Putting the energy transition at the heart of the EU’s energy future
Interview with Cristian Bușoi, Chair of the European Parliament Committee Industry, Research and Energy (ITRE)
By Gaston Moonen
In the European Parliament, energy — and therefore everything related to energy transition issues — is part of the daily bread and butter of the Industry, Research and Energy Committee, better known as ITRE. Cristian Bușoi has chaired ITRE since 2019. Among other things, this is something he combines with being an alternate member of the EP Committee on Environment, Public Health and Food Safety, which is another important committee when it comes to energy legislation. In this interview, he explains how the energy crisis has affected ITRE’s work and what ITRE has done for EU citizens and businesses to address short-term energy supply issues and long-term energy transition challenges.
An integrated energy market as a building block for the energy transition
You have been an MEP for many years and for several of these you’ve chaired the ITRE Committee. Your committee has legislative responsibilities for various EU key policy areas, ranging from EU research and innovation to energy. How important was energy in your discussions prior to 2022 and in which way have discussions, and the time spent on energyrelated matters, changed since the war in Ukraine and the soaring energy prices?
Cristian Bușoi: Energy has always been one of the ITRE Committee’s key responsibilities, even before the war started. We are committed to making the energy transition the future of energy in the EU! Our committee ranks highly in terms of legislative activity, largely because of the amount of legislation relating to the energy field. The Renewable Energy Directive, the Energy Efficiency Directive, and the Energy Performance of Buildings Directive are some of our cornerstone pieces of legislation.
Of course, after the war started, we entered a period of extraordinary activity in this field because energy supply has been a core feature of the war, and we are working extremely hard to counteract the consequent effects that Russia’s weaponisation of energy is having on our citizens and on our economy.
As we saw last year, energy is a topic that directly concerns EU citizens, with severe energy price increases for both citizens and companies in the EU. Faced with this situation, where and how can your committee make a real difference to EU citizens, and how has it done so over the past few months? Can you provide a few concrete examples?
Cristian Bușoi: Energy is fundamental for our welfare and prosperity. At the European Parliament and specifically in the ITRE Committee, we’re working very hard to ensure that the EU’s energy policy delivers an integrated energy market — one that is properly interconnected and that functions well, to provide citizens and companies with access to clean, competitive, and abundant energy. This will allow us to continue on the EU’s path towards a carbon-neutral economic and social model.
Under normal circumstances, we have an energy market that benefits from the generation of low-carbon energy, and one that over time has ensured that the share of indigenous low-carbon energy is increasing and on target to reach our 2050 goals. However, it is important to acknowledge that over this last year and a half, we’ve been living through extraordinary times, where we’ve seen energy prices that have been heavily affected by Russian market manipulation — this had already begun before February last year, and thereafter continued with the war.
We therefore have to differentiate between long-term measures such as the Fit for 55 package and short-term emergency actions where our aim is to tackle the consequences of the war on our energy markets. Both are extremely important lines of action where the ITRE Committee is fully involved. On the one hand, we are finalising our negotiations with the Council on essential issues to establish the underlying rules for faster renewable energy deployment, as well as for energy efficiency (including in buildings), and defining the conditions for future energy markets that will include hydrogen and other renewable gases. On the other hand, we have defined the EU-level obligations for mandatory gas storage, which is something that has proven to be a very successful tool to help stabilise the volatility generated in the markets, sparked by Russia’s war.
The ITRE Committee has also played a key role in defining how member states might spend the Recovery and Resilience Facility funds — the RRF — on the RePowerEU chapter of the RRF. ITRE supported making a portion of RRF funds available to alleviate the effects of high energy prices on citizens and companies. Furthermore, we’ve supported the European Commission’s and member states’ efforts to introduce joint purchases of gas, to pool demand and provide EU companies with a better negotiating position when buying from third countries. We proposed and supported the ban on further purchases of Russian oil and gas. Likewise, we supported the introduction of alternative benchmarks for the gas TTF spot market, and we encouraged member states to take all measures necessary to keep energy prices at a manageable level (e.g. capping windfall profits, inframarginal pricing on the electricity markets, and social welfare actions to support vulnerable citizens and SMEs directly). We’ll soon be starting our legislative work on revising the electricity market design.
ITRE and swift EU measures on energy issues
To address the high energy prices over the past few months, the Council has used Article 122(1) of the TFEU to pass EU legislative proposals for market correction mechanisms quickly. What’s your view of using this article for this particular situation? Do you think it was justified, and what alternatives do you envisage, while aiming to keep a similar legislative pace?
Cristian Bușoi: Our committee has been supportive of the measures that have been introduced to tackle market disruption caused by the war. We understand that there is a need for speedy decisions to be made in some cases, which is why Article 122 of the TFEU exists. However, it’s worth noting that we consider some actions could have been achieved using ordinary legislative procedures, such as speeding up procedures for issuing permits for renewable energy generation, defining rules for joint gas purchases, and the ban on Russian pipeline gas imports. With the Gas Storage Regulation, the Parliament has shown that it had the capacity to deal with a legislative matter rapidly. We reached a deal within two months following the Commission’s proposal, which is the equivalent of the time the Council took to agree on the issues I just pointed out. Specifically, with regard to issuing permits and in terms of joint purchases, there was less urgency in terms of implementation than there had been for other measures such as the market correction mechanism or the energy savings and solidarity measures, which would have allowed for the EP’s full participation in the process.
How do you perceive the possibility of RRF funds financing gas projects under the REPowerEU chapters? Is there a clear majority view on this aspect in your committee? Do you see the energy transition that the EU wants to achieve being hampered by the search for energy security? Do you think that the EU’s energy security actions will be jeopardised by the gas cap that the EU decided upon last year?
Cristian Bușoi: The REPowerEU chapters of the RRF are an extremely important solution to help European citizens deal with the energy crisis and gradually become independent from Russian fossil fuels. Financing gas projects is part of the solution, at least in the immediate term. A targeted exemption from the ‘do no significant harm’ principle for specific investments and projects was also deemed necessary, under the Commission’s scrutiny. The ITRE Opinion supported this approach and the subsequent vote was passed with a broad majority — 42 in favour, 10 against, 3 abstentions.
Nevertheless, increasing energy security does not necessarily undermine the energy transition. REPowerEU also ensures that financed measures should contribute to the green transition, including biodiversity, and to addressing the challenges resulting thereof, for at least 37 % of the funds. Furthermore, Parliament remains committed to the energy transition, and is working on multiple pieces of legislation to deliver on this objective.
At the end of January 2023, the ECA published its special report 3/2023 on the integration of the EU’s internal electricity market. The main conclusions are that integration is slow and benefits linked to greater price convergence are still to be realised. In your view, what changes should the Commission propose in terms of the electricity market reform, which is expected later this year? Do you foresee any actions from the EU, and more specifically from your committee, to address EU citizens’ concerns regarding the windfall profits of electricity suppliers and those of energy suppliers in general?
Cristian Bușoi: We will be dealing with the EU’s electricity market design — the EMD — revision, giving it our full attention and the urgency it deserves. We expect the Commission to propose a targeted amendment to the existing framework to address the shortcomings in the existing market rules that have been evidenced with the war. However, it is important to clarify that the current electricity market design has served its purpose of promoting the generation of indigenous renewable and low carbon electricity generation very well. This is something that is and will continue to be essential in our 2050 carbon neutral future. But of course, the legislation in force did not take into consideration the rising energy prices and supply shocks such as those we have experienced since the war started. Therefore, certain measures will have to be considered to ensure that vulnerabilities and the price volatility we have been faced with will not be repeated in the future. I am confident that the EMD proposal will serve as a good starting point.
Legislative steps forward on hydrogen and energy efficiency
You are also an alternate member of the Parliament’s Committee on Environment, Public Health and Food Safety, ENVI. Do you see a big difference in the energy-related issues and discussions in ENVI compared to in the ITRE committee?
Cristian Bușoi: ENVI focuses more on CO₂ aspects and sustainability criteria, while in ITRE we focus more on security of supply, the internal energy market, infrastructure, interconnections, and overall energy policy coherence. We pave the way to reach our climate targets, and work towards making the energy transition both possible and attainable for all sectors.
On 9 February 2023, the ITRE committee discussed a legislative package on gas and hydrogen. What was the committee’s main concern regarding the package as it now stands, and where do you think the EP can make a difference?
Cristian Bușoi: Indeed, on 9 February the ITRE committee adopted its position to enter into interinstitutional negotiations with the Council on the so-called gas package — the Gas and Hydrogen Directive and Regulation — following months of internal deliberations. Our position differs from the Commission’s proposal in several ways. Notably, with regard to the Directive, the EP position allows more certainty for investments in hydrogen infrastructure based on the existing natural gas grid. It also calls for gas, hydrogen, and electricity infrastructure to be planned jointly, and it prioritises hydrogen in sectors that are hard to decarbonise.
Concerning the Regulation, the EP position notably calls for member states to collectively ensure that at least 35 billion cubic metres of sustainable biomethane is produced and injected into the system. We propose extending the European Network of Transmission System Operators for Gas (ENTSOG) to include hydrogen network operators. The EP also proposes using the Regulation to enshrine some of the provisions adopted as part of the Council’s Emergency Regulation of October 2022, such as those relating to the joint purchase of gas and a new reliable LNG benchmark, to make these provisions permanent.
As part of the energy transition discussions, one of the key aspects for swift gains regarding energy relates to energy efficiency. In its special report 11/2020 in 2020, the ECA reported on energy efficiency in buildings and concluded that cost-effectiveness as a determining factor was lacking. On 9 February, you discussed the Energy Performance of Buildings Directive, which should enhance energy savings, including those supported by EU funds. In your view, what is the key new element in this latest package compared with previous legislation, and what has been the main change introduced to this package by the ITRE committee?
Cristian Bușoi: The Commission proposal was already a substantial step forward, compared to the existing legal framework since it contained the following points :
- the obligation for all new buildings to be zero-emission by 2030;
- increased EU-level minimum energy performance standards for existing buildings, whether residential or non-residential, with a particular focus on the lowest performing buildings to address energy poverty;
- improving energy performance certificates by making them more transparent and more comparable, e.g. through using a harmonised scale from A to G;
- creating a building ‘Renovation passport’ that provides owners with a tool to facilitate their planning and give a step-by-step renovation guide to help move towards a zero-emissions level;
- contributing to green mobility efforts by rolling out the necessary infrastructure in buildings’ parking areas to accommodate e-vehicles and e-bikes;
- more cross-policy coordination by integrating national buildings renovation plans into national energy and climate plans; and
- adapting our legislation to cover technological developments and encouraging the use of smart systems, which help operating buildings efficiently, especially in terms of energy performance.
In a second round, the Commission also introduced new provisions to facilitate solar panel installation on buildings.
To single out one single change made by ITRE in such a complex area would be unfair to the hard work done by all the colleagues involved. Of course, some could point to phasing out fossil fuel-based heating systems in all buildings, unless it can be shown to the Commission that such phasing out is not feasible. However, above all, it is important to keep our approach in mind instead. ITRE has worked very intensively to strike the right balance between higher ambition — higher than that proposed by the Commission — and realism, in a context where European citizens are confronted with higher energy bills and rising prices, and where member states have very different building types, quantities and energy performance levels.
Tackling energy poverty
What kind of audit would you like to see from the ECA in the future when it comes to the energy transition, which could potentially support your committee’s work? What topics spring to mind?
Cristian Bușoi: Topics that I would like to see covered by ECA audits range from how member states finance energy poverty measures to member states’ actions to tackle excessive windfall profits made by energy companies, from progress in terms of implementing energy legislation to permit-related issues for renewable energy sources.
In the dual context of the energy transition and the energy crisis, what’s your view on the EU’s role in the fight against energy poverty? Are there many divergent views on this issue in your committee?
Cristian Bușoi: It is the ITRE Committee’s view that all levels of governance must play their part in tackling the issue of energy poverty. Already as part of the third energy package in 2007, it was our committee that introduced the need for member states to define energy poverty, something that not all have yet done and our reason for defining it now in the Energy Efficiency Directive. At EU level, we can contribute by establishing a harmonised approach to determining what energy poverty is. To ensure that all EU citizens will eventually be able to enjoy the same level of protection, we can also allow EU funds to be used for that purpose and in general, we can definitely contribute by developing the right energy legislation to promote the most extensive possible generation of competitive and sustainable energy sources and transparent market rules.
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.
