Energy Crisis: Opportunity or threat for the EU’s energy transition? | A data driven analytical Executive Brief
The European Climate Law sets a legally binding target for the Union to reach climate neutrality by 2050. This is accompanied by the European Commission complementary set of proposals to make the EU’s climate, energy, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030.
As the production and use of energy account for more than 75% of the EU’s greenhouse gas emissions, decarbonising the EU’s energy system is critical to reach both 2030 climate objectives and the EU’s long-term strategy of achieving carbon neutrality by 2050. One of the three key principles for achieving the clean energy transition is the assurance of a secure and affordable EU energy supply.
However, with limited and depleting resources, the EU experiences extremely high dependency rates, at 95% for oil and at 85% for gas1. A high share of fossil fuel in the energy mix is not only a significant source of greenhouse gas emissions, but also an issue of security of supply. The recent succession of crises (Covid-19, the surge in gas and electricity prices in 2021, and the war in Ukraine) is an implacable reminder that long term climate objectives cannot be achieved without addressing in parallel the issues of energy security and affordability. These three topics are the pillars of the EU’s energy strategy
In its response to the hardships and global energy market disruption caused by Russia’s invasion of Ukraine, on March 8th, 2022, the EU adopted the REPowerEU Plan to phase-out EU dependency on Russian fossil fuels through energy savings, diversification of energy supplies, and an accelerated roll-out of renewable energy.
The European banking sector plays an important role in supporting these EU policies due to its capacity to provide and channel financial resources towards activities that contribute to achieving climate neutrality. Many banks are committing to align their portfolios with the climate neutrality objectives. For example, through the Net-Zero Banking Initiatives, banks are committing to transition GHG emissions out of their lending and investment portfolios to align with pathways to net-zero. They are also setting intermediary targets, focusing on priority sectors, such as energy and transportation, where banks can have the most significant impact in a transparent and publicly accountable way.
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About the EBF
The European Banking Federation is the voice of the European banking sector, bringing together 32 national banking associations in Europe that together represent a significant majority of all banking assets in Europe, with 3,500 banks – large and small, wholesale and retail, local and international – while employing approximately two million people. EBF members represent banks that make available loans to the European economy in excess of €20 trillion and that reliably handle more than 400 million payment transactions per day. Launched in 1960, the EBF is committed to a single market for financial services in the European Union and to supporting policies that foster economic growth.
Enerdata is an independent research company incorporated in 1991, headquartered in Grenoble, with a subsidiary in Singapore. The company specialises in the analysis and forecasting of energy and climate issues, at different geographic (world, country or region) or business / sector levels. Leveraging its globally recognized databases, business intelligence processes and prospective models, Enerdata assists companies, investors, and public authorities across the world in designing their policies, strategies, and business plans.
European Banking Federation
The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The federation is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.
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