On 8 March the European Commission proposed the outline of a plan to make Europe independent of Russian fossil fuels well before 2030. At the European Council on 24-25 March, EU leaders agreed on this objective and asked the Commission to present the detailed REPowerEU Plan which was adopted on 18 May.
Designated the REPowerEU Plan, it is a response to the hardships and global energy market disruption caused by Russia's invasion of Ukraine. There is a doubly urgent need to transform Europe's energy system – ending the EU's dependence on Russian fossil fuels, which are used as an economic and political weapon and cost European taxpayers nearly €100 billion per year, and tackling the climate crisis. The EU believes that by acting as a Union it can phase out its dependency on Russian fossil fuels faster, a belief shared by 85% of Europeans, and that it should reduce its dependency on Russian gas and oil as soon as possible to support Ukraine. The measures in the REPowerEU Plan are intended to respond to this ambition, through energy savings, diversification of energy supplies, and accelerated roll-out of renewable energy to replace fossil fuels in homes, industry and power generation.
The Recovery and Resilience Facility is at the heart of the REPowerEU Plan, supporting co-ordinated planning and financing of cross-border and national infrastructure as well as energy projects and reforms. The Commission proposes to make targeted amendments to the RRF Regulation to integrate dedicated REPowerEU chapters in Member States' existing recovery and resilience plans (RRPs), in addition to the large number of relevant reforms and investments which are already in the RRPs.
Energy savings are considered the quickest and cheapest way to address the current energy crisis, and reduce bills. The Commission proposes to enhance long-term energy efficiency measures, including an increase from 9% to 13% of the binding Energy Efficiency Target under the ‘Fit for 55' package of European Green Deal legislation. Therefore the Commission has also published an ‘EU Save Energy Communication' detailing short-term behavioural changes which could cut gas and oil demand by 5% and encouraging Member States to start specific communication campaigns targeting households and industry. Member States are also encouraged to use fiscal measures to encourage energy savings, such as reduced VAT rates.
The EU has been working with international partners to diversify supplies for several months, and has secured record levels of LNG imports and higher pipeline gas deliveries. The newly created EU Energy Platform, supported by regional task forces, will enable voluntary common purchases of gas, LNG and hydrogen by pooling demand, optimising infrastructure use and coordinating outreach to suppliers. As a next step, the Commission will consider the development of a ‘joint purchasing mechanism' which will negotiate and contract gas purchases on behalf of participating Member States.
Accelerating the rollout of renewables
A huge scaling-up and speeding-up of renewable energy in all areas will accelerate independence, give a boost to the green transition, and reduce prices over time. The Commission proposes to increase the headline 2030 target for renewables from 40% to 45% under the Fit for 55 package. Setting this overall increased ambition will create the framework for other initiatives, including: a dedicated EU Solar Strategy to double solar photovoltaic capacity by 2025 and install 600 GW by 2030.
This includes a Solar Rooftop Initiative with a phased-in legal obligation to install solar panels on new public and commercial buildings and new residential buildings. Other measures include doubling of the rate of deployment of heat pumps, and measures to integrate geothermal and solar thermal energy in modernised district and communal heating systems.
There is also a Commission Recommendation to tackle slow and complex permitting for major renewable projects, and a targeted amendment to the Renewable Energy Directive to recognise renewable energy as an overriding public interest. Dedicated ‘go-to' areas for renewables should be put in place by Member States with shortened and simplified permitting processes in areas with lower environmental risks. There is a proposal to set a target of 10 million tonnes of domestic renewable hydrogen production and 10 million tonnes of imports by 2030, to replace natural gas, coal and oil in hard-to-decarbonise industries and transport sectors. To accelerate the hydrogen market increased sub-targets for specific sectors would need to be agreed by the co-legislators.
Delivering the REPowerEU objectives requires an additional investment of €210 billion between now and 2027. This is ‘a down-payment on our independence and security’ says the Commission. Cutting Russian fossil fuel imports can also save the Union almost €100 billion per year. These investments must be met by the private and public sector, and at the national, cross-border and EU level.
To support REPowerEU, €225 billion is already available in loans under the Recovery & Resilience Facility. The Commission has adopted legislation and guidance to Member States on how to modify and complement their RRPs in the context of REPowerEU. In addition, the Commission proposes to increase the RRF financial envelope with €20 billion in grants from the sale of EU Emission Trading System allowances currently held in the Market Stability Reserve, to be auctioned in a way that does not disrupt the market. As such, the ETS not only reduces emissions and the use of fossil fuels, it also raises the necessary funds to achieve energy independence.