Green Week Recap 2021 - Europe Gets Fit For 55
We look back on one of Green Week 2021's most interesting discussions - between Statkraft's Anne Bolle and The Institute for Applied Ecology's Felix Matthes - on their perceptions of the European Union's Fit For 55 Package.
As the COP 26 meets for a critical summit in Glasgow this week, the world’s eyes are, as they have been for much of the year, focused on the climate crisis. What targets will global leaders agree on? Will the political will match up to the expectations of those protesting on the streets? What conclusions, commitments and compromises might emerge from the summit?
At Montel Group, we are, like everyone else, watching intently. But we are also casting our minds back to a few weeks ago and thinking about the discussions we held during our second annual digital Green Week. Whilst the webinars we hosted pale in comparison to the weighty debates at the COP, they shone a light on how energy markets are responding to the climate crisis. Over 4 days of presentations and panel discussions, we covered topics that ranged from GOs and PPAs to energy prices and renewable certification. The scope of the presentations was matched only by the depth of thought and knowledge on display, showing how actors across the market are thinking about how to reach a zero-carbon future.
The webinars are available to stream on demand and in full via the Montel Group Vimeo page, but we wanted to take the opportunity to highlight one webinar in particular - the discussion on the EU's Fit For 55 plans between Statkraft's Anne Bolle and Felix Matthes from The Institute for Applied Ecology.
Target-setting and implementation.
While the COP will set the tone on a global level, implementation of policies to meet targets will depend on individual countries. And thus far, no group of countries has displayed more ambition than the EU. The trading bloc's latest thrust has been the Fit For 55 legislative package, which, amongst other things, expanded the scope of the Carbon trading mechanism, set new targets for renewable generation, and introduced a carbon import tax.
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Germany's coalition negotiations and the coal phase-out
It is often forgotten that the EU is only as powerful as its member states. Recent splits - notably with Poland showing resistance to phasing out coal production according to the tight European timelines, have demonstrated that. The discussion between Anne and Felix began with an exploration of the current German political situation - and notably the goals that will be agreed upon by the new coalition government. Felix Matthes drew attention to a point that has been overlooked during the discussions over when to set the coal phase out objective: the target of 2030 is only one side of the equation and that the real challenge will be finding ways to replace that production and ensure security of supply.
Slow down or speed up?
In light of the current energy crisis, an increasing number of voices have begun to question whether our energy markets and systems are sufficiently robust and prepared for a transition to renewable energy. This is one point that Anne Bolle believes has been overstated. If anything, the crisis shows that we need to accelerate, she says.
Is the ETS the answer?
Both panellists agreed that the ETS does have a role towards a transition. Yet they disagreed slightly on the weighting it should be afforded. Felix Matthes highlighted the 'unsexy' and complex directive on energy taxation as an area which merits more attention as we battle to reduce emissions, and which at present has been overshadowed by the more visible ETS. But Anne Bolle reiterated Statkraft's strong support for expanding the system as far as possible, so as to provide a price for emissions wherever possible.
Towards a global carbon price
Both participants tackled the subject of the new Carbon Border Adjustment Mechanism, one of the more controversial measures of the new legislative package. Felix Matthes noted that the existence of a global carbon price - which many believe is the objective of the CBAM - is not in and of itself a panacea.
Fitter, happier, more transparent?
In their conclusions, both panellists noted the subtext to the Fit For 55 Mechanism - the importance of transparent, functioning energy markets.