The European Commission is currently finalising its delegated act on Renewable Fuels of Non Biological Origin (hydrogen and e-fuels). Both groups are worried that the draft now under discussion could lead to a situation where the production of these new ‘green’ fuels would put the continent’s decarbonisation efforts at risk and dramatically increase consumers’ energy bills.
As the EU is undergoing an unprecedented energy price crisis, EU decision-makers are currently discussing a number of policy measures to help protect households while putting us on track to meet our climate goals.
This approach of prioritising the solutions that shield consumers against price volatility while contributing to our climate goals needs to be applied consistently. This is why the latest developments in the drafting of the delegated act on Renewable Fuels of Non-Biological Origin (RFNBO) are so worrying. This delegated act is supposed to set criteria for the production of new renewable fuels, like hydrogen or e-fuels which will be needed to decarbonise the industrial sectors, such as steel or cement, where emissions are hard to abate. Science is clear that to be truly sustainable, these fuels need to be produced using renewable energy. If not, they will be even worse than the fuels they are supposed to replace.
Therefore, both groups say that high targets for ‘green’ e-fuels must go hand-in-hand with additional supply of renewables. If this condition would not be met, the risk is that these fuels will be produced in large amounts through expensive and polluting gas-fired power plants. This would not only be unsustainable and at odds with our climate objectives, but it would also put a huge strain on European energy markets and probably lead to consumers electricity bills skyrocketing.
To match the expected demand of e-fuels in 2030, it is indeed estimated that Europe will need 500 TWh of additional electricity production, the equivalent of adding the annual consumption of France to our electricity demand. If this increase of the demand is not matched with additional renewable capacity, it is unavoidable that electricity prices will go up exponentially and worsen the difficulties of European households.