EU drafts $205 billion plan to wean itself off Russian fuels
(Bloomberg) — The European Union’s executive arm is set to bolster renewables and energy savings goals as part of a 195 billion-euro ($205 billion) plan to end its dependency on Russian fossil fuels by 2027.
The European Commission will propose raising its clean energy target for 2030 to 45% from the current 40% when it puts forward a package to implement its RePowerEU strategy on May 18, according to people familiar with the matter. It will also boost its energy-efficiency goal, requiring member states to reduce energy consumption by at least 13% from projections made in 2020 versus the current 9%.
The EU wants to combine faster deployment of renewables, greater energy savings, diversification of supplies from international partners and new tools to accelerate investment in a bid to replace coal, oil and natural gas from Russia following the country’s invasion of Ukraine. The strategy, which will bolster a Green Deal push for bigger emissions cuts by 2030, can save the bloc 80 billion euros on gas, 12 billion euros on oil and 1.7 billion euros on coal imports a year, the people said.
The EU’s plans will indicate the billions of euros needed in infrastructure investments to enable sufficient imports of LNG and pipeline gas from new supplies, and will ensure that the developments are hydrogen-ready.
The proposals will also outline a limited investment that will be needed in the shorter term on oil infrastructure to guarantee the security of supply to countries that are fully dependent on pipeline oil from Russia, the people said. The size of that package has yet to be decided.
Hungary has been blocking EU plans to ban Russia oil by the end of the year, arguing that it needs more time and money to ensure a sustainable transition, and has been seeking technical and investment assurances.
The EU’s plans are poised to include a target of 10 million tons of domestic renewable hydrogen production and 10 million tons of renewable hydrogen imports by 2030. The objective for biomethane production will be 35 billion tons.
The proposals will also map out work on EU wide contingency plans in the event Russia cuts off gas, including the need for common criteria and coordinated action.
The package may still change before adoption. The commission has a policy of not commenting on draft documents.
To help unlock investment, the commission wants to bring forward financing from the Innovation Fund, which is based on revenues from sales of carbon permits in the EU Emissions Trading System. That will be done in a call for projects this autumn, with the available funding set to double.