Dear Dr Birol,
Dear Assistant Secretary Ms Palmer,
Dear Ambassadors, good afternoon.
Thank you for inviting me here today. I am very happy to join you today, it brings me back a few years when I lead the Estonian NATO Parliamentary Assembly Delegation. We also had the pleasure of welcoming the NATO Secretary-General to the European Commission meeting in December. You were clear in your message that climate and defence is a key area to further intensify EU-NATO cooperation. I am very glad to be able to continue that dialogue with today’s meeting.
Dr Birol has given an overview of the main trends shaping up the global clean energy transition. As many IEA reports illustrate well, a profound transformation is underway. 2020 was a breakthrough year for energy. The oil supply shock and the pandemic provided a preview of how a renewable based energy system can look like. In Europe, for the first time electricity from renewable energy overtook electricity generated by fossil fuels. Many EU Member States accelerated the phase out from coal. New technologies and innovations kept coming to the market. Yet, the pandemic also brought to the fore our vulnerabilities, from the dependence on global supply chains to the vital role of functioning digital and electricity infrastructure. And the climate emergency has not become less urgent nor its impact less challenging. 2020, was the hottest year on record in Europe.
That’s why the European Union has set out the Green Deal Strategy as the blueprint to guide and accelerate the clean energy transformation. We need change by design, not by default.
Let me focus on what the EU Green Deal means and how we are taking energy security considerations into account as we take it forward.
The European Green Deal mission is very simple: to make the EU climate neutral by 2050. And to put us firmly on track to achieve this objective, we have assessed that we need to cut our greenhouse gas emissions by 55% by 2030. This requires a radical transformation of all the sectors of the economy and society. Some sectors, especially power generation and industry, have already reduced their emissions. But sectors like transport, buildings or agriculture and land use, will have to contribute more.
Last year, we identified what we needed to change across the entire system, from the energy efficiency, to renewables. And from boosting established markets, to creating new low-carbon ones.
So, we brought forward strategic documents on hydrogen, methane, energy system integration, offshore energy, and a wave of renovation for Europe’s buildings.
We also brought forward a revision of the Trans-European Networks for energy – essentially a new vision for the European energy infrastructure holding our energy system together.
This year, we are turning this strategic vision into concrete legislative proposals. In June with the launch of our Fit For 55 package, we are bringing forward a whole host of revised legislation. That includes revising our legislation for energy efficiency and renewables in line with our new ambitions.
The changes we are willing to make are some of the biggest in history. So we need some of the biggest investment in history to match.
In the EU we assess that about 350 billion EUR of investment per year are needed in this decade.
EU leaders have agreed on the largest long-term budget in the history of our Union, 1.1 trillion EUR. At least 30% of this will be dedicated to climate mainstreaming.
On top of that, as part of our Recovery Plan post-COVID, we have a total of 672.5 billion EUR to inject into the economy over the next four years. And at least 37% must be dedicated to the green recovery.
That brings the total available financial firepower to 1.8 trillion EUR. To help direct private investment to clean energy projects the Commission also recently adopted a set of criteria to identify sustainable activities for climate mitigation and adaptation, the so called Taxonomy of sustainable investment. This is a ground breaking global benchmark, designed to sustain the shift of investment from fossil fuels to clean technologies.
So, we have a plan and strategies. We have resources. We have a Climate law to give long-term stability to our climate neutrality goal. We will soon lay the regulatory foundation for achieving the at least 55% target by 2030 in a cost-efficient and fair way.
Through all of this, the Green Deal will radically change Europe’s energy landscape. Let me give you a snapshot of what the Green Deal vision for Europe means:
- First and foremost, renewables will dominate our energy system;
- By 2030, electrification will reach 40%;
- By then also, oil gas will no longer sustain our system: oil will reduce by almost a third and gas by a quarter;
- Hydrogen is projected to grow from less than 2% today to 13-14% within the next thirty years.
- Europe’s import dependency will be significantly reduced.
This transformation creates new opportunities, but of course comes with challenges. And some of the most important challenges concern the secure supply of energy.
The first and most apparent threat to our energy security lies with our Critical Infrastructure.
We know that the energy system of tomorrow will be significantly more electrified than today. But that brings with it new vulnerabilities.
A large portion of new renewable electricity capacity will be connected to the distribution grid, and not centrally located as before. This will make our grids more vulnerable and exposed to threats. Protecting our critical infrastructure will be even more important and even more complex all at once. This requires a greater focus on resilience.
First of all resilience to unpredictable and extreme weather events. Unfortunately we have all in mind recent examples of dramatic disruption caused by extreme weather events. In the EU, we have a strong framework with the Regulation on Security of Supply. But we have also adopted a new EU strategy on adaptation to climate change in February which will:
- support the integration of climate resilience considerations into the criteria for the construction of critical infrastructure.
- work to improve knowledge of climate impacts and adaptation solutions;
- step up adaptation planning and climate risk assessments;
- and accelerate adaptation action.
Second, our infrastructure must be resilient to cyber and hybrid threats.
The Commission adopted a package last December on cyber security and critical infrastructure.
- a new ambitious EU cyber security strategy;
- a legal proposal for the revision of the network and information systems directive;
- …and a legal proposal for a new directive on the resilience of critical entities.
The package includes a framework to support Member States to ensure the resilience of vital sectors including energy. Within this framework, we are currently considering dedicated, complementary energy-specific initiatives to further enhance the resilience of our critical energy infrastructure.
We also plan to adopt a network code to strengthen the cyber security of cross border electricity next year.
Thirdly, resilience means also looking at a secure, transparent and diversified access to the very Raw Materials we need for our new energy system to function. If we want to take our energy future into our own hands, we can’t simply move from the dependency from fossil fuels to another form of dependency. That includes a greater focus on recycling of what we already have. The pandemic has also shown us the importance of a shortened supply chain. At some stage, our offshore wind industries, leaders in the world, had to stop working because crucial components from Asia could not be supplied.
So, we are taking those lessons and developing concrete plans to diversify the supply of raw materials, build shorter supply chains and strengthen partnership with countries with whom we have “common dependencies”.
While we are mindful of these new challenges, we remain alert to the importance of ensuring diversification and security of gas supply. EU leaders have recently recognised gas as a transition fuel that plays a role in ensuring that we phase out more polluting sources of energy such as coal or lignite. Maintaining secure and affordable access to gas and LNG remains an important dimension of EU energy policy.
The Green Deal has of course also a geopolitical dimension. When we presented the Green Deal Strategy, Europe was alone. The group of countries that have taken net zero commitments is now growing by the day. There is a growing momentum. And we are particularly happy that climate and energy are again a theme uniting both sides of the Atlantic.
It is the time for a renewed EU-US ambition in energy.
I’ve already had a very friendly conversation with Secretary Granholm, and we are exploring the best ways to coordinate EU-US energy actions. We have agreed to relaunch the EU-US Energy Council. Similarly, we are getting ready for the run up to multilateral discussions at the G7, G20 and COP26.
We are also seeking new opportunities for cooperation with our European neighbours East and South, including by promoting energy market integration and interconnectivity with them.
In fact, our Green Deal agenda has of course a more direct impact on our neighbourhood.
In Ukraine, the continuation of energy sector reforms towards fully functioning and competitive electricity and gas markets is a matter of national security.
Last winter was the first in fourteen years without major uncertainties on Russian gas deliveries to the EU via Ukraine. This is the direct positive outcome of Ukraine’s gas sector reform and a new gas transit agreement reached at the end of 2019 between Ukraine and Russia, where the Commission acted as a mediator. A milestone that should not be underestimated.
The EU remains committed to an important transit role for Ukraine in the long-term. And it is ready to play a facilitation role in possible new trilateral negotiations.
Even so, we cannot speak of resilience of the Ukrainian system without continued reform: stable governance of the Ministry of Energy and effective competition are all key.
The clean energy transition is also becoming a flagship in our relations with the Western Balkans. By mobilising up to 9 billion EUR for investment in the region with the Investment Agenda for the Western Balkans, we are supporting a green and digital transition. Here, energy efficiency, renewables and regional market integration are firmly on the agenda.
The energy transition can also be a unique opportunity to reset our relations with the Mediterranean region and contribute to stabilisation and growth by setting a new decarbonisation ambition. In this region, Europe’s renewable drive can come as a challenge, as some countries will see oil and gas export revenues diminish. Therefore, we must turn the green transition into an opportunity.
That means helping the region to increase electrification for its own economic development, diversify its supply and increase its export opportunities towards Europe, for instance of renewable electricity or green hydrogen.
If we look further south to our partners in Africa, we are working jointly on a Green Energy Initiative. We are concentrating on three main areas:
- Increasing the share of renewables
- Supporting energy access
- ...and energy efficiency
As we look at the external energy policy, let me say that in our view energy security and a global just transition must go hand in hand. We need to be aware of the social implications that come with our push to climate neutrality.
That’s why we are committed to ensuring a just transition for the most vulnerable citizens and regions in Europe but also internationally.
We talk about ensuring a just transition as a moral duty. And it is.
But it is also a security issue.
So, as we implement the Green Deal we are discovering how it affects all sectors of economy and society, and also the military.
Defence comes into play because we need to reduce the carbon footprint of our military forces while making sure we preserve their full operational capacity. But also because we need to be able to reconcile civilian and non-civilian activities for the use of our space, in particular at sea, when it comes to offshore renewables energy exploitation.
For instance, proper maritime spatial planning will be essential for large-scale deployment of offshore renewable energy.
Secretary General, dear Ambassadors,
I’ve outlined how the EU sees the future of the energy sector, and its challenges for energy security and defence.
As the door to the age of coal and gas closes, and the door to the age of renewables opens, we cannot step blindly through the threshold.
We need to be fully prepared for what might be on the other side. And the best way to do that is reduce our dependencies, positively impact the neighbouring countries around us, and promote a level playing field for access to technologies and raw materials. In this way, an energy system based on renewables will contribute to a greener, more prosperous but also more secure European and global order.