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'The green transition is not the problem, but the solution' Donohoe

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Following today’s (4 October) Eurogroup, Irish Finance Minister and Eurogroup President Paschal Donohoe said that ministers had discussed the hike in energy prices and their impact on people and businesses. 

Donohoe invited Christian Zinglersen, director of the European Union Agency for Co-operation of Energy Regulators (ACER) to make a presentation on recent developments and make an assessment outlining prospects for the market. The discussions focused on inflationary pressures and ministers agreed with the ECB assessment that the situation was likely to be temporary.

Ministers were adamant that the situation did not undermine ambitious climate objectives. Donohoe said: “The green transition is not the problem. It is part of the solution.” He added that the situation meant that we should maintain and speed up efforts to improve energy efficiency.

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Economy Commissioner Paolo Gentiloni pointed to high demand on gas globally, especially from Asia, the need to fix infrastructure that hadn’t taken place because of the pandemic and, to a lesser extent, the increase in the EU’s Emission Trading Scheme (ETS) price, which he hastened to add only accounted for around 20% of the price rise.   

Spain and France call for European approach to managing the gas market

Ahead of the meeting, French Economy and Finance Minister Bruno le Maire, the Spanish Finance Minister Nadia Calviño called for more concerted European action and a European approach to managing the market. 

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In response the Commission will propose a toolbox of policy measures that can be deployed to mitigate the impact of the additional cost, the Commission will also launch a reflection on how to better secure energy supply for EU citizens and businesses in the medium term, with a view to shaping energy legislation proposed for December. 

Gentiloni said any measures would need to be temporary, targeted, respectful of state aid rules and consistent with the transition to a decarbonized economy, which he added was the structural response to volatility and dependency on fossil fuels.

The hike in prices has been particularly sensitive in Spain where it has become a sensitive political question, with the government imposing a large windfall tax on energy providers.

Le Maire said: “It is time to have a look at the European energy market. The European energy market has one key advantage, it secures the supply of energy everywhere in Europe, in all countries, at all times. This is clearly one of the key advantages of the European energy markets, but it also has one major downside, which is the alignment of electricity prices on the gas price. This is totally inefficient and we can no longer accept to have the electricity prices aligned to the gas price.”

Two solutions were put forward by the ministers. Firstly, to improve the regulation of gas stocks. The second one is to have a direct link between the average cost of production of electricity in every country, and to the price paid by the consumer. Gentiloni acknowledges that measures are needed, but that a balance has to be found that isn’t contrary to climate objectives. 

European Citizens' Initiative (ECI)

Coalition seeks EU ban on fossil fuel advertising

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An effort to outlaw greenwashing by fossil fuel companies across the European Union launched today, with more than 20 organizations representing millions of Europeans launching a European Citizens’ Initiative to “Ban Fossil Fuel Advertising and Sponsorships”.

The campaign seeks to cement such a ban into European Union legislation [1]. Achieving this, according to the Europe Beyond Coal coalition, would cut off a vital channel that coal barons and other fossil companies use to promote their inadequate efforts on climate action, while a vast majority of their investments still go into fossil fuels.

“Finland’s Fortum pretends it’s green despite opening a new coal plant in Germany last year; RWE shouts about its renewable energy business while destroying German villages like Lützerath to mine coal it cannot burn; and Poland’s state-owned PGE is illegally expanding coal mining in Turów, while targeting Brussels politicians with ads showing fake citizens promoting coal,” said Kathrin Gutmann, Europe Beyond Coal campaign director.

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“While coal will be gone in Europe by 2030, these companies are more than willing to waste huge sums of money trying to stop the unstoppable, rather than plan for it and finance a fair energy transition. It is communities, workers and all of us everyday people that end up paying the price for their propaganda.”

Over 60 percent of advertisements from fossil fuel companies are ‘greenwashing’ according to new research [2], that could for instance be used to polish their public profiles, deny their responsibility for the climate crisis, promote false solutions like coal to gas replacements, and delay the phase-out of their fossil businesses.

“The companies most responsible for climate breakdown buy ads and sponsorship to present themselves as the solution to the crisis they created, and to influence politicians,” said Silvia Pastorelli, Greenpeace EU climate and energy campaigner. “Like the tobacco industry, fossil fuel polluters first denied the science and then tried to delay action. A ban on their advertising is a logical step to bring public debate and policy in line with science.”

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More information about the European Citizens’ Initiative, “Ban Fossil Fuel Advertising and Sponsorships”, is available here.

  1. A European Citizens’ Initiative (or ECI) is a petition that is officially recognised by the European Commission, and pre-approved by them. If an ECI reaches one million verified signatures in the timeframe allowed, then the European Commission is legally obliged to respond, and may consider incorporating the demand into European law.
  2. Bans on fossil fuel advertising do have precedent in the EU. In December 2020, the City of Amsterdam banned fossil fuel advertisements from its metro and the city centre. The French ‘climate and resilience’ bill, published in 2021, also includes some first steps towards a ban of fossil fuel advertisement. On 18 October, Stockholm city council will debate a proposed ban on fossil fuel advertising in the city.
  3. Participating organisations to this ECI include: ActionAid, Adfree Cities, Air Clim, Avaaz, Badvertising, BoMiasto.pl, Ecologistas en Acción, Europe Beyond Coal, FOCSIV, Food and Water Action Europe, Friends of the Earth Europe, Fundación Renovables, Global Witness, Greenpeace, New Weather Institute Sweden, Plataforma por un Nuevo Modelo Energético, Reclame Fossielvrij, Social Tipping Point Coalitie, Stop Funding Heat, Transport & Environment, and Zero.
  4. Research by environmental news outlet DeSmog  on behalf of Greenpeace Netherlands found that out of over 3,000 Shell, Total Energies, Preem, Eni, Repsol and Fortum adverts published on Twitter, Facebook, Instagram and Youtube since the launch of the European Green Deal, from December 2019 to April 2021, only 16 percent were explicitly for fossil fuel products, despite the fact that this is the majority business of all six companies.
  5. This spring, PGE launched a PR campaign in Brussels, calling for a “Green Deal, not a Grim Deal,” featuring a stock photo of a child.
  6. One local resident spoke out about the faked campaign, and the real impact of Turow on his community.
  7. Less than a week after Germany's 'climate election', people from the village of Lützerath in Western Germany staged a sit-in to defend their homes from destruction by coal company RWE last Friday (1 October). The expansion of the mine would cause Germany to fail on its Paris Agreement commitments. Greta Thunberg and German climate activist Luisa Neubauer visited Lützerath the day before the election, ramming a sign into the ground in front of the village that read: "Defend Lützerath, defend 1.5". Images here.
  8. Europe Beyond Coal is an alliance of civil society groups working to catalyse the closures of coal mines and power plants, prevent the building of any new coal projects and hasten the just transition to clean, renewable energy and energy efficiency. Our groups are devoting their time, energy and resources to this independent campaign to make Europe coal free by 2030 or sooner.

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Electricity interconnectivity

Commission approves Greek measures to increase access to electricity for PPC's competitors

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The European Commission has made legally binding, under EU antitrust rules, measures proposed by Greece to allow the competitors of Public Power Corporation (PPC), the Greek state-owned electricity incumbent, to purchase more electricity on a longer-term basis. Greece submitted these measures to remove the distortion created by PPC's exclusive access to lignite-fired generation, which the Commission and Union courts had found to create an inequality of opportunity in Greek electricity markets. The proposed remedies will lapse when existing lignite plants stop operating commercially (which is currently expected by 2023) or, at the latest, by 31 December 2024.

In its decision of March 2008, the Commission found that Greece had infringed competition rules by giving PPC privileged access rights to lignite. The Commission called on Greece to propose measures to correct the anti-competitive effects of that infringement. Due to appeals at both the General Court and European Court of Justice, and difficulties with the implementation of a previous remedies submission, such corrective measures have not been implemented so far. On 1 September 2021, Greece submitted an amended version of the remedies.

The Commission has concluded that the proposed measures fully address the infringement identified by the Commission in its 2008 Decision, in light of the Greek plan to decommission all existing lignite-fired generation by 2023 in line with Greece's and the EU's environmental objectives. Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The decision and the measures proposed by Greece will enable PPC's competitors to better hedge against price volatility, which is a vital element for them to compete in the market for retail electricity and offer stable prices to consumers. The measures work hand in hand with the Greek plan to decommission its highly polluting lignite-fired power plants by discouraging the usage of these plants, fully in line with the European Green Deal and the EU's climate objectives.”

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A full press release is available online.

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Biofuels

Commission approves one-year prolongation of tax exemption for biofuels in Sweden

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The European Commission has approved, under EU state aid rules, the prolongation of the tax exemption measure for biofuels in Sweden. Sweden has exempted liquid biofuels from energy and CO₂ taxation since 2002. The measure has already been prolonged several times, the last time in October 2020 (SA.55695). By today's decision, the Commission approves an additional one-year prolongation of the tax exemption (from 1 January to 31 December 2022). The objective of the tax exemption measure is to increase the use of biofuels and to reduce the use of fossil fuels in transport. The Commission assessed the measure under EU State aid rules, in particular the Guidelines on State Aid for environmental protection and energy.

The Commission found that the tax exemptions are necessary and appropriate for stimulating the production and consumption of domestic and imported biofuels, without unduly distorting competition in the Single Market. In addition, the scheme will contribute to the efforts of both Sweden and the EU as a whole to deliver on the Paris agreement and move towards the 2030 renewables and CO₂ targets. The support to food-based biofuels should remain limited, in line with the thresholds imposed by the revised Renewable Energy Directive. Furthermore, the exemption can only be granted when operators demonstrate compliance with sustainability criteria, which will be transposed by Sweden as required by the revised Renewable Energy Directive. On this basis, the Commission concluded that the measure is in line with EU state aid rules. More information will be available on the Commission's competition website, in the State Aid Register under the case number SA.63198.

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