In five years, European countries hope to end dependence on Russian fossil fuels, and by the end of the year they aim to reduce dependence on Russian gas by two-thirds. If Europe delivers on those pledges, Russia’s invasion of Ukraine could fuel one of the fastest energy transitions in history.
The biggest question now is whether this is a transition from oil and gas – or just Russian oil and gas.
For now, fossil fuels appear to be winning. Oil companies in the United States are desperate to see Europe swapping one fossil fuel for another and building more infrastructure on both sides of the Atlantic to get oil and gas to Europe. And despite their climate pledges, world leaders have shown early support for expanding fossil fuel infrastructure.
On Friday, during President Joe Biden’s trip to Europe for G7 and NATO meetings, the US announced a new joint deal with Europe that promises 15 billion cubic meters of new shipments of liquefied natural gas (LNG) this year. That’s on top of supplies already going to Europe and replaces about a quarter of the gas imported from Russia.
But the United States is not in the driver’s seat. European countries are the ones facing the real choice between building new fossil fuel infrastructure or accelerating their clean energy investment timeline. And they could accelerate their shift away from fossil fuels by prioritizing climate-friendly solutions, such as incentivising energy efficiency, installing heat pumps and speeding up renewable energy permits. Two new reports from independent think tanks this week outline a viable path that does not involve substituting other fossil fuels for Russian oil and gas.
A month after Russia’s invasion of Ukraine, the European Union’s message was mixed. Earlier this month, the executive branch of the European Union, the European Commission, included new LNG terminals and pipelines to import other countries’ fossil fuels into its options for meeting energy needs. Despite this, it reaffirmed its commitment to reducing greenhouse gas emissions by 55 percent from 1990 levels in just eight years.
It would be extremely short term to speed up LNG terminals in Europe. United Nations Secretary-General António Guterres has called it “madness” to ignore the need to reduce dependence on fossil fuels when it has become crystal clear that the world must stop building new infrastructure. “Fossil fuel dependence is mutually assured destruction,” he said on March 21. “Countries could become so engrossed in the immediate fossil fuel supply gap that they neglect or falter in taking action to reduce fossil fuel use.”
The European Union has the second-biggest impact on climate change since the Industrial Revolution, after the United States, and the next few weeks could transform global energy policies forever. It’s anything but a given although. EU members now have a choice: extract oil and gas from other sources or make the most ambitious transition to renewable energy and energy efficiency in history.
There is a real chance that Europe will choose fossil fuels
Energy prices have risen steadily over the last year, but at the moment there is no immediate gas shortage in Europe. Next winter will be the real test of whether Europe can survive without Russian gas, as building heating drives up gas demand. No country faces a bigger roller coaster ride than Germany, which relies on Russia for more than half of its gas imports, followed by Italy.
The European Commission has published a first plan called RePowerEU on how to overcome the immediate crisis. One of the first steps recommended by the European Commission was to increase gas storage to 80 percent of capacity before next winter. The EU is looking for other countries to stock up on this gas.
But the EU needs infrastructure to process and transport all this gas, and the existing infrastructure will not cope. According to the German newspaper Deutsche Welle, there are 37 LNG terminals in EU member states and none in Germany. Countries like Germany are planning new terminals, but the ones already in the works will not be completed for several years. A planned LNG terminal in north-west German cities will not be built until 2026 and will cover up to 10 percent of the country’s gas needs. Now there are talks of two new terminals planned in Germany in response to Russia’s war with Ukraine, a sign that countries are increasing their fossil fuel investments in response to this crisis.
This is hardly an energy transition. In response to the crisis, Europe’s energy supply would still look largely the same; it would just come at a higher cost from other parts of the world.
Supporters of the plan to boost LNG imports to Europe say it is the only way to fill the void left by Russian gas. As a senior White House administration official said in a press briefing on Friday, the LNG deal “is needed in the very short term to keep people from freezing this winter and next before clean energy is deployed on a large scale.”
This approach has its critics. “The necessary measures to permanently reduce the consumption of fossil gases go hand in hand with meeting the EU climate targets,” says Matthias Buck, head of the German think tank Agora Energiewende. “The EU must now ensure that RePowerEU accelerates energy efficiency and the expansion of renewable energies in order to achieve energy sovereignty by 2027.”
The Natural Resources Defense Council’s international program director, Jake Schmidt, argues that building new fossil fuel infrastructure would be foolish. “There is a lot of skepticism as to whether Germany can actually build the import plants as quickly as is claimed,” said Schmidt. “The gas plants will be connected to the grid at a time when they do not need this gas. So you see an investment with a term of 30 years and a maximum term of 5 to 10 years. That’s not great economics.”
Europe can get through this crisis without committing to more fossil fuels. Serious.
Two reports released this week by European think tanks argue that almost all of Europe’s gas needs can be met through energy efficiency and examine untapped clean energy options. This would require the EU to make a concerted effort to reduce energy consumption. A report by Agora Energiewende, which advocates for Germany’s clean energy transition, suggests it is possible to reduce the EU’s total gas consumption by 32 percent by 2027.
A second report by environmental NGOs Bellona, Ember, E3G and Regulatory Assistance Project concludes that combining clean energy expansion with accelerated energy efficiency efforts would meet about two-thirds of Russian gas demand as early as 2025.
Importantly, the report argues that “security of supply and reducing Russia’s gas dependency do not require the construction of new EU gas import infrastructure such as LNG terminals.” The NGOs argue that this can be done even without extending the lifespan of nuclear power or increasing coal use in the next few years.
Some reforms the report proposes require more accountability and oversight for the oil and gas industry, namely by doing more to prevent methane leakage throughout their operations, as this wasted fuel could be saved and used. Other solutions are fairly simple but require collective action. These are relatively small behavioral changes, like consumers turning their heating down a degree or two, installing smart thermostats, sealing drafty windows, and installing LED lights.
These measures may sound small, but according to Agora Energiewende, they add up to a lot. For example, the report says that energy efficiency and replacing gas boilers in fossil fuel buildings could reduce gas dependency by more than a third, or 480 terawatt hours, by 2027. Heat pumps – a technology that can be used to heat or cool buildings – are one of the modern alternatives to the inefficient gas boiler. Industrial plants could also become more efficient, so some similar energy saving measures could reap even bigger gains.
Overall, the report claims that of the 3,800 terawatt hours of gas the EU consumed in 2020, around a third could be displaced in five years.
Then there are the political levers. Governments can expedite approvals for proposed clean energy projects at sea and on land. Meanwhile, the European Commission has already announced a plan to double the installation rate of heat pumps by this winter. Other policies are in the works that can ensure the EU is less dependent on fossil fuels. France, for example, announced that it would end subsidies for new gas heaters and instead increase subsidies for heat pumps.
Beyond energy efficiency, there are other strategies working to accelerate the clean energy transition. The European Union is considering a regulation proposal that would levy a fee on imports from countries with weakening climate policies, making it the world’s first carbon border tax. The idea behind the tax is to discourage companies from relocating to countries with more lax climate policies.
The common denominator of many of these solutions is that more emphasis needs to be placed on energy efficiency. Leadership in many of these actions will not come from the United States. The US has yet to pass sweeping climate change legislation, and Biden’s clean energy investment hopes have faltered in Congress. The US won’t lead, but Europe still can.