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By Kapil Shyam Lokare
Last November, The European Commission (EC) presented a 4,300-page dossier defining measures to keep the European Union (EU) competitive while it transitions to become a leader in clean energy, potentially changing global energy market dynamics.
The regulatory proposals and facilitating measures presented in the package aim at accelerating, transforming and consolidating the EU economy’s clean energy transition, thereby creating jobs and growth in new economic sectors and business models. Mobilising EUR177 billion (USD186.5 billion) of public and private investment per year from 2021, the package aims to generate up to 1% increase in gross domestic product (GDP) over the next decade, and create 900,000 new jobs. With the average carbon intensity of the EU economy dropping by 43%, renewable electricity will represent half of the EU’s electricity generation mix.
The dossier entitled “Clean Energy for All Europeans” aims to drive the transition to clean energy while being consumer centric, through energy efficiency, renewable energy, the design of the electricity market, security of electricity supply and governance rules for what the EU calls its energy union, essentially a zone of common energy laws uniting all 28 member-states.
The proposal focused to reduce carbon dioxide emissions by 40% by 2030 in parallel with modernising the EU’s economy. The package’s flagship measure is targeting a 30% improvement in energy efficiency, along with generating 27% of the EU members’ energy from renewable sources; transport fuels consumed in the EU will have to be produced with 70% lower greenhouse gas (GHG) emissions than fossil fuels.
Highlighting the construction sector, “Buildings in Europe account for 40% of net energy consumption and around 75% of them are energy inefficient. Whilst two-thirds of EU’s buildings were built before energy performance standards existed, and their renovation rate is only around 1% per year.” The proposal encouraged energy efficiency with efficient buildings, clarified eco-design framework and measures, coupled with smart finance. The buildings sector alone is projected to contribute to the overall savings of 29.1 million tonnes of oil equivalent (Mtoe) by 2030.
The amendment of the Energy Performance of Buildings Directive will accelerate building renovation rates by reinforcing provisions on long-term building renovation strategies, with a view to decarbonising the building stock by mid-century.
Energy intensive industries (e.g. steel and automobile) will need to maintain their efforts towards energy efficiency improvements.
Ecodesign and energy labelling will be imperative in delivering energy and resource savings for consumers and creating business opportunities for European industry.
The Renewable Energy Directive (RED), together with proposals on new electricity market design, will set regulatory frameworks that allow a level playing field for all technologies, without jeopardising climate and energy targets.
According to the International Energy Agency (IEA), renewable energy surpassed coal as the main source of power capacity in 2015. In 2030, half of the EU’s electricity generation will come from renewables. Transport in the EU still depends nearly entirely on fossil fuels. Oil supplies about 94% of all energy used to power European cars, trucks, ships and planes.
This package will accelerate the deployment of low-emission and renewable energy for transport, such as advanced biofuels and electricity. The EC proposes biomass used for energy production in the Union to be sustainable, i.e., that it delivers high GHG savings (70%) compared to fossil fuels, that is produced in a way that does not cause deforestation or degradation of habitats or loss of biodiversity and that it is converted into energy with a high efficiency combined heat and power technologies while ensuring Land Use, Land-Use Change and Forestry (LULUCF) accounting. The revised RED strengthens the existing EU criteria for bioenergy sustainability and extends them to cover also biomass and biogas for heat and power.
As part of the Clean Energy for All Europeans Package, the Commission also adopted a European Strategy on Cooperative Intelligent Transport Systems (C-ITS) – an initiative towards cooperative, connected and automated mobility. While the EC proposal contains very limited incentives for electric vehicles (EVs), it is premature to draw conclusions based on the current dossier and requires a follow-up proposal on carbon dioxide emissions from transportation that has yet to be released and will not be aired until EU ministers debate the package in detail at an upcoming European Council heads of government meeting.
Under one Horizon 2020 study priority – on “electro-mobility” – the EC promised energy efficiency through the development and deployment of next-generation EVs with advanced battery designs, new power trains and smart charging grid network. In addition, financing would be available for decarbonization of the European transport sector to promote alternatively fueled buses and cars. The automotive industry may be further eligible for funds via the Connecting Europe Facility to support the trans-European networks and infrastructures in transport, telecommunications and energy, and the European Fund for Strategic Investment – a EUR16 billion (USD16.8 billion) guarantee from the EU budget, complemented by EUR5 billion (USD5.3 billion) from the European Investment Bank (EIB) have been earmarked under the “expansion of renewable energy and resource efficiency.”
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