Newsletter 5.2022

Dear reader,  

Welcome to the fifth EUROFUEL newsletter of this year! This edition will provide an overview of the EU latest responses to the energy crisis as well as take stock of the most relevant amendments submitted to the EPBD proposal.

Ahead of summer break, the Commission published its winter preparedness package aiming at reducing Europe’s gas demand and proactively improving the EU’s security of supply as a response to Russia’s ongoing attempts to weaponize gas supplies. In the meantime, however, new cuts to the supplies of Russian Gas in early September caused by “technical” issues have led, once again, to new hights in energy prices, prompting EU leaders to finally take into consideration the issue of price caps.

All the while, the ever more crucial debate on the energy performance of buildings is about to restart, with MEPs in the ITRE committee set to begin negotiating compromises over the 1200 amendments tabled, ahead of the expected vote on the draft Report scheduled for late October. 

In view of these developments, EUROFUEL is proactively engaging with all relevant stakeholder to bring the voice of the heating oil industry to the table and showcase the heating oil’s efforts to develop innovative and cleaner fuels fit for a sustainable and secure energy mix


Dr Ernst-Moritz Bellingen  

EU Winter package

Following up on the REPowerEU Plan, on July 20, President von der Leyen, together with Executive Vice-President Timmermans and Commissioners Breton and Simson announced the publication of the winter preparedness package, a comprehensive set of measures aimed at reducing Europe’s gas demand and proactively improve the EU’s security of supply in light of Russia repeatedly cutting the gas flows towards Europe through the Nord Stream pipeline.

safe winter

In particular, the package includes the “Save gas for a safe winter” Communication, which suggests an initial voluntary gas demand reduction target of 15% for all Member States between 1 August 2022 and 31 March 2023 as well as outlining the existing instruments and best practices to guide them in their efforts. The proposal also includes measures to reduce energy demand, solidarity clauses that will help out countries that run low on fuel, as well as recommendation for “large savings” in heating by using gas saving campaigns targeted at households, including turning down thermostats by 1°C and mandating the reduced heating of public buildings, offices and commercial buildings to 19°C. In addition, the European Commission calls on EU countries to look at switching the fuel used for electricity production away from gas, including coal and nuclear power. 

The plan is also underpinned by a legislative proposal introducing a new EU emergency tool to address a potential gap between supply and demand in the European gas market. The proposed Regulation, based on Article 122 of the EU Treaty, introduces a process to declare, after consulting the Council, an EU alert if voluntary demand-reduction targets are not sufficient to prevent this gap. In case of such a situation, the Commission is empowered to activate a binding demand reduction target.

Presenting the package, president von der Leyen hailed it as the much-needed coordinate response required to soften the consequences of the energy crisis for the EU’s economy. However, while the proposed measures do go in the right direction, things might not be that easy, as, for instance, member states still need to establish bilateral pacts to share gas under the solidarity clause. Nevertheless, national governments are concurrently coming up with their own “creative measures” to tackle the gas price surcharge on households – most notably France adopted an envelop of 230 million euro to be allocated to households using heating oil - while industries, in a significant reverse of long-established political trends, are being advised, whenever possible, to switch from gas to fuel oil to save on their energy bills.


EU leaders set to approve price caps on oil and gas to answer skyrocketing energy prices

In a not-at-all surprising move, on 2 September, members of the G7 have agreed to impose a price cap on Russian oil in a bid to hit Moscow's ability to finance the war in Ukraine. The proposal, which was first put forward during the G7 meeting in late June, was developed to convince countries which so far haven't been willing to boycott Russian oil, to at least gang up and agree to only buy it at rock-bottom prices. The oil cap, which will be implemented at the same time as the anticipated EU embargo on Russian oil takes effect, will consist of two price caps, one for crude and one for refined products. The crude cap will apply from December 5 with refined products to follow from February 5, 2023. At their virtual meeting, the G7 finance ministers stressed that while the oil price cap plan was "specifically designed" to reduce Russian revenues and its ability to "fund its war of aggression", at the same time it will also minimise the damaging economic fallout of the conflict, "especially on low and middle-income countries".

As expected, the agreement was immediately followed by Moscow announcement that it would stop supplying oil to any county implementing the price cap. However, the West response to the Kremlin threats of using energy as a weapon by cutting supply and manipulating energy markets is not stopping at oil. Following the agreement at the G7 level, the EU has in fact decided to move forward on a potential price cup on imported gas and on gas used for electricity production. EU energy ministers are meeting in Brussels on Friday 9 September and are expected to discuss plans for caps on wholesale gas prices to tackle the widening energy crisis and curb inflation.

In the meantime, in a move that is already having repercussion on the whole energy market, the Kremlin sought to ramp up pressure on western Europe with the indefinite closure of the Nord Stream 1 pipeline to Germany. With prices rising up once more to new hights, remains to be seen if the moves devised by Brussels to contain the fast-spiralling energy war will be enough to soften the harsh perspective of a winter without Russian gas.


EPBD battle continues

Following the summer recess, the members of the ITRE committee are back in Brussels to take stock of the over 1500 Amendments tabled to rapporteur Ciarán Cuffe  Draft Report on the Energy Performance of Buildings Directive. With the energy crisis more severe than ever and the prospect of a long hard winter ahead, buildings are in the spotlight, and MEPs will have to work hard to find a compromise before the scheduled vote in October. 

Among the proposed amendments, we are  happy to highlight that several ones directly toke on board Eurofuel recommendations, including MEPs Sean Kelly and Morten Petersen proposed amendment to Annex II, calling for the inclusion of “the modernisation of the heating and cooling stock via the installation of technologies ready to work with renewable and decarbonised energy sources”. Additionally, several MEPs pointed to the specific situation of rural homes which cannot rely on renewable energy produced on-site, indicating the need to allow off-grid buildings to “utilize other readily available renewable energy sources […] such as renewable liquid gasses”.

amendments epbd

Other relevant amendments submitted to the draft report include:

  • the EPP, S&D and ECR groups proposed removal of the conditions requiring the distribution of energy from renewable sources produced nearby’ through a dedicated network and its use through a dedicated connection to the energy production source under Article 2.
  • changes to the rules on setting minimum energy performance requirements under Article 5, with the EPP, Renew Europe and ECR Shadow Rapporteurs recommending enabling Member States to set an exemption from the application of minimum energy performance requirements in respect of officially protected buildings which would see their character or appearance unacceptably altered. 
  • the EPP and Renew Europe Shadow Rapporteurs proposed introduction of a threshold for the implementation of indoor air and environmental quality measuring devices in new and existing buildings to be set at 70 kW effective rated output for their heating systems, cooling systems or systems for combined space heating and cooling.
  • The Rapporteur, as well as the EPP Shadow Rapporteur, amendment addressing the introduction of binding targets, applicable to banks and other mortgage lenders, on mortgage portfolio standards which are aligned with national building renovation plans. 
  • the recommendation of the Shadow Rapporteurs from the S&D and GUE/NGL groups to complement the promotion of financial incentives with policies and measures to avoid renoviction and gentrification processes. 
  • the GUE/NGL Shadow Rapporteur proposed introduction of a new Annex IIb laying down examples of economic instruments and other measures to provide incentives for the application of circular and sufficiency measures for low life-cycle emissions in the construction of buildings. 

Of particular note for Eurofuel is also the amendment tabled in the TRAN committee by MEP Gheorghe Falcă, with whom we met, advocating for taking into account not only “energy from renewable sources” but also from “low-carbon sources”.