EU Energy and Climate Policy Update | No. 23

EUROPEAN PARLIAMENT ADOPTS POSITION ON THE GAS & HYDROGEN PACKAGE: On 15 March, the European Parliament voted in favor of the directive and the regulation on gas and hydrogen markets. The proposals aim to facilitate the uptake of renewable and low-carbon gases (including hydrogen and biomethane) in the EU gas market. In line with REPowerEU, MEPs want the directive to ensure that hydrogen corridors cross-borders are supported by investments and adequate infrastructure. Moreover, the regulation provides that Member States should ensure collectively at least 35 billion cubic meters of sustainable biomethane by 2030. MEPs also propose to reform the European Network of Transmission System Operators for Gas (ENTSOG) to cover Hydrogen Network Operators. The proposed regulation includes the mechanism for Member States to coordinate gas purchase, a measure that was originally set up under an emergency procedure. Now, the European Parliament is ready to enter into interinstitutional negotiations with the Council of the EU, which is planning to vote on its General Approach on 28 March.

MEPS ADOPT THEIR POSITION ON THE ENERGY PERFORMANCE OF BUILDINGS DIRECTIVE: On 14 March, the European Parliament adopted its position on the revision of the Energy Performance of Buildings Directive (EPBD). The report by Rapporteur Ciarán Cuffe (Greens/EFA, Ireland) proposes that all new private buildings should be zero-emission and be equipped with solar technologies from 2028, while for new public buildings the deadline is anticipated to 2026. Residential buildings have until 2032 to undergo major renovation to increase their energy performance and energy class (e.g., at least class E by 2030 and D by 2033). Non-residential and public buildings will have to achieve energy performance class E by 2027 and D by 2030. MEPs agreed that Member States’ renovation plans will establish the measures needed to achieve these targets and they should include support schemes to access grants and funding opportunities. Member States could exclude monuments, protected buildings (e.g., for historical merit), technical buildings, places of worship (e.g., churches), and public social housing (if the rent increase is not compensated by savings on energy bills). Following the vote in plenary, the European Parliament is ready to enter Trilogue negotiations with the Council of the EU.

CO-LEGISLATORS REACH A POLITICAL AGREEMENT ON ENERGY EFFICIENCY DIRECTIVE: On 10 March, the European Parliament and the Council of the EU reached a political agreement regarding the revision of the Energy Efficiency Directive (EED). The agreement provides that the EU should collectively reduce its final energy consumption by 11.7% in 2030 (energy consumed by end-users), compared with the energy consumption forecasts for 2030 made in 2020. Notably, the 11.7% target is higher than the original Council of the EU’s General Approach (9%), but lower than the European Parliament’s position and REPowerEU plan (13%). The final energy consumption target will be binding for Member States collectively, while primary energy consumption targets will be indicative (energy used for the production and supply of energy). Member States will have to set indicative national contributions and trajectories to achieve the EU-level target in their integrated national energy and climate plans. The annual savings target for final energy consumption will be gradually increased from 2024 to 2030, and Member States should ensure new annual savings of 1.5% on average during this period. Specifically, the public sector will have to reduce is consumption by 1.9% each year and at least 3% of public buildings will have to be renovated each year. The provisional agreement will now be subject to formal adoption in the European Parliament and Council of the EU before it can be published in the EU’s Official Journal and enter into force.

LIMITED PROGRESS DURING TRILOGUE NEGOTIATIONS ON RENEWABLE ENERGY DIRECTIVE: On 9 March, Rapporteur Markus Pieper (EPP, Germany) provided an update on the status of the Trilogue negotiations on the revision of the Renewable Energy Directive (RED). During the last meeting on 6 March, the co-legislators discussed about the ‘go-to-area’ principle to reduce permitting processes and agreed on the acceleration of biomass and hydropower installations. However, several items remain open for discussion, such as the provisions of RED regarding the transport sector and the inclusion of biomass in the scope. Moreover, co-legislators need to still work on the sustainability and environmental provisions regarding ‘go-to-areas’ and ‘acceleration zones’. Rapporteur Pieper criticized the proposal of the Council of the EU to extend deadlines in RED and reduce the ambition of the proposal. The next Trilogue meeting is planned on 21 March, when co-legislators will discuss the RED issues related to the transport sector.

MEMBER STATES DISAGREE OVER THE VOTE ON CO2 EMISSION STANDARDS FOR CARS AND VANS: On 13 March, following a meeting of transport ministers, a group of Member States (Germany, Italy, Czech Republic, Poland and Bulgaria) reiterated their negative position on the revised rules on CO2 emission standards for cars and vans and called for a change in the text to cover e-fuels. Last week, Germany criticized a proposal from the European Commission to strengthen the recital to include non-binding provisions for e-fuel. According to Czech transport minister Kupka, a deal with the Commission could be reached in the coming days that would include legally binding exemption for e-fuels. However, not all Member States agree with the position taken by the group. France, Spain, Belgium, Sweden, Denmark, Ireland and the Netherlands have been critical about the German last-minute decision to refrain the support for the 2035 electric vehicles’ target, and they oppose changes to the text agreed during Trilogue negotiations. Notably, France is already supporting the switch to electric cars with substantial subsidy programs and the growth of French battery industry. Spain is also investing into the domestic production of batteries for vehicles.

EU MEMBER STATES WANT LESS STRINGENT INDUSTRIAL EMISSION RULES: The latest compromise text on the Industrial Emissions Directive (IED) by the Swedish Presidency presented on 10 March before Coreper exempts the rearing of cattle or pigs in installations operating under extensive production regimes. The document shows that Member States agree with the inclusion of extraction and treatment of minerals in the scope of the IED, with a threshold of 500 tons for industrial minerals. The compromise text also increases flexibility for Member States’ different systems as regards penalties and compensation and processing infringements in the field of industrial emissions. The IED is the most important EU instrument regulating the pollutant emissions of the industry sector. The European Commission proposed revising the IED, so that it would cover more farms in the EU. On 16 March, Environment ministers aim to agree their position on the revision of the rules.

What’s next?

On 21 March, the co-legislators will hold a Trilogue meeting on RED, while on 22 March, the next Trilogue on FuelEU Maritime is scheduled to take place. On 23 and 24 March, the European Council will convey once again to discuss concrete actions to deliver on the Green Deal Industrial Plan and the EU long-term competitiveness strategy. On 27 March, the next round of negotiations on the Alternative Fuels Infrastructure Regulation (AFIR) is planned, the aim is to have a final agreement. The Plenary vote on Deforestation Regulation is provisionally planned on 17 April.

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