Policy Updates 27/06/22

Fit for 55 - The European Parliament two weeks after rejecting the compromise on the EU ETS, adopted a new compromise

On the 8 June, the European Parliament rejected, by a clear majority, the environment committee’s compromise on the proposal to revise the Emissions Trading Scheme (EU ETS). In this occasion, an unexpected alliance was formed between the far-right, the far-left, as well as the progressives.

The key issues at stake that triggered the report to be voted down were the general level of ambition of the text, as well as the date for the phase-in date of the Carbon Border Adjustment Mechanism (CBAM) and the phase-out date of free allocations for industry.

The text was sent back to the European Parliament’s environment committee and a new date was set for a vote. In the meantime, the Socialists, RENEW Europe (the centrists) and the EPP (the right) worked on a deal that could be supported by a strong and stable majority. On 22 June, in Plenary, the compromise was put to vote and adopted by a vast majority

Regarding the ETS2, the delayed adoption had no impact on the content of the deal regarding ETS2. MEPs decided as part of the deal to resubmit most of the compromises that had been approved on 8 June before the whole report was voted down. The compromise foresees an ETS2 entering into force in 2026 for commercial heat and from 2029 for residential heat, as well as a 50% limit for fuels suppliers to pass on the costs to consumers. These measures are meant to mitigate the impact on vulnerable consumers but dilute the effect of a carbon price signal.

The Council’s latest compromise foresees the start of the auctions from 2027 with derogations for Member States which already have a national carbon tax, from 2027 to 2030. The Council should adopt its position during the Environment Council meeting on 28 June.

For more information, please contact Pauline Lucas – [email protected]

EHP co-signs the Manifesto of Energy Cities on More local staff to achieve the climate transition

The European Union is increasingly acknowledging the role of local and regional governments in the transition to climate neutrality. In the proposal to revise the Energy Efficiency Directive, it suggested that every municipality with more than 50,000 inhabitants should be required to design heating and cooling plans. EHP considers this as a key aspect for the refurbishment of existing and the development of new networks. In order to achieve climate neutrality, the EU and its Member States need strong local and regional authorities, ready to develop and implement their energy transition plans.

Therefore, Energy cities drafted a manifesto asking for “more local staff to achieve the climate transition” with other 25 associations, also signed and supported by Euroheat & Power.

The initiative addresses the EU-27 Member States and the European Commission, and recommends to:

  • Finance the recruitment of municipal and local public body staff;
  • Make jobs more appealing and support local pooling of expertise;
  • Provide training and reallocation programmes to upskill municipal and related local public body staff;
  • Provide a framework enabling local governments to develop their own green budget, investments, and workforce.

For more information, please contact Pauline Lucas – [email protected]

NEW REPORT published by the European Commission: “Overview of District Heating and Cooling Markets and Regulatory Frameworks under the Revised Renewable Energy Directive”

On the 15 June the European Commission published four studies exploring different aspects of heating and cooling decarbonisation in the European Union. One of them is entirely dedicated to District Heating and Cooling. The latter was supported by EHP Member Tilia and DHC+ Member Fraunhofer Institute.

The EU is already addressing the decarbonisation of the sector through the Renewable Energy Directive (RED). But the aim of these studies is to fill the knowledge gap and to support EU law by providing comprehensive and in-depth analyses of key aspects.

Despite the wide consensus on the general interest of a broader deployment of modern and efficient DHC systems, this solution represents only 12% of the EU’s heating market1, and the public awareness of its benefits remains low, especially in emerging DHC markets.

This study contributes to the evidence base needed to develop effective policies on DHC and ensure that it contribute to achieving the decarbonisation targets for H&C set under the ‘Fit for 55’ package and the European Green Deal.

The study provides a detailed vision, for all EU Member States as well as the UK, Norway, Iceland and Ukraine, of DHC markets, regulatory framework of DHC systems and urban regulations affecting its use in buildings and industries as well as the various technical possibilities to further integrate renewable and waste heat and cold sources in local energy systems.

For more information, please contact Eloi Piel - [email protected]

1 - in the residential and service sectors (2018 data)

EHP published its “DHC Market outlook”

This year’s edition of the Euroheat & Power Country by Country includes the District Heating & Cooling Market Outlook: a comprehensive statistical overview of the district heating and cooling sector in Europe and beyond. This new chapter is enhanced with a new section on “National DH transition pathways”, which gathers detailed information on the district heating transition in  ten selected markets, such as Austria, Czech Republic, Denmark, Finland, France, Germany, Italy, Slovenia, Sweden and The Netherlands.

The District Heating and Cooling Market Outlook has been published as an online tool. This flexible format allows the Euroheat & Power’s team to edit content and add updated information as it becomes available. The publication is expected to contribute to the ongoing public debate about the future and potential of district heating and cooling.

Link to access the DHC Market Outlook: https://www.euroheat.org/policy/dhc-market-outlook.html

For more information please contact, Giulia Forgnone – [email protected]