EU unveils €300bn plan to quit Russian fossil fuels by 2027 and boost clean energy

The European Commission submitted on Wednesday (18 May) a €300 billion plan to eliminate Russian energy imports by 2027, although it admitted this would require short-term investments in new fossil fuel infrastructure to replace imports of Russian oil and gas.

Combined with green legislation already on the table, the new plan, dubbed REPowerEU, will help Europe save €100 billion each year on gas, oil and coal imports, the EU executive said.

“Putin’s war is, as we all see, heavily disrupting the global energy market,” said European Commission President Ursula von der Leyen, adding that it has shown Europe’s dependence on imported fossil fuels and the vulnerability that comes with it.

“We must now reduce as soon as possible our dependency on Russian fossil fuels. I’m deeply convinced we can,” she continued.

The plan consists of three main elements: energy savings and boosting renewables as well as diversifying European oil and gas supplies.

It includes new proposals to raise the EU’s renewable energy target to 45% by 2030, up from the 40% target tabled last year, and increase the energy efficiency target from the 9% goal put forward in July 2021 to 13%.

It also proposes to make solar panels mandatory in public and new residential buildings by 2025, 2029, respectively.

“It is more urgent than ever that Europe become master of its own destiny, increase its resilience and sovereignty and continue to lead the world in facing the climate crisis,” said EU climate chief Frans Timmermans.

According to the plan, Russian gas usage would be cut by two thirds by 2022. A senior European Commission official stated that this will be followed up by a gradual and linear reduction in dependence due to the time required to build renewable energy capacities.

“If you would take that line, just for the sake of argument, you would reach independency, [in] about 2026 or 2027,” the official added.

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According to the European Commission proposal a REPowerEU plan is focused on rapid and large-scale deployment of renewable energy (especially solar)

To accelerate deployment, the EU executive wants to make permitting procedures simpler, with new wind and solar projects being declared a matter of “overriding public interest”, and ‘go-to’ areas introduced at the national level in zones with low environmental risk.

But there will also be costs associated with this, the EU executive adds, saying the REPowerEU plan would entail an additional investment of €210bn from the EU budget and carbon market revenues between now and 2027. By the end of the decade, the bill is expected to rise to €300bn in total.

Moreover, the fast decoupling from Russian energy could “lead to a period of higher and more volatile energy prices, due to the rising cost of fossil fuels,” the European Commission warns.

To tackle this, it insists on measures that would protect the most vulnerable households, including the possibility for EU countries to cap gas prices for consumers, “including households and industry”, and taxing windfall profits made by electricity companies because of the current high gas prices.

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The EU will also have to diversify its oil & gas supplies away form Russian sources by implementing new agreements in the short term. This includes agreements with the US, Canada, and other countries, as well as creating a joint purchasing platform for countries who wish to participate.

“We have to be transparent, we have to be honest: we have a short-term serious problem because of the Russian [imports] that… cannot be replaced immediately by renewables. So we will have to go out there in the world and try to find alternatives to Russian gas,” Timmermans said, indicating that contacts have been established with countries like Egypt, Israel, Algeria and Qatar.

It is crucial to provide long-term certainty for potential new suppliers during these negotiations. “They know we are weaning ourselves off fossil fuels. So of course they’re making a calculation” and asking themselves when Europe will stop being customers, Timmermans said.

“So what we’re proposing to them is what I would call a double deal: first a short term deal to provide us with the fossil fuel that we need, and then a long-term deal to incorporate them in a global system on the production and use of green hydrogen,” he said.

The plan also includes “financing round about €10 billion in missing links for gas and LNG so that no member state is left in the cold and up to €2 billion for oil infrastructure in view of stopping the shipment of Russian oil,” said von der Leyen.

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These come in addition to existing gas infrastructure in the EU’s list of priority projects, including the gas interconnector between Poland and Lithuania, the Poland-Slovakia interconnector, the Baltic Pipe between Poland and Denmark, and the Greece-Bulgaria pipeline (IGB).

In Cyprus and Greece, new terminals for liquid nitrogen (LNG), will be completed by 2023. They will also be completed in Gdansk and Poland in 2023. Numerous gas storage projects are underway in Greece, Romania, Bulgaria, and other countries.

The European Parliament’s lawmakers stated that a short-term focus on finding fossil fuel suppliers will likely cause a temporary increase in emissions. This should be considered when implementing green legislation.

“In times of crisis when we have to replace Russian gas, also partly with coal, we should be careful and do everything to increase the share of renewables, but that takes time,” said Peter Liese, a German MEP who leads the European Parliament’s position on the reform of the EU carbon market.

“More ambition should thus rather concentrate on the time between 2027 and 2030,” he said.

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Environmental NGOs have criticised the inclusion of fossil fuels within the plan. “These plans will further line the pockets of energy giants like Saudi Aramco and Shell, who are making record profits on the back of the war, while people in Europe struggle to pay the bills,” said Greenpeace EU climate and energy campaigner Silvia Pastorelli.

“The Commission’s focus on swapping one source of dirty fuel with another keeps bankrolling environmental destruction and human rights abuses and will lock in fossil gas for decades to come,” she continued.

However, the International Renewable Energy Agency applauded the plan with Director-General Francesco La Camera, calling it a “bold move to boost energy transition and attract investment for a faster green shift”.

Timmermans acknowledged that carbon emissions in Europe could go up in the short term as a result of Europe’s effort to diversify from Russian energy.

“We might use coal a little bit longer – that has a negative impact on your emissions,” he admitted. He said that this would be compensated by the simultaneous push to renewables. “So on balance, I hope we will have even a plus in terms of our emissions reduction,” he said in reply to a question from Euractiv.

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