In an unprecedented move, the Commission proposed mandatory rules to reduce electricity consumption, claw back profits from utilities and fossil fuel companies—estimated to total €140 billion—and redistribute them to consumers. National governments will discuss the proposals on Sept. 30.
Europe’s energy crisis got worse following a summer full of extreme weather exacerbated by climate change, including heatwaves that boosted electricity demand and droughts that shut down hydro and nuclear power plants, Commission President Ursula von der Leyen noted in her yearly State of the Union address Sept. 14.
The Commission also vowed to propose by early next year comprehensive reform of the electricity market, including new pricing formulas that would decouple the price of natural gas from electricity.
Natural gas prices have risen to more than 10 times their pre-pandemic levels, the Commission said. The share of Russian gas as part of the EU’s gas imports went from 40% at the start of the war to 9% today.
Europe’s medium- and long-term plan is to fully shed its reliance on Russian fossil fuel imports—which include coal and oil—and to accelerate its green energy transition. But the current energy squeeze ahead of winter is leaving some countries opting for dirty fossil-fuel options to keep the lights and heaters on.
Europe boosted coal imports by more than any other region in the first eight months of this year, bringing in 35.5% more of the polluting fuel compared to the same timeframe last year, Reuters reported.
Furthermore, Germany is investing in new liquefied natural gas plants. The United Kingdom lifted a ban on fracking for shale gas earlier this month and is set to announce dozens of new North Sea oil and gas licenses to boost domestic gas production.
The U.N. has repeatedly criticized new fossil fuel investments, with a high-level U.N. official warning the EU last week that “there is no room for backtracking in the face of the ongoing climate crisis.”
The Ukraine war and the energy crisis have created “two contradicting waves,” Mahmoud Mohieldin, former World Bank senior vice president and the U.N. Climate Change High-Level Champion for Egypt, told reporters last week ahead of the events in Pittsburgh. This year’s U.N. climate change conference, or COP27, will be held Nov. 7-18 in Egypt.
The first wave is “not really positive for the Paris agreement” since it means “burning anything that could produce energy.” However, he added, it also “created a concern” that can spur the diversification of energy sources and see more investments in renewables.
Mohieldin spoke in connection to yesterday’s launch of a report developed by the International Energy Agency, the International Renewable Energy Agency and the U.N. Climate Change High-Level Champions. It coincides with the Global Clean Energy Action Forum in Pittsburgh kicking off tomorrow, where leaders will meet to discuss how to fast track the deployment of clean technologies.
The report warns that a gap in international collaboration threatens to delay achieving net-zero emissions by decades. (See more in the Data Dive below.)
This dichotomy between where we are and where we should be is also the central focus today of a leaders’ roundtable on climate action in New York, which occurs as part of the U.N. General Assembly and the affiliated Climate Week.
The world already has 85% of the technologies, such as those underpinning heat pumps and electric vehicles, to decarbonize by 2030, Laura Corb, senior partner at consulting firm McKinsey & Company, said Monday during the kick-off event of Climate Week. Demonstrated technologies, which are proven in practice but not yet scaled, push that number to 99%, she added.
“We have what we need,” Corb said. “The challenge is really scaling.”
