Moving EU-Russia gas relations 'out of the cold' : a policy view

The warming of EU – Russia gas relations would be considerably beneficial to the EU, and is an achievable goal if a rational approach is adopted. Fundamental to this, is the acknowledgment of three essential issues. Firstly, EU – Russia gas relations cannot be considered independent of the bleak political context. Secondly, the EU will continue to need Russian gas for the foreseeable future. Thirdly, Russia’s dependence on the EU gas market is becoming much stronger than the EU’s energy reliance on Russian gas. Once these issues are acknowledged and accounted for, an improvement in EU – Russia gas relations is achievable and sustainable. It is only a matter of will to negotiate and create stable and viable proposals

Competitiveness and energy: two sides of the same coin

Overview over the energy policy of the European Commission in recent year

What to Expect from the 2020 Gas Package

Gas is considered an important part of the European Union’s (EU) energy mix. Making up a quarter of the energy consumed in the EU, it is widely used by both households and industry. Gas supports the penetration of intermittent renewable electricity and is considered the cleanest of the fossil fuels but its combustion emits a considerable amount of greenhouse gases. In the fight against climate change, the EU has committed itself to the near-complete decarbonisation of the energy sector well before 2050. This will have a significant impact on the gas sector, especially in the EU, which has significant gas transportation and storage assets. This commentary examines two potential pathways that could enable the gas sector to contribute to the EU’s decarbonisation efforts while continuing to play a substantial role in the EU’s energy supply. The pathways include gas and electricity sector coupling and the substantial increase of renewable gas production. Those options, which are not mutually exclusive, provide an opportunity for the gas sector to thrive in a decarbonised energy future. In some cases, it could require changes in the EU’s gas legislation announced by the European Commission to be proposed in 2020

The role of CCUS on the EU road to climate neutrality

The EU has decided to achieve carbon neutrality by 2050. While energy efficiency and renewable energy must and will remain the foundation of the EU's future energy priorities, carbon capture, utilisation and storage (CCUS) will be necessary to achieve this 2050 objective, notably during the transition. In some sectors with hard-to-abate greenhouse gas (GHG) emissions, such as cement, this is the only option for decarbonisation, and in other energy-intensive areas it will be needed for affordable GHG reductions during the energy transition period. CCUS using biomethane could also deliver negative emissions and be an important carbon sink. Finally, the use of carbon capture and storage (CCS) for producing low-carbon hydrogen could provide significant cost savings, again during the energy transition. Despite the implementation of Directive 2009/31/EC ‘On the geological storage of carbon dioxide,’ the use of CCUS has been slow. Strong leadership by the European Commission is needed. The adoption of a European Strategy for CCUS and a European Commission initiative to catalyse CO2 infrastructure could provide this necessary step change

Energy security meets the circular economy : a stronger case for sustainable biomethane production in the EU

The outbreak of the Russia-Ukraine war has revived discussions on the EU’s dependence on fossil fuel imports from Russia. To ensure gas diversification, the EU Commission has suggested over a tenfold increase in EU biomethane production from the current ~3 billion cubic meters (bcm) to 35 bcm by 2030. While higher gas prices could provide some incentive for biomethane production in the short term, additional measures will be necessary to reach the 2030 target. The International Energy Agency (IEA) has suggested that putting a value on methane emissions (which would otherwise be emitted from the decomposition of organic waste in the agriculture and waste sectors) avoided could support biomethane production while reducing this potent GHG. This could be an interesting option for the EU to support achievement of its Global Methane Pledge commitment. The EU circular economy framework could help boost biomethane production by alleviating energy security concerns, but it requires better policy coordination. This policy brief identifies four focus areas: (a) measurement, reporting and verification of methane emissions from the agriculture and waste sectors; (b) continual improvement of best practices to mitigate methane emissions; (c) sustainable production of biomethane; and (d) responsible operation of biomethane plants

Europe’s energy challenges : security and infrastructure in a dangerous landscape

The safeguarding of critical offshore energy infrastructure has assumed a heightened level of urgency in the wake of the Nord Stream pipeline explosions in September 2022 and the suspected sabotage of the Baltic Connector in the summer of 2023. While the discourse on infrastructure protection has been prevalent since the 2001 terrorist attacks in the United States, the emphasis on maritime zones has only recently become pronounced. The ramifications of sabotage, as well as unintended incidents of force majeure in these zones, can profoundly impact Europe’s grid-bound energy markets, disrupting both electricity and gas sectors. This paper posits that, despite recent advancements in initiatives and the strengthening of legal frameworks, the protection of critical energy infrastructure remains fraught with significant challenges. It advocates for the integration of a strategy for measures of protective and surveillance for offshore grid-bound energy infrastructure into the European Sea Basin Strategy. This strategy represents a dynamic and innovative policy approach, designed to bolster cooperation and foster innovation across various European maritime zones. A key component of this policy framework is the emphasis on prioritizing the development of offshore wind energy and enhancing inter-state connections through maritime cables and gas pipelines. Current policy evolutions indicate a strategic shift in the role of maritime infrastructure, acknowledging the emergence of new security risks. While onshore energy infrastructure protection is undeniably crucial and demands focused efforts at the national level, the protection of maritime infrastructure necessitates a coordinated approach at the EU level. Drawing from these observations, the Policy Brief suggests relating the voluntary efforts in protection and surveillance of offshore grid-bound energies by stimulating insurance mechanisms against risks and by ensuring back-up solutions for existing infrastructure. This way, market incentives will increase effectiveness of monitoring and surveillance, while inter-state cooperation will be framed by the European Sea Basins Strategy. To address this set of issues, the Policy Brief will initially review recent developments in policy literature on this subject. It will then provide an overview of the existing and latest initiatives undertaken by the EU and NATO, aiming to conduct a comprehensive policy gap analysis. The paper will conclude by delineating the primary policy challenges associated with the protection of critical infrastructure, offering insights into potential policy responses

The EU can reduce global methane emissions by jointly purchasing gas

The European Union (EU) is likely to face a gas supply-demand gap of 27 bcm in 2023-2024. This gap could be reduced by enhancing its partnership with oil and gas producing countries with spare export capacity – particularly Algeria, Egypt and Nigeria – to incentivise the capture and export of gas that is currently wasted (flared, vented and leaked). To tap this opportunity the EU could combine two measures in the REPowerEU toolbox: joint gas purchasing and 'You collect/we buy’ schemes (purchasing frameworks aimed to incentivise the capture of wasted fossil gasses, including methane, under the EU energy diplomacy). This combination would enable the main barriers preventing greater capture of methane to be addressed while taking advantage of the Union’s leverage: the presence of non-operated joint ventures (NOJVs) controlled by EU-based undertakings in the region; and the upcoming EU Methane Regulation covering domestic emissions and those associated with fossil energy imports. This approach would help the EU increase its energy security without triggering unintended policy consequences: compromising on its climate targets; prolonging reliance on fossil fuels; or decelerating the energy transition in developing economies. If successful, the scheme could be replicated in other regions to support achievement of the Global Methane Pledge objectives

The appeal procedure in the application of the EU energy law – experience from ACER’s board of appeal 2016-2021

This paper analyses the design and functioning of the EU Agency for the Cooperation of Energy Regulators’ board of appeal, and provides a record of the key issues of substance and procedure it faced, from the inside perspective of the authors, as former chairman and vice chairman of this body, from November 2016 to October 2021. As in some other EU decentralised agencies, the BoA is an independent panel of specialists appointed to review the appeals against the agency’s decision, and a mandatory gateway to the General Court. It’s specificities stem from those of ACER’s role in the construction of energy markets and of the place of the decisions it takes in the architecture of the EU energy policy : despite being labelled as “individual decisions” many of ACER’s decisions are of general application and have major impacts on energy markets. In the context of the implementation of network codes, the BoA was faced with an increasing number of cases (29 appeals, which were consolidated into 19 decisions) on complex issues. The time limit in which it must issue its decisions has been extended from 2 to 4 months to enable it to progressively adjust the depth of its scrutiny to the appropriate level. Outstanding questions remain on the resources allocated to the board and on the clarification of its powers and procedures

Are pipelines and ships an ‘either or’ decision for Europe’s hydrogen economy? : planning import lines for hydrogen and derivatives

If estimates and targets are to be believed, roughly 6 to 10 million tonnes of hydrogen will be imported into the EU every year by the end of the decade, requiring very significant infrastructural investment decisions. At times, the policy debate appears to frame shipped deliveries of liquid hydrogen or hydrogen carriers and pipeline deliveries as two sides of the same coin, particularly in the wake of a strong shift away from pipeline gas and towards LNG since the Russian invasion of Ukraine. In this paper we explore the cost, scalability, technological maturity, and project evolution of these two delivery methods. We find that although shipping of hydrogen in carriers could in some scenarios deliver the single cheapest tonne of hydrogen, shipping does not appear to have the scalability to meet any meaningful portion of the EU’s needs within the next decade or so. We make the case that Europe should have a two-step approach to infrastructure planning. First leveraging its competitive advantage in pipelines, allowing island and remote nations to innovate and scale shipped delivery options, with experimentation for derivative imports in the EU being used to directly decarbonize those sectors. In a second phase the EU can take advantage of advances in shipping to diversify import options if hydrogen begins to constitute a meaningful share of the energy mix