The Green Brief: A turning point for fossil fuels

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Welcome to EURACTIV’s Green Brief. Below you’ll find the latest roundup of news covering energy & environment from across Europe. You can subscribe to the weekly newsletter here.

Russia’s war on Ukraine has put an end to years of cheap oil and gas, a situation expected to last well into next year which is prompting the EU to accelerate its shift to clean energy.

Yesterday, the EU presented plans to slash Russian gas imports by two thirds before the end of 2022 and become independent from all Russian fossil fuels “well before 2030”. 

“The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system,” said Commission President Ursula von der Leyen. 

With the war in Ukraine intensifying, energy prices are showing no signs of abating. 

Over the past week, crude oil prices briefly surpassed $130 per barrel for the first time in 13 years. Prices at the pump also reached new records, hitting more than €2 in many EU countries and putting pressure on the most vulnerable. On gas markets, the supply squeeze that Poland warned was being engineered by Russia has sent prices through the roof, causing electricity prices to soar as well.

The situation has prompted governments across Europe to intervene. Last week, Hungary announced a price cap on the wholesale cost of petrol at €1.30 per litre. Many others had already brought in a cap on the price of gas for consumers following the autumn price hike.

Europe’s thirst for oil and gas doesn’t just hit citizens’ wallets. It is also fuelling the Kremlin’s war in Ukraine. On March 3 alone, the EU paid Russia €600 million for natural gas and €350 million for oil – close to €1 billion in one day, according to Simone Tagliapietra, a senior fellow at the Bruegel think-tank in Brussels.

And yet, things could get even worse. While Poland has called for EU sanctions against Russian energy exports, Germany is opposed, saying this would endanger “social peace” due to the country’s high reliance on Russian gas.

But the EU could soon be compelled to go further if the Kremlin continues its military campaign in Ukraine. The bill for Europeans would then soon become intolerable and require public intervention on a massive scale to prevent a sudden inflation spike. 

High energy prices are also inevitably impacting the European Green Deal. In 2021, soaring gas prices stopped Europe’s coal phase out in its tracks and prompted a revival of coal power generation in some countries.

Now the EU is looking more favourably at coal. At a meeting with EU lawmakers in Strasbourg on Monday, EU Green Deal chief Frans Timmermans admitted that some EU countries may stick with coal for longer because of concerns about Russian gas.

“In this extraordinary situation we are in, there are scenarios thinkable that member states will not want to use gas at the same level in the transition. And then we are stuck a bit longer with coal, but if that is combined with a much swifter introduction of renewables, for climate that can still be a good solution,” he said.

Soon, the entire European economy could be affected, the European Commission warned in its communication on energy prices published yesterday. “A combination of higher energy, transport and higher food prices would exacerbate the pressure on low income households, with increased risks of poverty.”

In the long term however, the Ukraine war is acting as a wake up call for Europe. “Following the invasion of Ukraine by Russia, the case for a rapid clean energy transition has never been stronger and clearer,” the EU executive argues. 

EU leaders also broadly agree that the green transition must be accelerated.

“We can no longer depend on others, especially Russian gas. I will defend a European energy independence strategy,” said French President Emmanuel Macron who will host a meeting of EU leaders later this week (10-11 March).

The question now is how fast this can be done. Unfortunately, there are no quick fixes and next winter could prove challenging for European consumers. Clashes are also likely to surface at this week’s meeting of EU leaders, especially when it comes to the short-term economic cost of the transition, which risks being eye-watering.

But it could also mark the beginning of a new era for Europe, where the EU makes a collective decision to break free from fossil fuels. In Germany, they coined a new term for this: Zeitenwende or ‘turning point’.

– Frédéric Simon


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This week’s top stories

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News from the capitals

BRATISLAVA. Future of Russian nuclear power unclear. Slovakia is entirely dependent on Russian nuclear fuel developed by TVEL, but after Russia invaded Ukraine, the discussion started on changing suppliers. The only viable alternative is American Westinghouse, which Economy minister Richard Sulík considers expensive. Read more.

PARIS. French government warns of rising energy prices. Economy Minister Bruno Le Maire has called on the French to “make an effort” in countering the rise in energy prices despite financial support from the state. Read more.

LONDON. Johnson: New energy supply strategy will speed transition from Russian gas. The UK government will propose a new energy supply strategy that would see it use more of its own fossil fuels as it responds to the need to diversify its energy supply in the wake of Russia’s invasion of Ukraine, Boris Johnson said. Read more.

MADRID. Spain could replace Russia as EU’s main natural gas hub. Spain, which houses the EU’s largest storage and regasification capacity, could fill the gas gap left by Russia because of the war in Ukraine. However, its limited interconnections with the rest of the continent continue to be a problem. Read more.

PARIS. Putin tells Macron he will not attack Ukrainian nuclear facilities. Russian President Vladimir Putin said he will respect the standards of the International Atomic Energy Agency (IAEA) and will not carry out offensives against civilian nuclear facilities, the Elysée has said. Read more.

ROME. Qatar to help Italy amid energy resources crisis. Qatari authorities will provide Italy with more support, Foreign Minister Luigi Di Maio has announced from Doha as a major energy resources crisis looms. Read more.

MADRID. Spain releases 2 million barrels of oil to support Ukrainian army. The Spanish government on Friday approved the release of two million barrels of oil from its “strategic reserves” in a coordinated action with the International Energy Agency (IEA) to support the Ukrainian army. Read more.

PRAGUE. Czech MEPs call for Green Deal revision due to war on Ukraine. The EU should assess the impact of the war on the Green Deal and the European energy sector, three Czech MEPs from Renew Europe have said. Read more.

BUCHAREST. Canadian company to invest €400 million in a lithium factory in Romania. RockTech Lithium will sign a memorandum of understanding in Romania to construct a €400 million factory to produce materials for lithium batteries used in electric cars. Read more.

DUBLIN. Irish government considers measures to offset war-fuelled rise in energy costs. Ireland’s government met on Thursday to consider potential measures to offset increases in the cost of fuel and energy caused by the war in Ukraine. Read more.

LJUBLJANA. Idea for LNG terminal in Slovenia meets major pushback. The idea that Slovenia should diversify its energy supplies by a regasification terminal for liquefied natural gas (LNG) on the coast, pushed by senior officials like Prime Minister Janez Janša, has been met with stiff resistance from local communities and environmentalists. Read more.

SKOPJE. North Macedonia to complete first large-scale PV plant. Oslomej, North Macedonia’s first large-scale photovoltaic plant located in Kičevo will soon be completed. Read more.

LISBON. Portuguese energy giant Galp stops buying Russian oil products. Galp announced Wednesday that it has suspended the purchase of Russian oil products and regretted the “acts of aggression against the Ukrainian people”, according to a statement sent to the Portuguese Securities Market Commission (CMVM). Read more.

WARSAW. Morawiecki calls for total ban on Russian fossil fuels. The European Commission should ban imports on Russian fossil fuels, starting with coal, Polish Prime Mateusz Morawiecki said during a meeting with European Council President Charles Michel on Wednesday. Read more.


News in brief

Ukraine calls on EU to cut ties with Russian energy traders. The Ukrainian government has urged all financial regulators in the EU to ban Russian and Russian-affiliated energy traders. In a series of open letters, released on March 3rd-4th, Ukrainian officials appealed to the European Commission and other EU regulators to “immediately apply sanctions to increase financial pressure on Russia to end the war”.

In an open letter sent on 4 March, the Chairman of Ukraine’s National Securities and Stock Market Commission Ruslan Magomedov said: “We ask you to exclude the possibility of stock and commodity exchange trading and clearing services to companies from Russia or affiliates with Russia. Operating on foreign exchange markets, Russia receives a strong financial reserve to continue the war in Ukraine.”

Europe has already issued punitive economic sanctions against major Russian banks and individual government members. On Saturday (5 March), Shell said in a statement that they will choose alternatives to Russian oil wherever possible. The company also said it will put any profits Shell makes from the purchase of Russian oil into a special fund to assist Ukrainians. (Frédéric Simon | EURACTIV.com).

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Breakthrough on global plastics treaty. The United Nations Environment Assembly agreed on Wednesday (2 March) to launch negotiations on a legally binding global agreement to combat plastic pollution. 

According to the European Commission, which helped broker the UN deal, the future agreement will aim to close the gaps that existing initiatives currently do not address, especially at the design and production phases of the plastics life cycle. “About 11 million tonnes of plastic currently enter the ocean every year and this amount will triple in the next 20 years without an effective international response,” said Virginijus Sinkevičius, the EU’s environment commissioner. “We will engage actively in the discussions of a legally binding agreement that looks at all stages of the plastics life cycle from product design to waste,” he added in a statement.

Environmentalists welcomed the move but cautioned that it was only the beginning of a process. ​​”This is a turning point in the fight against plastic pollution, but only if countries live up to the challenge. We look at the EU and we hope policymakers will keep their promises and act in line with the leadership role the EU has played during the negotiations to move towards ending plastic pollution at source, focusing on reducing production and redesigning products for non-toxicity, reusability and durability,” said Giulia Carlini, Senior attorney with the Center for International Environmental Law, who spoke on behalf of The Rethink Plastics alliance. 

Plastics Europe, an industry group, also welcomed the deal but insisted on “the importance of creating a supportive policy environment that is tailored to the specific needs of our industry and value chain to facilitate our transition”. See full statement from Plastics Europe and more reactions from the Gaia Foundation and the Surfrider Foundation Europe. (Frédéric Simon | EURACTIV.com)


Opinions


Upcoming events

15 MARCH. Circularity of bottles: contributing to the Green Deal. Join this EURACTIV Virtual Conference to discuss what’s the best recipe for meeting circular economy and climate objectives and whether deposit return schemes are an efficient way to meet collection and recycling targets for EU natural mineral and spring water producers. Speakers tbc. Programme and registration here. (Supported by Natural Mineral Waters Europe)

16 MARCH. Efficient district heating systems: How to achieve cost-effective decarbonisation? Join this EURACTIV Virtual Conference to discuss the new definition of efficient district heating systems in the energy efficiency directive proposal, and how stakeholders can best cooperate to achieve cost-effective decarbonisation. Speakers tbc. Programme and registration here. (Supported by PGE)

30 MARCH. How to develop the heating sector to ensure better air quality? Join this EURACTIV Virtual Conference to discuss the link between pollution and district heating systems, and the impact that the proposal for the recast energy efficiency directive plays in this regard. Speakers tbc. Programme and registration here. (Supported by PKEE)


On our radar

10-11 MARCH. Informal EU summit to discuss energy independence from Russia.

17 MARCH. Environment Council.

23 MARCH. Nature protection package: Revision of rules around sustainable use of pesticides and nature restoration targets.

30 MARCH. Circular economy package 1:

  • Sustainable products policy initiative, including a revision of the Ecodesign Directive
  • Review of the Construction Product Regulation
  • Proposal for a Regulation on substantiating environmental claims using the Product/ Organisation Environmental Footprint methods (green claims)
  • Strategy on sustainable textiles
  • Empowering consumers for the green transition 

5 APRIL. Emissions and pollutants package:

  • Revision of the Industrial Emissions Directive and update of the European Pollutant Release and Transfer Register (E-PRTR)
  • Review of EU rules on fluorinated greenhouse gases
  • Regulation on substances that deplete the ozone layer
  • Development of post-Euro 6/VI emission standards for cars, vans, lorries and buses 

3 MAY. International partnerships and energy package:

  • New strategy on international energy engagement
  • Joint Communication on a partnership with the Gulf

25-27 MAY. G7 meeting of climate and energy ministers.

7 JUNE. Joint Communication on international ocean governance

27 JUNE. Energy Council.

28 JUNE. Environment Council.

20 JULY. Circular Economy Package 2:

  • Policy framework for bio-based, biodegradable and compostable plastics
  • Review of the Packaging and packaging waste directive to reinforce the essential requirements for packaging and establish EU level packaging waste prevention measures and targets
  • Review of the Urban Wastewater Treatment directive 

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