In five years, European countries hope to end dependence on Russian fossil fuels, and by the end of the year, they look to slash reliance on Russian gas by two-thirds. If Europe follows through on these pledges, Russia’s invasion of Ukraine could propel one of the swiftest energy transitions in history.
The biggest question now is whether it’s a transition off oil and gas — or just off Russian oil and gas.
Right now, it seems fossil fuels are winning. Oil companies in the United States are eager for Europe to swap one fossil fuel for another and build out more infrastructure on both sides of the Atlantic to carry oil and gas to Europe. And despite their climate pledges, world leaders have shown early support for ramping up fossil fuel infrastructure.
On Friday, during President Joe Biden’s trip to Europe for meetings of the G7 and NATO, the US announced a new joint agreement with Europe that promises 15 billion cubic meters in new shipments of liquified natural gas (LNG) this year. That will be on top of the shipments already going to Europe, and will replace about a quarter of the gas imported from Russia.
But the United States is not in the driver’s seat. European countries are the ones that face the real choice between building new fossil fuel infrastructure or speeding up their timeline on clean energy investments. And they could hasten their transition off of fossil fuels by prioritizing climate-friendly solutions, like incentivizing energy efficiency, installing heat pumps, and speeding up renewable permitting. Two new reports from independent think tanks this week outline a viable path that doesn’t replace Russian oil and gas with other fossil fuels.
One month into Russia’s invasion of Ukraine, the European Union’s messaging has been a mixed bag. Earlier this month, the executive branch for the European Union, the European Commission, included new LNG terminals and pipelines to import other countries’ fossil fuels in its options for meeting energy demand. Even so, it reaffirmed its commitment to slashing greenhouse gas pollution 55 percent over 1990 levels in just eight years.
It would be decidedly short-term thinking to fast-track LNG terminals in Europe. United Nations Secretary-General António Guterres has called it “madness” to ignore the need to reduce fossil fuel reliance when it has become abundantly clear the world needs to stop building new infrastructure. “Addiction to fossil fuels is mutually assured destruction,” he said on March 21. “Countries could become so consumed by the immediate fossil fuel supply gap that they neglect or knee-cap policies to cut fossil fuel use.”
The European Union is second only to the United States in having the largest impact on climate change since the Industrial Revolution, and the next few weeks can reshape global energy politics permanently. It’s far from a given, though. EU members now have a choice: They can boost oil and gas from elsewhere, or they can undertake the most ambitious transition to renewables and energy efficiency in history.
There’s a real chance Europe chooses fossil fuels
Energy prices may have been steadily climbing in the last year, but for now there aren’t immediate gas shortages in Europe. Next winter will be the true test of whether Europe can survive without Russian gas because that’s when heating for buildings drives up gas demand. No country is in for more of a roller coaster than Germany, which relies on Russia for more than half of its gas imports, followed by Italy.
The European Commission released an initial plan, dubbed RePowerEU, on how to get through the immediate crisis. One of the first steps the European Commission advised was to increase storage of gas ahead of next winter to 80 percent of capacity. The EU’s looking to other countries to stock up on that gas.
But the EU needs infrastructure to process and transport all this gas, and the existing infrastructure isn’t going to cut it. According to the German newspaper Deutsche Welle, there are 37 LNG terminals in EU member states, and none in Germany. Countries like Germany are planning new terminals, but those already in the works won’t be completed for several years. One proposed LNG terminal in northwestern German cities wouldn’t be built until 2026, and would meet up to 10 percent of the country’s gas demand. Now there are talks of two new terminals planned in Germany in response to Russia’s war with Ukraine, a sign that countries are increasing their investments in fossil fuels in response to this crisis.
This is hardly an energy revolution. Europe’s energy supply would still look largely the same in response to the crisis; it would just come from other parts of the world, at a higher cost.
Defenders of the plan to boost LNG imports to Europe say it is the only way to make up the gap left by Russian gas. As one White House senior administration official said in a press call Friday, the LNG deal is needed “in the very near term to avoid people getting cold this winter and next winter before clean energy is deployed at scale.”
That approach has its critics. “The necessary measures to permanently reduce fossil gas consumption go hand in hand with what’s needed to meet the EU’s climate targets,” Matthias Buck, director of the German think tank Agora Energiewende, said. “The EU now needs to make sure that RePowerEU accelerates energy efficiency and renewables expansion to achieve energy sovereignty by 2027.”
Natural Resources Defense Council’s international program director Jake Schmidt argues building new infrastructure for fossil fuels would be foolish. “There’s a lot of skepticism about whether or not Germany can actually build the import facilities as fast as they’re claiming,” Schmidt said. “The gas facilities will come online at a time where they won’t need that gas. And so you’re looking at a 30-year investment facility that has five to 10 years of life, max. That’s not great economics.”
Europe can get through this crisis without latching on to more fossil fuels. Seriously.
Two reports out this week from European think tanks argue that almost all of Europe’s gas needs can be met with energy efficiency and exploring underutilized clean energy options. It would require the EU to make a concerted effort to slash energy consumption. One report from Agora Energiewende, which advocates for Germany’s clean energy transition, suggests it’s possible to cut the EU’s overall gas usage by 32 percent by 2027.
A second report from environmental NGOs Bellona, Ember, E3G, and Regulatory Assistance Project concludes that combining a clean energy expansion with accelerated energy efficiency efforts would replace about two-thirds of the demand for Russian gas as soon as 2025.
Importantly, the report argues that “security of supply and reduction of Russian gas dependence do not require the construction of new EU gas import infrastructure such as LNG terminals.” The NGOs argue this can even be done without extending the life of nuclear power or increasing coal use in the next few years.
Some reforms that the report suggests require more accountability and oversight for the oil and gas industry, namely by doing more to prevent methane leaks throughout their operations, since that is wasted fuel could be conserved and used. Other solutions are fairly simple but do require collective action. These are relatively small changes to behavior, like consumers reducing their heating by a degree or two, installing smart thermostats, sealing drafty windows, and installing LED bulbs.
These measures sound small, but add up to a lot, according to Agora Energiewende. For example, the report says energy efficiency and replacing gas boilers in buildings that run on fossil fuels could slash reliance on gas by more than a third by 2027, by 480 terawatt hours. Heat pumps — a technology that can be used to heat or cool buildings — are one of the modern alternatives to the inefficient gas boiler. Industrial operations could also stand to become more efficient, so some similar energy-saving measures could net even greater gains.
Added up, the report claims that of the 3,800 terawatt hours of gas that the EU consumed in 2020, about a third could be displaced in five years.
Then there are the policy levers. Governments can fast-track permitting for proposed clean energy projects offshore and on land. Meanwhile, the European Commission has already announced a plan to double the rate of heat pump installations by this winter. There are other policies in the works that can ensure the EU is less reliant on fossil fuels. France, for example, announced it will end subsidies for new gas heaters, and ramp up subsidies instead for heat pumps.
Beyond energy efficiency, there are other policies that work to speed up a transition to clean energy. The European Union is considering a proposed regulation that places a fee on imports from countries with lagging climate policies, constituting the world’s first carbon border tax. The idea behind the tax is to discourage companies from relocating to countries with more lax climate policies.
The common thread of many of these solutions is that there needs to be more emphasis on energy efficiency. Leadership on many of these measures won’t come from the United States. The US has yet to pass any comprehensive law to tackle climate change, and Biden’s hopes for clean energy investments have stalled in Congress. The US won’t lead, but Europe still can.
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