The European Commission will present this week a package of energy measures that seeks to reform the electricity market, promote the ‘clean’ industry and reduce dependence on third party supplies to position the EU as a worthy competitor in the ‘green’ race and thus counterattack powers such as China or the United States, which intend to dissociate themselves with a ‘doping’ millionaire to their companies.
Although the President of the Community Executive, Ursula von der Leyen, announced this Friday from Washington an agreement on clean energy with the United States and that both parties will work on access to critical raw materials, these measures are part of Brussels’ plan to counteract the impact on the European economy of the injections of the US Inflation Reduction Act (IRA), with a package of 369 billion dollars, and the investments in clean technologies announced by China, which exceed 280 billion dollars.
After announcing this Thursday a relaxation of State aid to allow EU countries to match offers from third parties to avoid the flight of companies, Brussels will present next Tuesday the law for a zero emissions industry and the regulation of critical raw materials, two complementary regulations that seek to avoid business migration and achieve European self-sufficiency in the production of new technologies while reducing CO2 emissions.
In a context where the global market for leading zero-balance mass production technologies is expected to triple by 2030, with an annual value of around 600 billion euros, the EU wants to seize this opportunity as its competitors have already done through ambitious measures to ensure it is part of this new market.
However, the resilience of future energy systems will be measured above all by the security of access to the technologies that will power them, such as wind turbines, electrolyzers, batteries, solar photovoltaics or heat pumps, strategic areas on which the European plan focuses.
The net zero industry law is part of the actions announced in this context, with the aim of simplifying the regulatory framework for the production capacity of technologies that are key to meeting the Union’s climate neutrality objectives and ensuring the resilience of its decarbonized energy system, but are currently dependent on third countries such as China, which accounts for 90% in certain sectors of the value chain.
In this regard, the regulation contains measures to speed up the bureaucracy with a view to ensuring that, by 2030, manufacturing capacity for net-zero emission technologies reaches at least 40% of the EU’s annual deployment needs for the corresponding technologies required to reduce net greenhouse gas emissions by at least 55% compared to 1990 levels.
The critical raw materials law, meanwhile, seeks to diversify EU imports of strategic raw materials, such as lithium, cobalt or manganese, with a view to ensuring that, by 2030, no more than 70% of the annual consumption of each strategic raw material at any relevant stage of transformation comes from a single third country.
NEW ELECTRICITY MARKET FOR LONG-TERM CONTRACTS These will be followed on Thursday by the proposal for a reform of the electricity market focused on increasing the presence of renewables to the detriment of fossil fuels and facilitating long-term contracts to reduce price volatility to protect consumers, as already advocated by Spain in the approach it presented to the Commission last January.
According to the draft to which Europa Press has had access and which is subject to change until its official publication, Brussels encourages Member States to »strive» to create the right market conditions for long-term market-based instruments, such as power purchase agreements.
These are bilateral purchase agreements between energy producers, in particular renewable energy producers, and trading companies that, the text stresses, »provide long-term price stability for the consumer and the necessary certainty for the producer to make the decision to invest».
Once the Commission has officially presented its proposal, it will be up to the Council and the Parliament to endorse it at the level of both Member States and political groups, before the final negotiation again with Brussels and with the aim of starting to implement it in the first half of 2024.
However, as opposed to the structural reform proposal defended by countries such as Spain, another bloc of seven countries led by Germany demands that the review of the electricity market be »limited» and that it maintains the benefits reported by the system in the last decade and that it does not compromise the EU’s climate and energy objectives, two opposing positions that augur a lengthy debate at the EU-27 level.
Source: (EUROPA PRESS)
