New EU Plan Tackling Energy Crisis And Climate Change

New EU Plan Tackling Energy Crisis And Climate Change
The European Commission has presented the REPowerEU Plan, its response to the global energy market disruption caused by Russia's invasion of Ukraine.

The European Commission has presented the REPowerEU Plan, its response to the hardships and global energy market disruption caused by Russia's invasion of Ukraine.

There is a double urgency 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 $105 billion per year and tackle the climate crisis.

By acting as a Union, Europe can phase out its dependency on Russian fossil fuels faster. Some 85 percent of Europeans believe that the EU should reduce its dependency on Russian gas and oil as soon as possible to support Ukraine.

The measures in the REPowerEU Plan can 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 green transformation will strengthen economic growth, security, and climate action for Europe and our partners. The Recovery and Resilience Facility (RRF) is at the heart of the REPowerEU Plan, supporting coordinated 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. The country-specific recommendations in the 2022 European Semester cycle will feed into this process.

According to the European Commission, energy savings are 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 percent to 13 percent of the binding Energy Efficiency Target under the ‘Fit for 55' package of European Green Deal legislation. Saving energy now will help us to prepare for the potential challenges of next winter.

Is diversification the answer?

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. As a next step, replicating the ambition of the common vaccine purchasing program, the Commission will consider the development of a ‘joint purchasing mechanism' which will negotiate and contract gas purchases on behalf of participating Member States. The Commission will also consider legislative measures to require diversification of gas supply over time by the Member States. The Platform will also enable joint purchasing of renewable hydrogen.

The adopted EU External Energy Strategy will facilitate energy diversification and the building of long-term partnerships with suppliers, including cooperation on hydrogen or other green technologies.

In the Mediterranean and the North Sea, major hydrogen corridors will be developed. In the face of Russia's aggression, the EU will support Ukraine, Moldova, the Western Balkans, and Eastern Partnership countries, as well as our most vulnerable partners.

Accelerating renewables

A massive scaling-up and speeding-up of renewable energy in power generation, industry, buildings, and transport will accelerate EU 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 percent to 45 percent 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 600GW by 2030, a Solar Rooftop Initiative with a phased-in legal obligation to install solar panels on new public and commercial buildings and new residential buildings, doubling of the rate of deployment of heat pumps, and measures to integrate geothermal, and solar thermal energy in the modernized district and communal heating systems.

Setting a target of 10 million tons of domestic renewable hydrogen production and 10 million tons of imports by 2030, to replace natural gas, coal, and oil in hard-to-decarbonize industries and transport sectors.

To accelerate hydrogen projects, additional funding of $210 million is set aside for research, and the Commission commits to complete the assessment of the first Important Projects of Common European Interest by the summer.

A Biomethane Action Plan sets out tools including a new biomethane industrial partnership and financial incentives to increase production to 35 bcm by 2030, including through the Common Agricultural Policy.


Delivering the REPowerEU objectives requires an additional investment of $260 billion between now and 2027. This is a down payment on our independence and security. Cutting Russian fossil fuel imports can also save us almost $124 billion per year. These investments must be met by the private and public sectors, and at the national, cross-border, and EU levels.

To support REPowerEU, $236 billion is already available in loans under the RRF. The Commission adopted legislation and guidance to the Member States today 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 $21 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.

Under the current MFF, cohesion policy will already support decarbonization and green transition projects with up to $105 billion by investing in renewable energy, hydrogen, and infrastructure.

An additional $28 billion from cohesion funds could be made available in voluntary transfers to the RRF. A further $7.9 billion from the Common Agricultural Policy is also made available through voluntary transfers to the RRF. The Commission will double the funding available for the 2022 Large Scale Call of the Innovation Fund this autumn to around $3.15 billion.

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