The European Commission has recently decided to increase the 2030 emission reduction target from 40 to 55 per cent. A foreseeable decision as Europe is not on track to become the first climate-neutral continent by 2050.
Ahead of the Budapest Climate Summit, CEENERGYNEWS spoke with Frans Timmermans, Vice President of the European Commission, about what the Commission has in store to reach this new target and the importance of energy transition for Central and Eastern European countries.
“The climate target plan we presented a few weeks ago details how the European Union can reach at least 55 per cent reduction of greenhouse gas emissions by 2030,” he begins. “Before presenting this proposal, we did a thorough impact assessment. This analysis shows that a target of at least 55 per cent is feasible and realistic.”
“It sets us on the smoothest possible path to climate neutrality by 2050, it provides certainty for investors and it offers a clear timeframe for sectors that need a longer lead-time for their transition.”
It is indeed an ambitious target which Mr Timmermans believes to be necessary to ensure a sustainable future for everyone.
“Right now, emissions are not going down fast enough and we see the devastating effects of climate change every day – just look at the forest fires in the US, the droughts in Europe, or the locust plague in East Africa,” he says. “They are all linked to climate change, and will not go away on their own. We need to act if we want to prevent the temperature from rising even more.”
The Vice President of the European Commission reminds us that to reach the target of at least 55 per cent, significant investments will be required.
“For the energy system, we will need 350 billion euros more annually,” he expects. “It is one reason why it is so important that the recovery plans support sustainable economic growth and the green transition, also on the national level.”
“We have one chance to get it right and halt climate change as we get back from this terrible pandemic. If we do it, we will save jobs for decades to come and give future generations a healthy, secure life on this planet.”
Earlier in July, the European Council agreed on a comprehensive package worth 1,8 trillion euros. Other than the next seven-year budget plan (the Multiannual Financial Framework – MFF), an additional 750 billion euros post-pandemic recovery fund (Next Generation EU) was approved.
“The European Union’s recovery plan, Next Generation EU, makes funds available for renewable energy, updating energy infrastructure, or making homes and buildings more energy-efficient,” Mr Timmermans underlines.
Although some Member States, especially from Central and Eastern Europe could benefit from the energy transition, they are still lagging behind.
“The entire European Union has signed the Paris Agreement and together, we are committed to climate neutrality by 2050,” Mr Timmermans recalls. “Nobody can say we will not do anything for the time being and maybe start in 2045. Each Member State and every sector of the economy will have to step up, there is no room for free riders.”
The Vice President of the European Commission calls up the fact that the market itself is moving away from fossil fuels. A number of major oil and gas producers have already announced they will focus more on climate-neutral investments.
“Eventually, even the staunchest supporters of fossil fuels will have to contend with this economic reality,” he believes.
“As we move ahead with the Green Deal, we will stay mindful that not everyone in Europe has the same starting point. This will be a just transition, or there will just be no transition. This is a shared burden and we will share it in a way that is fair to all. The Just Transition Fund, the recovery fund Next Generation EU and the wider EU budget are all there to support those who need it most.”
When it comes to energy transition in Eastern Europe, Mr Timmermans is an optimist. He points out that Slovakia will exit coal by 2023, Hungary by 2030, Czechia launched a Coal Commission similar to the one in Germany to define a path away from coal. And in Poland the debate has just started – the new Energy Strategy proposed for 2040 would mean that Poland reduces its reliance on coal to 10 per cent (from over 70 per cent today).
“Bulgaria and Romania were among the first EU countries to meet their 2020 renewables targets and the largest European onshore wind park is in Romania,” he continues. “In January 2017, the International Renewable Energy Agency published a report on renewables in south-east Europe and Ukraine and concluded there was vast potential – and at competitive costs. Bulgaria might soon see the biggest subsidy-free investment in solar power (400 megawatts). By the end of June 2021, Poland will run tenders for 5.9 gigawatts of offshore wind capacity followed by two other tenders in 2025 and 2027 for a combined capacity of 5 gigawatts. And Hungary is investing massively in photovoltaic farms.”
“There is a clear wind of change and it might be turning East.”
However, even though they are exiting coal, countries like Romania, Poland and the Czech Republic are still relying on gas and nuclear. At the beginning of July, Members of the European Parliament (MEPs) in the Regional Development Committee called for a derogation for investments in natural gas projects for regions heavily reliant on coal. The proposal came after a letter signed by Bulgaria, the Czech Republic, Greece, Hungary, Lithuania, Poland, Romania and Slovakia, which underlined the importance of natural gas as a bridge to a sustainable future for countries that have less capacity to deploy zero-emission technologies.
“Member states have the freedom to decide on their own energy mix,” Mr Timmermans replies. “In the transition to climate neutrality, Europe will use various energy sources and technological solutions. Natural gas can be a useful transition fuel, especially important in countries that are now still heavily reliant on coal.”
However, he highlights how the support from the EU budget is focused on energy solutions that are climate-proof in the long term, such as hydrogen, biogas and synthetic gas. They should increasingly replace natural gas.
“It is therefore important that we already put in place the infrastructure to support these new energy carriers,” he says. “Our strategy for energy system integration details will help the deployment of these new technologies and the corresponding infrastructure.”
Circling back to the recovery fund, within the Next Generation EU, 390 billion euros will be delivered in the form of grants while the remaining 360 billion euros in loans. Although it will be a lower-rate loan, more private investments must be mobilised to ease the burden to the EU’s economies.
“This is money borrowed from next generations and we have to spend it on their future,” Mr Timmermans comments. “As a parent and grandparent, I believe this is a moral imperative, but it is also a matter of economic good sense.”
“We have to borrow and spend this money to reboot our economy. And while the fight against the pandemic dominates our day-to-day life, the climate and biodiversity crises are still here.”
“So why would we spend it on keeping things as they are when we know we’ll again have to spend large amounts to change them in the near future?”, he asks. “It would be wasteful and irresponsible – even the strictest penny pinchers admit that.”
However, also Frans Timmermans agrees that public spending alone will not be enough.
“We need a structural shift, which will only happen if enough private funds start flowing towards green investment as well,” he says. “And in contrast to the financial crisis, this time the financial sector can help us find the solution. The sustainable finance agenda that is part of the Green Deal is entirely focused on mobilising private funds to support the transition to climate neutrality.”
“The taxonomy for sustainable finance that will start to apply at the end of this year is one example. It sets clear criteria that determine which economic activities truly help achieve our climate goals. Another is that savers will be asked about their sustainability preferences. This means that everyone with a bank account can drive change. I am convinced that more and more Europeans will want their money to contribute to building a better future.”
Now that it has presented the proposal for our new 2030 climate target, the Commission will work on the necessary changes to the legislation to reach a 55 per cent reduction of greenhouse gases.
Mr Timmermans announces that by June next year they will present new proposals for energy efficiency, renewable energy, emissions standards for cars and vans, the emissions trading system, as well as the Effort Sharing Regulation and the Land Use, Land Use Change and Forestry Regulation.
“On the shorter term, our focus is on initiatives that promise efficient emissions reductions and help local jobs,” he reveals.
“This is why, later this month, we will present our renovation wave and, in November, our strategy for offshore wind. Both will help our green recovery from the COVID-19 economic crisis. We will also present a methane strategy. Also important is the in-depth assessment of the national energy and climate plans that will come out in October. This will give a detailed analysis of where individual member states are in their transition.”
“Of course, we will continue work on updating the EU’s Nationally Determined Contribution under the Paris Agreement before the end of the year,” he concludes. “Adopting the new target of at least 55 per cent will send an important signal to our international partners, and set the bar for others to follow. Already, they are responding: I’m convinced that our commitment to climate neutrality by 2050 has had an impact on the Chinese government. While we still have to wait for the concrete plans, I salute the announcement by President Xi, it is an important first step forward.”