Kadri Simson, the EU’s top energy official, wants to oversee the end of an 150-year era in Europe with the phasing out of coal-powered electricity.
A former Estonian minister for economic affairs, Ms Simson has been Brussels’ energy commissioner since 2019 and is in charge of setting the EU’s trailblazing path to becoming the world’s first carbon-neutral continent by 2050.
The target — which commits the EU to reduce its net carbon emissions to zero by mid-century — will require a radical overhaul of Europe’s energy mix, vast investment in renewable technologies, and the rapid phasing out of a coal sector that has largely powered the continent’s industrial growth since the 19th century. The trading bloc also intends to more than half its emissions compared with 1990 by 2030.
“Many member states have phased out coal faster than predicted,” Ms Simson tells the Financial Times. “Most governments have either phased out coal already or have set a date and collectively we are on course to hit our renewable targets”.
Coal and lignite now make up around 19 per cent of the EU’s electricity supply — the lowest on record. The widespread closure of coal-fired plants in western Europe in recent years has also led to steep declines in greenhouse gas emissions — what analysts have dubbed the “low-hanging fruit” on the road to decarbonisation.
But there remain pockets of Europe where coal and other fossil-fuels are a mainstay of countries' energy supply. Ms Simson’s native Estonia is a case in point: the small Baltic nation relies on oil shale — a fossil fuel that is native to the country — for around 70 per cent of its energy needs, according to the International Energy Agency.
Poland, the EU’s sixth-largest economy, is also a coal powerhouse, relying on the fuel for 40 per cent of its energy needs. Poland’s conservative Law & Justice party government was the last to sign up to the EU’s 2050 goal earlier this year, fearing the green transition would be disproportionately costly for its economy.
Ms Simson praised a deal between the Polish government and its coal mining unions to fully phase-out of coal by 2049. The commissioner added that Greece is also aiming to eliminate lignite by 2025: “We know that the energy sector has a role to play in achieving at least a 55 per cent reduction in greenhouse gases by 2030 — because right now, it doesn't”.
With the onset of the pandemic, Brussels has tried to win round governments sceptical of the costs of going green with a landmark €1.8tn package of incentives and subsidies. Governments will be required to spend on average 38 per cent of a €750bn fund made up of grants and loans to reform their economies in line with green goals. A €17.5bn “Just Transition Fund” will also be established to support the poorest most fossil-fuel dependent parts of Europe.
“The Green Deal is also our growth strategy,” says Ms Simson. “When the commission gained significantly bigger financing earlier this year, my task became a little easier because a lot of member states were worried about their financial needs during this transition.”
She added that the drive to also decarbonise needed the continued backing of public opinion “otherwise, we will not achieve our ambitious targets”.
But even with the offer of money, the commission has no power to dictate the energy policies of its member states. Energy supply remains a fiercely protected national right of EU governments and one that has drawn Brussels into controversy over the role of nuclear power and natural gas — both “low carbon” energy sources that have been attacked by environmental groups.
To quell concerns about the role of natural gas, Ms Simson says Europe’s extensive gas infrastructure should be exploited as part of the bloc’s push to create “green hydrogen”. Earlier this year, the EU launched a hydrogen strategy that aims to bring together governments and corporates to radically scale up the use of the gas which has been touted as the “fuel for the future”.
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As part of its climate goals, the commission wants 40GW of “green” hydrogen capacity — hydrogen made without using fossil fuels — by 2030. Advocates say the fuel can play a major role in decarbonising heavy industry like steelmaking and long-haul transport where battery capacity for electric lorries remains limited.
The commissioner says Brussels wants to “retrofit gas pipelines so that they can help us to improve the transport of hydrogen.” According to Ms Simson. “With the hydrogen strategy, additional volume can bring down the cost of the hydrogen produced from fossil fuels and replace it with hydrogen from renewable sources.”
In the coming months, Brussels will make a push for higher renewable energy targets, measures to promote greater energy efficiency and a “renovation wave” in its building sector as part of the journey towards carbon neutrality.
With another three years left in her mandate, Ms Simson said the bloc is striving to create an energy market with an ever greater role of renewable technology and one that can become a global “first mover”.
“I expect that after five years there will be a lot of countries across the world who are following us. This is not just about climate, but about competitiveness.”
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