Carbon neutral sources of energy: European vision

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According to the EU ambitious plans, the member states should transform national economies in line with the EU-wide integrated approaches using sufficient instruments and promoting the most energy efficient and renewable source for all developmental sectors. Besides, the approach will be supplemented by promoting a system efficiency leading to a reduction of energy required for economic activity.  

Industrial development accounts for about 25 percent of the EU-wide energy consumption; besides, the sector is a major consumer of heating and cooling, which is currently supplied by about ninety percent by fossil fuels. However, about half of the member states’ demand for heating and cooling is under low-temperature (< 200 °C) for which there are cost-effective renewable energy options, including through electrification and direct use of renewable energy. In addition, industry uses non-renewable sources as raw materials to produce steel and/or chemicals.
Thus, presently, the national industrial-investment’s decisions will determine the future industrial processes and energy options; therefore, it is important that those investments decisions are future-proof and avoid the creation of stranded assets.
In order to achieve the objective of the Union to become climate neutral by 2050 and to decarbonise Union’s industry, the member states should be able to combine the use of non-fossil energy sources and renewable fuels of non-biological origin in the context of their specific national circumstances and energy mix.
In this regard, the EU states should be able to reduce the target for the use of renewable fuels of non-biological origin in the industry sector, provided that they consume a limited share of hydrogen or its derivatives produced from fossil fuels and that they are on track towards their expected national contribution.
Renewable fuels of non-biological origin, including renewable hydrogen, can be used as feedstock or as a source of energy in industrial and chemical processes and in maritime transport and aviation, decarbonising sectors in which direct electrification is not technologically possible or competitive. They can also be used for energy storage to balance, where necessary, the energy system, thereby playing a significant role in energy system integration.
The Union’s renewable energy policy aims to contribute to achieving the Union’s climate change mitigation objectives in terms of the reduction of greenhouse gas emissions.
Main source: The EU Directive 2023/2413 on promotion of energy from renewable sources; more on Directive 2413 in: OJ L, 2023/2413, 31.10.2023, ELI: http://data.europa.eu/eli/dir/2023/2413/oj

Background
The EU-wide objectives of climate neutrality by 2050 and an intermediate target of a reduction of net greenhouse gas emissions by at least 55 percent compared to 1990 levels by 2030 require concentrated and profound efforts from the EU institutions and the member states’ authorities. Renewable energy plays a fundamental role in achieving these objectives, given that the energy sector currently contributes over 75 percent of total greenhouse gas emissions, GHG in the EU. By reducing those GHGs, the renewable energy sources can also contribute to improve nature and environmental quality, e.g. the loss of biodiversity pollution reduction. The Commission adopted a communication in May 2021, entitled “Pathway to a Healthy Planet for All, the EU Action Plan towards Zero Pollution for Air, Water and Soil”’.
More in: Regulation 2021/1119, 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations 401/2009 and 2018/1999 (‘European Climate Law’); (OJ L 243, 9.7.2021, p. 1).

The EU’s green transition to an economy based on renewable energy is aimed at achieving the EU-wide objectives (formulated in Decision 2022/591) to protect, restore and improve the state of the environment by, inter alia, halting and reversing biodiversity loss. The fact that renewable energy reduces exposure to price shocks compared to fossil fuels can give renewable energy a key role in tackling energy poverty. Renewable energy can also bring broad socioeconomic benefits, creating new jobs and fostering local industries while addressing growing domestic and global demand for renewable energy technology.
Source: Decision 2022/591, 6 April 2022 on a General Union Environment Action Program to 2030; (OJ L 114, 12.4.2022, p. 22).

Already in 2018, the EU has set binding for all member states targets (Directive 2018/2001) to reach a share of at least 32 percent of energy mix from renewable sources in the Union’s gross final consumption of energy by 2030. Under the 2030 Climate Target Plan, set out by the Commission (Communication on 17 September 2020 entitled “Stepping up Europe’s 2030 climate ambition: Investing in a climate-neutral future for the benefit of people”, the share of renewable energy in gross final energy consumption would increase to 40 percent by 2030 in order to achieve the Union’s greenhouse gas emissions reduction target.
More in: Directive 2018/2001, 11 December 2018 on the promotion of the use of energy from renewable sources; (OJ L 328, 21.12.2018, p. 82).

In July 2021, as part of the package delivering on the European Green Deal, the Commission proposed to double the share of renewable energy in the energy mix by 2030, compared to 2020, to reach at least 40 percent.
Since some vital objectives of the “climate directive”, e.g. reduction of GHG emissions, energy dependence and energy prices, etc. cannot be sufficiently achieved by the member states but can rather, by reasons of the scale of the action, be better achieved at Union level, the EU institutions may adopt the EU-wide measures, in accordance with the principle of subsidiarity (art. 5, TEU). Then, in accordance with the principle of proportionality, as set out in that article, measures included in the directive do not go beyond what is necessary in order to achieve those objectives.

The REPowerEU Plan
The REPowerEU Plan set out in the Commission communication of 18 May 2022 (the ‘REPowerEU Plan’) aims to make the EU states independent from Russian fossil fuels well before 2030. The communication provides for the front-loading of wind and solar energy, increasing the average deployment rate of alternative energy sources as well as for additional renewable energy capacity by 2030 to accommodate the higher production of renewable fuels of non-biological origin.
It also invited the co-legislators to consider establishing a higher or earlier target for the increased share of renewable energy in the energy mix. In that context, it is appropriate to increase the overall Union renewable energy target to 42,5 percent in order to significantly accelerate the current pace of deployment of renewable energy, thereby accelerating the phase-out of the Union’s dependence on Russian fossil fuels by increasing the availability of affordable, secure and sustainable energy in the Union. Beyond that mandatory level, the EU states should endeavor to collectively achieve an overall Union renewable energy target of 45 percent line with the REPowerEU Plan.
The renewable energy targets should go hand-in-hand with the complementary decarbonisation efforts on the basis of other non-fossil energy sources towards reaching climate neutrality by 2050. The EU states should be able to combine different non-fossil energy sources in order to achieve the objective of the Union to become climate neutral by 2050, taking into account their specific national circumstances and the structure of their energy supply. In order to achieve that objective, the deployment of renewable energy in the framework of the increased binding overall Union target should be integrated into complementary decarbonisation efforts involving the development of other non-fossil energy sources that the EU states decide to pursue.
The EU is also targeted the annual production of sustainable biomethane of 35 billion cubic meters by 2030, which was set out by the Commission already in May 2022 accompanying the REPowerEU Plan, entitled “Implementing the Repower EU Action Plan: investment needs, hydrogen accelerator and achieving the bio-methane targets”, thereby supporting security of supply and the EU-wide climate ambitions.

Innovation issues
As soon as innovation is a key to the competitiveness of renewable energy, the EU Strategic Energy Technology Plan (set out in September 2015) formulated the “Integrated Strategic Energy Technology plan”, SET-plan. It is aimed at boosting the transition towards a climate neutral energy system through actions for research and innovation, which address the whole innovation chain, from research to market uptake.
In the EU-wide integrated national energy and climate plans (according to art. 3 of the Regulation 2018/1999), the EU member states were obliged to set national objectives and funding targets for public and possibly private research and innovation measures relating to the EU energy union, including a timeframe for reaching the objectives. These measures should reflect the EU-wide Energy Union Strategy, set out in the Commission communication (February 2015 on the “Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy”; as well as the SET-Plan requirements.
To complement the member states’ national objectives and funding targets, as well as to promote the production of renewable energy from innovative renewable energy technology and to safeguard the continued EU leadership in research and development of innovative renewable energy technology, each EU state should set an indicative target for innovative renewable energy technology of at least 5 percent of newly installed renewable energy capacity by 2030.
More in: Regulation 2018/1999, 11 December 2018 on the Governance of the Energy Union and Climate Action, (OJ L 328, 21.12.2018, p. 1).

Renewable electricity
Renewable electricity can also be used to produce synthetic fuels for consumption in hard-to-decarbonise transport sectors such as aviation and maritime transport. A EU-wide framework for a sustainable electrification is to enable robust and efficient coordination, expand market mechanisms to match both supply and demand in space and time, stimulate investments in flexibility and help integrate large shares of variable renewable energy generation.
Hence, the EU states national patterns should ensure that the deployment of renewable electricity continues to increase at an adequate pace: e.g. the states should establish frameworks that include market-compatible mechanisms to tackle existing barriers towards secure and adequate electricity systems to a high level of renewable energy, as well as storage facilities fully integrated into the electricity system. In particular, such frameworks should tackle remaining problems, including non-financial issues and the lack of sufficient digital and human resources to process a growing number of permit applications.
Cooperation among the EU member states to promote renewable energy can take the form of statistical transfers, support schemes or joint projects, etc. to allow for a cost-efficient deployment of renewable energy across the EU and contribute to the energy market integration. Despite its potential, cooperation among the EU states has been very limited leading to negative results in terms of efficiency in increasing renewable energy: e.g. the states should therefore be obliged to establish a framework for cooperation on joint projects by 2025. Within such a framework, the states should establish at least two joint projects by 2030; in addition, the states whose annual consumption of electricity exceeds 100 TWh should establish a third joint project by 2033.

Permit granted procedures
Further streamlining of administrative permit-granting procedures may be needed to eliminate unnecessary administrative burdens for the purpose of establishing renewable energy projects and related grid infrastructure projects. There are several means regulating permit-granting procedures, e.g. including the requirement of setting-up the contact points and ensuring the fulfillment of the deadlines for the permit-granting procedures set out in the directive. It should be possible for some additional measures to include indicative key performance indicators on, inter alia, the length of permit-granting procedures regarding renewable energy projects located in and outside renewables acceleration areas.
On the basis of the integrated national energy and climate mitigation means (including previous Regulation 2018/1999 and Directive 2018/2001, etc.), all lengthy administrative permit-granting procedures should be eliminated as representing barriers to investment in renewable energy projects and their related infrastructure. Those barriers include the complexity of the applicable rules for site selection and administrative authorizations for such projects, the complexity and duration of the assessment of the environmental impact of such projects, and related energy networks, grid-connection problems, constraints on adapting technology specifications during the permit-granting procedure, and staffing problems of the permit-granting authorities or grid operators. In order to accelerate the pace of deployment of such projects it is necessary to adopt rules which would simplify and shorten permit-granting procedures, taking into account the broad public acceptance of the deployment of renewable energy.
For example, Directive 2018/2001 streamlines the administrative permit-granting procedures for renewable energy plants by introducing rules on the organisation and maximum duration of the administrative part of the permit-granting procedure for renewable energy projects, covering all relevant permits to build, repower and operate renewable energy plants, and for the connection of such plants to the grid.
In order to further promote and accelerate the repowering of existing renewable energy power plants, a simplified permit-granting procedure for grid connections should be established where the repowering results in a limited increase in total capacity compared to the original project. The repowering of renewable energy projects entails changes to or the extension of existing projects to different degrees. The permit-granting procedure, including environmental assessments and screening, for the repowering of renewable energy projects should be limited to the potential impact resulting from the change or extension compared to the original project.
Reference to: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023L2413&qid=1699364355105

Needed skills
Insufficient numbers of skilled workers, in particular installers and designers of renewable heating and cooling systems, slows down the replacement of fossil fuel heating systems by renewable energy systems and is a significant barrier to integrating renewable energy in buildings, industry and agriculture.
Hence, the EU states should cooperate with social partners and renewable energy communities to anticipate the skills that will be needed. A sufficient number of high-quality and effective upskilling and reskilling strategies and training programmes and certification possibilities that ensure proper installation and reliable operation of a wide range of renewable heating and cooling systems and storage technology, as well as electric vehicles recharging points, should be made available and designed in a way to attract participation in such training programmes and certification systems.
Besides, the EU states should consider optimal actions to attract population groups currently under-represented in the renewable occupational areas: i.e. a list of trained and certified installers on the national level should be made publicly available to ensure consumer trust and easy access to tailored installer and designer skills guaranteeing proper installation and operation of renewable heating and cooling.

Hydrogen strategy
The Union’s hydrogen strategy, set out in the Commission communication of 8 July 2020 (“Hydrogen strategy for a climate-neutral Europe”), recognized the role of existing hydrogen production plants retrofitted to reduce their greenhouse gas emissions in achieving the increased 2030 climate ambition.
According to the strategy, and within the framework of the Union’s Innovation Fund (established almost two decade ago by Directive 2003/87), the “early movers” have taken investment decisions with a view to retrofitting pre-existing hydrogen production facilities based on steam methane reforming technology with the aim of decarbonising hydrogen production.
More in: Directive 2003/87/, of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union; OJ L 275, 25.10.2003, p. 32.

For the purpose of calculating the denominator in the contribution of renewable fuels of non-biological origin used for final energy and non-energy purposes in industry, hydrogen produced in retrofitted production facilities based on steam methane reforming technology for which a Commission decision with a view to the award of a grant under the Innovation Fund has been published before the date of entry into force of this Directive and that achieve an average greenhouse gas reduction of 70 % on an annual basis, should not be taken into account.
Moreover, it should be acknowledged that the replacement of hydrogen produced from the steam methane reforming process might pose specific challenges for certain existing integrated ammonia production facilities. It would necessitate the rebuilding of such production facilities, which would require a substantial effort by Member States depending on their specific national circumstances and the structure of their energy supply.

     Note. By July 2028, the Commission intend to particularly assess the impact of used methodology on the availability and affordability of renewable fuels of non-biological origin for industry and transport sectors and on the EU’s ability to achieve its targets for renewable fuels of non-biological origin, taking into account the Union strategy for imported and domestic hydrogen while minimizing the increase in greenhouse gas emissions in the electricity sector and the overall energy system. If that Commission concludes that the methodology falls short of ensuring sufficient availability and affordability and does not substantially contribute to greenhouse gas emissions savings, energy system integration and the achievement of the Union targets for 2030 for renewable fuels of non-biological origin, the Commission should review the Union methodology and, where appropriate, adopt a delegated act to amend the methodology to provide the necessary adjustments to the criteria in order to facilitate the ramping-up of the hydrogen industry.

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