Actions for the EU energy transition following the Russian aggression

Object: Extraordinary times call for extraordinary actions and ambition for the EU’s energy transition

Dear Ms von der Leyen, President of the European Commission,
Dear Mr Timmermans, Vice-President of the European Commission in charge of the Green Deal,
Dear Ms Simson, Commissioner for Energy,

Following the unprecedented military aggression against Ukraine by the Russian Federation on 24th of February, the European Union reacted in a united manner to condemn Russia’s illegal military actions. The Greens/EFA strongly condemn the Russian attack, standing firmly by Ukraine and we welcome the restrictive measures adopted by the Commission and Member States, although tougher sanctions may be needed. We also applaud a coordinated response to support Ukraine, especially in terms of humanitarian assistance as well as providing EU corridors and offering shelter to all people fleeing the country.

An area impacted by the Russian aggression is the energy policy of the Union, highlighting the urgent need to end the dependence on Russian energy imports. In spite of numerous attempts to reduce EU energy dependency, the share of Russian gas in the EU gas consumption is still nearly 40% (1). Russia is also the main supplier of EU imports of crude oils and coal (2). Furthermore, several Member States have ongoing collaboration with Russia in the nuclear field, in particular with Rosatom and its subsidiaries, and the ITER project is partly financed by Russia. The European Commission already announced the need for a new strategy that makes Europe completely independent of Russian gas. This is urgently needed as Russia’s energy sector generates about 40% of its federal budget (3). The European Union cannot fund the Russian military aggression against Ukraine via its own energy imports.
However, a new EU energy strategy cannot be based on more gas only, especially liquefied natural gas (LNG), as it seems to be the case for now. Diversified gas routes will only create new dependencies or further retain dependency on Russian LNG  (4). Russia is actually one of the main suppliers of LNG in Europe. Biogas is also a false solution: increased reliance on biogas will lead to higher emissions and climate damage. Only a small quantity of sustainably sourced biogas is available and it can therefore play only a small role in the transition, if produced locally from true wastes and residues and consumed locally. There is no room for additional gas investments if we are serious in tackling the climate crisis. The current energy price surge and the geopolitical situation highlight that fossil gas investments increase import dependencies and expose vulnerabilities, including in form of increased energy bills for Europeans.

It is time for a new EU energy strategy that bets on a sustainable, safe and socially fair future. Greens/EFA have already called for a truly European Energy Union to move away from national decision-making on energy mix and energy infrastructures. We already have enough total capacity for LNG but it is poorly distributed, which is why we need a European approach. In other words, we want
an emergency strategy to invest now in a highly energy efficient, 100% renewable-based economy. The European Commission’s leadership will determine how fast energy efficiency and renewable energies will replace our fossil dependency or how much that process will be slowed down. It is time for true political will and bold actions.

Below are six Greens/EFA calls to address the short to long-term effects of the Russian aggression on the EU energy policy, which we hope you will take into account in your upcoming Communication on energy.

1. COMMIT TO ADOPT AN “EU ENERGY INDEPENDENCE ACT” AS SOON AS POSSIBLE TO INCREASE FINANCING FOR ENERGY EFFICIENCY AND RENEWABLES

•  Dedicate at least 1% of Member States’ GDP to energy efficiency and renewable energy: at a time where billions can be invested in military spending, we need to see the same political will to invest in measures for our energy independence. Each Member State should commit to set a minimum percentage - at least 1% - of their annual GDP to energy efficiency measures as well as the development of renewable energies. Ambitious investments in green solutions and the reduction of energy dependencies would have a double positive effect on the EU energy independence and the achievement of its climate objectives.
• Urgently propose an EU Energy Independence Facility, a RRF-like instrument dedicated to speed up the energy transition and enhancing energy independence: we should demonstrate similar ambitions as we did in addressing the impacts of the COVID-19 pandemics in terms of volume and speed. Such new investment vehicle is urgently needed to make the European Union truly energy independent by 2030. In addition, the Commission, in close cooperation with the EIB, should help Member States in the design of their short-term measures scaling up renovation and renewable programmes, looking at best practice from Ireland or Italy (5).
•  Tax energy companies that made windfall profits during this energy crisis: according to Global Witness, eight fossil fuel companies made over $119 billion profits since the energy crisis began in the autumn 2021. The European Commission should propose that EU countries tax profits made from recent gas price spikes and use it to invest in renewable energy and energy efficiency measures.

2. IMPLEMENT SHORT-TERM ENERGY EFFICIENCY MEASURES TO EMPOWER CITIZENS

• Support less energy intensive behavioural practices: the savings potential has yet to be fully tapped, but let’s expand and multiply existing measures like free public transport or encouraging modal shift for both passengers and freight, the promotion of teleworking as much as possible, the generalisation of energy audits... Let’s get inspired by worldwide best practices and look at what other countries are doing e.g. Japan adopting energy efficiency measures in response to the Fukushima disaster. All these measures can have a huge impact on behaviour and will mobilise citizens to be part of a new energy strategy, which is a key component to ensure greater ownership and higher success.
• Adopt financial incentives to promote changes: the European Union and its Member States should further facilitate the disbursement of financial support to households, prioritising the most vulnerable, to reduce their energy consumption and investing in energy efficiency and renewable energy installations. It is also time to implement a modal shift towards the lowest energy consuming modes for both passenger and freight transport including walking, cycling and use of e-bikes. Information and advice to households and companies in so-called one-stop-shops will help to unlock the renovation wave for example.
• EU and national action plans for renewable self-consumption and creation of at least one renewable energy community per municipality by 2023: citizens have the right to produce, consume, store and resell their own renewable energy as individuals or communities.
  The potential for prosumers is still largely untapped by Member States: prosumers could meet 20% of the Union energy demand by 2030 according to conservative estimates (6). The Commission should push each Member State to finalise their national assessments of potential and barriers, and present an action plan with yearly milestones to boost renewables production and energy efficiency through self-consumption and renewable energy communities (REC), with a specific objective to create at least one REC per municipality by 2023.
• Support the Member States to run spatial planning for renewable energy potential at local and regional levels: to fully exploit the domestic potential and optimise the use of local renewable energy sources, it is of utmost importance to map and plan at different levels and in a coordinated manner the potential for renewable deployments as close to citizens as possible. Member States need to be able to answer how many solar PV or heat pumps can be rolled out, by when and at which levels, how much energy demand can be sourced and covered locally, what is the potential of re-powering existing “old” renewable installations etc.
   

3. ADOPT SECTOR SPECIFIC MEASURES FOR ENERGY SAVINGS AND RENEWABLE DEPLOYMENT ACROSS EUROPE

• A bold plan for deep renovations: We need fresh measures to invest in energy efficiency and it starts with buildings’ renovation. In the residential and services sectors, energy efficiency could massively reduce the reliance on gas as almost 75% of the building stock is energy inefficient. Some examples of measures that the European Commission should propose include:

  • Dedicated funding to install:

    • 100 million heat pumps in buildings across Europe by 2030; including at least 4 million by the end of 2022.

    • 70 million solar PVs by 2030, as complementary to the Renovation Wave, including at least 1,5 million solar rooftops by the end of 2022;

    •  2,2 GWth of solar thermal within one year, which would correspond to 100 million cubic meters of saved gas;

  • Create an obligation to:

    •  Ban oil and gas boilers in new and refurbished buildings and immediately stop financing installation of oil and gas boilers from the EU budget and the RRF;

    • Install solar thermal and PV installations in all new buildings and those undergoing major renovations in Member States;

    • Switch to and develop fully renewable-based district heating;

    •  Promote serial and deep building retrofits, including with on-bill schemes and consider the potential of pre-fabricated renovation modules;

  • Enlarge the scope of energy audits and make audit recommendations binding on companies;

  • Use the framework of the Important Projects of Common European Interest (IPCEIs) and industrial alliances to scale up production of equipment for fast building renovations (e.g. an initiative to develop solar PV manufacturing and another one on serial renovation material);

• An industrial reconversion plan to spur the EU’s value chain on energy efficiency and renewable technologies: the European Union should develop a dedicated industrial strategy for energy efficiency and renewables to enable EU market leaders. During the Covid pandemic, we exploited the possibility of stimulating certain industries to increase their production for necessary goods or promote reconversion of industrial processes to do so. Further strengthening the EU’s value chain for energy efficiency and renewable technologies would first ensure enough and swift delivery of the materials needed for the ecological transition. It would also speed up the autonomy in such strategic value chains. The European Commission should promote joint procurement of critical materials both by public and private actors.
   
• Renewable energy solutions for the industry sector: the European Union should promote the rapid adoption of mature and sustainable renewable energy solutions for low and medium-temperature industrial heat. 64% of natural gas use in industry in the EU is used to produce low and medium temperatures up to 500 degrees Celsius. Expert analysis shows that mature and relatively inexpensive renewable energy technologies, such as industrial heat pumps, geothermal solutions or e-boilers can already be used to provide low and medium temperature industrial heat solutions, thus using direct electrification solutions for these sectors backed by renewable power. For sectors requiring high temperature industrial heat (e.g. steel, fertilizers, aluminium...) industrial gas use could also be limited and replaced by green hydrogen.
• Promote a 'mobility guarantee' for everyone living in the EU: a mobility guarantee is a promise to be able to reach your home, workplace, school as well as other essential errands and culture within a specified timeframe. A mobility guarantee would require the deployment of reliable public transport service options, to provide a clear incentive for people to switch from environmentally and socially harmful transport patterns to a truly sustainable mobility less dependent on fossil fuels. It should be worked out by national, regional or local authorities for a specific area and in collaboration with non-state stakeholders to achieve the best quality of life within the given global constraints.
• Launch a green critical raw materials (CRM) strategy to be able to produce the necessary technologies we need for fast roll out of renewable technologies and energy efficiency measures. Such strategy should lead to a functioning recycling market (not competing against primary raw materials), funding for technological development of recycling processes, the introduction of very high recycling quotas for specific CRM and the promotion of resource efficiency and increased Research & Innovation on possible sustainable substitution of CRMs.
• Train and use all available qualified work force to support the quick deployment of energy efficiency and renewable technologies: together with Member States, the Commission should develop a plan to address labour shortages and speed up the re- and up-skilling of workers and the unemployed. Member States should also consider reallocating available civil servants (e.g. military, police forces, peace corps...) to the deployment of these technologies and introducing an environmental civil service year. Promoting eco-volunteering with training could also provide the required additional workforce in the short term for the massive rollout of these measures.

4. INCREASE THE AMBITION OF THE FIT FOR 55 PACKAGE AND THE STATE AID GUIDELINES

• Increase the EU target in the Energy Efficiency Directive to at least 45%: the Commission should aim at increasing the EU Energy efficiency target from proposed 36% to at least 45% by 2030 and to introduce mandatory national binding targets for each Member State. For every 1% of energy savings gained, the EU could cut its gas imports by 2.6%. Energy efficiency is the central measure for increasing energy security: the safest energy supplies are those that are not used.
• Increase the EU target in the Renewable Energy Directive to at least 50%: The share of renewable energy in the EU by 2030 should be increased from proposed 40% to at least to 50%. Many of the renewable technologies we need do already exist and their costs keep falling compared to other energy sources. Together with energy saving and efficiency measures these are no-regret investments. In this context, the Commission should also perform as soon as possible an impact assessment for a fossil- and nuclear- free EU economy i.e. a highly energy efficient, 100% renewable based economy by 2040.
• Accelerate the transition of the EU transport sector through the Fit for 55 package: the transport sector accounts for more than two thirds of EU’s demand for oil and petroleum products (7), of which a large part comes from road transport. The true potential lies in massive electrification, including shifting to rail, complemented by the use of zero-emission fuels such as green hydrogen in modes where direct electrification is not possible. An accelerated phase out of the sale of new diesel and gasoline cars by 2030, with ambitious intermediary targets, would largely contribute to cut the dependency of the EU road transport sector to Russian oil. Other files such as the Alternative Fuel Infrastructure Regulation, the FuelEU Maritime and the Refuel aviation should lead to a rapid ramp-up use of real sustainable and renewable fuels. All explicit and hidden incentives for further use of fossil fuels in the transport sector should be immediately eliminate. We must also avoid creating any further incentives related to the development of transport infrastructure that would allow for an increased use of fossil fuels such as refuelling points for LNG. Indeed, such subsidies would further increase demand and thus the dependency on third counties for fossil fuels supply. The revision of the Energy Taxation Directive should also contribute to put an end to the lack of internalisation of true costs of aviation that by eliminating the current VAT exemptions to jet fuel, preventing a level-playing field across modes by privileging air travelling and thus undermining the needed shift to rail.
• Amend the Climate, Energy and Environmental Aid Guidelines: the European Commission should consider revising the scope of its Climate, Energy and Environmental Aid Guidelines to ensure that state aid supports renewable, energy savings and energy efficiency only, with a faster approval procedure. There will be little incentive to shift the focus if public money still finance natural gas installations and LNG based transport for example. Pending notification procedures from Member States on energy savings, energy efficiency and renewables state aid should also be approved at a much faster pace by the European Commission.
   

5. PRESENT AN ALTERNATIVE LIST OF PROJECTS OF COMMON INTEREST

• The Union list of projects of common interest (PCIs) is a selection of energy infrastructure projects - such as electricity lines, gas pipelines, LNG terminals or smart grid projects - eligible for EU funding and faster permitting procedures. The Commission presented its 5th PCI list in November 2021: it included several new gas infrastructure projects, which are not commensurate with future EU gas demand, are not necessary from a security of supply perspective and would further increase our greenhouse gas emissions instead of reducing them. Relying on the recipe of more gas through diversification only creates new dependencies, draws away funds from investments in renewable energy and energy efficiency and lock us into fossil infrastructures for decades. This is why the European Parliament should reject this list in its plenary session in March and the Commission should draft an alternative list, as we suggested a few months ago.(8)
   

6. WITHDRAW THE TAXONOMY DELEGATED ACT ON NUCLEAR AND GAS

• The European Commission’s delegated act to the EU Taxonomy Regulation seeking to list gas and nuclear projects as potential sustainable investments should be immediately withdrawn by the Commission. In addition to significantly undermining the EU's credibility as a climate actor, such delegated act cannot give the signal to Russia that the EU still wants fossil gas and nuclear to be part of the gold standard for future investments and the greening of our economy. We cannot want to get rid of Russian gas’ dependency and promote gas as a sustainable source of energy in the coming decades.
• Nuclear, including from Russia is not an option to replace gas. We fully support the EP resolution on ‘Russian aggression against Ukraine’ calling on the Member States to stop any collaboration with Russia in the nuclear field, in particular the termination or removal of operating licences for Rosatom and all its subsidiaries9. In light of the latest developments, we also ask to immediately revisit any Euratom Art 41-44 opinions10 and the support of Russia to the ITER project.

We live in an unprecedented time and we need unprecedented responses to adapt our economy and policies to a time of war. There is no time for institutional resistance and this could be reflected in the organisation of the European Commission itself e.g. with the creation of dedicated taskforces on energy efficiency and renewable energies. The European Union should be coherent and cannot invest big on fossil fuels while providing only small support to energy efficiency and renewables. It is the responsibility of the European Commission to ensure that measures taken today are not only looking at the short-

term but also provide European citizens a sustainable future in a decarbonised world. It is time for the European Union to dedicate political will and funding to achieve its Green Deal objectives.
Yours sincerely,
MEP Philippe Lamberts, Co-President of the Greens/EFA Group
MEP Ville Niinisto, Greens/EFA coordinator for the ITRE committee
MEP Bas Eickhout, Greens/EFA coordinator for the ENVI committee

1 https://www.bruegel.org/2022/01/can-europe-survive-painlessly-without-russian-gas/
2 https://ec.europa.eu/eurostat/cache/infographs/energy/bloc-2c.html
3 See the Energy Strategy of the Russian Federation until 2035 adopted in 2020 https://bit.ly/3IzSMge
4 According to the European Commission’s report on European gas markets, Russia is the second largest LNG supplier to the EU (with an import share of 21%), behind the US (31%) but before Qatar in third position (18%). See: https://ec.europa.eu/energy/sites/default/files/quarterly_report_on_european_gas_markets_q2_2021_final.pdf
5 Ireland is planning grants at 80% of the amount for roof and cavity home insulation to cut gas use ahead of next winter and Italy hs a €50 billion super bonus programme, which pays back 110% of renovation investments
6 CE Delf 2015, the potential of energy citizens in the European Union
7 Cambridge Econometrics (May 2020), Oil Dependency in the EU
8 Greens/EFA alternative list of projects
9 EP Resolution on ‘Russian aggression against Ukraine’, 1 March 2022 https://www.europarl.europa.eu/doceo/document/TA-9-2022-0052_EN.html
10 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:C:2016:203:FULL&from=DE