Member States will complement their Just Transition Fund allocation from their resources under the "European Regional Development Fund" and the "European Social Fund Plus" through a specific transfer mechanism.

 

All European Union countries should have access to this Fund, with the amount to be allocated to each country being proportional to its size, from the point of view of regional and local impact, of decarbonization changes - industries or activities with high intensity of atmospheric emissions. It should also be noted that this Fund can only be used by countries in a concentrated manner with the Cohesion Funds (Regional Development and European Social), in addition to national co-financing for each candidate project.

 

 

European Green Deal

 

The European Commission presented on December 11, 2019 the European Green Deal, a package of measures that should enable European businesses and citizens to benefit from a sustainable transition, aiming to achieve climate neutrality by 2050.

 

The European Green Deal is structured around several actions: climate ambition; clean, affordable and secure energy; industrial strategy for a clean and circular economy; sustainable and smart mobility; greening the Common Agricultural Policy; preservation and protection of biodiversity. The Green Deal consistently use all policy instruments: regulation and standardization, investment and innovation, national reforms, dialogue with social partners and international cooperation. The European Pillar of Social Rights will guide action in ensuring that no one is left behind. Digitization is a key driver for the European Green Deal. Substantial investments in strategic European digital capabilities, as well as in the development and wide deployment of key digital technologies, will provide smart, innovative and customized solutions to address climate-related concerns.

 

Complementing other initiatives announced under the Green Deal, the Plan has three dimensions:

 

Finance: mobilising at least €1 trillion of sustainable investments over the next decade through the EU budget. This budget will devote a greater share of public spending on climate and the environment. It will attract private funding through guarantees and help make the transition just one by facilitating public sector investments in the regions most affected by the transition through the Just Transition Mechanism.

 

Enable: provide incentives to mobilise and redirect public and private investment. The EU will provide instruments for investors by putting sustainable finance at the heart of the financial system. It will facilitate sustainable investment by the public sector by encouraging green public procurement and granting ways to facilitate State Aid approval procedures for Just Transition regions.

 

Practical support: Commission provides support to public authorities and project promoters in identifying, structuring and implementing sustainable projects. Support to public authorities to assess financial needs and plan subsequent investment will be strengthened, as well as direct support to public and private project promoters.

 

 

Renewable Energy and Energy Efficiency

 

Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources set new binding target of a share of at least 32% of renewable energy in the EU gross final consumption of energy by 2030 and will be reviewed if there are reductions in the costs of renewable energy production or in the Union's international decarbonization commitments. That Directive established rules on financial support for electricity from renewable sources, self-consumption of such electricity, the use of energy from renewable sources in heating, cooling and transport sectors and regional cooperation between Member States and cooperation between Member States and third countries, guarantees of origin, administrative procedures and information and training, as well as sustainability and greenhouse gas saving criteria for biofuels, bioliquids and biomass fuels.

 

Directive (EU) 2018/2002 of the European Parliament and of the Council of 11 December 2018 on energy efficiency imposes Union an energy efficiency target for reducing primary and/or final energy consumption by at least 32.5% in 2030.

 

Directive (EU) 2018/844 of the European Parliament and of the Council of 30 May 2018 on the energy performance of buildings aimed to accelerate the renovation of buildings by introducing control systems and automation of existing buildings, encouraging the implementation of infrastructure for electric mobility and the adoption of smart indicators to assess the technological performance of buildings.

 

 

Overall conclusions of the Report from the Commission to the European Parliament and the Council on the implementation of the European Energy Programme for Recovery and the European Energy Efficiency Fund

 

This report describes, for each part of the EEPR, the progress made in implementing projects and using the European Energy Efficiency Fund (EEEF). It updates the report adopted in 2020 [2018 Report, adopted on 10 February 2020 [COM (2020) 38 final]] and covers the implementation of projects between 1 January 2019 and 31 December 2019, as well as payments made in this period. The European Energy Programme for Recovery (EEPR) has delivered good results. All 12 electricity and most of the gas infrastructure projects have been completed. Two gas projects are ongoing and are expected to be completed in 2021 and 2022. The close monitoring by the European Commission project implementation and monitoring has increased the efficiency of the instrument.

The offshore wind projects were more complex than expected, but the promoters and constructors have managed to find solutions to finish them - sometimes by extending the duration of the contracts. Over the 10 years of the program, the EEPR supported the acquisition of technological knowledge and contributed to the development of offshore wind interconnection technologies.

While the financial support from the EEPR has not been sufficient to drive companies into commercial scale CCS demonstration projects, the Commission still sees this technology process as important for decarbonisation (it is the only reliable technology for long-term storage of carbon dioxide), for the EU in general and for carbon-intensive energy industries.

The European Energy Efficiency Fund (EEEF) has invested in several energy efficiency projects and will continue to expand its portfolio, offering financing solutions and generating profits for its shareholders. This fund also serves as a model for innovative financial instruments investing in cost-effective and mature sustainable energy projects that can attract private capital while demonstrating the commercial viability of such investments and establishing a credible track record.

 

Source: Report from the Commission to the European Parliament and the Council on the implementation of the European Energy Programme for Recovery and the European Energy Efficiency Fund.

 

 

EU hydrogen strategy and long-term investments

 

The Commission has launched two different initiatives: Strategy for Energy System Integration, which outlines how to make our energy system more flexible, and the Hydrogen Strategy, which looks specifically at the necessary steps on making renewable and low carbon hydrogen a key element in the energy system.

Renewable hydrogen not only has the potential to support future renewable-based electricity, because of Europe’s potential of electrolyser production that can create jobs and economic growth in the EU. Thus, the hydrogen strategy sets out a vision of how the EU can install at least 6 GW of renewable hydrogen electrolysers by 2024 and 40 GW by 2030 in Europe.

In the future EU budget, the Commission highlights the need to unlock investment in clean technologies and key value chains including clean hydrogen.

The Commission has prepared the "Power Up" initiative to encourage EU countries to use their European recovery funding to invest in renewable energy and renewable hydrogen production. Alongside measures to promote investment, the European Commission's "fit-for-55" package will cover policy proposals to create an operational EU hydrogen market.

The EU supports hydrogen projects and initiatives, notably through the European Clean Hydrogen Alliance, announced as part of the new Industrial Strategy for Europe and the EU Hydrogen Strategy.

The EU promotes hydrogen research and innovation projects under Horizon 2020, managed through a joint public-private partnership supported by the European Commission. It includes the EU-funded Djewels project that will build a 20 MW electrolyser to help to ensure low-cost green hydrogen and STORE&GO that supports new technologies to feed renewable methane into the gas grid, ensuring sustainable energy supply in Europe.

 

Source: European Commission

 

 

Long-term Strategy for Building Renovation - ELPRE

 

The European Green Deal identified the renovation of buildings, both public and private, as a key initiative to drive energy efficiency in the sector and meet the decarbonization objectives. In this context, and in order to pursue this ambition of energy gains and economic growth, the European Commission published, in October 2020, a new strategy to boost renovation called "A Renovation Wave for Europe – Greening our buildings, creating jobs, improving lives”, under which the construction sector appears as one of the largest energy consumers in Europe due to the energy inefficiency of its building stock, around 75%, being also responsible for one third of GHG emissions in the European Union.

As part of the Clean Energy Package, an obligation was placed on each Member State to establish a Long-Term Strategy to support the Renovation of the national stock of residential and non-residential buildings, both public and private, by 2050, to convert them into a decarbonized and highly energy efficient building stock, facilitating the transformation of existing buildings into Net Zero Buildings, including a roadmap with measures and indicative targets for the horizons 2030, 2040 and 2050, and their link to the achievement of European energy efficiency and GHG emission reduction targets.

The measures included in the Long-Term Strategy for Building Renovation (ELPRE), include intervention in the building surroundings, the replacement of existing systems with more efficient systems, the promotion of renewable energy, and the adoption of technical solutions when appropriate for the practice of energy renovation of the buildings involved. To achieve the respective goals, the policies and actions contained in ELPRE were organized according to seven areas of action:

 

- Buildings Renovation, through the creation of an appropriate financial framework, the revision of the Energy Efficiency Program in Public Administration for public buildings, which now includes water and raw material efficiency, as well as increasing the environmental performance of buildings.

- Develop and promote the intelligence of the buildings involved, by encouraging research activities and technological innovation.

- Labelling products and/or services related to the energy renovation of buildings, the use of energy certificates as a mechanism for access to financing or other benefits, and the qualification of the building energy rating as an incentive factor in the rental market.

- Fill the gaps in training and professional qualifications in the field of energy and resource efficiency performance of buildings.

 - Tackle energy poverty by reducing energy and consumption costs and supporting the most vulnerable households in the energy renovation of their homes through, among other measures, the availability of financing mechanisms and tax benefits.

 - Ensure that citizens and companies, both public and private, are informed and aware of the benefits of building renovation, through publicity and awareness campaigns, use of information technology to provide and develop knowledge on these issues.

- Implement a set of indicators and mechanisms to monitor the progress of ELPRE and ascertain the respective practical results in the energy performance of the buildings involved through the articulation of efforts among public entities for the creation and development of a monitoring system.

It is evident the alignment and articulation of the objectives and actions of ELPRE with the European Climate Pact and the European Recovery Plan, whose priority initiative called the Renovation Wave, assumes relevance for the achievement of other strategic objectives, which include tackling energy poverty and economic recovery due to the epidemiological situation caused by COVID-19.

 

 

Taxonomy

 

The EU Taxonomy is a robust, science-based transparency tool for companies and investors, establishing a common reference that investors can use when investing in projects and economic activities with a substantial positive impact on the climate and the environment. This instrument also introduces disclosure obligations on companies and financial market participants.

The EU Taxonomy Climate Delegated Act, presented by the European Commission on 21 April 2021, introduces for the first time a set of technical assessment criteria to define which activities contribute substantially to two of the environmental objectives of the Taxonomy Regulation: climate change adaptation and mitigation.

This Delegated Act covers the economic activities of about 40 % of listed companies, in sectors which are responsible for almost 80 % of direct greenhouse gas emissions in Europe, and includes sectors such as energy, forestry, manufacturing, transport and buildings. This act aims to promote the redirection of investment towards more sustainable technologies and businesses by identifying those economic activities that contribute most to achieving the EU's environmental objectives, including climate neutrality by 2050. It sets out criteria on two of the environmental objectives set in the regulation, namely climate change mitigation and adaptation.

The delegated act on sustainable activities for climate change adaptation and mitigation objectives was published in the Official Journal on 9 December 2021 and is applicable since January 2022.

 

The Commission has adopted a communication setting out its approach in more detail, clarifying aspects of the taxonomy on the implications of whether an activity qualifies as "environmentally sustainable", the level of ambition, and the criteria and scope of the taxonomy.

On 2 February 2022, the Commission approved in principle a Complementary Climate Delegated Act which include, under strict conditions, specific nuclear and gas energy activities in the list of economic activities covered by the EU taxonomy.

The criteria for the specific gas and nuclear activities are in line with EU climate and environmental objectives and will help accelerating the shift from solid or liquid fossil fuels, including coal, towards a climate-neutral future.

 

 

Climate Law

 

The Commission's proposal for the first European Climate Act aims to ensure in law the goal of climate neutrality by 2050 for the European economy and society set out in the European Green Deal.

This agreement sets the target of a collective reducing net of greenhouse gas emissions by at least 55% by 2030, compared to 1990, making Europe the first continent to be climate neutral by 2050.

To meet this goal, it is necessary to achieve net zero greenhouse gas emissions for all EU countries, mainly by reducing emissions, investing in green technologies and protecting the natural environment.

The law is intended to ensure that all EU policies contribute to this goal and that all sectors of the economy and society play their part in this effort. This law aims to set long-term guidelines to achieve the climate-neutrality objective in 2050 across all policies in a socially just and cost-efficient manner; to set up a system for monitoring progress and take further action if needed; to provide predictability for investors and other economic actors and to ensure that the transition to climate neutrality is irreversible. With the European Climate Act, the Commission proposes a legally binding target for net zero greenhouse gas emissions by 2050.

European institutions and member states are obliged to take the necessary measures at national and EU level to meet this target, considering the importance of promoting fairness and solidarity among member states.

The Climate Law includes measures to monitor progress and adjust the actions, accordingly, building on existing systems such as the governance process for Member States' national energy and climate plans, regular reports from the European Environment Agency and the latest scientific evidence on climate change and its impacts.

The Commission will be empowered to make recommendations to Member States whose actions are inconsistent with the climate neutrality objective, and Member States will be obliged to follow these recommendations or, failing that, to justify why they are not doing so. Member States should develop and implement adaptation strategies to strengthen resilience and reduce vulnerability to the effects of climate change.

The Council and the European Parliament reached a provisional political agreement on 21 April 2021 to achieve the goal of climate neutrality in the EU by 2050.

The European Commission will also propose an intermediate climate target for 2040, at the latest six months after the first global stocktake carried out under the Paris Agreement. It will estimate an indicative EU greenhouse gas budget for the period 2030-2050.

The Council and the European Parliament reached a provisional agreement on the Climate Act. This agreement enshrines in the future climate law the objective of achieving a climate-neutral EU by 2050 and a collective target of a net reduction of greenhouse gas emissions (i.e. emissions after subtracting removals) of at least 55% by 2030 compared to 1990.

In order to ensure that enough efforts are made to reduce and prevent emissions by 2030, a limit of 225 Mt CO2 equivalent has been introduced for the contribution of removals to the net target. Other elements include the establishment of a European Scientific Advisory Board on Climate Change consisting of 15 high-level scientific experts of different nationalities, with a maximum of two nationals from the same member state and serving a four-year term.

 

 

Europe's global approach to cooperation

 

This strategy reaffirms the EU's commitment to international cooperation in research and innovation and strengthens the EU's leadership in supporting multilateral partnerships. The approach guides the implementation of the international dimension of Horizon Europe, for EU research and innovation for civil purposes, the Neighbourhood Instrument, Development Cooperation Instrument and International Cooperation - Global Europe.

 

SOURCE: COM (2021)