Page 10 - EurOil Week 22 2021

EurOil POLICY EurOil

Eleven EU states call for

end to gas PCI funding

EUROPE GERMANY and 10 other EU states are push- as a “litmus test” for how seriously the EU takes
ing for natural gas infrastructure to be excluded its commitment to bring emissions down to net
The revised rules are from the bloc’s list of projects of common inter- zero by 2050. The bloc recently raised its inter-
due to come into force est (PCI), which enjoy grants and eased permit- mediary reduction target for 2030 from 40% to
in 2023. ting requirements. 55%.
Europe is taking an increasingly hardline However, closing the door on gas financ-
stance against natural gas, which it once hailed ing altogether will surely be opposed by those
as a key transition fuel to help countries reduce member states that are looking to expand the
their emissions by switching from dirtier fuels role of gas in order to reduce coal use, or want
such as coal. Many of Europe’s most ambitious to develop new import options to limit their
gas infrastructure initiatives including the dependence on Russian gas. Poland has faced
Southern Gas Corridor (SGC), which pipes strong criticism from EU authorities over the
gas from Azerbaijan, were realised in large part years for maintaining a large share of coal in its
thanks to their inclusion as PCIs. But in Decem- energy mix, but recently has shifted its policies
ber, the European Commission proposed revis- in favour of gas.
ing the TEN-E regulations that determine what The revised TEN-E regulations are antic-
can be considered a PCI to rule out support for ipated to come into force in 2023. In reality,
all fossil fuels. though, they may not have a significant impact,
The proposal is yet to be approved by the as the EU has significantly reduced its support
European Parliament and EU member states. for gas infrastructure already. The EU’s Euro-
But Austria, Belgium, Germany, Denmark, pean Investment Bank (EIB), which has typically
Estonia, Spain, Ireland, Luxembourg, Latvia, provided substantial loans to PCIs, has pledged
the Netherlands and Sweden have issued a joint no longer to fund any fossil fuel projects after the
paper expressing their support for the EC’s plan. end of 2021.
Not only this; they also want to rule out any pro- What is more, the EC is proposing ever fewer
jects that involve the blending of hydrogen with gas projects in the PCI lists it publishes every
gas. two years. Its 2021 list is expected to include
“TEN-E must not facilitate investment in only one gas project, a pipeline linking Bulgaria
fossil fuel infrastructure nor blending of hydro- and Serbia which secured a €25mn ($30.5mn)
gen with fossil fuels,” the paper states. “TEN-E grant from the EIB last month, which the bank
must contribute to developing the framework hailed as one of its final investments in fossil
for a viable pathway away from reliance on fossil fuels. In comparison, the 2019 list included 32
fuels.” gas projects, and the 2017 list 53. This dwindling
Many gas producers and network operators support is partly the result of growing antipathy
want to steadily increase the hydrogen content in towards gas in Brussels, but it also reflects the
Europe’s pipelines in order to decarbonise their fact that the European gas market is now highly
operations step by step over time. interconnected thanks to a concerted EU push
How the TEN-E rules are altered will serve over the years. ™

P10 www. NEWSBASE .com Week 22 03•June•2021