Seven UK and EU green policy stories you may have missed this week

Many key green policy votes have been held in the EU this week, and new UK Ministers are hinting at their approaches

It has been an historic week in the UK, with thousands of people queuing in London to pay their last respects to the Queen ahead of her state funeral on Monday 19 September. Parliament is suspended until after the event, meaning that new Prime Minister Liz Truss faces a uniquely challenging first few days in the job.

In this context, some other news stories have not been given the prominence they usually would. This is true in the green economy and elsewhere. Here, we round up seven green policy stories from Europe this week, to bring you up to speed.

1) Reports of rollbacks on the UK’s Energy Security Bill

Government sources have told several of the UK’s national news outlets, including i News, that new Energy and Business Secretary Jacob-Rees Mogg has requested that the Energy Security Bill is put on hold.

The Bill was first introduced in July and is intended to create the legal and regulatory frameworks needed to deliver on the ambition of the Energy Security Strategy. The Strategy increased the UK’s 2030 capacity targets for nuclear, offshore wind and hydrogen, while also outlining plans for electricity market reform and for scaling domestic fossil fuel production.

Reports abound that Mogg is intending to pause the Bill’s passage. It is currently progressing through the House of Lords. Mogg is understood to be set on either scrapping or dramatically changing the Bill. Parliament will be updated officially when recess ends next week.

2) Plans not to cap EU gas prices

Europe has been the geography most affected by the gas price crisis due to the fact that some nations import much gas from Russia. The EU had, therefore, been developing and fine-tuning plans to shield residents from the price increases.

At a meeting of national energy ministers in Brussels last week, many expressed concerns about whether a gas price cap would harm the bloc’s ability to negotiate supply deals with other countries. There were also concerns about how the cap would be paid for and how long it would need to be in place.  However, some nations did state that a cap would be needed. Opinions were divided, Euractiv reports.

The European Commission has, therefore, decided on an alternative approach to a price cap for the time being. It will create a new task force to negotiate deals with Norway and other gas-supplying nations. It will also create a new gas market benchmark, reflecting the shift towards liquefied natural gas imports.

In related news, the European Parliament voted in favour of a 45% target for renewable energy in the EU’s energy mix by 2030. Meeting this target will require all member states to implement a minimum of two cross-border electricity projects. Parliament also voted for a progressive phasing down of bioenergy, given controversies over its land-use impact and the lifecycle emissions of some forms.

3) Promises of a European Hydrogen Bank

European Commission president Ursula von der Leyen announced on Wednesday (14 September) that the EU will create a new European Hydrogen Bank backed with an initial €3bn.

“We need to move our hydrogen economy from niche to scale,” said von der Leyen.

Details about the bank’s location, remit, and other key facets remain scant at present. However, it is expected to be modelled on Germany’s forthcoming  H2-Global foundation, which has an initial €900m. The bank will offer a guaranteed price for hydrogen for up to ten years.

The EU is notably striving to produce ten million tonnes of green hydrogen each year by 2030. Green hydrogen is produced by running water through electrolysers powered using renewable electricity.

4) Increased EU transport decarbonisation targets for 2030

Wednesday was a jam-packed day for green policy discussions and votes in the EU. In addition to the votes detailed above, lawmakers voted to  increase the EU’s transport emissions reduction target for 2030 from 13% to 16%. The baseline is 2015.

Transport accounted for 27% of the bloc’s emissions in 2017. In absolute terms, emissions from the sector rose by one-third between 1990 and 2018, making this a key challenge in achieving carbon budget commitments.

Achieving the reductions, it was stated, will require more support to be deployed for electric vehicles and related charging infrastructure, as well as synthetic and alternative fuels. MEPs voted to more than double the target for synthetic fuels to 5.7% by 2030, including a 1.2% sub-target for the maritime sector.

5) New anti-deforestation laws in the EU

Last year, the UK Government passed ‘comply or explain’ legislation banning companies sourcing forest-risk commodities from overseas from permitting illegal deforestation in their supply chains. There were arguments for including all deforestation – legal or illegal – and for an expansion to the financial sector, but the move was welcomed as an overdue first step.

The EU has now followed suit. The Parliament voted this week on improving draft legislative requirements on deforestation-free products, updating the European Commission’s original proposal, which was presented in November last year.

Lawmakers have agreed to increase the list of commodities which now have to prove they were sourced without causing deforestation to pig, sheep and goats, poultry, maize and rubber, charcoal and printed paper products. The original list also included cattle, cocoa, coffee, palm oil, soya and wood, all of which remain on the updated legislation.

Under the new amendments, companies selling those goods in the EU will need to prove that they were not produced while contributing to deforestation and with respect to the human rights of indigenous peoples. You can read edie’s full story here.

6) The EU’s Raw Materials Act

Demand for certain critical raw materials has been increasing due to the digital transition, and will increase further in the future as technologies such as electric cars and battery energy storage become more common. For example, cobalt demand is set to climb more than 17% year-on-year in 2022 alone and demand increase will likely accelerate in the late 2020s and early 2030s.

This will present supply chain challenges and, as Covid-19 has shown, critical mineral supply chains are already facing challenges due to the fact that production is often reliant on a handful of locations.

The European Commission has announced a new legislative proposal, the Critical Raw Material Act, to help ensure that the bloc does not become overly dependent on nations such as China for critical materials – instead building its own capacity and a diverse network of supply, while also investing in circular economy solutions. Click here to read the Act.

7) Tensions over the EU’s green finance taxonomy

The process of developing the EU’s green finance taxonomy, which defines which investments can be considered sustainable and not, has been a tense one. Environmental groups and some industry bodies were, in particular, in disagreement about the inclusion of nuclear energy and of natural gas as a ‘transition’ investment. Inclusions and exclusions on commodities linked to deforestation were also hotly debated.

This week, five civil society organisations decided to leave a European Commission-led expert group on sustainable finance, saying the EU executive has interfered politically in decisions around the taxonomy.

The European Consumer Organisation (BEUC), Birdlife Europe and Central Asia, Environmental Coalition on Standards (ECOS), Transport & Environment (T&E), and the World Wildlife Foundation (WWF) European Policy Office. announced their decision in a letter on Wednesday, saying the European Commission has interfered in their work and “acted against evidence despite its legal obligation to follow science-based advice.”