REPowering the EU with Fit-for-55?

The European energy system needs to transform in record speed in order to respond to the stresses and disruptions caused in the global energy market by the Russian invasion of Ukraine. To repower the EU, the Commission is prioritising three key actions: energy savings, the diversification of energy supply and an accelerated expansion of renewable energies and fuels. By the end of 2022, two-thirds of Russian gas imports in the order of 100 billion cubic metres require replacement. According to the Commission's strategy, the EU should be completely decoupled from Russian energy imports by 2027. In order to realise the REPowerEU goals, additional financial resources of some 300 billion euros are required.

More renewable energies and more energy efficiency

The use of renewable energies needs to massively increase in electricity generation, industry, the building sector and transport. To this end, the EU Commission proposes tightening the 2030 overall target for renewable energies from 40 to 45 percent as part of the Fit-for-55 legislative package. Simultaneously, the binding EU energy efficiency target for 2030 is proposed to increase from nine to 13 percent.

A specific EU solar strategy aims to double photovoltaic capacity by 2025 and install 600 gigawatts (GW) by 2030. In addition, a solar rooftop initiative calls for a gradual, legal obligation to install solar panels on new public and commercial buildings, as well as on new residential buildings. The rate of adoption of heat pumps should be doubled, too.

The central element of the REPower EU Plan, however, remains the proposal to speed up planning and approval procedures for the deployment of renewable energies: via a targeted legislative amendment, renewable energies would be recognised as a priority in the overriding public interest. EU member states would establish special areas ("go-to-areas"), within  which shortened and simplified authorisation procedures woud apply.

Thereby, the Commission is taking an important step in the right direction. However itshould not stop halfway. The underlying energy, transport and digital infrastructures must also be modernised quickly.

Ambitious hydrogen targets, but too rigid green power criteria

REPowerEU sets the target of producing ten million renewable tonnes of hydrogen domestically and importing another ten million tonnes by 2030. These should replace natural gas, coal and oil used in the industry and transport sectors that otherwise are difficult to decarbonise.

Energy savings, efficiency, fuel substitution, electrification and increased use of renewable hydrogen, biogas and biomethane by industry could save up to 35 billion cubic metres of natural gas by 2030 in addition to the savings envisaged under the Fit-for-55 proposals. Though for this to happen, Europe depends on the ability of quickly ramping up electrolyser capacities and cross-border hydrogen infrastructures.

Only pragmatism and sufficiently flexible green power criteria can help  unlocking the urgently needed investment decisions in domestic hydrogen production, infrastructure expansion and the development of new markets. The published drafts of the delegated acts on additionality and other green electricity criteria, however, continue putting a break on such urgently needed hydrogen investments. More flexibility should be introduced if we wish to turn ambitious REPowerEU targets into reality.

A new reality needs new solutions

German industry stands behind the EU goal of phasing out Russian fossil fuels as quickly as possible. We particularly welcome that the REPowerEU plan focuses on accelerated diversification and more renewable gases, especially hydrogen.

However, the Fit-for-55 legislative proposals need to be reassessed in the light of REPowerEU. Raising targets and redistributing climate funds alone will not deliver. In view of the Ukraine war and its economic consequences, industry needs reliable, overall investment-friendly framework conditions.

Among them, flexible green power criteria for the hydrogen market ramp-up as well as reliable carbon leakage protection instruments in the transition and a swift negotiation of the EU gas package are of critical importance. A solid new emissions trading system for buildings and transport has also an important role to play..

Protecting the global climate, preserving Europe´s prosperityand strengthening its resilience, lean towards one common denominator: a strong, sustainable, European industrial continent - let´s build it!