Announced in May this year (2022), the European Commission set the goal of boosting Europe’s renewables usage to 45% of the energy mix by 2030, as well as setting targets to produce 10 million tonnes of renewable hydrogen domestically by the same deadline.
It has been reported in the European media that EU member states are proposing the plan be scrapped, reducing to 45% renewable target with 40%, a target that had already been agreed by the European Parliament in June (2022).
The plan came off the back of increasing geopolitical and energy market concerns following Russia’s invasion of Ukraine in February (2022), setting out to cut dependence on Russian fossil fuels, while meeting ambitious climate targets.
Growing uncertainty around the continent’s short-term energy security, and an ongoing war in mainland Europe that threatens power blackouts across EU member states, appears to be stirring a sense of ‘not-in-my-backyard’ attitude among consumers and economies alike, with resistance also seemingly building to renewables as countries seek immediate energy solutions.
In a report released today (October 13), independent energy expert, DNV, said that Europe’s gas consumption will fall dramatically as a result of the war in Ukraine, predicting that gas will meet just 10% of Europe’s energy demand in 2050, compared to 25% today.
The Energy Transition Outlook report predicted that by 2024, no new oil and gas will be needed in high income countries, with middle- and low-income countries following in 2028.
Despite seeing high energy costs reversing the coal-to-gas switch in many regions, which is ‘putting a dampener on decarbonisation’ investments, the DNV believes the impact of the current crisis on the overall energy transition is outweighed by plummeting renewables costs, and increased carbon costs in the long term.
However, the DNV found that investments in renewables must triple, and grid investments must grow by more than 50% over the next decade if we are to hit Net Zero globally by 2050.
According to DNV, its pathway requires greater policy intervention than seen currently, with higher carbon taxes, subsidies, stronger mandates, bans, and financial incentives to encourage the replacement of fossil fuels with renewables.
The report reads, “The pursuit of energy security, particularly in Europe, will accelerate the transition to renewable energy and hydrogen in the medium term, trumping the short-term doubling-up of hydrocarbon production.
“However, only if Europe, and other sanction imposing countries, persuade other countries to diversify their energy sources, will this affect the global demand for fossil fuels and accelerate the green transition globally.”
Remi Eriksen, Group President and CEO of DNV, said, “With COP-27 approaching, it is important that policymakers recognise the huge opportunities inherent in decarbonising the energy mix in light of the mounting costs of climate change impact. The technology exists to achieve Net Zero emissions by 2050, but for this to happen we must utilise the scope of the policy toolkit.”