It has been hectic days on the European arena. Commission head Ursula von der Leyen announced yesterday in her State of the Union speech what could amount to one of the biggest breakthroughs in the development of the hydrogen economy on the continent: the creation of a European Hydrogen Bank. This new institution will aim at helping guarantee the purchase of hydrogen using an initial capitalisation of €3 billion from the Innovation Fund, which when leveraged is expected to reach up to €20 billion.
The Commission also yesterday unveiled some of its emergency short-term measures to intervene in the energy market and address high prices. As expected, the proposal package consists of three main measures: a mandatory overall reduction in electricity consumption of 10% (with a minimum reduction of 5% during peak hours), a revenue cap at €180/MWh for inframarginal generators, and a solidarity contribution from fossil fuel producers with high profits. At the end of the month, we shall see if the Ministers of Energy agree with them.
However, the Commission remained silent about the controversial gas price cap and did not provide details on the long-term structural energy market reform.
For their part, the Parliament adopted yesterday the revisions of the Energy Efficiency Directive and the Renewable Energy Directive. As for energy efficiency, they introduced a final energy consumption reduction of at least 40% by 2030, and regarding renewables, the Parliament agreed on raising their share in the EU’s final energy consumption to 45% by 2030, with sub-targets for each sector.
For the Nordics there was, however, very gloomy news, with new rules aiming to reduce the usage of biofuels from forestry residue until 2030. Since such forestry residue has for decades underpinned the de-fossilisation of Sweden’s and Finland’s heat and combined heat-and-power production, this is a surprising and counterproductive turn of events. Seen in the light of the current energy crisis and the urgent need to move away from Russian energy supplies, the change moves from counterproductive to outright damaging over the long term.
Overall, important advances have taken place this week in the field of energy, but some challenges have also deepened. Nevertheless, what all European policy makers agree on is that the era of cheap fossil fuels has come to an end, and the future of the EU rests in renewable energies.
