EU Energy Policy

There is a multitude of factors that influence and form the international energy policy scene. The exacerbation of the adverse effects of climate change have rendered the realisation of the Paris Agreement targets, to contain global warming to within 1.5 degrees Celsius above pre-industrial temperature levels, a primary political priority for all nations. The EU's strategic pursuit to become a leader in addressing climate change has lead to the adoption of the "European Green Deal"; the Union's growth strategy for the development of a modern, resource-efficient and competitive economy, where economic growth is decoupled from resource use and a net-zero economy is achieved by 2050.

Although the ultimate goal is a carbon-neutral economy by 2050, the EU has set an intermediate goal for 203o, whereby the Union is to reduce its emissions by 55% compared to 1990 levels. The "Fit for 55" legislative package was introduced in order to define the transformative measures required to achieve climate neutrality by 2050.

Given that energy production and use are responsible for over 75% of the Union's emissions, the decarbonisation of Member States' energy systems is of vital importance for achieving carbon neutrality. The necessary structural reforms observed in European energy policy and regulation, emphasise on energy efficiency and a shift in the energy mix by increasing the share of energy production from renewable sources, as well as creating a unified market and infrastructure for low-emission fuels such as Hydrogen.

However, even though the pathway to climate neutrality requires a complete detachment from fossil fuels, their role in the European energy mix remains significant, especially that of Natural Gas and Liquefied Natural Gas (LNG), which are classified in the "EU Taxonomy" as transitional fuels. Therefore, the issue of Europe's high energy dependence on imported fossil fuels continues to be a structural factor in the EU energy market, the severity of which is highlighted in the context of the current global energy crisis. The disruption of fossil fuel supply due to the Russian invasion of Ukraine and the subsequent sharp increase in energy prices, place the security of supply at the center of policy priorities, shaping the conditions for adopting more ambitious energy transition goals.

With the introduction of the "REPower EU" plan in May 2022 and measures like the Energy Platform and AggregateEU, rapid reduction of dependence on Russian fossil fuels is promoted through coordinated energy demand and collective diversification of energy supply sources. Simultaneously, REPower EU accelerates the Union's energy transition, laying the groundwork for updating the "Fit for 55" package.

Therefore, the goals of revised directives aiming to increase the share of renewables in the EU energy mix to 45% by 2030 and improve energy efficiency by 11.7% by 2030, along with other challenges stemming from efforts for energy independence and achievement of European climate goals, will be influential factors in the future developments of the European energy market and regulation.

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