EU maps out $300 bn roadmap to ditch Russian energy

The European Union’s executive arm moved Wednesday to jump-start plans for the 27-nation bloc to abandon Russian energy amid the Kremlin’s war in Ukraine, proposing a nearly 300 billion-euro ($315 billion) package that includes more efficient use of fuels and faster rollout of renewable power.

The move by the European Union runs simultaneously with the green trade deals by the United Kingdom to help end the world’s dependence on Russian oil and gas and “de-Putinise” the global economy.

The European Commission’s investment initiative is meant to help the 27 EU countries start weaning themselves off Russian fossil fuels this year. The goal is to deprive Russia, the EU’s main supplier of oil, natural gas and coal, of tens of billions in revenue and strengthen EU climate policies.

“We are taking our ambition to yet another level to make sure that we become independent from Russian fossil fuels as quickly as possible,” European Commission President Ursula von der Leyen said in Brussels when announcing the package, dubbed REPowerEU.

With no end in sight to Russia’s war in Ukraine and European security shaken, the EU is rushing to align its geopolitical and climate interests for the coming decades. It comes amid troubling signs that have raised concerns about energy supplies that the EU relies on and have no quick replacements, including Russia cutting off member nations Poland and Bulgaria after they refused a demand to pay for natural gas in rubles.

The bloc’s dash to ditch Russian energy stems from a combination of voluntary and mandatory actions. Both reflect the political discomfort of helping fund Russia’s military campaign in a country that neighbors the EU and wants to join the bloc.

An EU ban on coal from Russia is due to start in August, and the bloc has pledged to try to reduce demand for Russian gas by two-thirds by year’s end. Meanwhile, a proposed EU oil embargo has hit a roadblock from Hungary and other landlocked countries that worry about the cost of switching to alternative sources.

In a bid to swing Hungary behind the oil phaseout, the REPowerEU package expects oil-investment funding of around 2 billion euros for member nations highly dependent on Russian oil.

Energy savings and renewables form the cornerstones of the package, which would be funded mainly by an economic stimulus program put in place to help member countries overcome the slump triggered by the coronavirus pandemic.

Von der Leyen said the price tag includes about 72 billion euros for grants and 225 billion euros for loans. There is a push to fund energy efficiency and renewables.

The European Commission also proposed ways to streamline the approval processes in EU countries for renewable projects, which can take up to a decade to get through red tape. The commission said approval times need to fall to as little as a year or less.

It put forward a specific plan on solar energy, seeking to double photovoltaic capacity by 2025. The commission proposed a phased-in obligation to install solar panels on new buildings.

The European Commission’s recommendations on short-term national actions to cut demand for Russian energy coincide with deliberations underway in the bloc since last year on setting more ambitious EU energy-efficiency and renewable targets for 2030.

These targets are part of the bloc’s commitments to a 55% cut in greenhouse gases by decade-end compared with 1990 emissions and to climate neutrality by 2050.

In that context, the commission urged EU lawmakers in European Parliament and national governments to deepen their own proposals for 2030 energy-savings and renewables objectives.

Meanwhile, Britain is working on green trade arrangement that would lead to the end world’s dependence on Russian energy.

Britain’s Minister of Trade, Anne-Marie Trevelyan, said Wednesday that the green trade deals would help to end the world’s dependence on Russian oil and gas and “de-Putinise” the global economy.

Russian President Vladimir Putin said on Tuesday that it was impossible for some European countries to quickly ditch Russian oil, as the European Union is proposing.

Britain, which is less dependent on Russian energy than its continental neighbours, said that the rapidly growing green sector could help other countries cut reliance on Russian oil and gas.

“This terrible conflict in Ukraine has underlined what can be achieved through a cohesive global approach. It has also reminded the globe that we must de-Putinise the world’s economy,” according to speech extracts released by the minister’s office.

According to the UN, the world is on course for a catastrophic temperature rise of 2.7°C (4.9°F) if we don’t change our habits fast. Despite targets to reduce our collective carbon footprint by 2030, many countries are still polluting the planet through fossil fuels and deforestation.

“These past months have highlighted the need to accelerate our journey as a global community away from hydrocarbons, to decisively turn our backs on the era of dependence on polluting fuels, and transition to a Net Zero future.”

In the speech she will announce loan guarantees for green businesses worth nearly 190 million pounds ($237.01 million) and a green trade and investment expo in the northeast of England in the autumn, her office said.