Newsletter 6.2020
Dear reader,
Welcome to the sixth EUROFUEL newsletter of 2020. In this edition, we will have a look at the latest EU energy policy announcements as well as take stock of the activities we organised over the summer.
September 2020 will probably be remembered as a turning point in both EU and global climate policy. The Commission’s plans to raise the 2030 GHG emission reduction targets and China’s surprising announcement to pursue carbon neutrality by 2060 are once again demonstrating that energy transition holds a primary role in governments’ agenda across the globe.
These plans will start showing their concrete effects in the second half of 2021, as the EU will present a series of legislative proposals revising the entire energy and climate regulatory framework. Measures expected to have a strong impact on our sector are the ones announced as part of the recently published “Renovation Wave Strategy”, aiming at decarbonising heating in buildings. Faced with such an unprecedented regulatory pressure, there’s no other option for our industry but keep communicating about the advantages of heating fuels and advocating for technology neutrality as the best approach to achieve the EU’s climate targets.
Yours,
Dr Ernst-Moritz Bellingen
The EU climate policy mantra: increasing ambition (and targets)
September 2020 marks an important milestone for EU climate and energy policy. During her first State of the Union address to the European Parliament, Ursula von der Leyen announced the Commission’s intention to increase the 2030 GHG emission reduction targets to at least 55% (instead of the existing 40% commitment). Presented the following day by Commissioners Timmermans and Simson, the so called 2030 Climate Target Plan outlines in more detail how the Commission intends to achieve the objective. If the new goal is to be met, a set of sub-targets must be pursued by 2030, such as:
- 30% electrification in the EU energy mix
- Doubling the rate of building renovation
- 24% share of renewables in transport
- Reduction of oil and gas consumption respectively by a third and a quarter
The Plan identifies also heating as an area where more decarbonisation efforts are needed. The Commission indeed believes that “in heating and cooling, renewables would achieve around 40% penetration in 2030. Buildings will become more energy efficient and rely less on fossil fuels for heating and cooling. As a result, by 2030, emissions from buildings would decrease by around 60% compared to 2015.”
While the use of heating oil is indicated as outdated and the deployment of heat pumps as the fastest growing solution, the plan acknowledges that focusing only electrification will not be feasible. Using renewable and low carbon fuels such as advanced biofuels is therefore indicated as an alternative for end uses such as heating and cooling or transport.
The Commission’s Plan changed the cards on the table in the negotiations of the European Climate Law, opening up the debate on the intermediate targets for 2030. While the European Parliament voted for a 60% objective, complicated discussions are currently ongoing in the Council as some Member States – particularly from Eastern Europe – seem to be reluctant to endorse the target proposed by the Commission. Member States are expected to come to an agreement on this issue at the next European Council scheduled for 17 December.
Despite the only marginal progress on the European Climate Law, the 55% target is already changing the EU policy priorities for the coming year. As confirmed in the Work Programme for 2021, to align EU legislation with the new target, between Q2 and Q4 of 2021 the Commission will propose the “Fit for 55 Package”, a set of legislative proposals revising the entire EU energy and climate regulatory framework. The heating sector will be impacted by several of these initiatives, including the revision of the energy taxation and renewable energy directives (further analysis in the following paragraph).
Increasing decarbonisation ambitions and targets will be the policy direction pursued by the Commission in the “Fit for 55 Package”. Showing how renewable and low carbon fuels fit in this new context will therefore be our priority in the next months.
A boost for the economy and decarbonisation: The Renovation Wave
Published on 14 October, the Renovation Wave Strategy is one of the key pillars of the “green recovery” announced by the Commission after the outbreak of the Covid crisis last spring. Boosting buildings’ renovation would not only help the EU to achieve its climate targets but would also create a stimulus for local jobs and economic recovery in Member States.
The Strategy will pursue the following key objectives:
- Strengthening information, legal certainty, and incentives
- Ensuring adequate and well-targeted funding
- Increasing the capacity to prepare and implement projects.
- Promoting comprehensive and integrated renovation interventions for smart buildings, integration of renewable energy and enabling to measure actual energy consumption.
- Making the construction ecosystem fit to deliver sustainable renovation, based on circular solutions
- Using renovation as a lever to address energy poverty
- Promoting the decarbonisation of heating and cooling
The last objective constitutes the most relevant for our sector and will be pursued by a mix of different actions.
Based on a thorough impact assessment, the revision of the Renewable Energy Directive by June 2021 will consider strengthening the existing renewable heating and cooling target in accordance with the proposed higher climate target ambition for 2030 and introducing a requirement to use minimum levels of renewables in buildings. The revision will explore a toolbox of measures to promote advanced heating and cooling, including highly efficient low-temperature renewable and the development of local and regional heating and cooling plans, and to address the barrier of high upfront capital investment. It will also promote the use of decarbonised gases that can create local synergies with municipal and agricultural waste recycling and industrial sectors.
Based on a thorough impact assessment, the revision of the Energy Efficiency Directive by June 2021 will strengthen the capacities of public authorities to prepare, finance and implement comprehensive heating and cooling planning in coordination with renovation projects. Local authorities and utility companies have an important role, in creating the necessary regulatory framework, market conditions and skills as well as in preparing a robust pipeline of projects to finance the modernisation of heating and cooling systems.
The Ecodesign Framework Directive and the product-specific eco-design and energy labelling delegated and implementing acts will further be developed to continue promoting high environmental standards, providing the public with information on the most efficient products.
In addition, the revision of the Energy Taxation Directive will encourage public authorities to use energy and CO2 taxation to promote the switch-away from fossil fuels. The thinking of the Commission on the decarbonisation of buildings is therefore clear and aims at a gradual phase-out of fossil fuels from heating and cooling.
Eurofuel/NORA Conference
The unprecedented level of regulatory pressure our industry will face in the coming months requires us to keep communicating about the benefits of heating oil and the important role it can play in a low carbon future. A great example has been the first International Conference on liquid heating fuels in a carbon constrained world, co-organised by the National Oilheat Research Alliance (NORA) and Eurofuel. The Conference has been a big success, with about 40 speakers who spoke over the course of 4 days to an audience of more than 100 participants per day.
The recordings are now available:
These recordings represent a very valuable material which can be shared to further disseminate our messages to policymakers and other stakeholders.