EU Promises €300 Billion to Get Off Russian Gas

EU Promises €300 Billion to Get Off Russian Gas

The European Union has announced REPowerEU, a plan that will dedicate €300 billion ($316 billion) to the bloc’s independence from Russian oil and gas by the end of the decade. Currently, Russia provides about 40% of the bloc’s gas and 27% of its oil, though Bulgaria and Poland were cut off from Russian supply in late April after refusing to pay in rubles. The new plan intends to cease all gas imports from Russian sources, speed up the transition to renewable energy, and increase energy-saving efforts.

At the briefing, European Commission President Ursula von der Leyen stated, "REPowerEU will help us to save more energy, accelerate the phasing-out of fossil fuels, and kick-start investments on a new scale. This will be speed-charging for our European Green Deal."

European Commission: REPowerEU, May 18, 2022.

CNN: EU unveils $220-billion plan to sidestep Russian gas, May 18, 2022.

European Commission: Proposals regarding REPowerEU, defence investment gaps and the relief and reconstruction of Ukraine!, May 22, 2022.

Why This Matters

The war in Ukraine has made it clear that energy policy and geopolitics are impossible to separate, especially when the EU is paying Russia the equivalent of $285 million a day for oil and indirectly funding a war. The EU’s Green Deal is not just a climate tool but a diplomacy one.

Much of the immediate action has been to diversify the gas supply, which doesn’t eliminate gas or its climate-damaging emissions. But many countries are finding their transition plans to cleaner energy sources unrealistic. The focus now is getting to green energy ASAP. Last year, clean energy comprised 38% of the world's electricity generated in 2021, an even larger share than coal, which generated 36%. The EU is creating a fast-track permitting process to accelerate wind and solar installations and earmarking €113 billion for a "massive scale-up in renewables."

Bloomberg: Scaling Up Renewable Energy Usage, March 16, 2022.

IEA: A 10-Point Plan to Reduce the European Union's Reliance on Russian Natural Gas, March 3, 2022.

Getting Efficient

It might not be as flashy as a full transition, but energy efficiency is also an essential part of the EU’s approach -- by using less energy to begin with, less gas is needed in the short term. According to a recent report, the bloc’s Fit for 55 climate package has the potential to replace two-thirds of Russian gas imports by 2025 without building any new gas import infrastructure.

The Commission has also highlighted energy efficiency as the "cheapest, safest and cleanest" way to get off Russian (and other) gas. In addition to setting a new target of cutting overall energy use by 13% (up from 9%), it has suggested several solutions, including improving insulation in buildings and swapping out gas boilers for heat pumps.

CBS: Huge carbon emissions cuts needed, UN climate report finds, April 4, 2022.

Forbes: EU Looks To Renewable Energy To End Dependence On Russia, April 11, 2022.

IEA: A 10-Point Plan to Cut Oil Use, March 18, 2022.