In response to Russia’s invasion of Ukraine, apart from the sanctions imposed on the aggressor and Germany’s suspension of Nord Stream 2, the European Commission announced a strategy to quickly make the EU independent of Russian gas supplies. Equally, new sources were identified to replace lost volumes. The communication emphasises the importance to the EU’s energy security of swiftly removing dependence on Russian fuels, while keeping in mind ambitious climate goals. There is also a strong focus on maintaining price and gas storage stability in the EU. SSW Pragmatic Solutions, a law firm recognised by Legal 500 in the Global Green Guide 2022 category, summarises the most important aspects of the adopted strategy. We also indicate what legislative actions can be expected in Poland in the near future.
The REPowerEU plan, announced by the Commission last week, calls for a quick transition from Russian supplies of raw materials by 2030. This target is extremely ambitious considering that, currently, around 45% of the EU’s total gas and coal imports come from Russia. Similarly, the greatest amount of oil imported into the EU is Russian oil (27%). As a first step, the Commission presented the strategy to replace Russian gas supplies as a challenge requiring the greatest effort by the Member States.
The Commission has calculated that 155 billion m3 of gas obtained from Russia by 2030 can be fully replaced by implementing two pillars:
- diversification of gas supply;
- accelerating the transition to renewable energy sources.
“REPowerEU is our plan to break our dependency of Russian gas and define freedom on our energy choices. All we need is the courage and grid to get us there. If ever there was a time to do it, it is now.” –Frans Timmermans, Executive Vice-President of the European Commission, 8 March 2022, Brussels
DIVERSIFICATION OF GAS SUPPLY AND SUBSTITUTION OF NATURAL GAS
The Commission indicates that the implementation of the REPowerEU plan could already lead to a reduction in EU gas demand by the end of the year, at an amount equivalent to two thirds of last year’s imports of Russian gas. Further measures are to include in particular:
- changing the directions of gas imports, e.g. transport via existing pipelines from Azerbaijan, Algeria and via the completed Baltic Pipe;
- increasing the supply and development of the LNG infrastructure – the potential destinations include the United States, Qatar, Egypt, Korea, Japan and even Nigeria, Turkey and Israel;
- increasing production of biomethane –production should increase to 35 billion m3 per year thanks to additional support schemes to construct biogas plants, which should finally provide the economic justification for making difficult investments such as large biogas plants to turn biomethane into a substitute for natural gas in the gas distribution network;
- accelerating the use of hydrogen – up to 50 billion m3 of imported Russian gas is expected to be replaced by hydrogen; interestingly, the Commission does not rule out the use of nuclear energy.
ACCELERATING THE TRANSITION TO RES
However, replacing natural gas with hydrogen and methane will not be enough. The Commission has placed particular emphasis on accelerating investment in the RES sector, including large-scale projects. The barrier identified by the Commission is that the permitting process is complicated and time-consuming. At the household level, the pace of installing PV panels on roofs is to be accelerated and home furnaces are to be replaced by heat pumps.
