Belgium – In light of Russia’s invasion of Ukraine, the European Commission has proposed an outline of a plan to make Europe independent from Russian fossil fuels by 2030, starting with gas.
This plan also lays out a series of actions to address Europe’s rising energy prices and to replenish gas stocks for the coming winter. Energy prices have been rising in Europe for several months, but supply uncertainty is exacerbating the problem. REPowerEU’s goal is to diversify gas supplies, accelerate the deployment of renewable gases, and eliminate gas from heating and power generation. By the end of the year, the EU’s demand for Russian gas could be cut by two-thirds.
Emergency measures
The Commission’s ‘Energy Prices Toolbox,’ which was released in October, has aided Member States in mitigating the impact of high prices on vulnerable consumers, and it continues to be a useful framework for national policies. The Commission is providing additional guidance to Member States today, confirming the possibility of price regulation in exceptional circumstances and laying out how Member States can redistribute revenue from high energy sector profits and emissions trading to consumers. EU State Aid rules also allow Member States to provide companies affected by high energy prices with short-term assistance while also reducing their exposure to energy price volatility in the medium to long term. The Commission will consult with Member States on the need for and scope of a new State aid Temporary Crisis Framework to grant aid to companies affected by the crisis, particularly those facing high energy costs, following a consultation on targeted amendments to the Emission Trading System State Aid Guidelines.
The Commission plans to present a legislative proposal by April that would require underground gas storage across the EU to be filled to at least 90% capacity by October 1 of each year. The proposal would include filling level monitoring and enforcement, as well as solidarity arrangements between Member States. Concerns about potential competition distortions by operators, particularly Gazprom, have prompted the Commission to continue its investigation into the gas market.
To address the skyrocketing energy prices, the Commission will consider all available options for emergency measures, such as temporary price limits, to limit the impact of gas prices on electricity prices. It will also evaluate options for optimizing the electricity market design, taking into account the final report of the EU Agency for Cooperation of Energy Regulators (ACER) as well as other contributions on the benefits and drawbacks of alternative pricing mechanisms to keep electricity affordable while not disrupting supply and further investment in the green transition.
REPowerEU
It is possible to phase out our reliance on Russian fossil fuels well before 2030. To do so, the Commission proposes to develop a REPowerEU plan based on two pillars: diversifying gas supplies by increasing LNG and pipeline imports from non-Russian suppliers, as well as larger volumes of biomethane and renewable hydrogen production and imports; and reducing the use of fossil fuels in our homes, buildings, industry, and power system by increasing energy efficiency, incr
By 2030, full implementation of the Commission’s ‘Fit for 55’ proposals would reduce annual fossil gas consumption by 30%, or 100 billion cubic metres (bcm). With the measures outlined in the REPowerEU plan, Europe could gradually phase out at least 155 billion cubic meters of fossil gas use, which is equal to the volume of Russian gas imported in 2021. In less than a year, nearly two-thirds of that reduction can be achieved, putting an end to the EU’s overdependence on a single supplier. The Commission proposes that it collaborate with Member States to identify the best projects to achieve these goals, building on the extensive work already done on national recovery and resilience plans.
