Mr. Chairman, dear Christian,
Honourable Members of the European Parliament,
It’s a pleasure to see you all again.
When I spoke at this same structured dialogue one year ago there were many unknowns.
The pandemic had stopped us in our tracks.
In the energy sector, oil prices plummeted. New renewables investment projects were at risk. Certain supply chains were disrupted.
Some doubted that the Green Deal would survive the impact.
But one year later, uncertainty has given over to determination.
The Green Deal underpins our Recovery effort.
We have set our compass for the journey to net zero with the EU Climate Law. We adopted the first delegated act under the taxonomy regulation, to direct investment to sustainable activities.
And we have presented a number of strategies across the full spectrum of energy policy.
The clean energy transition is picking up pace and speed, everywhere.
G7 economies have all taken net zero commitments. Many other countries are lining up their new national commitments.
The challenge is to translate this into concrete action. The recent IEA report on Net Zero by 2050 makes this position clear: the current global commitments fall short of what we need to reach climate neutrality by 2050. All governments need to ramp up action before it is too late. Including the EU.
This is the purpose of the Fit for 55 package the Commission will present in July.
And this is what I will detail for you today.
The Fit for 55 package will have no less than 12 legislative proposals:
- The revision of the energy efficiency and renewable energy directives
- The strengthening and extension of the Emissions trading scheme
- The revision of the Energy taxation directive
- ..and a carbon border adjustment mechanism, among others.
In November, a second set of initiatives will follow in the energy field with:
- Hydrogen and the decarbonisation of the gas markets
- A proposal for a regulation on reducing Methane emissions
- …and one on strengthening the energy performance of buildings.
This is one of the most ambitious policy overhauls in EU history. Offering us a way to tackle climate change, and providing crucial opportunities for the recovery.
Let me give you more detail on the energy aspects, beginning with the revision of the energy efficiency directive.
From our Climate Target Plan, we know that we need to increase our efforts when it comes to energy efficiency:
- 36-37% for final energy consumption
- 39-41% for primary energy consumption.
To get there, I will propose a new headline target for energy efficiency, binding at EU level. But Member States will have flexibility on how to contribute to this collective target in a non-binding way. This will be complemented with a delivery gap mechanism to encourage Member States to take remedial actions, if they fall short of needed progress.
Increasing the annual energy savings rate under the energy savings obligation would be another key instrument. In this way, we have the chance to take individual Member State contexts and potential into account. This obligation will lead them to the sectors with the biggest energy efficiency potential – starting with buildings, transport and industry. Policy measures promoting direct fossil fuel combustion should be excluded from the scope of the obligation.
We also want the revision to target specific areas.
First, public buildings need to be renovated at a pace worthy of the Renovation Wave. I am considering extending the obligation for an annual rate of renovation of public buildings to all public buildings. The public sector can also lead by example in using energy performance contracting. And, we have the chance to make energy efficiency a central tenet of public procurement.
Second, the requirements on energy audits and energy management systems need to address all large energy consumers, while reducing the administrative burden.
Third, empowering consumers and eradicating energy poverty will be prominent. This includes dedicated provisions to deliver energy savings to vulnerable consumers, lowering their energy costs. This will help mitigating distributional impacts of energy transition and contribute to a truly just transition.
Finally, the proposal will provide an explicit legal basis to the Energy Efficiency First Principle, supporting its application. We will accompany this provision with an operational guidance, to help all actors implement across the board in their policy and investment decisions.
On the revision of the Renewable Energy Directive, our aim is to reap all the benefits of a revolution that is already happening.
We need greater deployment of renewables. By rolling out clean technologies where Europe is leading, and by developing new lead markets, for example in renewable hydrogen, we will support growth.
As it stands, RED II sets a binding target for 2030 at of at least 32%.
But our ambitions have changed. The Climate Target Plan sets a higher target of between 38-40%.
This is attainable. We have the political will, the technological expertise, and the EU funds, including from the Recovery and Resilience facility, to make it happen.
The revision will not change the legal framework for renewables in the EU entirely. We had a major overhaul of the directive in 2018. But it will aim to enable greater energy system integration and boost renewables in those sectors where we need changes to happen faster.
First, we will provide incentives to facilitate cross border development of projects and to use power purchase agreements.
Second, we will promote renewables in the heating and cooling sector, industry and transport. Knowing buildings are responsible for 36% of emissions, we are looking at how to decarbonise them. Under RED II, industry is not explicitly covered, and the pace of RES uptake is not where it should be. So, we are looking at setting an indicative target for renewables in this sector. We will also promote a labelling for industrial products using renewables.
In transport there was less than 10% of RES in 2019. That needs to more than double by 2030 according to the Climate Target Plan. We need to set new targets, while maintaining flexibility for the Member States to decide their pathways.
Third, we will foster system integration. The Directive offers a chance to promote electrification in transport. We will design a credit system that will help account for electricity provided to vehicles under the target. As electrification will not work for all transport modes, we are envisaging target based measures to support clean hydrogen uptake in transport. We will also introduce measures to incentivise clean hydrogen use for industry.
Through this revision, we will also lay down rules for the classification of green hydrogen and a methodology for its certification for all uses, beyond transport.
Finally, on bioenergy, there is huge debate in the EU at the moment. Especially on bioenergy derived from forests. RED II already includes a new sustainability framework. We are currently strengthening and clarifying its application through the implementing acts foreseen under RED II. Even so, a further targeted strengthening of the framework could provide better safeguards for sustainably using forest biomass for energy, while keeping in mind that bioenergy will remain a key element on our road to net zero.
These are the main lines of our planned revision of the two Directives. Before finishing, I will update you on the preparation of the fifth PCI list under the current TEN-E Regulation.
We have so far completed six rounds of preparatory discussions since last November in the regional groups with EP representatives participating. By the end of March, the electricity and gas infrastructure needs and bottlenecks had already been agreed.
Soon, we will see the assessment of the candidate projects. As we are working within the framework of the existing TEN-E regulation, gas projects still have the legal right to apply for PCI status. But this time we will assess gas projects through a new methodology including strengthened sustainable criteria.
The draft regional lists are expected in mid-June, followed by the ACER opinion. In October, we expect the final validation by the regional decision-making bodies; the Commission plans to adopt the Union PCI list in November this year.
And for the 6th PCI list, we are counting on your support to have the revised TEN-E regulation in place.
We strongly hope that the basic elements of the Commission proposal are kept and fossil fuels are excluded. We believe this is the only credible path to reaching net zero by 2050.
These are the main elements of our work. But not all we are doing. We are working in parallel on many other aspects of the energy agenda, including its international dimension. For instance, cyber security is firmly on our radar and will be a priority for the years to come.
Let me also say that nuclear safety in third countries, in particular in Belarus, remains a top priority and I am glad how well our renewed collaboration with the United States is shaping up.
Ladies and gentlemen, Honourable Members,
We are at a crossroads when it comes to the energy sector in Europe.
The work of the coming months is of the utmost importance. And I want to thank you for your support so far, and count on your continued support in the future.
Thank you for listening. I look forward to hearing your views today.