The European Union and its member states have been ramping up efforts over the past two years to combat climate change and decarbonize as many sectors as possible, from standpoints of both policy and the economy. The European Commission published its Green Deal in December 2019 and subsequent Fit-For-55 legislative package in July 2021, which set some very ambitious decarbonization goals. These included a 55% reduction in greenhouse gas emissions (as compared with 1990 values) by the end of 2030 and complete carbon neutrality within the year 2050. The Fit-For-55 package contains five directives and eight regulations aimed at adding renewable energy sources into the European energy mix, reducing the overall consumption of energy, switching to electricity where possible and increasing the energy efficiency of energy-intensive sectors such as transportation, industry and construction; all this in addition to making it increasingly costly to produce CO2 emissions.
The ultimate scope of the European strategy is to start now making the investments needed to rapidly achieve those climate goals and ensure a sustainable society and world to future generations. G20 member investments in fossil fuels between 2020 and 2021 were only slightly higher than those in renewables, estimated at respectively $274 billion and $258 billion. To further encourage this trend and stimulate private investing in sectors consistent with the green transition, over the past two years the EU has compiled a list of activities considered environmentally sustainable, among which low emissions gas fuel and the transitory use of nuclear power. Although it will be gradual, the energy mix transformation is going to have an impact on jobs, creating new professions that will replace some activities in the fossil fuel sector. The projected results will only be reachable if a holistic approach is brought to this epochal challenge, which includes increasingly efficient energy technologies, greater digitization and adequate investment in preparing the younger generations with the necessary skills and knowledge.
Starting in the autumn of 2021, electricity and gas prices began to rise in all EU member states due to the scarcity and costliness of raw materials, resumption of manufacturing after the pandemic and the tariffs on CO2 emissions levied by the Emissions Trading System (ETS). Since then, national governments and European institutions have been discussing how to mitigate the spike in prices for consumers and limit such price volatility in the future. While there are many emergency policies to be implemented, the most efficient long-term solution would seem to be to gradually reduce Europe’s reliance on gas and fossil fuels and accelerate the transition to clean energy. Despite the sizeable initial investment this would call for, experts and regulatory agencies alike agree that renewable energy sources’ low marginal costs clearly make them a more sustainable long-term option.
Moscow’s invasion of Ukraine has reinforced the urgency of protecting Europe’s energy security by reducing dependency on foreign suppliers, integrating wind and solar power and accelerating the production of green hydrogen and biogas. Although achievement of these goals will inevitably be gradual, it is especially at moments of crisis such as the present one that Europe must not forget its promises to future generations. However brief they may be, emergency measures such as reopening coal plants to offset skyrocketing prices and dwindling gas reserves must not be allowed to stand in the way of the goals set for the next ten, twenty and thirty years.
As necessary as it is for the European Union to share a long-range vision, energy strategies are almost always within the purview of national governments that must decide on the most appropriate path for their respective nations. While Italy, for example, is still highly dependent on natural gas, the National Recovery and Resilience Plan (PNRR) could provide the impetus it needs to accelerate the green transition and increase the use of renewables. To that end, it is going to be essential to streamline the bureaucratic and authorization procedures that currently discourage investments and impede the development of innovative energy projects.