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#FORATOM welcomes improvements in hydrogen categorization

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FORATOM has taken note of the two strategies released on 8 July in relation to smart sector integration and hydrogen.  The Association welcomes the addition of a ‘low-carbon hydrogen’ category but its usage should not be limited to the short and medium term and says it nevertheless remains concerned that the insufficient attention is paid to low-carbon, non-fossil fuel sources of hydrogen, such as nuclear.

“Nuclear is a very versatile and proven technology, providing low-carbon electricity that can be used for the production of clean hydrogen and heat for industrial processes or district heating. For example, in 2018, around 350 gigawatt-hours (GWh) of electrical equivalent heat of district heating and process heat was generated in the EU and Switzerland,” said FORATOM Director General Yves Desbazeille.

“Given the huge challenge which Europe will face over the next 30 years, it is essential that policymakers do not focus only on variable renewables.  Transforming our energy system is going to require ALL low-carbon solutions currently available. And EU policy must reflect this.”

Electrification should be the main driver for a future integrated energy system. Indeed, a decarbonized power system can help other sectors in achieving the GHG reduction targets. But for some industries electrification will not be enough and therefore low-carbon hydrogen can provide an ideal solution, as long as it is available when they need it – and at an affordable cost.

“In terms of smart sector integration, low-carbon hydrogen is an important solution for hard to decarbonize sectors, such as industry and transport,” added Desbazeille. “But these sectors are going to depend on a significant amount of affordable hydrogen, 24/7.  Therefore, it is essential that these EU strategies recognize ALL sources of low-carbon hydrogen, including nuclear.”

In order to produce affordable hydrogen, electrolysers will need to run constantly on low-carbon electricity. With nuclear complementing variable renewables (wind and solar) in supplying power for low-carbon hydrogen production, this will ensure a quasi-baseload electrolyser which will trigger decreasing production costs.

This is why FORATOM believes that it is essential for the EU to adopt a technology neutral approach based on the impact of each technology on the CO2 emission reduction targets. We therefore urge the EU to acknowledge the important role that the nuclear energy sector will play alongside renewables.

Energy

Nord Stream-2 and US sanctions 

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Washington's threats of sanctions against the Nord Stream-2 project are nothing more than attempts to oust Russia from the European gas market with non-market instruments. This was stated by the head of Gazprom export ("daughter" of Gazprom PJSC) Elena Burmistrova, speaking at online conference, writes Alexi Ivanov, Moscow correspondent.

"Unfortunately, there is an additional threat, which increasingly affect our co-operation is a political confrontation in General and, in particular, the threat of US sanctions against the Nord Stream-2," she said.

According to Burmistrova, American suppliers of liquefied natural gas (LNG) have disturbed the European market and are unable to stabilize him. "Now the US is trying to oust Russia using non - market instruments," the top Manager believes.

US threats to impose sanctions on Nord stream 2 are attempts to oust Russia from the European gas market with non – market instruments, said Elena Burmistrova.

Earlier, Russian Ambassador to the United States Anatoly Antonov said that the actions of the American side in relation to the "Nord stream – 2" are caused by the desire to make Moscow pay for an independent foreign policy.

Meanwhile, in early October, Denmark found a way to circumvent US sanctions against Nord Stream-2. According to many news reports, Copenhagen, which had been dragging its feet for many years with a permit to build the pipe, gave the go-ahead for its operation in advance and how this would affect the completion of the project.

On the first day of the work of the new Polish government, in which the position of Deputy Prime Minister responsible for national security was given to the Russophobe Jaroslaw Kaczynski, the head of the Polish antitrust regulator UOKiK Tomasz Krustny said that his Department had completed the investigation on Nord Stream-2 the day before and decided to impose a fine of 29 billion zlotys ($7.6bn) on Russia's Gazprom. In Warsaw they are convinced that the project participants should have previously notified UOKiK and received consent.

"We are talking about construction without the consent of the Antimonopoly German Chancellor Angela Merkel makes similar statements: "We have different views on Nord stream-2. We consider this project an economic one. We are in favor of diversification. The project does not constitute a threat to the diversification," said the politician at a meeting with Polish Prime Minister Mateusz Morawiecki in February 2020.

The Germans are really in favor of diversification. The German energy doctrine for the next three years refers to the construction of terminals for receiving liquefied natural gas (LNG). Simply put, Berlin was going to import fuel from other suppliers: Americans or Qataris. This looks somewhat strange, given the current relations between Germany and Gazprom (in which Germany has every chance to become a key player in the European energy market). At the same time the cost LNG is definitely more expensive than main gas. Not to mention that the construction of LNG infrastructure also costs money (at least 500 million euros for one terminal in Brunsbuttel, according to Bloomberg).

On the other hand, the same German energy doctrine prescribes a complete rejection of the use of coal (by 2050). This is done for environmental reasons. Coal is an inexpensive fuel, but its use is dangerous because of harmful substances released into the atmosphere. Gas is a much safer type of fuel for the environment. It turns out that the demand for it from Germany will grow, but the Germans will not be able to meet their gas needs by importing LNG from the United States and Qatar. Most likely, Berlin's plans for liquefied natural gas are just a step to diversify supplies, but the country will not be able to refuse Russian fuel, experts say..

Germany has always been the main lobbyist for the construction of Nord Stream-2. This is understandable: after the gas pipeline is put into operation, Germany will become the largest gas hub in Europe, gaining both political points and financial flows. Two German companies are taking part in the construction of the second branch of Nord stream: E.ON and Wintershall (both have 10% each).

The other day, German foreign Minister, Heiko Maas, claimed that the gas pipeline project is economic. "Nord stream-2 is a project within the private economy. This is a purely commercial, economic project," Maas was quoted as saying by TASS.

German Chancellor Angela Merkel makes similar statements: "We have different views on Nord stream. We consider this project an economic one. We are in favor of diversification. The project does not constitute a threat to the diversification," said the politician at a meeting with Polish Prime Minister Mateusz Morawiecki in February 2020.

It seems that no one else in Europe cares about the issue of US sanctions in connection with the construction of the Nord stream - 2 gas pipeline. They have long understood that their own economic interests are much more important than American claims, and therefore they are trying to overcome American pressure in every possible way for the sake of their economic benefits.

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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 scheme was prolonged following the Commission decision in case SA. 48069 in 2017 until 31 December 2020. By this decision, the Commission approves a one-year prolongation of the tax exemption (from 01 January 2021 to 31 December 2021).

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 measures under EU state aid rules, in particular the Guidelines on State Aid for environmental protection and energy 2014-2020. 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.55695.

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Energy

Investing in new energy infrastructure: Green light for EU grants worth nearly €1 billion

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EU member states have agreed on a Commission proposal to invest €998 million in key European energy infrastructure projects under the Connecting Europe Facility (CEF). Financial aid will be provided for works and studies on ten projects, in line with the objectives of the European Green Deal; 84% of the funding goes to electricity or smart grid projects. The largest amount goes to the Baltic Synchronization Project (€720 million), to better integrate the electricity markets of Estonia, Latvia, Lithuania and Poland.

Meeting with the Lithuanian president and the prime ministers of Estonia, Latvia and Poland to celebrate the funding to the Baltic Synchronization Project, President Ursula von der Leyen (pictured) said: “Today is a very important day for Europe. It is a landmark moment in ending the isolation of the Baltic energy market. This project is good for connecting Europe, good for our energy security, and it is good for the European Green Deal.”

Energy Commissioner Kadri Simson said: “These ten projects will contribute to a more modern, secure and smart energy infrastructure system, which is crucial for delivering the European Green Deal and meeting our ambitious 2030 climate targets. Yesterday's decision marks a decisive step in the Baltic Synchronisation process in particular, a project of European strategic interest. These investments will help sustain the EU's economic recovery and create jobs.”

Among the ten projects, there are two for electricity transmission, one for smart electricity grids, six for CO2 transport, and one for gas. The President's remarks at this morning's meeting are available here and a press release on the funding for the ten projects is available here.

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