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6th Aug 2021

EU ambassadors divided over prolonging gas funding

  • The International Energy Agency recently said that new investments in fossil fuels are inconsistent with the 2015 Paris Agreement goal to keep global temperature rise to 1.5 degrees (Photo: nord-stream2.com)

EU ambassadors failed to reach an agreement on Wednesday (2 June) over whether cross-border natural gas projects should continue to receive EU funding, under the TEN-E regulation, which is currently under revision.

The dispute comes after a group of member states put forward a new joint paper pushing for rules that exclude fossil-fuel funding - which directly opposes the leaked proposal from the European Council, drafted by the Portuguese presidency.

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The TEN-E regulation determines which cross-border energy infrastructure projects in the EU are eligible for public funds, under so-called "Projects of Common Interest".

Last December, Brussels proposed a revision of the TEN-E rules, excluding dedicated support for oil and gas infrastructure - in a bid to align a key piece of energy policy with the Green Deal's objectives.

Austria, Belgium, Germany, Denmark, Estonia, Spain, Ireland, Luxembourg, Latvia, the Netherlands, and Sweden have backed this position, arguing that the TEN-E regulation was a "litmus test" of the EU's commitment to achieving climate neutrality.

"TEN-E must not facilitate investments in fossil fuel infrastructure nor blending of hydrogen with fossil fuels," said the non-paper, seen by EUobserver.

The so-called "blending" process occurs when existing gas infrastructure is modified to mix hydrogen with natural gas.

The joint paper also says that EU rules for cross-border energy projects must enable a pathway "away from reliance on fossil fuels" in order "to avoid lock-in effects and sunk investments" - in line with the approach of environmental organisations and green campaigners.

"It should not be taking this long for member states to agree the blindingly obvious that we can no longer afford to support fossil fuels. It is ridiculous that some states are still dragging their heels," said Tara Connolly from NGO Global Witness.

Under the Portuguese proposal leaked last week, retrofitted gas pipelines carrying natural gas blended with hydrogen should be eligible for EU funding until 2029. This is currently one of the sticking points of the discussion.

The leaked proposal also established continued support for projects in Malta and Cyprus, arguing that these countries are not fully connected to the European gas network.

These include the controversial EastMed pipeline, designed to link Israel and Cyprus to Greece.

Last month, the same group of 11 countries called for the first time to stop funding fossil fuels under EU rules for cross-border energy projects.

"We don't need more fossil fuels! We can make the transition," tweeted the Austrian minister for climate Leonore Gewessler.

A recent report of the Paris-based International Energy Agency concluded that new investments in fossil fuels are inconsistent with the 2015 Paris Agreement goal to keep global temperature rise to 1.5 degrees.

EU ambassadors will return to this issue next week (9 June) before EU energy ministers meet on 11 June.

Both EU countries and MEPs must give the green light to the updated TEN-E rules.

Portugal under fire for backtracking on gas funding

A group of member states is seeking to prolong EU funding for cross-border natural gas projects - contrary to the European Commission's plans to remove all support for such infrastructure, according to a draft document seen by EUobserver.

Controversial EastMed pipeline not necessary, report warns

A new report warned that the gas reserves over which Greece, Turkey, Cyprus, and the EU are currently embroiled could lead to an increase of greenhouse gas emissions that could undermine the bloc's climate goals for both 2030 and 2050.

New EU rules for energy-project funding to keep fossil gas

The European Commission will unveil a reform of EU criteria for picking energy infrastructure projects for financial support - with a particular focus on hydrogen. However, green groups have warned of the risks of not excluding fossil fuels.

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