COP 26 | Les actualités économiques et financières

The European Union develops an ambitious energy policy

Energy independence, climate neutrality and the use of clean energy: three major objectives are imposed on the 27 EU Member States.

Adopted in spring 2022 for the next 15 years, the REPower EU plan should make it possible to overcome the economic crisis. It prepares the energy future of the European Union and its 447 million inhabitants.

Constrained by the tense geopolitical context and the energy market, the 27 Member States of the European Union agreed in spring 2022 on a common energy policy. Its implementation amounts to EUR 300 billion.

Reinventing the European Union’s energy sovereignty

The war in Ukraine has highlighted the European Union’s (EU) dependence on Russian fossil fuels. REPower EU’s first challenge is to break off this supply before 2030. For now, the EU embargo on Russia that has been in place since the beginning of the war in Ukraine remains gradual. By the end of September 2022, the EU had bought €100 billion worth of oil, gas and coal from Russia, according to the Centre for Research on Energy and Clean Air (CREA). 

Gas alone accounts for around a quarter of the European Union’s energy consumption. It is used in particular for heating or to produce electricity. Some European countries have their own resources, such as the Netherlands and Romania. However, their production is insufficient to cover the needs of all households and businesses on the Old Continent. In this context, the EU has embarked on a diversification of gas supply sources. It is increasing its imports of liquefied natural gas (LNG) from Qatar, the United States, Egypt and West Africa. It is also diversifying its pipeline imports from non-Russian suppliers via Algeria and Azerbaijan.

Reducing EU energy consumption: a way to save money

The EU is working to develop a platform that would allow for the pooling of Member States’ gas purchases on a voluntary basis. A European storage policy has also been put in place. It should make it possible to cope with further cuts in the supply of Russian gas. The goal is to reach a storage level of 80%. For this, Brussels requires continued efforts to reduce gas consumption by 15% by spring 2023. All consumers are concerned: public administrations, households, public buildings, electricity suppliers, industries… Awareness campaigns on individual actions are multiplying. According to the European Commission, lowering the temperature of its thermostat by one degree saves 10 billion cubic meters of Russian gas imports.

The European Union aims for energy sobriety by 2030

The other priority set by the European Union is to accelerate the energy transition to achieve sobriety. The REPowerEU plan aims to reduce net greenhouse gas emissions by at least 55% by 2030. As such, alternatives to fuels must be found. The EU intends to mobilise part of the funds of the European Next Generation EU recovery plan. This plan was adopted in July 2020 to deal with the health crisis. It provided 228.8 billion to finance the rise of renewable energies (photovoltaic, wind, biomethane) and the development of green hydrogen.

Green hydrogen, a bearer of solutions for a new energy policy?

Hydrogen is the most abundant chemical element in the universe. It is invisible, odorless, colorless, ultra light and non-toxic.It occurs naturally in water, oil and natural gas. Carbon-free hydrogen is a complementary energy to electricity. It is storable and transportable on demand and can be used as fuel for motor vehicles. It is also used to propel the Ariane rocket, for example. Its main advantage is not to generate carbon emissions or fine particles. In addition, it allows extremely fast recharging (20 minutes for a hydrogen bus against 4 hours for an electric bus).

The France grasped the strategic challenges of this promising energy. It has announced a budget of €9 billion to develop hydrogen technology and its production by 2030. The France wants to decarbonize its industry and mobility.

The main thing to remember

  • The REPower EU plan aims to get out of its dependence on Russian fossil fuels.
  • This transition requires large-scale energy savings.
  • The France is pursuing an investment strategy for the development of carbon-free hydrogen.
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