Energy Union Winter Package: disappointing for transport decarbonisation and climate action

Energy Union

Today’s Energy Union Package consists of the Commission’s legislative proposals for a revised Renewable Energy Directive (RED), Energy Efficiency Directive, Energy Performance in Buildings Directive and Electricity Market Regulation among others. While not legally binding, and still pending negotiation and approval by the European Parliament and Member States, this package forms the Commission’s official position vis-à-vis the Union’s climate and energy policy towards 2030.

In the new RED proposal, an important, but seemingly overlooked, element is added: synthetic fuels produced with captured industrial fossil CO2, so-called ‘waste-based fossil fuels. Such fuels, by their inclusion in the main EU policy tool for renewable energy, are implicitly labelled as being ‘renewable’, due to the assumed use of renewably produced hydrogen (H2) for their production. Not only will this allow public funds meant to finance effective actual renewable energy to be spent on such expensive initiatives without any proven climate effect, but it could cause irreparable damage to the climate policies of the EU. Bellona has been vocal in its efforts to prevent this inclusion in the lead up to the release of the package.

The Commission has not responded to any contact attempts from Bellona on this matter. Given the extremely opaque decision-making regarding this matter – there has been no consultation, no impact assessment, and no life-cycle analysis (LCA) has been performed – Bellona even wrote to the Commission’s Regulatory Scrutiny Board to ask that this provision was removed from the Directive, to no avail.

The proposal states that fuels from fossil waste streams are ‘low-carbon’. That is plain false – the renewable hydrogen that assumedly would be used to produce them is zero-carbon (and could/should be used as a zero-carbon fuel), but fossil industrial CO2 is added to the hydrogen, turning it into high-carbon fuel. This must not be framed as low-carbon, circular, and most certainly not renewable. Moreover the proposal states that such fuels could contribute to transport decarbonisation. The reality is they’re likely to contribute to halting transport decarbonisation.

CCU Circular Economy

Bellona therefore urges that synthetic fuels, produced with waste-stream industrial CO2, is left out of the Renewable Energy Directive

Synthetic fossil fuels are not renewable, nor sustainable, economically or in any other way. Capturing CO2 from industrial facilities and preventing it from entering the atmosphere is, indeed, a major step in decarbonising industry. However, using that CO2 to make synthetic fossil fuels, after which the CO2 is deposited in the atmosphere during fuel combustion, is costly, energy-demanding, and does not make sense from a climate perspective.

The inclusion of such fuels allows massive state subsidies for renewable energy sources to be channelled into fossil fuel production, using CO2 captured from industrial sources.

It will likely undermine the EU Emission Trading System (ETS) through the subsidised moving of CO2 out of the ETS into non-ETS sectors that would make the CO2 ‘disappear’ out of the accounting as it would be treated as renewable and zero carbon in the non-ETS sector. ‘CO2 laundering’ will thus become a fact.

Additionally, the incumbent automotive sector (i.e. internal combustion engines) will indirectly be subsidised and the era of the internal combustion engine perpetuated at expense of electro-mobility, fuel cells and other zero emission technologies, as well as chemicals industries and other heavy emitters. The funding for real climate technologies will be diverted to sources of fossil CO2, and it will even be a disincentive for transport decarbonisation (e.g. electro-mobility, fuel cells and other measures.

It is claimed in Article 65 of the Directive that synthetic fossil fuels, derived from waste streams, “can also contribute towards the policy objectives of energy diversification and transport decarbonisation” (p. 45).

Based on this assumption, the Commission concludes that the fuel suppliers ought to be obliged to incorporate synthetic fossil fuels.

(ff) (p. 63)

‘waste-based fossil fuels’ means liquid and gaseous fuels produced from waste streams of non-renewable origin, including waste processing gases and exhaust gases;

What about electro-mobility?

A legislative proposal for the new Energy Performance in Buildings Directive also formed part of today’s package. The Commission’s initial proposal called for 10% of parking spaces in all new buildings in the EU to be equipped with electric vehicle (EV) recharging facilities by 2023. Bellona, along with 23 other organisations within the Platform for Electro-Mobility, strongly supported the inclusion of this provision to address consumer needs with regards to EV charging.

EV Charging Infrastructure_ThinkstockPhotos-167427226 Electric car in charging Credit: Think Stock

In fact, as shown by the Platform’s recently published report on the topic of charging infrastructure, normal power recharging from 3.7 to 22 kW is and will continue to form the backbone for the daily recharging of passenger EVs, as the majority of consumer needs are met via normal power charging at home overnight or at the work place.

Unfortunately, however, after having faced enormous push back from EU Member States this provision was significantly watered down – now being an unambitious and delayed obligation.

The Commission directive proposal presented today stipulates that for existing buildings, this provision will apply only to commercial ones with more than 10 parking spaces only as of 2025. For new buildings or buildings undergoing major renovations, the provision will apply to residential buildings with more than 10 parking spaces in the forms of an obligation to include pre-cabling and to commercial building with more than 10 parking spaces in the forms of an obligation to install recharging points.

What is more, SMEs and public authorities are excluded from the scope, the latter due to the fact that they are already covered under the Alternative Fuels Infrastructure Directive, as far as their charging points are publically accessible.

In an annex to the package, the Commission announced the launch on 1 December 2016 of a so-called Cleaner Transport Facility together with the European Investment Bank which will make use of financial instruments and blending to deploy innovative low carbon technologies to accelerate the shift to low-emission mobility. The possible market potential for the renewal of buses and coaches is around 3500 vehicles or EUR 875 million added investment per year.

There is still hope

Although the current document is not yet part of the EU’s legal framework, it will become such after the so-called ‘co-decision procedure’ is finalised.

This co-decision procedure involves negotiations between the EU Commission, and the European Council and the EU Parliament. Although the Commission has clarified its position today, there is a possibility that certain provisions in the text could be adapted, deleted, or included.

It will likely more than a year before the co-decision procedure is finalised, and many parties constituting the European Council and the EU Parliament will wish to have a certain level of influence on the outcome of this process.

Bellona will be redirecting its efforts toward Parliament and Member States in order to hold them democratically accountable for the integrity of the future EU climate and renewable energy policy.

Bellona Europa

europe@bellona.org