Press Story

In the shadow of the Ukrainian crisis, Europe could cut its gas dependency by a third – the proportion of the EU's demand met by imports by Russia – if it made energy efficiency improvements the centrepiece of its strategy, according to a new report from the think tank IPPR.

IPPR says a new target for improving Europe's energy efficiency by 35 per cent by 2030 would cut the EU's gas dependency by a third – equivalent to the proportion of the EU's gas demand currently met by Russia. The report says a decisive strategy for reducing European reliance on gas imports in this way could slash Europe's fuel bill by half a trillion euros through to 2030.

The report shows that over half of Europe's energy is now imported, including 90 per cent of oil, 66 per cent of gas, and 62 per cent of coal. It shows that 24 of the 28 EU member states import gas from Russia, and half of this gas flows through Ukraine. Six member states are now completely reliant upon Russia for all of their gas and, in total, the EU is sending Russia around ?,£31 billion a year for imported gas. The UK uses Russia for 15% of total gas supply.

The report points to analysis by the International Energy Agency (IEA) showing that by 2035 the EU's energy bill could reach US $615 billion. It argues that most of the projected increase in consumer electricity bills is expected to result from the rising cost of these fossil fuels, with a significant additional cost stemming from the need to replace ageing and polluting energy infrastructure.

Joss Garman, IPPR Associate Fellow, said:

"The crisis in Ukraine has reignited the debate in Europe over whether the package of energy policies that the continent's leaders are aiming to agree in October should include a binding 2030 target on energy efficiency. This is because the countries that are most dependent on Russian gas are also the least fuel-efficient, and improvements in energy efficiency could vastly reduce the scale of our dependency on Russia."

"The European Commission did not initially propose a 2030 energy efficiency target, but at least seven European governments – including Germany but also crisis-hit countries such as Greece and Portugal – strongly favour setting one. It is both the cheapest means of cutting carbon output, and essential for improving European energy security.

"European leaders should adopt a new, binding EU-wide target for energy efficiency of 35% by 2030. This level of ambition would enable Europe to cut gas imports by a third, equivalent to the proportion of the EU's gas demand that is currently met by Russia. Britain should overcome its aversion to an energy efficiency target as part of its broader response to Russian aggression."

The report also recommends:

Europe should advocate for an international climate agreement from next year's UN summit in Paris that establishes emission reduction targets set for every five-year period to 2050.
Europe should adopt a new, EU-wide, legally binding commitment to halve greenhouse gas pollution (against 1990 levels) by 2030, provided that other major economies also make sufficiently ambitious commitments to address climate change. This target should be translated into binding greenhouse gas targets for each member state.
Europe should adopt a new, EU-wide binding commitment to grow the share its energy that is provided from renewable sources to at least 30 per cent by 2030.
Member state access to European Commission funding for energy projects should be conditional upon member states submitting to the Commission, and verifiably following, a credible decarbonisation strategy. The European Commission should identify any gaps that need to be filled in order to achieve the EU-wide targets on renewables and efficiency after assessing the total contributions from member states, and should then make recommendations as to how best to address any such shortfall in ambition. This could be through new vehicle standards, for example.
There should be a one-off and permanent removal of 'pollution allowances' in the European Emissions Trading Scheme (ETS), to tighten the scheme's carbon budgets so that they are in line with the EU's newly established and strengthened targets for greenhouse gas reduction. The Market Stability Reserve being proposed for the carbon market by the European Commission MSR should take effect by 2016, and should not be delayed.
Member states should introduce backstop measures, such as emissions performance standards, for dealing with carbon pollution from unabated fossil fuel power plants.
Remaining European funds available until 2020 for clean energy deployment, low-carbon infrastructure and energy efficiency should be pooled to create a 'European clean energy super-fund' to support a smaller number of much larger, shared projects that would not be able to proceed without European cooperation.
The European Investment Bank and the European Bank of Reconstruction and Development should leverage greater sums for clean energy investment that could assist the low-carbon transition.

Notes to Editors

The new report – Europe's Power: Re-energising a progressive climate and energy agenda -– will be available Wednesday 10 September from http://www.ippr.org/publications/europes-power-re-energising-a-progressive-climate-and-energy-agenda

Contacts

Richard Darlington, 07525 481 602, r.darlington@ippr.org

Sofie Jenkinson, 07981 023 031, s.jenkinson@ippr.org