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EU cash is driving the power transition in Europe, particularly in international locations nonetheless closely depending on fossil fuels, however some governments are nonetheless trying to make use of EU public cash to finance new fossil gasoline tasks, regardless of their local weather obligations.
Investing in fossil gasoline infrastructure is a dangerous enterprise. Greenhouse gasoline emissions from fossil gasoline extraction, transportation and combustion, whether or not deliberate or inadvertent, vastly exacerbate international warming.
Such investments are additionally questionably suitable with the EU’s decarbonisation technique at a time when governments needs to be prioritising renewable power sources and power effectivity to make sure a habitable planet for future generations. Increasing the fossil gasoline sector essentially drives gasoline consumption, in flip undermining the binding targets of slicing 55 p.c of greenhouse gasoline emissions by 2030 and reaching web zero emissions by 2050.
So, nationwide authorities can’t spend EU public cash on new fossil gasoline infrastructure and declare they’re dedicated to the European Inexperienced Deal.
However in some European capitals, policymakers suppose in any other case.
In line with a latest Bankwatch report, the Polish and Romanian governments plan to steeply improve investments by way of EU funds — together with the cohesion coverage, restoration plan and the modernisation fund — and spend almost €4bn on new gasoline infrastructure and tasks growing gasoline consumption. If these plans materialise, they might concurrently undermine efforts to chop emissions and threaten the financial sustainability and power safety in Poland and Romania.
Gdansk
In Poland, the authorities are planning to sink over €2bn by 2027 in EU financing into tasks meant to import and transmit fossil gasoline and to broaden gas-based heating. These embrace the brand new LNG terminal in Gdansk, new transmission and distribution networks, and subsidy schemes for gasoline boilers in buildings.
The Romanian authorities has additionally earmarked greater than €1.7bn for fossil gasoline tasks for a similar interval. That might be 4 occasions greater than the earlier monetary interval. These allocations are anticipated to develop, as extra financing calls from the modernisation fund might be launched, from which Romania has entry to €14bn by 2030. On the finish of Could 2023, new disbursements had been made obtainable and Romania obtained one other €93m for gasoline pipelines.
When governments are utilizing EU funds to construct gasoline storage services, gas-fired models in energy crops or LNG terminals — because the Polish and Romanian governments are planning on doing — they’re successfully endangering the way forward for their very own residents.
So, how is it nonetheless doable?
Nationwide methods planning in a number of EU member states are dominated by current gamers that choose antiquated and central options primarily based on fossil fuels. However the principle purpose nationwide authorities are nonetheless in a position to direct EU cash to fossil gasoline tasks is due to EU funds’ outdated design.
Whereas some governments are utilizing the dearth of readability in EU legislation to utilise EU funds for gasoline infrastructure, it’s apparent that such investments are incompatible with the EU’s local weather aims. The dearth of precision in EU legislation relating to financing for gasoline infrastructure leaves an excessive amount of room for interpretation.
It’s laborious for the European Fee to handle member states’ power plans, since every nation decides its personal power combine individually. However EU establishments will help be certain that European public cash would not undermine, however moderately facilitates the power transition. For this, EU funds’ eligibility guidelines have to be revised in order that fossil gasoline investments are clearly excluded.
EU funds’ guidelines for the finances interval of 2021-2027 had been drawn up earlier than Russia, Europe’s predominant fossil gasoline provider, began utilizing its power exports, primarily fossil gasoline, to advance its belligerent geopolitical agenda.
Curbing fossil gasoline imports from Russia was the fitting method ahead. However importing gasoline from different non-democratic regimes equivalent to Azerbaijan, Qatar or Egypt can’t be thought of as enhancing the EU’s power safety. If something, such cooperation successfully legitimises these regimes’ horrendous human rights report.
Allocating EU funding for fossil gasoline may additionally show to be a big hit to state coffers. By constructing new gasoline infrastructure, the Polish and Romanian governments danger locking their power sectors into continued emissions and an economically inefficient technology supply as the worldwide power panorama shifts in the direction of extra sustainable options.
So, it’s now extra pressing than ever to revisit the governance of EU funding to align it each with the brand new worldwide power panorama, and with the EU’s effort to minimise its reliance on extremely risky and local weather wrecking fuels.
EU monetary sources needs to be used to allow and scale up confirmed options equivalent to renewable power manufacturing, primarily appropriately sited photo voltaic and wind farms, and residential photovoltaics methods, whereas strengthening electrical energy grids and storage, but additionally decreasing power demand by way of power effectivity measures.
Disqualifying fossil gasoline tasks from getting EU financing would additionally information international locations equivalent to Romania and Poland on their strategy to a safer and resilient power future.
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