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REPowerEU package provisionally agreed

A package of significant far-reaching measures aimed at reducing EU dependency on Russian fossil fuels and tackling the climate crisis has been provisionally agreed by EU law makers.

Among other things, the REPowerEU plan promotes an increase in renewable energy generation in the EU and seeks to make it easier for developers to pass through planning and permitting stages of a project to deliver new energy infrastructure, that is connected to electricity grids, faster.

The package also envisages greater use of renewable or “green” hydrogen, scaling up of energy storage capacity, improvements in the energy efficiency of buildings, and the decarbonisation of transport and industrial processes. EU funding is to be made available to member states in implementing the measures. The REPowerEU focus on production of green hydrogen has already accelerated development of offshore wind, grid and related areas in several markets including Ireland and France. Moreover, dedicated hydrogen “valleys” are emerging with the announcement of the €2.8bn Barcelona-Marseille subsea pipeline.

Energy projects expert Garrett Monaghan of Pinsent Masons in Dublin said: “The REPowerEU plan has already had a tangible effect since it was published by the Commission, driving policy, politics and projects inside and outside the EU. One of the biggest impacts has been seen in the emerging ‘green’ hydrogen market. Although there is considerable scepticism on the long-term viability of hydrogen as the key energy transition fuel, REPowerEU is pressing on with very deliberate market making strategy.”

“REPowerEU is implementing ambitious targets for the EU to produce 10 million tonnes of renewable hydrogen domestically – and to import 10mn tonnes of renewable hydrogen – by 2030. There is evidence of this not only in proposals for Ireland’s forthcoming hydrogen strategy due out in the first quarter of 2023 but also in the offshore wind sector and related investment commitments it is driving. One of the most significant cross-border projects planned in the EU is a pipeline between Barcelona and Marseille, via which only hydrogen will be transported and not natural gas – a sure sign that hydrogen projects are becoming a strategic priority as Europe’s energy transition picks up pace,” he said.

REPowerEU was originally set out in May. It reflected the European Commission’s desire to enhance energy security within the EU in response to the war in Ukraine and the impact that is having on gas supplies and prices – the EU estimates that gas from Russia meets more than 40% of EU demand, while a further 27% of oil imports and 46% of coal imports to the EU also arrive from Russia – and build on measures outlined in the EU Green Deal.

The European Parliament and Council of Ministers, the EU’s two main law-making bodies, have spent the months since scrutinising the proposals – both bodies must agree on the wording of the legislative text before that text can become EU law. The bodies reached a provisional agreement on the REPowerEU package on 14 December. MEPs and the Council are expected to formally vote on endorsing the package in the weeks ahead.

George Varma of Pinsent Masons in Perth, Australia, who specialises in hydrogen projects, said: “This step change is consistent with the approach we are seeing being implemented by markets around the world. Governments are looking to fast-track hydrogen projects and providing funding and legislative support to kick-start domestic hydrogen production markets. We are seeing this more actively in Australia recently, as well as in a number of the Asian markets such as Japan, China and India where decarbonisation is a key priority. Australia recently unveiled a new hydrogen refuelling station last month and continues to invest heavily in infrastructure to support the domestic use of hydrogen as an emerging market.”

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