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New GIE report shows how Central & South-Eastern Europe moves ahead with decarbonisation

The new report of Gas Infrastructure Europe (GIE) fills the information gap about the decarbonisation efforts of EU member states in Central- and Southeastern Europe (CEE/SEE region) and provides up-to-date information about the status of the energy markets and the energy transition in the region.

The region’s economies have higher energy intensity than the EU-27 average

The report starts by stating that energy plays a very important role in the economies of many of the EU Member States in the CEE/SEE region compared to many
less energy-intensive member states in Western Europe. Except for Austria, all countries in the region have an energy intensity higher than the EU-27 average and the five EU Member States with the highest energy intensity are all from this region. However, each of these Member States delivered significant reductions in the past years.

Total consumption mix by fuel (%) Source: GIE CEE SEE Decarbonisation Report 2022

The region is burdened by a significant carbon footprint due to the extensive use of coal and oil in total energy consumption. All the countries currently using brown coal, except for Poland, declared its phase out in the short to the mid-term horizon. However, the majority of the countries operating or presently retiring coal power plants have opted for their reopening in the light of possible Russian gas cut-off and increased gas prices, the report shows.

Energy industries and transport generate the most emissions

As in the rest of the EU, the energy industry and the transport sector are the most emissions-heavy sectors also in the CEE/SEE region. Decarbonisation is most advanced in power generation, however, the report notes that to reach the EU’s climate neutrality target, coal must be phased out completely in the electricity sector.

Total GHG by sector (MtCO2e) Source: GIE CEE SEE Decarbonisation Report 2022

In terms of the share of renewables in power generation, the report underlines that some countries such as Austria, Croatia, Greece, Romania, Slovenia, Czechia and Bulgaria all increased their 2030 targets from the goals previously declared in their National Energy and Climate Plans (NECPs) in 2019 in reaction to Russia’s aggression in Ukraine. However, the targeted share of RES is still below the EU average in the case of some countries, most visibly Hungary, Slovakia, Cyprus, Poland, Bulgaria and Czechia.

Decarbonisation in transportation has just started

The share of alternative fuels to the traditional liquid fuels from oil is so far not larger than 20 per cent in the region, the report finds. Liquified petroleum gas (LPG) dominates the alternative fuel mix for most of the countries in the region. Only Austria, Cyprus, Hungary and Slovenia have a cumulative share of electric (battery electric vehicles (BEV) and hybrid vehicles (plug-in hybrid electric vehicles, PHEV) of 50 per cent or more of the total alternative fuel vehicles. In the region, only Poland (111), Austria (55), Czechia (9), Slovakia (3) and Estonia (1) have registered hydrogen passenger vehicles.

Transportation by fuel (%) Source: GIE CEE SEE Decarbonisation Report 2022

The report also touches upon the role of low-carbon gases in hard-to-decarbonise sectors. Following the Russian invasion of Ukraine, the European Commission started to look for alternative gas sources to reduce the EU’s reliance on Russian natural gas. Simultaneously, it boosted its existing plans for the increased role of renewables, among which the low-carbon gases hydrogen and biomethane have a significant role to play.

According to the EU’s plans, about 17 billion cubic metres (bcm) of annual natural gas imports could be replaced by biomethane. The report shows that several EU Member States in the CEE/SEE region do include biomethane in their National Energy and Climate Plans (NECPs) as a part of their plans to decarbonise the energy mix.

Hydrogen could be another promising alternative to replace natural gas, coal and oil in hard-to-decarbonise industries and transport sectors. The Commission wants to see 10 million tonnes by 2030 of each domestic renewable hydrogen production and import. However, the report reminds us that ramping up the hydrogen economy is difficult as it means building up an entirely new value chain from production via transportation to the consumer on an industrial scale.

There are some promising initiatives relating to the development of hydrogen infrastructure in the CEE/SEE region as well. For instance, Ukraine is one of the key sources of imported green hydrogen as it offers excellent conditions for large-scale production. The study also mentions that H2EU+Store is an international industry partnership founded to accelerate the market ramp-up of green hydrogen in Central Europe. The Central European Hydrogen Corridor (CEHC) is another important project of the region that aims to develop a hydrogen import highway from Ukraine via Slovakia and the Czech Republic to large hydrogen demand areas in Germany and the EU.

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