Cyprus is not meeting its current climate change targets to 2020, and is already facing another challenge
By Charles Ellinas
Green issues played a decisive role in Ursula von der Leyen being confirmed by the European Parliament (EP) to become the next president of the European Commission (EC). She succeeded after pledging to strengthen EU climate action and to “reduce emissions by at least 50 per cent by 2030” and possibly “increase the EU target for 2030 towards 55 per cent in a responsible way”.
She also committed to present a ‘Green Deal’ for Europe during her first 100 days in office and to enshrine carbon-neutrality by 2050 into law. This will include Europe leading the way in becoming the first climate-neutral continent, investing in innovation and research, extending the Emissions Trading System (ETS), and introducing a Carbon Border Tax on imported goods.
Von der Leyen promised a just transition for all, “leaving nobody behind”, by putting together a Sustainable Europe Investment Plan that will support €1trillion of investment over the next decade “in every corner of the EU”. But she also said that “Emissions must have a price that changes our behaviour…All of us and every sector will have to contribute.”
However, given the lack of consensus among member states, von der Leyen may be facing an uphill battle to deliver on all her climate change pledges. Acknowledging this, she said, cautiously, “If we want to make it to these ambitious goals we have to take every member state and we have to take the people and the economy with us.”
Can she deliver?
Given the huge implications of her pledges on EU’s energy future, energy security, climate change and the economy, the question is: can she deliver? Not only has she to satisfy the EP, but also the European Council, where opposition from central and eastern European states in June prevented agreement on 2050 carbon-neutrality. Social issues and security of energy supplies during transition are key.
Creating a new climate transition fund to support less advanced economies may provide the answers. Von der Leyen said “Not all regions have the same starting point but we all share the same destination…This is why I will propose a just transition fund to support those most affected. This is the European way: we are ambitious; we leave nobody behind.”
Delivering the new ‘Green Deal’ requires regulators, the economy and the financial sector to pull in the same direction at the same time. It will not be easy, and it will be costly and will require support by all EU member states.
If the ‘Green Deal’ and transition to carbon-neutrality succeed, they could provide the EC and member states with an opportunity to unite around a common goal, with the EU playing a leading role worldwide.
But this should be tempered by the knowledge that even though EU’s emissions in 2018 were reduced down to 2014 levels, emissions in China, India and the US are still rising. EU’s annual share of global emissions is already low, less than 10 per cent.
In addition, the economic realities and practicalities of implementing the new ‘Green Deal’ may yet temper its adoption. There are also fears that if others do not follow, Europe could harm itself competitively by being a first-mover on climate.
Implications for natural gas
Even though von der Leyen still has to devise specific and detailed policies on how the ‘Green Deal’ pledges on climate change will be implemented, clearly there will be major changes in EU’s energy sector, with implications on the future of natural gas in Europe.
Even though the EU may be on track to meet the current target to cut carbon emissions by 40 per cent by 2030, achieving 50 per cent or 55 per cent is a much bigger challenge. It will require significant acceleration in the transition to a clean energy future in comparison to what has been considered to date.
This will require a radical change across the EU’s entire economy and implementation of more widespread decarbonisation strategies in all sectors. The natural gas industry must make its case, compatible with the new ‘Green Deal’, if it is to be part of the new commission’s thinking.
In a climate-neutral Europe, all industries relying on burning fossil fuels will have to change or vanish beyond 2030. That will require full decarbonisation of natural gas sooner than later. Climate change is the single greatest challenge facing the industry, jeopardising its licence to operate, as well as its ability to attract new investment. It must adapt or risk “going the way of the dinosaurs”.
But the industry is also facing a dual challenge: meeting climate change targets while delivering energy to the world’s growing populations, particularly in developing regions.
The proposed ‘Green Deal’ represents a unique opportunity for the EU to move away from fragmented policymaking in climate change to a comprehensive and consistent policy framework. This can promote decarbonisation while also taking advantage of the economic and industrial opportunities it offers.
Until recently it was thought that gas has until 2030 to adjust to the new realities of climate change in order to retain its role in Europe’s energy mix well into the future. But the changes proposed in the new ‘Green Deal’ will bring this forward, likely to 2025 – change will need to start now, especially if the more ambitious target to cut emissions by 55 per cent by 2030 in comparison to 1990 levels is adopted.
What does it mean for Cyprus?
Cyprus is not meeting its current climate change targets to 2020, and is already facing another challenge. Cyprus new target for reduction in carbon emissions is 24 per cent by 2030. But this was considered inadequate by the European Commission and Cyprus has been requested to revise it upwards. By the time LNG imports become available in 2022 any carbon emission reduction benefits will have already been overtaken by the new target. In order to reduce emissions further, Cyprus will have to vastly increase adoption of renewables, but also tackle the transport sector. Options include use of bio-fuels and electric vehicles powered by renewable electricity.
The stark conclusion is that the lack of overall strategy and planning and Cyprus’ reactive approach to energy and climate change issues eventually lead to retrospective and costly solutions, including imposition of penalties from the EU.
Dr Charles Ellinas is senior fellow at the Global Energy Centre of the Atlantic Council @CharlesEllinas
