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Will the March EU Summit be a springboard for a resilient European Union?

Elisa Giannelli / Mar 2022

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The landscape of possibilities has dramatically changed over the past few weeks, providing a window of action to accelerate the EU’s decarbonization strategy. The European Council on 24-25 March is a unique chance for EU Leaders to send a clear political signal of increased ambition for EU climate action.

Traditional (geo)political and economic paradigms in Europe and beyond have shifted dramatically in the past few days. Russia’s invasion of Ukraine raises the importance of managing the deep entanglement between energy, security and geopolitics. The decisive and quick political response from the Union has led to significant and firm sanctions. The EU and some of its key international partners have made efforts to develop a joint response to Russia’s war of aggression. While this is a promising start, a lot is ahead of us.

EU Leaders can turn this moment into a watershed point for Europe and its Green Deal delivery. For the EU to emerge from these tectonic shifts as a strong geopolitical actor, it will need to leverage the European Green Deal to deliver a fossil-free energy system, domestically as well as for its partners around the world. Fast-tracking and raising the ambition of selected elements in the Fit for 55 Package is Europe’s best chance to succeed in that endeavour.

The IEA recommendations have confirmed that the EU can cut around 6% of its gas imports from Russia (23 billion cubic meters) already before next winter by using energy efficiency and fuel switching measures. Bottom-up country analysis suggests this is possible in the Netherlands and Italy alone. But policy decisions must be taken urgently to deliver this paradigm shift.

Political signals from the EU Commission and EU leaders have set the tone and direction of the debate throughout March, with some positive elements. Redefining energy security to include both supply and demand measures is a good first step, but actions to fast-track energy efficiency and renewable energy deployment in the short term are still needed. The March European Council will set the direction for the upcoming quarter, when decisive policy progress will have to be secured before the change of EU Presidency in July.

EU Leaders should provide a clear mandate to their Ministers to do whatever it takes to strengthen EU resilience and pathway towards climate neutrality. This starts by supporting increased 2030 targets and accelerating climate action. Only then EU countries can prioritise safe, reliable, sustainable and affordable energy for all Europeans.

It is also imperative to avoid additional lock-ins into long-term contracts and investments as a short-term response to the supply shortage. The increased use of fossil fuels must be time-bound and conditional. On the other hand, Leaders must empower their citizens and share best practise to act on the demand side. Nine out of ten of the IEA’s recommendations are about active management and consumers’ behaviour, rather than technology changes.

Secondly, the EU will soon have to prepare a sound social support scheme to cope with rising energy poverty, which already exposed 80 million Europeans before the war broke out. Leaders can consider different options, e.g. using the remaining resources from the recovery fund, the reallocation of ETS revenues, or a new EU solidarity instrument. Serious solidarity efforts will be required not only within the EU Member States but also with the most vulnerable countries.

Finally, a new economic model is urgently needed to finance the shift towards a better EU resilience and geopolitical clout and ensure that Europeans are not hit by the perfect storm of inflation, energy prices and supply chain kinks. The “Fit for 55” package then needs to accelerate the enhanced transformation of the EU energy system away from fossil fuels. For example, there is a need to focus on prices and security of electricity markets that transition to net-zero.

In the longer term, EU countries will also have to tackle more structural challenges. Strengthening the resilience of climate action via robust national ownership of the energy transition will be even more important and urgent in the current circumstances. The domestic and international stakes are really high and Europe must do anything in its power to prevent this from happening again.

 

Elisa Giannelli

Elisa Giannelli

March 2022

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