Europe Has a $221 Billion Plan to Ditch Russia’s Energy

CNN Business

The European Union has unveiled a 210 billion euro ($221 billion) plan to ditch Russian oil and gas.

Unveiling its “REPowerEU” plan on Wednesday, the European Commission said it would aim to cut Russian gas consumption across the bloc by 66% by the end of this year, and break its dependency entirely by 2027, saving energy and finding alternative sources. and accelerate the transition to renewable energy.

“We are taking our ambition to another level to make sure we become independent from Russian fossil fuels as quickly as possible,” EU Commission President Ursula von der Leyen told a news conference on Wednesday.

Since Russia invaded Ukraine in late February, the bloc has sought to reduce its dependence on Russia’s vast energy exports. It has agreed to ban Russian coal from August, and last month had cut Russia’s share of EU natural gas imports to 26% from 40% last year.

The new plan goes further, aiming to rapidly increase liquefied natural gas imports from the United States and Canada, and increase pipeline gas flows from Norway.

The European Commission has also set up a platform to allow countries to buy energy together, with the aim of helping reduce skyrocketing prices.

“When Europe acts together, it has more influence,” von der Leyen said of the joint procurement program. “This way we can secure the energy imports we need without competition between our member states.”

The plan also emphasizes energy-saving tactics as the “fastest and cheapest way” to address the crisis. Europe will encourage citizens and businesses to reduce their energy use, for example by turning off lights and using less air conditioning, and believes these steps could reduce its demand for oil and gas by 5% in the short term.

In the longer term, the European Union will raise its target of at least 40% of its energy coming from renewable sources to 45%. The bloc plans to drastically reduce the amount of time it takes to obtain permits for new renewable energy projects.

Von der Leyen said the package would “accelerate” the bloc’s transition to renewables and include plans to double the bloc’s solar power capacity by 2025. The additional solar power produced could replace the consumption of 9 billion cubic meters of natural gas annually by 2027, the Commission said in a press release.

It will double the rate of consumption of heat pumps, devices that channel heat from the ground or the air into buildings and that can run on renewable energy.

The Commission has also set a target for the bloc to produce 10 million metric tons of renewable hydrogen and import a further 10 million metric tons by 2030 to help decarbonise some industries.

Much of the 210 billion euros ($221 billion) in new investment planned between now and 2027 would be financed from the EU’s coronavirus recovery fund.

Parts of the plan are proposals for legislation, which would require approval by EU member states, while others are recommendations.

In addition to the coal ban, EU countries are working on an oil embargo. The European Commission said more time is needed for landlocked states that rely heavily on Russian oil delivered through pipelines to find alternative supplies.

Hungary, which got about 40% of its oil imports from Russia last year, according to the International Energy Agency, has so far refused to sign on.

Some member states have rapidly reduced their energy imports in recent weeks. Germany, Europe’s largest economy, is particularly dependent on gas from Russia but has managed to reduce Russia’s share of its imports from 55% to 35% since the invasion, Economy Minister Robert Habeck said last month. .

The urgency to get rid of Russian energy increased in April when the country cut off supplies to Poland and Bulgaria, making good on President Vladimir Putin’s earlier threat to suspend deliveries to “enemy” countries that refused to pay in rubles.

Finnish state gas company Gasum, which has also refused to pay in rubles, unlike other European energy companies, said on Wednesday that its supplies of Russian gas could be cut off this weekend.

Wednesday’s plan laid out how the bloc would respond if Russia turned off the taps entirely. The Commission said it would work with member states to understand where gas demand could be reduced and which countries could reduce their consumption to the benefit of others.

“Decoupling Europe from its largest energy supplier is going to be difficult,” Kadri Simson, the European energy commissioner, told a news conference. “But the economic benefits of ending our dependency will far outweigh the short-term cost of REPowerEU.”

Robert North, Angela Dewan, and Joseph Ataman contributed to this report.

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