Page 4 - EurOil Week 01 2021

EurOil COMMENTARY EurOil

2021 in review: Europe sacrifices

energy security for energy transition

2021 was a year of energy crisis and a series of EU legislative proposals to

bring policy in line with the 55% emissions cut target

EUROPE THE European energy market has endured are estimated to have risen above the level before
unprecedented volatility this year, character- the pandemic. One of the reasons is a resurgence
WHAT: ised by very high gas and power prices that have in the use of coal, which has become a more
Gas and power prices forced energy suppliers and various industries competitive energy source due to the spike in
have soared this year. into bankruptcy. gas prices, despite its heavier carbon tax burden.
The causes of the crisis are greatly debated. The big question is whether the EU will
WHY: The European Commission has argued that the embrace a more pragmatic approach to the
Contributors to the energy crunch just shows that the EU needs to energy transition that recognises the continu-
crisis have been get away from fossil fuels as quickly as possible ing importance of energy security and energy
underinvestment in and accelerate the deployment of renewables. affordability.
indigenous gas supply But this narrative is questionable. Years of under-
and poor renewables investment in indigenous natural gas supply in Making things fit for 55%
performance. the EU, partly as a result of environmental poli- 2021 was an eventful year for EU regulatory
cies, played a major role in creating the current movements, as policymakers continue to debate
WHAT NEXT: situation. So too has the rapid deployment of how laws should be changed to help the bloc
The European intermittent renewables, with no means to store pursue its ambition to reduce greenhouse gas
Commission has this energy. Wind farms across the continent emissions by 55% by 2030. Many of the pro-
proposed significant have performed poorly this year, putting extra posed changes will have a significant impact on
climate legislation, pressure on gas to deliver. the European oil and gas industry.
though it remains to be The climate ambitions of EC President Ursula The EC published its Fit for 55 package
seen whether the crisis von der Leyen are far bolder than those of her in July 2021, that seeks to align laws govern-
will encourage the EU to predecessor Jean-Claude Juncker. But in 2021, ing multiple sectors with the 55% target. The
be more pragmatic. the second year of her leadership, EU emissions package included changes to the emissions

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