The Green Brief: Europe’s failed ‘grand bargain’ on energy

Greetings and welcome to EURACTIV’s Green Brief. Below you’ll find the latest roundup of news covering energy & environment from across Europe. You can subscribe to the weekly newsletter here.

Europe is on the cusp of a transformative trauma: after the 1970s oil crisis, which marked an entire generation, the 2020s energy crisis is now set to do the same. Are our leaders doing the right thing? Not quite.

People all around us are quickly turning into anxious kilowatt-counters, fearful of soaring energy bills triggered by Russia’s war in Ukraine and the weaponisation of gas supplies by Moscow.

“This is a war on our energy, a war on our economy, a war on our values and a war on our future,” European Commission President Ursula von der Leyen said in her annual State of the Union speech just a week ago.

Tellingly, von der Leyen used the word “solidarity” eleven times in her address to the European Parliament.

Her words, though, were probably addressed to national governments who tend to pursue national interests when confronted with crises on a European scale.

As Brussels-based think-tank Bruegel put it, Europe needs a “grand energy bargain” – a mutual commitment by all governments to do the right thing for all European people, not just their own voters. 

Bruegel’s scholars call for “unity over energy” and “all countries taking difficult domestic decisions to exploit diverse untapped energy potential.”

Alas, the grand bargain that will be necessary to get us through the winter seems to be dead on arrival, as governments keep on doing what they know best: appeasing voter sensitivities.

September saw the German government confirming its 2022 nuclear exit in all but name, depriving their own people and Europe as a whole from a cheap low-carbon source of electricity at a time when it’s needed most.

In France, media reported that electricity giant EDF wants to ban electricity exports to Italy. 

And in the Netherlands, the government is sticking by its decision to stop production at its Groningen gas field – the largest in Europe – which is fast depleting and causing tremours in the region.

“The people who live there really detest the idea that I would push open the tap, just, for example, to put prices down,” the Dutch state secretary for the extractive industries Hans Vijlbrief told journalists on 9 September.

Like the Dutch and the French, the Germans prefer pursuing beggar-thy-neighbour policies.

Prolonging the use of Germany’s nuclear power plants would have saved more gas and money abroad than at home. Instead, Berlin’s gas buying spree caused prices to spike further. Their stores are now 90% full while neighbouring Austria’s continue to hover at around 70%.

In France, investments in renewables may not be to the taste of everyone but could be a boon to European electricity supplies. Meanwhile, Paris continues to obstruct the MidCat pipeline despite calls from Germany and others to improve gas connections between the Iberian Peninsula and the European energy market.

The list goes on. And with the large countries leading from the front, smaller ones are revelling in similar bouts of national selfishness.

Hungary, for one, has stopped exporting gas entirely outside its borders. Croatia banned exports of domestically produced gas while seeking to boost output. Norway, suffering from low hydropower yields due to drought, is considering putting a stop to electricity exports to Europe.

Others, meanwhile, are resisting so-called gas solidarity agreements with Berlin. “Belgium, Luxembourg, the Netherlands, and Poland are avoiding constructive negotiations and the conclusion of bilateral solidarity agreements with us,” according to an internal German government document cited by dpa.

Bruegel’s proposed grand energy bargain is a great idea that should have been implemented years, or even decades ago. 

In the meantime, European countries keep on doing what they know best: pursuing beggar-thy-neighbour policies instead of solidarity.

– Nikolaus J. Kurmayer


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This week’s top stories

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News from the capitals

BELGRADE. Commission OKs plant acquisition by Serbian Gazprom-owned oil company. The acquisition of Serbian petrochemical company HIP-Petrohemija LLC Pancevo by Serbia’s Gazprom-owned Naftna Industrija Srbije was approved by the European Commission, the EU’s executive said on Tuesday. Read more.

PRAGUE. Half of Czechs fear EU Green Deal will harm economy. Half of Czechs fear EU Green Deal will harm economy. Czechs want to protect the climate but are worried about the economy as slightly more than half of them (52%) believe the EU Green Deal will harm it, a survey presented by the STEM agency on Tuesday found. Read more.

BRATISLAVA. Slovak ministry proposes days off school, home-office days to save energy. Slovak children may not attend school on Fridays, while state workers could telework on Mondays and Fridays if the Environment Ministry’s proposal to save energy is adopted by the government this week. Read more.

MADRID. Spanish government approves significant VAT drop for natural gas. To help families most severely hit by inflation, the government approved a significant VAT drop for domestic natural gas from 21% to 5%, saving almost €210 million for Spanish consumers. Read more.

DUBLIN. Irish regulator pledges to not disconnect households’ energy supplies this winter. Families that cannot pay their bills will not be disconnected from energy supplies this winter, the Irish utility regulator has promised. Read more.

THE HAGUE. Dutch King mentions energy prices housing crisis in annual speech. Soaring energy prices, the housing crisis, support for Ukraine, and the country’s nitrogen plans were among the topics addressed in King Willem-Alexander’s annual speech on Prinsjesdag on Tuesday. Read more.

LISBON. Portuguese government nervous over Nigerian gas supply contracts. Portugal’s environment minister has said the government “wants to believe” that Nigeria, the main natural gas supplier, will fulfil supply contracts but acknowledged the risk of non-compliance could lead to price changes in Portugal. Read more.

THE HAGUE. Dutch government to announce energy bill plan. The government and energy companies have been working on a plan to reduce energy bills, which will be announced by Climate and Energy Minister Rob Jetten on Tuesday. Read more.

SOFIA. Bulgaria hopes to host Azeri gas leadership meeting. An unofficial regional meeting on energy issues is potentially on Sofia’s agenda for October, featuring European Commission President Ursula von der Leyen and the presidents of Bulgaria, Azerbaijan, Serbia, Romania and North Macedonia, EURACTIV Bulgaria has learned. Read more.

MADRID. Spanish socialists call out conservatives’ gas price cap stance. Debate has erupted between the ruling Spanish socialist party (PSOE) and centre-right opposition Partido Popular (PP) after the latter’s EU political family, the European People’s Party (EPP), explicitly supported the Iberian exception to cap gas prices. Read more.

BERLIN. Germany to protect tenants struggling with energy bills. Tenants evicted after struggling with rent should be able to get their property back through making back payments, according to Construction Minister Klara Geywitz, who hopes to help those struggling with rising energy costs. Read more.

BUCHAREST. Romania to increase energy cooperation with Ukraine, Moldova. Romania, Moldova and Ukraine agreed to sign an inter-governmental agreement on interconnection and increased cooperation in the energy field. Read more.

ZAGREB. Croatia asks energy firm INA to boost gas output, sell only at home. The Croatian government will ask the oil and gas firm INA, co-owned by Hungary’s MOL, to increase the by 10% the production of gas and sell the entire output at home, Economy Minister Davor Filipović said on Wednesday. Read more.

BUCHAREST. Romania wants to price cap all sources of natural gas. Romania wants a European Union-wide cap for all natural gas prices, to avoid another market imbalance, Energy Minister Virgil Popescu said. Read more.

LISBON. Portugal embraces Commission’s EU hydrogen bank idea. An EU bank to support hydrogen projects is an excellent idea for energy autonomy, said Portuguese Foreign Minister João Gomes Cravinho following the announcement made by European Commission chief Ursula von der Leyen in her State of the Union address. Read more.

VIENNA. Austria’s recently deceased receive a €500 climate bonus. Austria’s cash bonus designed to offset the unequal impacts of the country’s newly implemented carbon price on petrol, heating, oil and gas, has been called into question for being awarded to people who have recently died. Read more.

PARIS. French ministers say energy bills will be kept low in 2023, call for EU solidarity. Senior ministers have outlined their priorities to control energy prices over 2023, with Economy Minister Bruno Le Maire saying that “government intervention has paid off better than anywhere else in the EU”. Read more.


News in brief

New trialogue dates for climate and environment laws. October is set to be a busy month for negotiators taking part in talks between the European Commission, the European Parliament and EU countries, known as trialogues. 

Laws up for negotiation include several in the ‘Fit for 55’ climate package, the batteries regulation and the first round of talks on a law to end deforestation from products imported into the EU. The Czech Republic, which currently holds the six-month rotating presidency of the Council, will lead talks on behalf of national governments.

The foreseen timings are:

  • 27/09 Regulation on deforestation free-products
  • 10/10 Revision of the EU emission trading system (ETS) and of the market stability reserve (MSR)
  • 11/10 Batteries regulation
  • 11/10 Effort Sharing Regulation
  • 13/10 Social Climate Fund
  • 27/10 CO2 Standards for cars

The date to discuss the land use and forestry regulation (LULUCF) is still tbc, but could be 10 or 26 October. There will also be trilogues for the carbon border adjustment mechanism on 4/10 and 8/11, according to Contexte. For trilogue dates for agriculture laws, check out our colleague Natasha Foote’s coverage. (Kira Taylor and Valentina Romano | EURACTIV.com)


Opinions


Upcoming events

12 OCTOBER. Reducing industrial fossil gas demand in Europe – what are the next steps? According to new data gathered by the research institute “Climact”, there is potential for reducing fossil gas consumption in many industrial processes, such as low and medium heat provision. Join this EURACTIV Virtual Conference to discuss how some industry sectors can move from fossil gas to electrification. Programme and registration here. (Organised with the support of the European Climate Foundation).

24 OCTOBER. District heating in the EU – What lies ahead? Join this EURACTIV Virtual Conference to discuss the future of district heating in the European Union, in light of the war in Ukraine. Programme and registration here. (Supported by PGE Polska Grupa Energetyczna). 

27 OCTOBER. How to ramp up hydrogen production & speed up the steel industry’s transition, while navigating an unprecedented energy crisis? Join this EURACTIV Hybrid Conference to discuss how to ramp up hydrogen production and speed up the steel industry’s transition in the current context of an unprecedented energy crisis. Speakers include MEP Jens Geier, Rapporteur for the Hydrogen and Gas Directive, and more to be announced soon. Programme and registration here. (Supported by Eurofer).

7 DECEMBER. EU Energy Transition – what role for critical raw materials? The European Commission, together with relevant stakeholders, is working on different action plans and initiatives to address critical raw materials in supply chains. Join this EURACTIV Virtual Conference to discuss the role of critical raw materials in ensuring a fast and ambitious energy transition across Europe. Programme and registration here. (Supported by the Nickel Institute). 


On our radar

SEPTEMBER

  • 26-30 SEPTEMBER. European Sustainable Energy Week.
  • 27 SEPTEMBER. Trilogue: deforestation-free commodities. 
  • 30 SEPTEMBER. Extraordinary Energy Council. 

OCTOBER

  • 6-7 OCTOBER. EU Bioeconomy Conference. 
  • 10 OCTOBER. Trilogues: Emission Trading System and Market Stability Reserve. 
  • 11 OCTOBER. Trilogue: Effort Sharing Regulation (ESR). 
  • 11-12 OCTOBER. Informal meeting of energy ministers. 
  • 12 OCTOBER. Development of post-Euro 6/VI emission standards for cars, vans, lorries and buses.
  • 13 OCTOBER. Trilogue: Social Climate Fund. 
  • 20-21 OCTOBER. European Council. 
  • 23 OCTOBER. European Commission to decide 2023 Work Programme. 
  • 24 OCTOBER. Environment Council.
  • 25 OCTOBER. Energy Council. 
  • 26 OCTOBER. Zero Pollution Package:
    • Integrated water management – revised lists of surface and groundwater pollutants 
    • Revision of EU ambient air quality legislation 
    • Review of the urban wastewater treatment directive Revision of the classification, labelling and packaging of chemicals regulation

NOVEMBER

  • 6-18 NOVEMBER. Sharm el-Sheikh Climate Change Conference (COP27).
  • 30 NOVEMBER. Circular Economy Package 2:
    • Proposal for a Regulation on substantiating environmental claims using the product/ organisation
    • Environmental footprint methods (green claims)
    • Policy framework for bio-based, biodegradable and compostable plastics
    • Review of the Packaging and packaging waste Directive to reinforce the essential requirements for packaging and establish EU level packaging waste prevention measures and targets
    • Measures to reduce the release of microplastics in the environment
    • Sustainable consumption of goods – promoting repair and reuse (the right to repair)
  • 30 NOVEMBER. Climate Package:
    • Carbon removal certification
    • Review of the CO2 emission standards for heavy-duty vehicles

DECEMBER

  • 5-17 DECEMBER. UN Biodiversity Conference (COP15). Montreal, Canada. 
  • 15-16 DECEMBER. European Council. 
  • 19 DECEMBER. Energy Council. 
  • 20 DECEMBER. Environment Council. 

[Edited by Zoran Radosavljevic and Frédéric Simon]

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