Change on the horizon: COVID-19 and the energy world

COVID-19 has been a catalyst for change as society seeks innovative ways of dealing with the pandemic. That momentum has to be maintained as Europe and the world move into recovery mode, particularly in the energy sector. Next year will be crucial for accelerating the green transition, as recovery funds come online and a growing number of international players – both in government and industry – agree a rethink is essential to fight climate change and spur sustainable economic growth. These issues were the focus of Thursday’s online Friends of Europe debate.

“It would be a gigantic missed opportunity if we were to spend some of the recovery money on doing more of what we are doing today, which is not in line with the climate transition and the energy transition,” (40:57) said Hans van Steen, European Commission Acting Director for Renewables, Research & Innovation, and Energy Efficiency. “This is an opportunity that we absolutely need to grasp.”

In the hour-long debate, Van Steen was joined by Manon Dufour, Head of the Brussels Office of E3G, an independent European climate change think tank; Francesca Zarri, Director for Technology, R&D and Digital at Eni, the Italian energy giant; and Maria Spyraki, Member of the European Parliament Committee on Industry, Research and Energy (ITRE).

Virtuous circles

Recent months have seen positive signs, from new commitments by the European Union and China to reach climate and carbon neutrality respectively, to increasing moves by the energy industry to rethink its strategic future along non-carbon lines. However, greater efforts are needed to move from linear to circular thinking on energy, and to change consumer patterns in line with green ambitions.

“The circular economy is not an option, it is compulsory,” (53:25) said Zarri. “We need to start that way … as a company we need to take value from that.”

5:27 Instead of wasteful linear energy systems, we need integrated systems, where energy flows in both directions. (Van Steen)

12:15 Details of Eni’s efforts to actively engage in the transition to decarbonisation. (Zarri)

35:58 Eni is one of the better ones, but some energy companies are using clean energy commitments as ‘smokescreens’; shareholders and policymakers need to maintain pressure on industry to follow through on pledges. (Dufour)

41:15 The EU summit agreement on the COVID-19 recovery fund and long-term budget is very good news; the Commission will make sure member states stick to commitments to spend one-third of the funding on climate mainstreaming. (Van Steen)

59:38 It’s time to think of energy in a more integrated and holistic way, bringing it into industry, agriculture, transport policy, etc. (Van Steen)

Making the transition fair, inclusive and affordable

The energy transition can bring more growth, more jobs and better lives. However, change can also trigger short-term difficulties, so efforts must be made to ensure a just transition for regions that rely on the production or supply of fossil fuels. Citizens need to see the benefits of green innovation that creates employment and brings clean, affordable energy for all.

“We have to focus on new technologies, to use them as enablers in order to decarbonise our energy mix and at the same time provide affordable energy to our citizens,” (46:30) said Spyraki.

10:10 The green transition will significantly impact regions and workers; for it to be successful, planning is needed now to manage those impacts (Dufour)

17:26 The green transition will create opportunities for jobs and growth and also for upgrading everyday life. (Spyraki)

31:20 Decarbonisation can only be achieved through innovation, that will mean new skills and big new employment opportunities. (Zarri)

48:04 It’s important to phase out fossil fuel subsidies quickly, however a balance is needed to ensure affordable alternatives and address energy poverty; energy efficiency can help by renovating homes to improve insulation and make heating cheaper. (Van Steen)

58:10 The ‘renovation wave’ must get enough funding; by using circular materials and supporting local SMEs, it can upgrade quality of life for citizens. (Spyraki)

59:04 It’s important for companies to have the right regulatory framework to make changes and to upskill people. (Zarri)

Going global

The EU can play a key role globally by providing an example and helping set international norms and standards. Going into 2021 there is optimism that the stars will align for a renewed international effort to tackle climate change.

“We are starting to be in a very different ball game with the new US administration and China taking on more commitments,” (24:40) said Dufour.  “If we manage this right, this can really lead to a competition, like a race to the top, and it can lead to innovation on new technologies that the EU can benefit from.”

17:50 Europe should be a pioneer, to give the world an example of working on green transformation. (Spyraki)

18:51 China is a strategic rival, but it could also be a partner for tackling climate change; Xi’s commitment to carbon neutrality by 2060 is very encouraging. (Spyraki)

21:28 It’s important to set global standards, creating a global level playing field for industry.  (Spyraki)

22:28 The power of example is very important. By showing that the green transition reduces emissions and brings growth, the EU can send a message to the world. (Van Steen)

23:18 The EU may need to protect industries from unfair competition; the Carbon Border Adjustment mechanism is important in that sense. (Van Steen)

27:30 2021 is a very important year as recovery efforts could make or break the climate transition. (Dufour)

54:32 The energy transition creates new geopolitical implications for Europe; as we become less dependent on oil and gas, will we become more dependent on imports of lithium and rare earths? There is a need to invest in battery capacity. (Van Steen)

57:38 The one big thing that Europe can do is align its foreign policy with European Green Deal objectives and set a really bold agenda for climate. (Dufour)