EU energy autonomy and climate targets — the next ten years
By Catriona Black, Tilemahos Efthimiadis, Rainer Jungwirth and Marzio P. Rotondò, Joint Research Centre, European Commission
The European Union has been taking significant steps to strengthen its energy autonomy while preserving its goal of becoming the first climate‑neutral continent by 2050. In this article, Catriona Black, Knowledge Management Officer, Tilemahos Efthimiadis and Rainer Jungwirth, both Portfolio leaders, and Marzio P. Rotondò, Press Officer, all in the European Commission’s Joint Research Centre (JRC)¹, explore some elements of the European Union’s energy autonomy and how the relevant policies are supported by evidence‑based research. In particular, they focus on critical raw materials and energy infrastructure.
Climate‑neutral by 2050
The EU aims to be the first climate-neutral continent by 2050. This transition has been gathering speed in recent years in response to the growing body of scientific evidence on the impacts of climate change, such as the comprehensive assessment reports of the Intergovernmental Panel on Climate Change (IPCC).
Securing a sufficient supply of affordable, decarbonised energy, and of the critical raw materials needed to produce it, is a prerequisite for a greener, digitalised and resilient EU. The Joint Research Centre (JRC), the Commission’s internal science and knowledge base, offers the independent evidence to support EU policies and our path to open strategic autonomy.
The EU’s need for strategic autonomy, and for a speedy energy transition, were both pushed to the top of the agenda last year by Russia’s aggression against Ukraine. Energy security became a top priority, as the EU faced the consequences of its over‑dependence on problematic imports, especially of coal, natural gas, and oil. The EU’s immediate and strong response to Russia’s aggression demonstrated solidarity and unity, and was appreciated by a majority of EU citizens polled, who also agreed that the EU should reduce its dependency on Russian gas and oil as soon as possible, and take measures to increase energy efficiency and autonomy.
Anticipation, integration, impact
While the EU has demonstrated its ability to react fast in a crisis, it must also steer its course with an eye to the horizon, ensuring that the ground is prepared for future success and for future crises too. The Commission is therefore strengthening its culture of preparedness and evidence‑based anticipatory policymaking with the help of the JRC.
In February this year, a two‑year process of internal transformation (read the ECA Journal interview with JRC Director-General, Stephen Quest) culminated in the adoption of the new JRC work programme for 2023 and 2024, with 33 thematic portfolios at its core. At least 12 of the JRC’s cross‑cutting portfolios address, in whole or in part, the energy transition, some looking at the bigger picture, others at specific aspects such as hydrogen and social justice.
Europe’s energy autonomy
For the energy sector, open strategic autonomy is key. The EU must assume greater responsibility for its own energy security, reducing one‑sided dependencies in critical areas and strengthening its capacity to set and implement its own priorities. These goals are pursued through a variety of actions that include the promotion of a single internal market for energy, implementing policies for upgrading the building stock, setting targets for the share of renewable energy in the EU’s overall energy mix, and strengthening international cooperation. The policies are guided by the principles of sustainability, security of supply and competitiveness.
Since 2021, the surge in the volatility of energy costs has challenged consumers and industry worldwide. An analysis by the JRC shows how low‑income households across the EU are more affected by rising energy prices, and the resulting increases in both energy and absolute poverty.
The Commission was of course hard at work on the issue of energy autonomy before the event of these overlapping crises. Experts from across the JRC were producing analysis to underpin the various new and improved directives of the Fit-for-55 package, designed to implement the European Climate Law’s legal obligation of reducing EU emissions by at least 55 % by 2030.
Some of these initiatives have already produced important results, such as the Battery Alliance which was launched five years ago, and has contributed to the scaling up of the EU’s battery production. Thanks to that, the EU is now close to having the capacity to produce two thirds of the batteries it will need.
Within three months of Russia’s invasion of Ukraine, the REPowerEU Plan was published, with the central aims of diversifying energy imports, accelerating clean energy (including wind power, solar photovoltaic and hydrogen production), and improving energy savings at all levels. These were accompanied by a requirement for natural gas storage across the EU to be filled to at least 90 % by 01 October 2022 (a goal that was achieved and surpassed), the creation of a European Hydrogen Bank, and other initiatives.
Another important step in that direction is Europe’s Green Deal Industrial Plan, presented by the European Commission on 01 February this year. Three elements from this plan are worth highlighting:
- developing our net-zero industry;
- ensuring the supply of critical raw materials; and
- remaining open for business with the world.
First, in the fight against climate change, we rely on our industry to be able to produce net‑zero technologies. This radical transformation of Europe’s industrial base requires targeted innovation, skills and financing, all of which will be addressed in the Net-Zero Industry Act.
Second, the clean tech revolution also requires access to lithium, rare earths and other critical materials. Demand for rare earths for the EU’s wind turbine needs alone will increase fivefold by 2030. We must avoid becoming dependent on unreliable sources again, as we did with oil and gas. That is why we are working on a Critical Raw Materials Act, with a proposal published on 16 March 2023, which will ensure the necessary supply of strategic raw materials from mining to refining, processing and recycling — all while ensuring the highest social and environmental standards.
Third and last, we need to resist the temptation of putting up trade barriers to protect the green transformation of our economies or to address the current economic challenges. The European Union is committed to global cooperation and to making trade work for the green transition, under the principles of fair competition and open trade.
Critical raw materials
It is becoming increasingly clear that the energy transition is also a materials transition. A clean energy system is much more minerals and metals‑intensive than a conventional fossil fuel energy system, and even with increased circularity, the implications for the extraction of raw materials, and for global competition to secure access to them, are enormous.
The demand for many critical raw materials, such as cobalt and lithium, is projected to rise dramatically along with the ramping up of the production and deployment of the clean energy technology required at scale, and at speed, by the REPowerEU Plan. This risk to the energy transition was already flagged up in 2018 by the European Political Strategy Centre, the Commission’s in‑house think tank of the time, with the help of the JRC.
The JRC has since continued to work closely with policymakers on this topic, and its major foresight study on supply chain analysis and material demand forecast in strategic technologies and sectors in the EU was published alongside the Commission’s proposed Critical Raw Materials Act in March 2023. The study’s projections for the demand and supply of critical and strategic raw materials in low and high demand scenarios, and the potential bottlenecks at every step of the supply chains, provided evidence to underpin the Act.
Our study showed, for example, that while the EU is a global leader in wind turbine production, it is fully dependent on China for the permanent magnets and the rare earth elements used in them. China is also the major world supplier for crystalline silicon solar photovoltaic cells and modules, which is the main technology that will be deployed to achieve the almost fivefold increase in EU’s solar PV capacity by 2030. Raw materials are also key for hydrogen electrolysers, especially as the REPowerEU Plan requires a tenfold increase in electrolyser manufacturing capacity in Europe by 2025. Global shortages loom in the 2020s and 2030s, as supply is unlikely to keep pace with demand for certain raw materials unless significant actions are taken (see Figures 1 and 2).
Figure 1 — Main EU suppliers for critical raw materials (2020)
Figure 2 — Overview of supply risks, bottlenecks, and supply patterns along the selected supply chains relevant to the renewable energy sector
In this context, the Commission’s Raw Materials Information System, managed by the JRC, provides up‑to‑date analysis to support policies for targeted innovation in the areas of substitution and circularity (recovery and recycling). Here, again, forward planning is crucial. While for some technologies, sufficient recycling volumes may not become available before 2030, work must start now on creating the conditions for circularity.
Anticipation is key to getting this right. New production and processing capacities take time to develop. While we don’t have good alternative materials yet, research and innovation in the area of substitution (with advanced materials for example) is of paramount importance both to the EU’s autonomy and to its global leadership.
The evolution of the Critical Raw Materials Act demonstrates the JRC’s value as a trusted partner to policymakers, starting with anticipating potential future issues, going on to provide the evidential basis for action, collaborating on the shape of legislation, and ultimately, measuring its implementation and impact.
Interconnecting the energy grid
The EU’s energy system has the distinction of being the most complicated, but also the most interconnected, resilient and flexible in the world, thanks mostly to regulatory developments and support over the past two decades. This interconnectivity has allowed for the sharing of resources across borders, the provision of solidarity when needed, and the development of sophisticated energy markets. These markets allow European consumers to save billions of euros every year, and do away with the need for member states to invest in their own expensive backup systems and flexibility.
One of the EU’s main challenges is the need to modernise its energy infrastructure. This includes upgrading transmission and distribution networks, and investing in new technologies such as smart grids and energy storage. This is necessary for integrating increasing amounts of renewable energy and ensuring the stability and reliability of the energy system. For example, further investment is needed in interconnectors to couple energy systems and allow energy to flow seamlessly across borders, ensuring security of supply, the integration of renewable energy and stable prices. A milestone will be achieved in 2026, when all member states will have a direct physical connection to the European electricity grid.
The JRC supports the European Commission in the design and implementation of the Connecting Europe Facility Energy, a key EU funding instrument for supporting sustainable energy infrastructure projects, especially for cross-border electricity and hydrogen transmission, energy storage, CO₂ transmission networks, electrolysers, smart electricity and gas grids, and offshore wind. We developed, for example, the cost‑benefit methodologies for assessing candidate infrastructure projects for EU support, considering sustainability, security of supply and market integration.
Looking ahead
While achieving energy autonomy and the green transition can be challenging, particularly in the light, as the UK Prime Minister Harold Macmillan once famously opined, of ‘Events, dear boy, events’, the EU remains committed to its objectives and its international obligations. The Commission continues to be supported by the JRC in maintaining its course and in steering new initiatives. The JRC supports table top exercises that aim to test the EU’s responses to hybrid threats, with EU Integrated Resolve 2022, for example, a joint exercise co-led by the Council, Commission and the European External Action Service, in parallel with NATO.
With the Strategic Foresight Report, the JRC produces an annual, forward-looking and comprehensive perspective for the European Commission on the key challenges and opportunities facing Europe in the decades to come. It underlines the renewed sense of urgency linked to the rapid evolution of the geopolitical and climate situation, energy autonomy and security, as the EU works together to achieve a more resilient and green energy system and a true Energy Union.
¹ We want to thank our JRC colleagues Samuel Carrara, Michalis Christou, Jette Krause, Teodor Kuzov, Zoe Onutu, Lucia Soldatova, Nigel Taylor, Georgios Tsionis and Matthias Weitzel for their input.
This article was first published on the 1/2023 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.
