Newsletter 2.2020
Dear reader,
Welcome to the second EUROFUEL newsletter of 2020. In this edition, we will have a closer look at the first policy developments in the framework of the Green Deal and the latest initiatives promoted by EUROFUEL, such as the launch of the updated version of the brochure “Heating with liquid fuels”.
The latter is a key sign of the commitment and willingness of our industry to be future oriented by providing innovative solutions to consumers. While highlighting our efforts to bring new products to the market, in the coming months our priority is to keep communicating the several advantages that heating oil already delivers to consumers. These relate for example to its cost-efficiency, high energy density and suitability for off-grid areas to name a few.
As the Green Deal starts to take shape, it is even more crucial to engage with policy-makers conveying our messages and, above all, the concrete solutions through which we can be part of the future energy system.
Yours,
Dr Ernst-Moritz Bellingen
The Green Deal takes shape
After its publication in December, the European Green Deal has started to take shape in the first weeks of 2020. In January, the Commission indeed launched the European Green Deal Investment Plan, the financial pillar of the Green Deal. The objective is to mobilise at least €1 trillion of sustainable investments from both private and public money over the next decade. The Plan will be financed through different instruments, including already existing EU funding initiatives, public and private money.
Part of it will be financed through the next EU Budget for 2021-2027 period, the so called Multi-Annual Financial Framework (MFF). In this regard, the Commission proposed to invest 25% of its total budget in climate and environmental objectives across multiple programmes, leading to a sum of €503 billion. Another stream will come through InvestEU, the flagship EU growth and investment plan expected to trigger around €279 billion of private and public climate and environment related investments over the period 2021-2030. A relevant amount of money will be provided by Modernisation and Innovation Funds, own EU resources derived from the auctioning of carbon allowances under the EU Emissions Trading System, which will provide some €25 billion for the EU transition to climate neutrality.
Last but not least, the European Green Deal Investment Plan includes a Just Transition Mechanism (JTM), an instrument aimed at supporting the economic transformation of the regions which will be most affected by the energy transition. It is expected to gather €143 billion in the next ten years (€100 in the next EU budget period 2021 – 2027). The core of the JTM is the proposal for a regulation establishing the Just Transition Fund (JTF), which will consist of €7.5 billion of new EU funds. Its relevant aspect is that, differently from the other funding streams mentioned above, the JTF has been proposed through a regulation, which will be discussed by the European Parliament and the Council throughout the coming months. According to the Commission proposal, the funds will be allocated especially to regions which will be identified by Member States upon the presentation of dedicated territorial just transition plans. The money will be used primarily to support workers to develop skills and competences for the job market of the future and help SMEs, start-ups and incubators to create new economic opportunities in these regions. While the fund will support investments in the clean energy transition, the Commission proposal states that it should not finance projects related to the production, processing, distribution, storage or combustion of fossil fuels.
While the European Green Deal Investment Plan represents the main initiative adopted so far, more is expected in the coming weeks. In March, the Commission will present its proposal for a European Climate Law, enshrining the 2050 decarbonisation objective into legislation. This law is of utmost importance as it will clarify the approach the Commission will take to cut emissions, indicating what the priority sectors will be. The Climate Law will then trickle down into a variety of other measures in the coming years such as more ambitious emission reduction and renewable energy targets, as well as tighter energy efficiency standards. This calls for additional efforts in our activity to communicate how the heating oil industry can be part of a future energy system.
Heating with liquid fuels – Launch of EUROFUEL brochure
A clear example of how we can concretely communicate the benefits of heating oil has been the launch, at the end of January, of the updated version of the “Heating with liquid fuels” brochure.
This piece of work not only recalls the multiple existing benefits of heating oil but shows that our industry can contribute to the success of the energy transition through a gradual approach and the development of innovative liquid fuel solutions. The brochure suggests three practical steps to make this vision concrete:
- Maximise boiler efficiency by installing modern oil-fired condensing boilers as they reduce both fuel oil consumption and the greenhouse gas emissions - by up to 30% compared to outdated boilers.
- Move to hybrid heating systems, a solution which build on the strength of the different technologies: renewables which reduce greenhouse gas emissions, and oil which is readily available independently of the wind and sun.
- Introduce CO2 neutral liquid fuels by deploying new liquid fuels that are CO2 neutral, to comply with the long-term climate objective.
This is of course not easy, and requires a coordinated and concerted effort by the entire industry and throughout the value chain. More initiatives of this kind are indeed crucial to ensure heating oil remains part of the future energy mix.