EU plans new green policies

In a new energy and climate plan, the European Commission has proposed a 40% by 2030  target for renewable energy, as part of its new ‘Fit for 55’ package, which aims to reduce EU greenhouse gas emissions by 55% from 1990 levels by 2030. It also looks at border carbon tariffs, home insulation upgrades, vehicle emission cuts, and low carbon aviation options.

Perhaps inevitably, some of these moves have met opposition, for example from heavy carbon using countries and those concerned about border carbon taxes. But there were also objections from those who felt much more could and should be done. For example, more attention to energy efficiency was called for.  And more renewables. As Euractiv reported,  SolarPower Europe had earlier said ‘reaching 45% renewable energy by 2030 is possible and would set the EU on a cost-effective trajectory to become climate neutral before 2050’. Then again, not all renewables were welcomed by all. The EC has been trying to develop a taxonomy for eligibility for energy investment, and there have been objections to the inclusion of bioenergy on the basis of environmental impacts. There certainly have been some concerns raised about EU biofuels policy. 

Another big area for contention was of course nuclear power. It has been quite a battle, with strong pressures to exclude it from the taxonomy, on the basis of social and environmental ‘do no significant harm’ criteria. The EC Joint Research Centre was commissioned to produce a review, but with its conclusion being that inclusion would be acceptable, it attracted more dissent. 

Five EU member states, led by Germany, have opposed nuclear inclusion in the support taxonomy. In a letter to the EC, Ministers from Austria, Luxembourg, Denmark, Germany and Spain said they were ‘disconcerted to learn that in the opinion of the Joint Research Centre, there were no indications that the high-risk technology that is nuclear power is more damaging to human health and to the environment than other forms of energy generation, such as wind and solar energy.’ They insisted that ‘Nuclear power..is a high-risk technology - wind energy is not’ and claimed that the EC report ‘deliberately ignored the possibility of a serious incident’, also noting that, ‘after more than 60 years of using nuclear power, not one single fuel element has been permanently disposed of anywhere in the world.’

They went on ‘many savers and investors would lose faith in financial products marketed as ‘sustainable’ if they had to fear that by buying these products they would be financing activities in the area of nuclear power’, a view confirmed later by a group of German and Austrian asset managers.   

Faced with intractable opposition like this, the EC seems to have decide to kick the issue into the long grass and leave the nuclear inclusion issue aside for a while.  A similar approach also seems to have been adopted in relation to natural gas and its role in the climate plan. For the moment then the Taxonomy and policy status of both nuclear and gas is unclear. 

The gas issue is linked to the ongoing debate about options for green heating, with hydrogen and heat pumps fighting it out. The ECs 2020 energy sector integration strategy said heat pumps could offer 40% of heating solutions in all residential housing and 65% of all commercial buildings by 2030. And more recently, the CEOs of major energy groups, including Italy’s Enel, Spain’s Iberdrola, & France’s EDF, claimed that heat pumps can be deployed on a large scale in Europe without grid stability issues, while allowing more integration of renewable sources & improving energy efficiency in buildings. So the ‘the lights will stay on with 50 million heat pumps,’ while switching from fossil fuel boilers to heat pumps will reduce final energy use in buildings by over 66%, and heating-related CO2 emissions by at least 60%. 

However, the EC is also keen on hydrogen- although possibly more for transport and other applications than for domestic heating. There has been a bit of confusion and delay over hydrogen, but the EC is now pushing for green hydrogen, although there are strong pressures for blue hydrogen to be accepted as an interim option. But enthusiasm for green hydrogen does seem strong, both in the the EU and elsewhere, while some say there could be an issue with imports of fossil fuel-derived blue hydrogen. A coalition of European electricity groups including EDF, Enel, Iberdrola, and Ørsted have called on the European Commission to impose a carbon tariff on hydrogen imports coming into Europe, ‘in order to avoid fossil-based and highly emitting hydrogen imports’ which would ‘introduce an unfair competition with the nascent EU based clean hydrogen production thus hampering the development of an EU hydrogen industrial value chain.’ 

The protectionist urge is clear enough, but it does leave open the issue of what to do about green hydrogen from, for example, PV in desert areas of North Africa. Importing that may may be environmentally preferable than covering large areas of the EU with PV! 

Around the EU

For good or ill, most of the issues raised above will, in the event, be dealt with at national level, with Germany mostly leading the EU pack. Its renewable capacity expansion continues, soon pushing out nuclear entirely and squeezing the fossil fuel share. For example, there’s 1GW of new onshore wind projects - the largest expansion since 2017. Its offshore wind expansion, although a bit slower of late, will include the new large 14MW Vesta technology. Germany’s first green hydrogen plant has opened in Cologne, with a 10 MW ITM Power electrolyser using green power. Expansion to 100 MW is planned by Shell, ‘on our way to gigawatt deployments’. And RWE is building a flexible 117 MW hybrid run-of-the-river hydro/battery storage plant on the Mosel River.

Although squeezing coal out is proving to be politically hard and slower than hoped, the technical prospects for the future look good.  Germany’s entire energy demand could be met via renewable energies alone within the next ten to fifteen years, according to a report by the German Institute for Economic Research, while a new study by the Climate Neutrality Foundation and the think tanks Agora Energiewende and Agora Verkehrswende claims that Germany can reach carbon neutrality by 2043, and then climate neutrality, by avoiding or offsetting all greenhouse gas emissions, in 2045. That now all looks a bit more credible, given that, following a landmark court ruling in favour of a challenge from youth plaintiffs, a ‘net zero by 2045’ target has been proposed, with a 65% emissions reduction by 2030, and 85-90% by 2040, all compared to 1990 levels. Previously, the goals were 55% by 2030 and climate neutrality by 2050. 

Germany may attract the most headlines, but there’s also good progress elsewhere in the EU.  For example, over a third of Italy’s electricity is now from renewables and over 44% of Spain’s power now comes from renewables- which make up almost 54% of its total generation capacity. Spain’s long-awaited climate law commits to cut emissions 23% by 2030, from 1990 levels, bans all new fossil fuel exploration and production permits, prohibits the sale of fossil fuel vehicles by 2040 and sets a goal to generate 74% of electricity with renewables by 2030. Meantime, Portugal is doing very well, with Environment Minister Matos Fernandes saying that recent low price PV auctions showed that ‘we are in a position to reach 2030 with 80% of the energy we consume produced by renewable sources’. It provided the venue for the biannual World Renewable Energy Congress, held this year in Lisbon, which reviewed technical and policy progress in the EU and across the world. There was plenty to report.