The European Commission's REPowerEU Plan, proposed on 18 May 2022, aims to pave the way for full EU independence from energy imports from Russia by 2027.
It is based on four pillars:
- Energy savings
- Diversification of energy imports
- Substitution of fossil fuels and acceleration of the clean energy transition
- Smart investments and reforms
The overarching Communication is accompanied by a whole set of sub-initiatives, among them a Communication on Energy Savings, an EU Solar Strategy, a Communication amending the Renewable Energy Directive, the Energy Efficiency Directive and the Energy Performance of Buildings Directive, a Recommendation on Permitting Procedures and Power Purchase, as well as a Regulation for REPowerEU chapters in national recovery and resilience plans.
In a nutshell, the plan raises the EU 2030 targets for energy efficiency from 9% to 13% and the share of renewable energy from 40% to 45% by 2030. It also sets out recommendations to speed up permitting procedures for new wind and solar projects. In terms of diversification of energy imports, it proposes to set up an EU Energy Platform for the voluntary common purchase of gas, while considering a voluntary operational joint purchasing mechanism as a next step.
Upgrading and adapting Europe’s energy infrastructure in line with changing transport needs (reverting gas flows from West to East and North to South), while ensuring infrastructure is ready for the uptake of hydrogen and ammonia, will come at considerable cost. The Commission’s proposal seeks to tackle this with €300bn made available from untapped loans of the Recovery and Resilience Facility (€225bn), topped up with additional funding coming from the auctioning of reserved ETS (Emissions Trading Scheme) allowances and allowing for the transfer of up to 12.5% of Member States’ Cohesion Funds.
Not enough to shield industry and workers
Regrettably, the REPowerEU plan fails to deliver appropriate responses to the short- and long-term risks for industry and working people. It is lacking ambition to truly tackle the structural problems of the energy market, where the price of gas will continue to determine the overall price of electricity. It is uncertain that the proposed measures will be able to deal with the short-term risks of ensuring that European industry, working people and households survive next winter.
Combined with other decisions, such as the proposal to accelerate the phase-out of free allocations in the revised ETS more quickly than originally proposed (as voted for by MEPs in the ENVI Committee in the European Parliament earlier this week), our members are increasingly concerned about the future of jobs in Europe’s energy-intensive industries. They are highly critical that a comprehensive strategy to tackle investment risks and enough time for a Just Transition are missing.
This perfect storm could result in plant closures, mass layoffs and increasing poverty across Europe.
But fundamentally, despite the loud calls from workers and industries, the absence of a social dimension to these proposals concerns us most. There is no reflection beyond empty rhetoric on how to address the social dimension and no strategy on how the EU can realistically keep its promise of ensuring a Just Transition for workers in the current context.
For industriAll Europe, windfall taxes, regulated prices, alternatives to the marginal cost pricing method, and greater use of public service obligations (to grant households and industry a right to energy), are all options that Europe must urgently consider. Households need to be supported by all available means to overcome this crisis, to avoid deepening inequalities and leaving more people in extreme poverty in Europe.
For industriAll Europe, the Green Deal remains the answer to our long-term challenges. But the EU must offer credible responses in the short term to the skyrocketing energy prices that are likely to remain high in the future. In the context of the current revision of the ETS Directive, free allocation of ETS allowances should remain a tool for industries to manage the transition and keep production in Europe. Under no circumstances should this mean a blank cheque for industry. Public funds must be conditional on clear binding commitments to decarbonise production while anticipating the change through strong and effective social dialogue with the workforce. In this period of extreme uncertainty, EU policies must ensure that we don’t lose more strategic industrial production capacity in Europe. This will only increase our strategic dependencies, creating new crises for tomorrow.
“We had high hopes for these REPowerEU proposals, but workers across Europe will be disappointed at the disconnect between their everyday domestic and industrial experience and the measures proposed”, said Luc Triangle, General Secretary of industriAll Europe.
Contact: Andrea Husen-Bradley (press and communication), Corinna Zierold (senior policy adviser)