Recently 9 EU Member States signed a position paper ( Non-paper_Role of gas in climate-neutral Europe.pdf ), disseminated by a few EU media, highlighting the role of natural gas in a climate-neutral Europe.
The paper aims to launch an informal discussion within EU institutions aimed at looking for agreement on a controversial policy issue. By signing this document, Bulgaria, Czechia, Cyprus, Greece, Hungary, Lithuania, Poland, Romania, Slovakia addressed an important challenge for the EU’s energy transition:
how realistic is to achieve carbon neutrality by 2050? How much natural gas could help reaching that goal and continue to be part of EU energy strategies, despite the Commission scenarios rule out any significant contribution by natural gas after 2030?
As it is obvious, the EU economic system will not achieve climate neutrality left to itself, It will require specific and timely actions such as stricter regulations, incentives and government funding for research and development. Yet, the political agreement reached by the EU Council on the post-pandemic recovery fund and the 2021-2027 budget have drastically reduced the resources to support research, innovation and the needed green transition for those Member States and Regions still deeply linked to the polluting coal economy.
These decisions have further deepened the investment gap that has marked the EU Green Deal since the outset. Moreover, the current policy framework on natural gas was designed to address the factors hindering competition, a different problem from that of developing the right technological, financial and market driving tools to achieve decarbonization.
The Commission commitment on the future EU Climate policy includes the adaptation of existing regulations to enable decarbonisation of gas, regulation on methane emissions, and the strategies on hydrogen and for smart integration between gas and electricity. But proposals are still relatively general and not always based on coherence.
According to Eurostat, in 2018 natural gas represented 24% of energy supply in the EU 28 and 22% of final energy use, 32% of industry final energy consumption, 31% of commercial, and 36% of residential. These figures speak volumes about the fundamental role that natural gas play in the economy and the scale of the challenge to achieve net-zero emissions
According to the signatories of the position paper, natural gas has already been a key factor in reducing EU emissions since 1990 and can continue to deliver important emissions reductions towards 2030 and beyond. In many regions across the EU, natural gas can still provide quick wins in decarbonisation when switching from fossil fuels with a higher carbon footprint, such as coal and oil, using well-known and proven technologies and costs not hampering the EU competitiveness.
The EU policy framework should equip investors with direction and predictability to create a momentum for the decarbonisation of the gas system. Investments cannot be subject to discriminatory treatment neither from the EU funding perspective, nor from the EU Taxonomy Regulation perspective which aims to stimulate sustainable investments.
Companies operating gas infrastructures should have the same access to external capital as the ones of electricity. Therefore, it is of crucial importance to maintain EU support and financial assistance for the development of gas infrastructure through enabling framework, structural funds, and investment loans.
The total investment needs in Poland’s power generation alone to reach carbon neutrality have been estimated at 179-206bn/Eur. In 2019 , In Germany, renewables accounted for approximately 40% of electricity production whereas coal and lignite were responsible for about 28%, gas for 15% and nuclear power for 12%. Generating such amounts of renewable energy required 122 GW of installed capacity and over 20 bn/Eur a year in subsidies. With these figures at stake, it is not surprising that Poland is among the signatories of the position paper.
In September, the Commission will propose to increase the EU target for 2030 greenhouse gas emissions reductions from 40% to at least 50% towards 55% compared with 1990 levels “in a responsible way”. It will do it first through the European Climate Law, and later through sectoral legislative proposals. Reaching an agreement in the Council will not be easy unless concrete answers are given about how to face the challenges outlined in the above – mentioned position paper.
However, the debate on decarbonisation should not focus exclusively on the role of natural gas. Other open questions remain.
The EU Council, while agreeing on the goal of achieving climate neutrality, acknowledged the need to ensure energy security and respect the right of the Member States to decide on their energy mix as well as choose the most appropriate technologies, including nuclear power.
Nuclear energy is a low-carbon energy source and represents a critical component in the energy mix of 13 of the 27 EU Member States, accounting for almost 26% of the electricity produced in the EU. In the aftermath of the 1986 Chernobyl disaster and the 2011 nuclear catastrophe in Fukushima, Japan, nuclear energy has become highly controversial. However, despite its drawbacks, nuclear is considered as one of the key solutions to fight climate change.
Advocates of gas phase-out choose to ignore that the contribution of nuclear power increases significantly under all UN IPCC scenarios which aim to keep global warming under 1.5°C.
The debate on the role of natural gas in the future energy scenarios of the EU takes place in the light of day, with the maximum participation of all stakeholders and a fierce, sometimes comical, media attention.
Yet, there is an extraordinary lack of open discussion about nuclear power. Particularly, about the huge costs to be considered as nuclear could face a global decline as steep as 66% less power by 2040, with a price tag of EUR 1.5 trillion to make up the energy supply lost.
Germany has vowed to start decommissioning every nuclear power facility by the end of 2022. However, Berlin was forced to restart some of its coal power plants to compensate for slumps in energy production caused by the inherent intermittency of wind and solar. Meanwhile, electricity costs for consumers are soaring.
According to the International Energy Agency (IEA) despite the impressive growth of solar and wind power, the overall share of clean energy sources in world electricity supply in 2018, at 36%, was the same as it was 20 years earlier because of the decline in nuclear. Halting that slide will be vital to stepping up the pace of the decarbonisation of electricity supply. The EU would see the largest decline with the share of nuclear in the generation mix falling to just 4%. Even if the decrease in wind and solar PV costs accelerates, the economic case for nuclear remains compelling.
There are a few questions seeking for urgent answers by the EU: is it feasible and sustainable to achieve decarbonisation by 2050 by giving up both natural gas and nuclear power? And if that is not possible, is nuclear energy, with all the problems and costs associated with environmental and human health safety, more acceptable than natural gas when it comes to ensure sustainable, safe, and affordable energy for Europeans?
9 EU Member States have clearly taken a position in support of maintaining the use of natural gas and the necessary infrastructure also to ensure a gradual transition to renewable energies and hydrogen. Some of the signatories have also begun to contemplate building new nuclear installations to reduce their carbon footprint.
It is high time that all 27 EU States set a clear path on the future of natural gas and nuclear power.
EU citizens have the right to be informed in a clear and timely manner about the scenarios that will impact on their future. Without a transparent, honest, and inclusive debate on how to achieve it, a decarbonized EU might turn into anything but a simple thought experiment.