The European Commission released new guidelines on Tuesday (December 21) to encourage public investment in green climate and energy initiatives while eliminating subsidies for the most polluting fossil fuels.
In effect, this means that natural gas projects will still be eligible for government funding if certain conditions are met.
EU countries with low GDP will have to show that their gas infrastructure is in line with EU climate goals in order to get approval from Brussels, either by supporting the phase-out of coal power or by being future-proof, such as having the ability to integrate hydrogen into the grid.
To avoid energy price hikes like the ones now, the goal remains to phase out all reliance on fossil fuels. Gas prices in Europe continued to rise this week, reaching €148.50 per megawatt-hour on Monday, a 600% increase since January. The new guidelines are “a major step” toward ensuring that state aid fully supports the EU’s climate goals of reducing greenhouse gas emissions by 55 percent by 2030 and becoming climate neutral by 2050.
Aside from renewables and other green infrastructure, specific funding can help with biodiversity recovery, building energy efficiency, the growth of the clean-mobility sector, and the closure of coal, peat, and oil shale operations.
Member states will also be able to run competitive auctions for green projects and decrease certain levies for energy-intensive customers under the new guidelines.
The goal is to incentivize investments in green initiatives while limiting so-called carbon leakage, which occurs when corporations move manufacturing to nations with less stringent climate regulations outside of the EU.
Meanwhile, EU member states would be required to conduct public consultations for significant projects with an estimated average annual aid of more than €100 million in order to identify environmental benefits and make informed decisions.
In mid-January, the new guidelines are anticipated to be formally implemented. By 2024, EU member states must adjust their existing support structures to the new guidelines.
This is especially crucial for nations like Poland, which intends to continue subsidizing coal mining until 2049.
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