Dear reader,
Welcome to the final edition of the monthly Energy and Climate Policy Update for 2024. As EU legislators approach their last weeks before the winter break, there’s plenty of ground to cover. In this edition, we’ll highlight the priorities of the Polish Presidency of the Council of the EU, which will take office on 1 January 2025. We also shine a spotlight on geothermal energy in the EU and examine the business impact of the Monitoring Framework for resilient European forests.
Stay tuned for our insights below!
Europe’s bold plan for sustainable growth, the “Clean Industrial Deal”, represents a major shift for EU businesses, especially in energy-intensive sectors. Don’t miss your chance to engage with the Commission to shape this deal and influence the policy direction for the next five years.
The spotlight
The EU turns its focus to geothermal energy
The Hungarian Presidency of the Council of the EU has prioritised, among others, energy security and reduced fossil fuel dependence by making use of geothermal energy. In the final weeks of the Hungarian Presidency, Member States adopted conclusions on geothermal energy to strengthen energy security.
Want to know how the EU Member States aim to leverage geothermal energy to strengthen energy security? Keep reading!
The Council of the EU – Conclusions on geothermal energy
On 29 November, the Council of the EU discussed conclusions on geothermal energy and acknowledged geothermal energy as a vital renewable resource for enhancing energy security, sustainability, and decarbonisation, particularly in cutting emissions within the building sector. It also emphasised the importance of geothermal exploration in strengthening EU mineral sovereignty by facilitating lithium production while maintaining environmental safeguards. The Energy Council unanimously adopted the conclusions on 13 December.
While the conclusions have no legally binding status, they form an indication of what the Member States want to see from the Commission on geothermal energy in the coming years. Here are the main calls for action:
- To develop a comprehensive strategy for decarbonising heating and cooling, including a European Geothermal Action Plan to accelerate geothermal energy deployment.
- To establish a structured forum, such as a European Geothermal Alliance, to facilitate collaboration among policymakers, industry stakeholders, and investors, share best practices, create partnerships, and address common challenges.
- To streamline and simplify regulatory procedures for geothermal energy production, including infrastructure, drilling, mining, and environmental processes. This includes permit and licensing procedures and improving access to information, possibly through a single contact point for project promoters.
- To issue guidance for local authorities and energy operators to incorporate geothermal energy into regional planning and infrastructure investments, aligning with the Energy Efficiency (EED) and Renewable Energy Directives (RED).
- To support local authorities in creating energy communities and collaborating with stakeholders on geothermal projects, based on local geothermal potential and market needs with adequate access to finance.
Next steps
Geothermal energy in Europe is still largely underdeveloped, with limited coordination among EU Member States and slow progress, leaving much of its potential for electricity, heating, and cooling untapped. A recent report by the International Energy Agency (IEA) underlines that with ongoing cost reductions, next-generation geothermal could meet 15% of global electricity demand growth by 2050. In Europe, it could complement wind and solar power by providing reliable electricity and supporting the decarbonisation of heating in buildings and industries.
The new European Commissioner for Energy and Housing, Dan Jørgensen, has expressed his commitment to drafting a geothermal strategy centred on cost-effective decarbonisation. As the new European Commission prioritises reducing energy costs, 2025 could likely bring strides in developing this strategy, potentially providing an impetus to geothermal energy in Europe.
Policy update
Polish Presidency on energy
From January to June 2025, Poland will hold the Presidency of the Council of the EU, marking the beginning of a new Trio Presidency, together with Denmark and Cyprus (which will follow Poland). The Polish Presidency will focus especially on security, based on seven pillars: external, energy, economic, food, climate, health, and information security.
Regarding energy, Poland will focus on energy security, accelerating the energy transition, lowering energy costs, and reducing reliance on foreign energy sources. For transport, key priorities include advancing rail transport resilience and competitiveness, progressing road transport legislation, and advancing on TEN-T. While sustainability is not a primary focus, Poland aims for a balanced approach to address climate risks and competitiveness.
EPP position paper on the competitiveness of the automotive sector
On 11 December, the European People’s Party (EPP) Group published a position paper, calling for a holistic EU strategy for the automotive sector. Key measures should include revising the 2035 ban on internal combustion engines to ensure technological neutrality, accelerating infrastructure roll-out for electric and alternative-fuel vehicles, securing critical raw material supply chains, and boosting research and innovation in sustainable automotive technologies.
According to the EPP, enhanced trade measures and reforms are also needed to safeguard Europe’s competitiveness and jobs while advancing climate neutrality goals.
MEPs call for inclusion of CC(U)S in Clean Industrial Deal
On 5 December, 30 MEPs sent a letter to Commission President von der Leyen, urging her to prioritise Industrial Carbon Management (ICM) and make carbon capture, removal, and storage technologies central to industrial decarbonisation in the upcoming Clean Industrial Deal.
The MEPs call for the development of a cross-border, multi-modal, and future-proof EU-wide CO2 transport network; an integrated European CO2 network; common CO2 storage and transport standards; international cooperation to remove legal and policy barriers enabling the creation of a European CO2 market with third countries; a strengthened, centralised ICM unit; and long-term investments in infrastructure and storage capacity, estimated at a total of €9.3 to €23.1 billion.
Transport Council meeting
On 5 December the Transport Council took place. Among others, the Council discussed the revision of the Combined Transport Directive, which aims to promote intermodal freight transport. The discussion in the Council mostly centred around the definition of combined transport.
Moreover, Bulgaria, Italy, Poland, Romania, Slovakia, and the Czech Republic presented their joint initiative for the revision of European automobile policy, including the consideration of the 2035 ban on combustion engines. The delegations from Estonia, Latvia, and Lithuania also presented their joint non-paper on the upcoming Connecting Europe Facility III programme, while the Spanish delegation highlighted concerns regarding the resilience of EU transport infrastructure to extreme climate-related and geophysical events.
MEPs vote for interinstitutional negotiations for CountEmissions EU
MEPs of the transport (TRAN) and environment (ENVI) committees voted on 4 December to start interinstitutional negotiations — the trilogues — with the Council of the EU on establishing a uniform EU method for calculating greenhouse gas (GHG) emissions from transport services, referred to as CountEmissionsEU.
Currently, the use of differing measurement methods by transport companies leads to inconsistent results, potentially misleading consumers and facilitating greenwashing. To address this, the EU aims to standardise measurements by introducing a uniform approach to calculating CO2 emissions: per tonne-kilometer for freight and per passenger-kilometer for passenger transport.
Commission invests in energy transition projects
On 3 December, the Commission announced it will invest €4.6 billion in projects advancing energy transition. Two new calls, with a budget of €3.4 billion, aim to accelerate the deployment of innovative decarbonisation technologies, including electric vehicle batteries.
They also launched the second auction of the European Hydrogen Bank, with €1.2 billion to support renewable hydrogen production across the EU. Both calls and the auction are funded by the Innovation Fund, using revenues from the EU Emissions Trading System (ETS). The renewable hydrogen auction has a €1 billion budget for projects across all sectors, while €200 million is reserved for maritime sector projects. Additionally, Spain, Lithuania, and Austria have committed up to €836 million in national funds to support renewable hydrogen projects in their countries.
Business impact
Monitoring Framework for resilient European forests
Last year, the European Commission presented a proposal for a new law aimed at creating a comprehensive monitoring framework for resilient forests across the EU. The framework will leverage and expand upon existing national systems and monitoring schemes, ensuring a collaborative approach across Member States.
Want to know more about how such a framework might impact businesses across the EU? Read on to find out!
The new framework seeks to provide an adequate response to current data gaps on forests while ensuring their multi-functionality, including their role in carbon removals, economic value, and long-term resilience. A key component is the strengthening of the Forest Information System for Europe (FISE), which will serve as a central database for forest-related information across the EU.
The proposal is closely linked to key existing legislation, such as the LULUCF Regulation, and the Renewable Energy Directive (RED) or the carbon removal certification Framework (CRCF). It leverages a common monitoring system that ensures interoperability between these frameworks, avoiding additional regulatory burdens on Member States.
The legislative proposal integrates earth observation technologies (i.e. Copernicus) with ground-based data from national inventories. Member States may provide data on a voluntarily basis, while using harmonised methodologies, enhancing data collection and improving adaptive forest management.
A state of play
While the European Commission published its proposal on 22 November 2023, both the Council of the EU and the European Parliament still are establishing their positions on the proposal.
On 4 December, the Members of the leading Parliamentary Committees for Environment (ENVI) and for Agriculture (AGRI) highlighted the proposal’s importance for rural communities and forest resilience. Moreover, they raised concerns about the EU authority to regulate forests, additional administrative burdens, privacy for forest owners, funding and the role of the Standing Forestry Committee.
On 9 December, during the Agriculture and Fisheries Council, Ministers discussed a progress report on the matter, emphasising the importance of harmonised and standardised forest data for effective policymaking. Additionally, concerns were raised about the proposal’s financial and administrative costs, with calls to ensure cost-efficiency and avoid duplicating existing efforts. Suggestions included adopting a bottom-up approach that respects Member State competencies and tailoring the framework to national and regional needs.
What does this mean for your business?
Despite implementation costs – with an estimation of €42 per square kilometer of forest area – economic benefits from the initiative include savings of up to €38 million by 2035.
- By using harmonised definitions and technical specifications, the system will enhance data quality and credibility, enabling forest managers to better market ecosystem services, such as carbon removal certification.
- Biomass companies sourcing forest-based raw materials for energy production, industrial use or other applications will benefit from standardised data, which enhances the traceability and sustainability of their supply chains. Additionally, improved knowledge and planning will promote more sustainable forest management, ensuring the long-term availability of woody biomass for renewable energy.
- For businesses involved in carbon credit trading and forest managers, indirect benefits include reduced administrative burdens.
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Martijn Meijer
Hi, my name is Martijn and I am curating the Energy & Climate Policy Update, aiming to bring you insightful updates straight from Brussels. At Publyon, I work mainly on transport and energy files. Do you have any questions on EU energy and climate policies or how these might impact your organisation? Feel free to reach out!
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