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Dumping Russian energy raises climate questions

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The European Commission on Wednesday aims to propose how the bloc should end its dependence on Russian energy imports — but that’s setting up a potential clash with the EU’s climate goals.

The Commission’s Russia solution is a fat packet of measures called REPowerEU, aimed at everything from boosting renewable energy to investing in alternative ways of supplying gas and hydrogen and increasing energy savings. 

But green groups and clean energy advocates are worried the Commission will try to substitute Russian oil and gas with imports from other countries and invest billions in new pipelines and import terminals rather than use the opportunity to rapidly jump to greener energy sources.

“Entering into long-term gas contracts with alternative suppliers is replacing one gas dependency with another,” said Sarah Brown, a senior analyst at the Ember think tank.

Alok Sharma, the U.K. minister who was in charge of November’s COP26 climate talks, hit on that concern in a speech Monday, calling clean power “a matter of security” and warning that “investing in fossil fuels will only risk stranded assets.”

The Commission is well aware that it’s walking a fine line — trying to quit Russian energy without torpedoing EU economies, while also ensuring that the bloc’s longer-term climate goals aren’t undermined.

“It is imperative that we take forward our work to become independent from Russian fossil fuels,” EU Energy Commissioner Kadri Simson said after her last meeting with energy ministers. She added that it is “neither sustainable nor affordable” to simply replace 155 billion cubic meters of Russian gas with gas from other suppliers. However, despite that warning member countries are pushing hard to find new sources of supply, from Norway to Algeria and beyond.

What’s in the box? 

The package is set to be composed of 15 documents, ranging from legal proposals to guidelines, recommendations and strategies, according to a senior Commission official. They fit into four strands: saving energy; diversifying supplies; accelerating the energy transition; and combining investments and reforms, according to a draft communication summing up the whole package obtained by POLITICO.  

The draft says that implementing the strategy would require an additional €195 billion between now and 2027. That’s on top of investment needed for Fit for 55 — the Commission’s legislative package aimed at cutting emissions by 55 percent by the end of the decade.

Renewable energy already is set for a boost under Fit for 55, rising from 511 gigawatts today to 1,067 GW by 2030; REPowerEU aims to raise that to 1,236 GW — part of an effort to boost the share of renewables in the bloc’s energy mix from 40 percent to 45 percent by 2030. 

To achieve that, the Commission is going to propose new laws that will massively speed up permitting processes for renewable energy projects — one of the industry’s biggest challenges — as well as introduce new rules to popularize solar energy by, for example, making rooftop solar panels mandatory for new buildings as of next year and on all existing public buildings as of 2025. It also aims to boost biomethane production to 35 billion cubic meters by 2030 and sets targets of 10 million tons of renewable hydrogen production and 10 million tons of hydrogen imports by 2030.

Brussels also wants to increase the target for reducing energy consumption from a proposed 9 percent to 13 percent by 2030. 

That’s all very green, but the package also wants to secure “adequate alternative gas supplies to cover Europe’s gas demand by diversifying external supplies.” That will require new liquefied natural gas import terminals and pipelines as well as updating existing pipelines to shift gas in reverse directions. 

Green groups and other observers are worried. 

According to Global Energy Monitor, plans for 22 LNG transport projects costing €6 billion have been announced, proposed or revived since February. The NGO’s Greig Aitken warned of a “stampede” of projects that could give the bloc “unnecessary” capacity.

The danger is so-called stranded assets — building infrastructure that will no longer be needed in the longer term as the EU weans itself off fossil fuels. Simone Tagliapietra, a senior fellow at the Bruegel think tank, called for the EU to use temporary floating gas terminals rather than investing in permanent facilities that would lock in gas use for decades to come or end up as a useless asset.

Sharma had a similar warning. Private investors “will have to consider that [with] any project where they put money in, whether they are going to get a return.”

Filling the immediate need to replace Russian energy “implies accepting apparently contradicting solutions,” Tagliapietra added. “In the short-term it might be OK to use a bit more coal, if in the meantime we seriously ramp up renewables and energy savings.”

Louise Guillot contributed reporting.

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