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European Green Deal – Central and Eastern Europe’s overlooked geopolitical tool

This opinion editorial was co-authored by Pieter de Pous, a Programme Lead in E3G’s Fossil Fuel Transition Programme.

When President Xi Jinping made a rare visit to Europe three weeks ago, Hungary featured prominently on his itinerary, with the announcement of an ‘all-weather strategic partnership’.

With Hungary poised to take over the EU Presidency in the second half of the year, the visit underlines the critical role central and eastern Europe plays amidst the current geopolitical turmoil and the need for Member States to maintain a unified approach.

There are few areas where this is more evident than in the energy transition. While Chinese–Hungarian cooperation has focused on nuclear energy, a new report by CEE Bankwatch and E3G reveals a significant shift from fossil fuels to renewable energy sources is well underway, promising enhanced energy security for the region. For instance, in 2023, Hungary alone added 1.6 gigawatts (GW) in solar capacity.

Local leadership, combined with essential financial backing from the EU, has been instrumental in advancing the energy transition. With political priorities on the ballot at the European elections, will the pace slow down or can central and eastern Europe continue to rely on this support to strengthen its economies and empower its citizens to tackle this challenge head-on?

Why central and eastern Europe is critical for the success of the EU’s clean energy transition  

Due to their heavy reliance on coal and the high costs of modernising infrastructure, many countries in Central and Eastern Europe face significant challenges in transitioning to cleaner energy. Compounding matters, the region is largely dependent on external sources for fuel imports and access to new technologies. To deliver the European Green Deal, the transition to cleaner energy must take off in central and eastern Europe. This is why the region has such a pivotal role to play.

Encouragingly, our findings suggest that this transition is already underway. Coal is on course to becoming ancient history, with most countries having put phase-out dates in place. Additionally, most national power mixes have seen a decline in the use of fossil fuels. Many regions, including former coal regions such as Eastern Wielkopolska in Poland, aim to achieve carbon neutrality well ahead of their national government plans. Meanwhile, prosumers and energy communities are thriving, particularly thanks to the widespread rollout of solar photovoltaics. On top of that, the boom in heat pumps in the region now exceeds the EU average, with Poland making a substantial contribution by significantly reducing its building emissions.

The urgent need for the EU to wean itself off Russian fossil fuel imports has been a major catalyst – but not the only factor. A combination of local leadership and initiatives, regulatory and market-based instruments, as well as robust financial support schemes, largely facilitated by the EU, has been crucial in driving this change.

The essential support of the EU for local climate action 

The decisions by Bulgaria and Romania to phase out coal were not included in their national energy and climate plans (NECPs) but were instead integrated into their respective EU-funded national recovery and resilience plans. Across the region, EU recovery and cohesion funds are bolstering initiatives such as Poland’s Clean Air programme and Slovakia’s Renovate House scheme. In the Czech Republic, vulnerable households are receiving financial support for home renovations through the New Green Savings Light initiative, financed by the Modernisation Fund. Meanwhile, the Just Transition Fund is helping Estonia’s Ida–Virumaa region to create a future beyond shale oil by preparing the workforce for the green transition.

These are just a few examples, but they are significant and need to be amplified and replicated at scale to ensure the transition stays on track.

And yet, major challenges remain. Governments are still not fully convinced of the benefits of the transition, displaying a tendency to favour increased gas consumption. Based on the latest NECP updates, the official trajectories for meeting the 2030 objectives and Fit for 55 goals are falling short, particularly in the areas of energy efficiency and renewables. In addition, the modernisation and interconnection of national energy grids are urgently needed to absorb new renewable energy capacity and support energy communities.

The energy transition is still in a fragile stage. For it to succeed, the EU needs to step up its current level of support. Elections inherently cause uncertainty, and pressure has been building to either adopt a more industry-friendly approach to the European Green Deal or even roll it back completely. Meanwhile, budgetary hawks are pushing to freeze the EU’s budget and resist continued joint borrowing under the current Recovery and Resilience Facility (RRF).

This makes it even more important that the essential role of the European Green Deal and especially the RRF, is widely understood and given stronger political backing. The upcoming Presidencies of the Council of the European Union, to be held by Hungary and Poland, provide an opportunity for Central and Eastern Europe to shape the EU’s agenda for the next five years and ensure the energy transition in the region gets the support it needs.

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