Dear reader,
Welcome to the new edition of Publyon’s EU Energy and Climate Policy Update. In this bi-weekly update, Publyon provides you with the latest insights on the ‘Fit for 55’ negotiations as well as updates on the energy transition, the energy crisis and the EU’s response, including other relevant news on the EU’s climate and emissions reduction policies.
The Energy & Climate Update is taking a summer break. We will be back on 31 August with a new edition. We wish you a delightful summer season.
The spotlight
Sit back and relax – Summer recess has arrived!
This week, summer recess has officially started, and Members of the European Parliament and other EU institutions are going back to their hometown to enjoy their well-deserved break of political debates and turmoil. This is an ideal time to present an overview of what still is on the 2023 agenda before the European Parliament will press the campaign button in 2024.
What is yet to come?
Even though the Parliament will slowly be getting into campaign mode, the European Commission is still planning to publish new initiatives in the second half of 2023, including the proposal to simplify multimodal ticketing (Multimodal Digital Mobility Service) and to set an EU strategy for industrial carbon management (Communication on Carbon Capture, Utilisation, and Storage). Also, the Commission has yet to publish the update of the Combined Transport Directive, expected to be presented during the first College meeting after recess.
Which files will reach the finish line?
The first half of 2023 has been incredibly busy in terms of publications of new proposals. Timing is limited and the EU institutions will aim to close as many proposals as possible before the European Parliament stops its work for the European elections (March 2024). Net-Zero Industrial Act and Critical Raw Materials Act might see the end of the legislative process. Discussions are moving incredibly fast, and a political agreement might be reached early 2024. Also, the Hydrogen and Decarbonized Gas Package as well as the Energy Performance of Buildings Directive are reaching the end of their legislative process.
On Fit for 55, the Council of the EU gave its final approval this week on Energy Efficiency Directive, Alternative Fuels Infrastructure Regulation and FuelEU Maritime. Renewable Energy Directive and ReFuelEU Aviation should receive their greenlight after summer. These legislations will therefore enter into force soon.
Question marks remain for more contentious files and those that have been published just before summer recess. On the one hand, CO2 emission targets for heavy-duty vehicles, Euro 7 targets and the reform of the electricity market are experiencing tough negotiations and reaching an agreement will not be easy. On the other hand, the internal discussions for the new proposals under the Greening Freight Package will commence only after summer, leaving little time to policymakers to discuss the texts.
National elections might disrupt the tight schedule
As if European elections were not enough, some Member States hold elections in 2023/2024. Just last weekend, elections in Spain resulted in no definitive winner, leaving the political landscape uncertain and the risk of another elections round in November. However, if the right-wing parties succeed in forming a government, the nation’s energy and climate policies might experience a significant change towards a less ambitious green agenda. The Netherlands and Poland will also hold elections in autumn 2023 and Belgium will face polls in 2024, leading to further political uncertainty.
Concerns are therefore rising as national political instability may have implications on the work programme of the Spanish Presidency of the Council of the EU as well as for the negotiations of the pending proposals in the next months. Priority might be given to less contentious proposals, leaving the most sensitive ones to the next legislative term (read among others Energy Taxation Directive).
Upcoming events
Publyon's annual transport networking event
Limited places available!
Register now for the Publyon annual transport networking event on Monday 18 September. The event will be centred around the publication of the Greening Freight Package, with the participation of Ms. Annika Kroon, Head of Unit for Maritime Transport and Logistics at the European Commission, and various industry stakeholders. The event be organised at the premises of Holland House Brussels, located at Rue d’Arlon 20, Brussels.
Due to high demand, registrations are subject to approval.
REGISTER HERE
Policy update
Will COP28 deliver on climate ambition?
Few months ahead of the United Nations climate summit (COP28), which will take place in Dubai at the end of November, the preparations are heating up. On 13 July, Executive Vice-President Frans Timmermans announced that the EU wants countries to sign up a pledge to triple renewable energy by 2030, double energy efficiency gains and accelerate the phase-out of fossil fuels. He also argued for the need to phase out unabated fossil fuels ahead of 2050, for instance using carbon capture and storage (CCS).
However, Timmermans will be running to be a candidate in Dutch national elections, meaning he will have to leave his position at the European Commission before COP28. The EU will therefore lose one of its most effective climate change negotiator and political heavyweight months before the UN summit.
Across the Channel, UK members of the parliament have been urging Prime Minister Rishi Sunak to attend the UN summit and appoint a secretary of state as special envoy for the climate. However, Sunak is currently facing pressure from sections of the Tory to row back on green commitments and make the transition to net-zero ‘proportionate and pragmatic’.
Some allies might come from other countries joining COP28, as Canada announced its full support for the EU agenda at COP28. However, the risk is that the ambition at COP28 might not be as strong as Timmermans advocates.
Powering the future: Industry Committee sparks support for EU Electricity Market Reform
On 19 July, the MEPs in the Energy and Industry Committee (ITRE) agreed on their position on the reform of the electricity market. The text calls for stronger consumer protection against volatile prices, special contracts such as “Contracts for Difference (CFDs)”, long-term purchase agreements to help encourage energy investments and more protection to stop vulnerable households from having their electricity cut off.
After the decision is greenlighted by the forthcoming plenary session in September, negotiations with the Council of the EU can start. However, as we reported in the last update, Member States are still discussing their common position.
Europe’s gas market congestion: ACER’s solutions to improve efficiency
The Russian invasion in Ukraine led to increased flows of LNG and pipelines from the west, causing bottlenecks in Northwest Europe (Belgium, France, Germany, and the Netherlands). To address this, EU’s Agency for the Cooperation of Energy Regulators (ACER) released a report investigating the causes and recommending solutions.
ACER emphasises prioritising acute gas bottlenecks in these Member States to enhance short-term market efficiency and optimise infrastructure for new gas supply routes. The solutions include joint optimisation of gas capacity, better gas network information, careful investment assessment, and refined gas transmission rules.
Energy poverty on the rise, is REPowerEU enough?
The REPowerEU Plan is not enough. This is the outcome of the European Economic and Social Committee (EESC) annual conference, where the EESC pointed out the alarming data from Eurostat: about 9.3% of EU citizens (42 million people) suffered from energy poverty in 2022.
The EESC called for stronger measures to protect consumers and raise awareness on the benefits of renovation. They also underlined how the focus must be more and more on renewables and local energy communities and that the reform of the electricity market should not forget that energy is a public service.
Reviving Europe’s nature: Spanish Presidency aims to finalise Nature Restoration Law before end of the year
Trilogue negotiations are already underway to finalise the Nature Restoration Law, after it narrowly passed in the European Parliament on 12 July. The proposed law, which aims to reverse Europe’s nature decline, faced pushback from right-wing groups, leading to the removal of certain targets and measures related to agricultural land and protected areas.
The Spanish Presidency has declared it an absolute priority to finalise the discussions before the end of the year. The negotiations process is likely to move quickly as most of the European Parliament’s position reflects the one of the Council of the EU.
Spanish Presidency kicks off discussions on carbon capture technologies
The Spanish Presidency of the Council of the EU circulated a discussion paper on carbon capture and storage technologies (CCUS). In the note, the Presidency encouraged Member States to assess CCS and CO2-transport compatibility with the “energy efficiency first” principle. The Spanish Presidency additionally questioned if a geographical balance in CCUS sites is feasible without compelling oil and gas producers to adopt CCUS applications and whether limiting CCUS promotion to challenging sectors is beneficial.
Given the current controversy around the role of CCUS in the race to net-zero, the European Commission is aiming to publish a comprehensive CCUS strategy by the end of the year.
What’s next?
- From 24 July to 28 August the European institutions will be in summer recess. This means no meetings or publications will take place.
- In early September, the European Commission will likely publish the Combined Transport Directive.
- During the Plenary sitting from 11 to 14 September, MEPs are expected to endorse the Trilogue agreements on Renewable Energy Directive and ReFuelEU Aviation.
- On 13 September, European Commission President Ursula von der Leyen will deliver the State of the Union.
Blog
European Cyber Resilience Act: can new requirements for products strengthen your organization’s cybersecurity resilience?
Imagine waking up one day to discover that all your sensitive business data, including confidential financial information, customer data, and trade secrets, have been stolen. A nightmare scenario, isn’t it? Unfortunately, this is a reality that many companies face as cyber threats continue to grow in scale, complexity, and impact. The good news is that the European Commission has introduced the European Cyber Resilience Act to set common cybersecurity standards for digital products and connected services sold in the EU market. Here are the updates!
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Sara Orcalli
Hi, my name is Sara and I am curating the Energy & Climate Policy Update to bring you the latest news on ‘Fit for 55’ as well as energy and climate insights. Do not hesitate to reach out should you have any questions or if you want to know how EU energy and climate policies might impact your business.
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