Image: European Parliament

New gas investments to ‘put EU Green Deal to test’

New gas projects call the European Commission’s climate ambitions into question as the financing of fossil fuels takes the central stage of discussions in Brussels.

“Call it ‘a first test for the EU Green Deal’,” said Jonathan Bonadio, an energy expert with the European Environmental Bureau (EEB).  “We’re not going to reach carbon neutrality if we continue to fund new fossil fuel infrastructure,” he paused.

Bonadio has good reasons to ring the alarm bells. Earlier last week, the European Parliament’s industry committee approved a list of 151 energy infrastructure projects, including 32 new gas pipelines and LNG terminals in Greece, Cyprus, Poland, Croatia and in Ireland. The projects may soon be eligible for EU funding, depending on the outcome of a plenary vote in the European Parliament in mid-February.

Already, the discussions have raised a few eyebrows. News has spread of a study finding that the 32 gas projects on the Commission’s list are “unnecessary” in view of decreasing gas demand and plans for climate neutrality.

According to the study, Europe has enough infrastructure to meet future gas demand, which is expected to drop by almost 30% in 2030 compared to 2015. The approval of EU funding for these gas projects would waste €29 billion of taxpayers’ money, data analysts at Artelys concluded.

Known as Projects of Common Interest, the list was originally put forward by the former European Commission last year, before the announcement of the EU Green Deal.

Many projects on the list are deemed necessary to boost electricity connection across Europe, which could in turn facilitate the uptake of renewable energy. However, the European Parliament will only be able to accept or reject the list as a whole, without the possibility of scrapping the gas projects.

Steel pipes in Northern Greece, built as part of the Trans-Adriatic Pipeline. Source: TAP-AG

The Parliament may now ask the European Commission to re-examine the list, Pascal Canfin, the chair of the Parliament’s environment committee, was quoted as saying in Euractiv.

Methane, the main component of fossil gas, is believed to be responsible for a quarter of all global warming – though it is difficult to assess the gas industry’s exact contribution to climate change because leaks in the pipelines often go undetected.

However, fossil fuel companies have been promoting gas as a ‘clean’ alternative to coal and partner for renewable energy. In 2016, Brussels-based lobby groups have reportedly spent over €100 million to push for more investments in gas infrastructure.

“The more gas infrastructure we build, the further away we get from our decarbonisation goals,” Bonadio said, pointing out that gas pipelines are expensive and, once built, will lock us in for decades. “It’s like gambling with taxpayers’ money hoping that some fictitious solution will save us.”

“Whether Europe can overcome the climate crisis efficiently will depend very much on the investments we’ll make in the next few years,” he concluded.

The EU budget: Planning the next cycle of investments

Crucially, the revision of the EU budget should soon clear things out.

EU institutions and governments are entering the final stage of negotiations to define the next EU funding cycle, which will run from 2021 to 2027 and may or may not include more support for gas projects.

The new European Parliament and Commission have already voiced their support for the exclusion of fossil fuels from the budget. But national governments are yet to reach a common position.

European Council president Charles Michel has recently sent a letter to all 27 member states requesting a meeting on February 20 to move things forward. “The time has come to reach an agreement at our level on the Multiannual Financial Framework,” he said in a statement.

Any agreement between governments and institutions will have to clearly spell out what percentage of the overall budget will be allocated to the climate crisis; how much money each government should put in the pot; and guidelines as to what the money are going to be spent on and what shouldn’t be spent on.

Last year, the Commission president Ursula von der Leyen promised she will deliver the most ambitious budget to date, with the aim of boosting climate action across Europe. To prove her case, only two weeks ago she put forward a plan to raise €100 billion to help coal-heavy regions transition to clean energy.

Campaigners now hope that this money will not be used to finance more gas infrastructure, a decision that rests in the hands of governments. 

If you would like to know more the EU budget and why it matters, read one the latest EEB briefings ‘A budget to address the climate crisis’.