The European energy and climate policy – Is gas in the driver’s seat?

Climate and energy policy are at the heart of the new European Parliament’s and the Commission’s agenda at the start of their five-year term. Citizens from different countries expect much from the institutions when it comes to reducing emissions or transforming the energy market. Are we to expect a genuine change in Europe or will the politicians fail to reach an understanding? Gasum’s Public Affairs Director Juha Ala-Huikku answered questions about the big picture of European energy and climate policy.

Mitigating climate change and limiting global warming to less than two degrees require significant and rapid emissions reduction in all sectors. The decisions that the new European Parliament and the Commission make are essential for Finland and Sweden. In Europe, the carbon neutrality target of 2050 has already been set and this will mean no less than 80 percent emissions reduction.

To achieve this goal, we need to make changes in all areas of the society: how we build our environment, how we transport ourselves and goods on roads and rails and in the air, and how we produce electricity and heat for our homes and workplaces. Until now, politicians in the EU have been cautious about locking in clear technological winner or a path to carbon neutral. Everyone has agreed that something needs to be done – and soon. However, it is difficult to perceive the big picture in the reform of the European energy policy.

Juha Ala-Huikku, Gasum's Public Affairs Director, answered a few questions about energy and climate policy.

What will the new EU term look like in terms of energy and climate policy?

"The new European Parliament and the Commission will definitely not set the ambition level lower than the previous ones when we talk about energy and climate policy. Of course, there are differences in the level of commitment among the member states, but if we look at the situation in the beginning of the year before the elections and now after, the change is clear: more and more member states are committing themselves to the carbon neutrality target. Sweden has already made its internal goal to reach carbon neutrality by 2045.

At the same time, it is good to remember that changing a system that people have relied on for many years is not to be done hastily. If we consider the time and the political will that was required to get renewable energy to the same level with the old energy system, even in political debate, not to mention technological readiness, we understand that 2050 is already in many respects around the corner. While we must be ambitious in our actions, we must remember to keep all the people in the member states onboard in climate change mitigation and that the pace of introducing new technologies should not be too fast. Different countries have different readiness for economic and social deployment of new ways."

Gasum sees the increased role of gas as a solution towards carbon neutrality. Gas is a cost-effective and low-emission energy source, which significantly reduces emissions. Currently, gas is used to replace more polluting fuels, such as coal or oil-based fuels.

How is gas then suitable for reforming the European energy and climate policy?

"Gas will play a key role in building a carbon neutral system. It can be used to produce low-emission energy at lower costs for an ever-growing number of people and industry.

It has always been Europe’s strength that the energy system has been kept rather varied. The key has always been that the Emissions Trading System (EU ETS) works. The new Parliament and Commission should ensure that the EU ETS continues to function properly, so that the energy market can be used to find the best way to operate.

Of course, in order to slow down climate change, we must reduce emission also outside the EU ETS. The so-called burden-sharing sector is currently our biggest challenge in emissions. Transport accounts for around 40 percent of the burden-sharing sector's emissions. Emissions from transport and, for example, agriculture must be cut immediately so that we can curb the effects of global warming. Gas makes it possible to reduce emissions by up to 85 percent already now."

What are the most important things that need to be done in the beginning of the term?

"I believe and hope that the circular economy will play a central role right from the beginning of the term. The new Commission’s programme is central to the next phase of the circular economy and taking it to the next level. Moreover, the Commission is introducing a comprehensive gas package early in the term and I truly hope, that the package would include concrete proposals to enhance the market development of renewable gases.

In many aspects, Sweden is ahead of other states. The Nymölla biogas plant, that is scheduled to open in 2020, is a great example about the co-operation companies can do in circular economy. The co-operation project between Stora Enso and Gasum increases sustainability in industrial processes and, at the same time, produces renewable fuel.

Gasum's expertise in biogas production and in the use of biogas as renewable fuel in traffic are always interesting topics in Brussels. Gasum has already made determined efforts for years now in the Nordics, and now other energy sector actors in Europe are beginning to realize the role of biogas towards a carbon-neutral society. I would like to see the new Commission take the role of biogas in road traffic more heavily to its agenda. We are already moving to the right direction, but now the discussion related to the many benefits of biogas should be extended also to passenger cars and public transport segments.

The EU is already firmly committed to the deployment of alternative fuels. However, this also requires a lot of investments in infrastructure, whether it be charging stations for electric cars or filling stations for natural or biogas. We now need the decisions quickly, in order to start building the necessary infrastructure. The framework and aspirations are already there. Now we only need to make gas available faster."

In Sweden, for example, Gasum already contributes actively to the development of gas filling station network. Gasum is building a network of around 12 new stations in 2019. Overall, Gasum is aiming to create a network of 50 new heavy-duty vehicle gas filling stations in Finland, Sweden and Norway by the early 2020s.