Putin’s war in Ukraine has upset European energy policy. As Professor Samuele Furfari, who has served for more than 35 years as a senior official at the Energy Directorate-General of the European Commission, has argued, the EU “has ignored its own strategy to diversify energy supply”, failing to implement its own plans designed back in 2000, for which Furfari acted as the main communicator within the Commission.
At least, there now is a consensus to no longer be excessively dependent on Russia for energy supplies, which is an artificial phenomenon, caused by the EU’s environmental policies, which involved a promotion of unreliable energy sources, like wind and solar power. In the end, such policies do not benefit the environment, and not only because of solar and wind energy also have environmental downsides, but because their lack of reliability requires gas as a backup energy source, given bans and restrictions on coal and nuclear power.
Still, the battle for more sensible energy policies that would also benefit the environment is not yet over. Belgium will reverse its nuclear exit, even if it will only keep two of its seven reactors open. Then a future Belgian government can reopen the other reactors, just like in Japan, where a clear majority now supports reopening nuclear plants that had been shut down after an earthquake and tsunami hit a nuclear plant.
In Germany, for now, the greens have been able to prevent extending the three nuclear power plants that are still in operation beyond the end of this year. They are even prepared to reopen dirty coal-fired power stations in order to be able to profess their dogmatic anti-nuclear faith. Still, the pressure on the greens is mounting.
Tough sanctions have been imposed on Russia by Western nations and their allies. It is questionable whether these will make Putin change his mind. As much as Ukrainians deserve sympathy and perhaps even arms support – with some sensible limits, to make sure European countries do not get dragged into the war – for their brave struggle, one should dare to ask the question whether Europeans do not inflict self-harm for nothing, in case Russia continues its aggression regardless of the sanctions. In any case, focusing on reducing energy dependence on Russia may be much more effective.
For now, Germany is, preventing that sanctions are extended to gas trade with Russia. That’s sensible, given how the European Commission’s plan to become independent from Russian gas is full of holes. Germany now is open to phasing out Russian oil and coal by the end of 2022, Chancellor Scholz has suggested, while its Foreign Minister has promised to end dependence on Russian gas.
*Not Enough LNG to Fuel EU‘s Shift From Russian Gas – BBG
I fear that no one really thought this through. pic.twitter.com/6k25fjh00m
— Fabian Wintersberger (@f_wintersberger) March 15, 2022
Business as usual in Brussels, or a rethink of green experiments?
As Europe is struggling with the question how to update its energy policies to the new geo-strategical reality, some EU business as usual simply continues. As if restricting trade with Russia isn’t enough, EU initiatives that were being prepared before the war, are being continued as if nothing has happened.
One of those is the Carbon Border Adjustment Mechanism (CBAM), which really amounts to a protectionist EU “climate” tariff, which the French EU Presidency just managed to get EU member states to support, to the delight of French President Macron, keen to fly the flag of protectionism during his re-election campaign.
CBAM would foresee a new levy on steel imports, just when construction companies in EU warn construction may come to a halt due to steel shortages. And believe it or not: despite of massive fertilizer shortages, the EU will also burden these products, which are already burdened with EU “anti-dumping tariffs” that are crucial for food supply, with yet an extra tariff.
At least, CBAM looks like an exception. Again French President Macron called for an adjustment of the EU’s flagship food policy, the “Farm to Fork strategy”, which involves new restrictions on farming. Also EU agriculture Commissioner Janusz Wojciechowski has pledged that the Commission would look again at the Farm to Fork strategy, as well as its “Biodiversity strategy”, to assess whether these policies can still ensure Europe’s food security under current circumstances. At the moment, such a u-turn is being opposed by both Germany and Frans Timmermans, the EU’s “Climate” Commissioner, but in the face of a global food crisis, as predicted by many experts, things may change, especially as Europe’s food sector is reliant on imported gas.
Third, I completely agree with comments by WTO representative, Ludivine Tamiotti, who quite directly attacks something which is a sacred cow in EU, sth I have also been saying for a year now: carbon leakage is a protectionist concept and CBAM should not be based on it. 6/14
— Tomasz Wlostowski (@TomWlost) March 19, 2022
Biofuels and palm oil to the rescue?
Also the EU’s plan to phase out biofuels by 2030 may in that respect be questioned. Sunflower oil prices are skyrocketing following Russian aggression, given how both Russia and Ukraine are key producers. As a result, some UK manufacturers have had to urgently switch to refined rapeseed oil, but according to supermarket chain Iceland, “there are some recipes where the only viable substitute for sunflower oil, either because of its processing properties or taste issues, turns out to be palm oil.” As a result, the chain has reversed its ban on palm oil, as an ingredient for things like frozen chips or breaded fish. The company thereby stressed it would only use certified sustainable palm oil as an ingredient. It should be noted that this shouldn’t be overly hard, as according to one NGO, Global Canopy, palm oil supply chains are doing a much better job than companies in other sectors when it comes to preventing deforestation. According to the World Wildlife Fund (WWF), “The best thing we can do is support sustainable palm oil and avoid boycotts, since we know substitutions with other vegetable oils can lead to even further environmental and social harm.”
Furthermore, there are growing fears that Europe might run out of diesel following Russia’s invasion of Ukraine. According to one estimate, it would only have about 40 days supply of the crucial fuel in its stockpiles. Biofuels relying on palm oil originating in Malaysia and Indonesia – geo-strategically reliable – may well turn out to be an attractive proposition then.
"Europe has only has about 40 days supply of diesel in its stockpiles, stoking fears that the continent might run out." pic.twitter.com/30FkzBEyiu
— Fabrizio Zulli (@FabrizioZulli) March 28, 2022
Also the assumption that biofuels originating from that part of the world would result in excessive deforestation – which are the reason for the planned phaseout – looks plainly wrong, as it simply depends where the palm oil concerned originates from. According to data from the UN Food and Agricultural Organization (FAO), deforestation is not as problematic in Asia as compared to Africa and South America. In a recent report, the World Resources Institute notes that Latin American countries like Bolivia, Colombia and Peru “see high levels of forest loss” whereas “Asia had the highest net gain of forest area in 2010–2020.”
Furthermore, the World Resources Institute specifically singled out Indonesia and Malaysia as “bright spots of hope for forests”, stating: “Indonesia’s rate of primary forest loss decreased for the fourth year in a row in 2020, one of only a few countries to do so. Indonesia also dropped out of the top three countries for primary forest loss for the first time since our record-keeping began.… Primary forest loss also declined in Malaysia for the fourth year in a row.”
Already before the Russian invasion of Ukraine, a major energy and food crisis was unfolding. This was due to the fall-out of the Covid crisis but also due to years of large-scale policy experiments in Europe with energy provision. As a result of the grave consequences of the war, a consensus is emerging that the EU’s energy and environmental policies are in need of fundamental revision. This is only going to become more pressing.