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RED III - Raised EU Ambitions on Renewables
The EU has enacted the new Directive requiring at least 42.5% of final energy consumption to come from renewable sources. Who will cover the gap between today's 21% and the 42.5% target in six years, along with higher bills indefinitely?
Timidly, the governments of the 27 have held back the ultra-green push from the European Commission and some European Parliament members, who were calling for increasing the contribution of renewable energy from the current 21% of final energy consumption to 45% in 6 years. Ministers managed to secure a reduction to 42.5% by 2030. Since renewables are undeniably more expensive than nuclear and fossil fuels used so far, citizens and companies are now destined to pay hefty bills in the future as well. Even without wars on their doorstep and without sanctions on Russia. Some prospective studies suggest that even to charge electric vehicles, energy costs will be quite high.
Certainly, it's not easy to navigate through the numbers and percentages provided annually by the EU institutions regarding future energy use: total energy consumption, the percentage of energy from renewables, energy savings, energy efficiency, the share of biomass, solar and wind power, fossil fuel imports, prohibitions on the production and import of CO2-producing fuels, and so on.
At least three events have generated this appetite: the pandemic, which caused a collapse in energy consumption, the war in Ukraine, which saw a decrease in energy imports from Russia, and the climate alarm.
These three factors have triggered anxiety within the EU institutions, and the European Commission has responded by offering increasingly ambitious energy solutions. However, the scent of an economic recession has emerged recently, putting European governments on alert and leading them to slow down the race towards the Green Europe.
In fact, while the European Commission and the European Parliament aimed for very high renewable energy targets by 2030, governments have curbed ambitions to 42.5%,. As for Euro7, the Council has secured a 2-year delay in the Regulation's entry into force, as opposed to the 4 years initially requested by a number of countries.
At least three events have generated this appetite: the pandemic, which caused a collapse in energy consumption, the war in Ukraine, which saw a decrease in energy imports from Russia, and the climate alarm.
These three factors have triggered anxiety within the EU institutions, and the European Commission has responded by offering increasingly ambitious energy solutions. However, the scent of an economic recession has emerged recently, putting European governments on alert and leading them to slow down the race towards the Green Europe.
In fact, while the European Commission and the European Parliament aimed for very high renewable energy targets by 2030, governments have curbed ambitions to 42.5%,. As for Euro7, the Council has secured a 2-year delay in the Regulation's entry into force, as opposed to the 4 years initially requested by a number of countries.
Are these two slowdowns a sign of a European climate commitment weakening? Two fundamental elements come into play here.
The ability of producers and consumers to withstand the stress of EU environmental competitions and the outcome of the 2024 European elections.
Regarding the first, it can be said that consumers are the decision-makers, especially if they cannot afford more expensive vehicles, if they have to wait too long to purchase them, if fueling electric cars becomes difficult and costly, if they lack the financial means to make their homes more energy-efficient, or if their bills increase significantly. In such cases, the political body cannot simply observe the loss of trust.
As for the second, it will be the new European political landscape, both within the EU and in Brussels, that will tell us whether the plans laid out by Ursula von der Leyen and former EU Commissioner Franz Timmermans will change.
Finally, citizens are becoming increasingly skeptical about the convenience of European restrictive choices, as more and more politicians from some European countries emphasize how Europe's use of non-polluting renewable sources is inconsequential for the climate.
The ability of producers and consumers to withstand the stress of EU environmental competitions and the outcome of the 2024 European elections.
Regarding the first, it can be said that consumers are the decision-makers, especially if they cannot afford more expensive vehicles, if they have to wait too long to purchase them, if fueling electric cars becomes difficult and costly, if they lack the financial means to make their homes more energy-efficient, or if their bills increase significantly. In such cases, the political body cannot simply observe the loss of trust.
As for the second, it will be the new European political landscape, both within the EU and in Brussels, that will tell us whether the plans laid out by Ursula von der Leyen and former EU Commissioner Franz Timmermans will change.
Finally, citizens are becoming increasingly skeptical about the convenience of European restrictive choices, as more and more politicians from some European countries emphasize how Europe's use of non-polluting renewable sources is inconsequential for the climate.
RED III: The new EU Directive sets a target of 42.5% for renewables
In 2018, the Directive (EU) 2018/2001 committed the 27 member states to achieve a binding target of at least 32% of energy from renewable sources as a share of total energy consumption by 2030.
In 2020, the European Commission proposed a more ambitious approach to address climate challenges swiftly and reduce greenhouse gas emissions. They aimed to double the share of energy from renewable sources compared to 2020 levels, targeting at least 40% renewable energy in the energy mix by 2030. This move was enshrined in Regulation (EU) 2021/1119, which also set the goal of climate neutrality by 2050 and a net reduction of 55% in greenhouse gas emissions compared to 1990 levels by 2030. Achieving these objectives necessitates a substantial energy transition, enhanced energy efficiency, and a significant increase in renewable energy.
The Directive approved in September 2023 presented a challenge as it brought into conflict the ambitions of European Parliament members advocating for even more ambitious goals with the governments of the 27 member states, who deemed the existing targets already too demanding. The compromise ultimately resulted in an increase in the share of renewable energies to 42.5%, while urging governments to aim for up to 45.0%.
In the International Energy Agency's primary forecast, it is expected that global renewable capacity will surge by nearly 2,400 GW, signifying remarkable growth of almost 75% between 2022 and 2027. This expansion is equivalent to the entire installed power capacity of the People's Republic of China.
This acceleration of 85% compared to the expansion rate observed in the previous five years can be primarily attributed to two key factors. First, the sharp increase in fossil fuel and electricity prices due to the global energy crisis has made renewable power technologies significantly more economically attractive. Second, the conflict in Ukraine has led to a heightened recognition of the energy security benefits offered by renewable energy, especially in Europe and among nations heavily reliant on fossil fuel imports.
Extra content with PREMIUM version:
-> RED III Directive: A brief analysis
-> Comprehensive Analysis of RED III Directive
-> Can the EU succeed in increasing renewables?
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Source: © European Union, 1995-2023
Source: © European Union, 1995-2023
