Category: Policy Watch Europe

Europe’s Roadmap to End Dependence on Russian Energy Imports

The dependency on Russian energy imports leads to serious security and economic risks for the Union and its Member States, as Russia has continuously used existing energy supply as a weapon to threaten the stability and prosperity of the Union. This Roadmap outlines the EU’s strategy to phase out remaining Russian energy imports. It also sets out a common vision of Europe working together in solidarity to ensure alternative and affordable energy supplies for all Member States, while undertaking joint action to reduce Russian revenues, which fuel its war machine and endangers stability of the continent. Reducing dependency on fossil fuels will further strengthen EU energy security and sovereignty in line with EU climate neutrality objective.

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EU’s Clean Industrial Deal

The Clean Industrial Deal outlines concrete actions to turn decarbonisation into a driver of growth for European industries. This includes lowering energy prices, creating quality jobs and the right conditions for companies to thrive. The Deal presents measures to boost every stage of production, with a focus on:  Energy-intensive industries such as steel, metals, and chemicals, that urgently need support to decarbonise, switch to clean energy, and tackle high costs, unfair global competition, and complex regulations. The clean-tech sector which is at the heart of future competitiveness and necessary for industrial transformation, circularity, and decarbonisation.

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Ireland’s Renewable Energy Policy Review

To reach the 80% renewable generation target by 2030, Ireland plans to have 22 GW of renewable electricity capacity installed, up from 6 GW at the end of 2023. Specifically, Ireland has set targets to achieve the deployment of 9 GW of onshore wind, 8 GW of solar PV and at least 5 GW of offshore wind capacity by 2030. Beyond 2030, Ireland expects offshore wind to account for the dominant share of new renewable capacity additions; however, further deployment of new and repowered onshore wind and solar is expected throughout the 2030s.

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Case for Hydrogen Heating in the UK

Hydrogen is a poor option for domestic heating and would substantially increase consumer bills relative to other heating technologies. Promptly ruling out further public spending on domestic hydrogen heating will be critical to secure affordable energy bills, and to enable effective long-term transition planning for networks and workers. The UK must act quickly to put the public interest before those of gas network shareholders. Government has promised to consult in 2025.

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Spain’s Solar Power Policy Framework: IEA Survey

A limited feed-in premium scheme remained in place for some legacy projects, particularly for centralized solar installations. Approximately 6 GW of PV capacity was still benefiting from this premium scheme. The Spanish government, through programs like the Next Generation EU funds, has provided subsidies to offset the initial costs of installing solar self-consumption. In 2024, the Institute for the Diversification and Saving of Energy (IDAE) launched the Innovative Renewable Energy Program, providing financial aid for projects focused on renewable energy innovation, energy storage, and the implementation of renewable thermal systems.

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Developing Green Iron Corridors in Europe

Iron ore quality will not constrain shifting to the direct reduction of iron (DRI) in the next decade. Green iron trade can allow traditional steelmaking countries to maintain large parts of their skilled workforces into the future. Restructuring half of primary steelmaking to use green iron could save >$25 billion annually across the 10 highest priority importers at today’s prices. First mover producers and buyers, coupled with strong policy support, will drive initial green corridors. Emerging economies possess strong opportunity to move into this market given their resource endowments.

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Policies for Decarbonising Aviation and Maritime in EU

In the EU, key policy tools include the integration of low-carbon fuels for aircraft and ships via the RefuelEU Aviation and FuelEU Maritime Regulations, as part of the Renewable Energy Directive, and the inclusion of aviation and maritime transportation in the Emission Trading Scheme (ETS). The 2023 ETS reform expanded its scope to cover 50% of voyages to/from EU ports.

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Policy Lessons from Norwegian CCS Sector

The development of CCS in Norway stems down to political willingness of the Norwegian Government to engage in CCS at a very early stage as well as providing the legal and regulatory framework and support mechanisms to attract private investment. The ambitious Norwegian CCS policies must be placed in the context that the Norwegian oil and gas sector is the country’s largest and most important sector when considering the revenues, export value and associated benefits on the national economy and welfare state. A key factor which contributed to the development of CCS in Norway involved the Government’s substantial ownership and participation in CCS projects within the country.

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Great British Energy to Boost Clean Power in UK

Energy was an important component of the Labour Party’s platform; one of its five key ‘missions’ was to ‘make Britain a clean energy superpower to cut bills, create jobs and deliver security with cheaper, zero carbon electricity by 2030, accelerating to net zero’ and one of its proposed first six steps was to set up Great British Energy (GBE) ‘a publicly-owned clean power company, to cut bills for good and boost energy security’. To achieve its 2030 goal the government promised to ‘work with the private sector to double onshore wind, triple solar power, and quadruple offshore wind by 2030.’

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Renewable Energy Directive Industry Target in Europe

On 20 November 2023, Directive 2023/2413 as regards to the promotion of energy from renewable sources (REDIII) entered into force, thereby amending the previous Directive 2018/2001 (REDII). The new directive aims to reduce the dependence on fossil fuels in the industry sector, as well as to decarbonise industrial emissions (recitals 59-61). Thus, it introduces notable changes by mandating the sector to increase the contribution of renewable fuels of non-biological origin (RNFBO). More specifically, under art. 22a(1), para. 5, an obligation is placed on Member States to ensure that by 2030, RFNBO makeup at least 42% of hydrogen used for final energy and non-energy purposes in industry, rising to 60% by 2035.

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Just when you most expected it: The EU’s new duties on Chinese EVs   

On June 12, 2024, the EU notified carmakers that it would impose countervailing duties ranging from 17.4% to 38.1% on imports of Chinese electric vehicles (EVs) starting in July. This decision follows an anti-subsidy probe into Chinese EVs initiated last September and comes after the US’ recent move to increase tariffs on Chinese EVs to 100%. The EU’s decision aims to prevent material injury to its industry from subsidized Chinese EVs but will have long-term consequences for the EU’s transition to a clean economy.

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Review of Hydrogen Policies in Europe

It identifies and provides an overview of the policies containing provisions on hydrogen, specifying which aspects of hydrogen they address, and how they impact the components (supply, demand, infrastructure) of the EU hydrogen market. Then it offers an insight into the financing of the EU hydrogen framework, categorising the instruments available according to the type of support they provide, their deployment stage, the technologies they cover, and whether they are open to applications from all EU Member States.

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European Hydrogen Bank Pilot Auction Results

The first EU-wide auction (IF23 Auction) for the production of RFNBO (renewable fuel of non-biological origin) hydrogen was launched on 23 November 2023 and closed on 8 February 2024. The auction attracted 132 projects bids from 17 European countries. After evaluation, seven renewable hydrogen projects were selected and will receive nearly €720 million in project support from the Innovation Fund. Altogether, the selected projects will cover 1.5 Gigawatts electric (GWe) of electrolyser capacity, and produce a total volume of 1.58 million tonnes of RFNBO hydrogen over ten years. 

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Consultation On UK Carbon Border Adjustment Mechanism

The UK Government launched a Consultation on the introduction of a UK CBAM on 21 March 2024. The Consultation closes on 13 June 2024. This follows the announcement, in December 2023, that the UK would implement a UK CBAM similar to the EU CBAM which came into effect on 1 October 2023. Non-UK importers of overseas goods will need to assess the potential impact of the scheme and any indirect consequences of the EU CBAM and UK businesses importing such goods will need to map the potential impact on their business.

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UK’s Network Reforms: Action plans to accelerate grid buildout and connections

The UK is taking serious steps to meet its climate and energy commitments of a fully decarbonised electricity system by 2035 and net zero by 2050. To deliver this in time, the end-to-end build time for transmission infrastructure needs to be reduced significantly. For this, the government-appointed Electricity Networks Commissioner has made 43 recommendations (published in August 2023) across eight themes to accelerate electricity transmission network build.

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Sustainable Data Centers — The German Energy Efficiency Act

The German Energy Efficiency Act (the “Act”) came into force at the end of 2023. As of January 1, 2024, energy efficiency obligations apply specifically to data centers. The Act provides for new rules on energy efficiency, energy reuse, waste heat, power supply from renewable energies and energy management systems, which are intended to make the operation of data centers more sustainable and the industry more innovative. These rules will come into force over the coming months and years.

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EU’s 2040 climate target: Reducing net emissions by 90% by 2040

In February 2024, the European Commission presented its assessment for a 2040 climate target for the EU. The Commission recommended reducing the EU’s net greenhouse gas emissions by 90% by 2040 relative to 1990. The 2040 climate target will reaffirm the EU’s determination to tackle climate change and will shape our path after 2030, to ensure the EU reaches climate neutrality by 2050.

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EU Power market reform: A launchpad for deep decarbonisation of EU power

A reform of the rules governing EU power markets, agreed just before Christmas 2023, creates new tools to support renewable energy investments, protect consumers and make grids more flexible and digital. Together with RePowerEU, a plan adopted earlier in the year to achieve EU independence from Russian energy imports, it constitutes a significant step toward achieving a predominantly fossil-free power system by 2035. The reform will support the integration of renewables in power systems, responding to demand by households and businesses to access more affordable energy in the aftermath of the energy price crisis.

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Emissions mitigation policies in the EU and neighbouring countries

The EU has been a leader in introducing sophisticated policy instruments that help with decarbonization in an economically efficient manner. The evolution of its emissions trading system, ETS, applied uniformly among all member states, is perhaps an example of the biggest experiment, globally, with a decarbonization policy. The EU’s partner countries, that are deeply integrated in economic relations with it, are expected to be affected by its rapid decarbonization towards net zero by 2050.

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