EUROPEAN
COMMISSION

Brussels, 18.5.2022
SWD(2022) 230 final

COMMISSION STAFF WORKING DOCUMENT
IMPLEMENTING THE REPOWER EU ACTION PLAN: INVESTMENT NEEDS,HYDROGEN ACCELERATOR AND ACHIEVING THE BIO-METHANE TARGETS

Accompanying the document
COMMUNICATION FROM THE COMMISSION TO THE EUROPEANPARLIAMENT, THE EUROPEAN COUNCIL, THE COUNCIL, THE EUROPEANECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE
REGIONS
REPowerEU Plan
{COM(2022) 230 final}

Table of contents

1.

INTRODUCTION................................................................................................................................. 2

2.

INVESTMENT NEEDS ....................................................................................................................... 4

1.
2.
3.
4.
5.
6.

EN

Reduction of gas demand and investments by technology ................................4
Drivers of natural gas demand reduction in RePowerEU ................................10
Why should the potential for natural gas reduction be higher than 155 bcm? 11
A Changing Energy System .............................................................................12
Preparing for the next winter by Short-Term and Behavioural measures Energy
System ..............................................................................................................14
Costs and benefits ............................................................................................15

EN

7.
8.
9.
10.
3.

RENEWABLES AND ENERGY EFFIENCY FOR REPOWEREU ................................................. 22

1.
2.
4.

Overall investment needs .................................................................................15
Infrastructure Needs and Bottlenecks ..............................................................17
Industry ............................................................................................................19
Skills, social, employment ...............................................................................21
Renewables ......................................................................................................22
Energy Efficiency ............................................................................................24

HYDROGEN ACCELERATOR ........................................................................................................ 26

1.
2.
3.
4.

Scaling up the production and import of renewable hydrogen to 20 Mt by 2030..........................................................................................................................26
Scaling up the development of hydrogen infrastructure in the EU ..................30
Stepping up our international engagement on hydrogen to scale up renewablehydrogen imports .............................................................................................31
Conclusions: .....................................................................................................33

5.

ACHIEVING THE BIOMETHANE TARGETS ................................................................................ 34

6.

LIST OF TABLES AND FIGURES ................................................................................................... 47

7.

ANNEX ON PRICE TRAJECTORIES BETWEEN 2020 AND 2050 FOR GAS, OIL AND COAL 48

1

1.

INTRODUCTION

Achieving the objectives of the REPowerEU communication1 to reduce the dependence of Russian
fossil fuels will require on the one hand, reducing faster our dependence on fossil fuels, and, on theother hand, diversifying gas supplies. Both efforts imply investments including to boost energy
efficiency gains, increase the share of renewables, address infrastructure bottlenecks, increase LNG
imports and pipeline imports from non-Russian suppliers and increase the level of renewable hydrogenand bio-methane.
This Staff Working Document provides an estimate of the investment needs and additional costs ofreducing the fossil fuel dependence from Russia to zero by 2027, with specific focus on natural gas
use. The decoupling between the EU and fossil fuel imports from Russia has already started and willpass through different stages, affecting the demand and the supply side. Taking into account the above
elements, the analysis indicates that implementing the full potential to reduce the dependence to zero
(310 bcm) would require €300bn2 cumulative from now until 2030 – beyond the Fit-for-55 proposals3.
By the end of 2027, this transition corresponds to approximately €210bn investments (and 235 bcm).
These REPowerEU investments correspond to about 5% of the total Fit-for-55 investments until 2030,
and come on top of them. The Commission analysis estimates that with the Fit-for-55 and REPowerEU
measures combined, the EU can save €80 bn on gas import expenditures, €12 bn on oil import
expenditures and €1.7 bn on coal import expenditures per year.
Full implementation of our Fit-for-55 proposals would lower our gas consumption by 30%, equivalent
to 116 billion cubic meters (bcm), by 2030. Together with additional gas diversification andaccelerated gas decarbonisation, frontloaded energy savings and electrification have the potential tojointly deliver at least the equivalent of the 155 bcm imports of Russian gas by 2027.
This SWD explores notably how the higher renewables (45%) and energy efficiency (-13% final
energy consumption) levels contribute to the objectives of the RePowerEU.
Achieving the objectives of REPowerEU relies notably on scaling up renewable hydrogen and biomethane and provide a crucial contribution to the effort of reducing the dependence of Russian gas.
Therefore, this Staff Working Document also explores how the development of hydrogen can be
accelerated and the bio-methane targets achieved.
The scaling up of the deployment of renewable hydrogen will reduce our dependence of natural gas,coal and oil imports from Russia, and will help to accelerate the EU energy transition. Therefore, the
REPowerEU communication of 8 March included the Hydrogen Accelerator with the ambition ofusing 20 million tonnes of renewable hydrogen in 2030 in the EU.

1

COM(2022) 108 final
All monetary values are in EUR 2022 with HICP index (March 2022) being 115.88 (compared to 2015).
3
The additional investments beyond the Fit-for-55 proposals reflect both the impact of the REPowerEU measures andthat of the higher (see Annex 1) fossil fuels price context. The analysis excludes:
 Transport.
 The possibility to increase intra-EU sources of fossil fuels (e.g Groningen in the Netherlands).
 The investments and infrastructure needed outside of the EU (e.g. LNG terminals or tankers outside the EU
removing bottlencks to increase supply from Third Countries).
22This Staff Working Document further develops the Hydrogen Accelerator by identifying activities tosupport the implementation of these accelerated ambitions. It describes in which priority sectors theincreased amount of renewable hydrogen can be used and what measures would enable this uptake,identifies possible activities and support for the rapid development of the needed hydrogen
infrastructure, including pipelines, storages and terminal facilities and sets out how the EU could step
up its international engagement and coordinate its actions to facilitate the import of 10 million tonnesof renewable hydrogen, while ensuring respect for the EU’s international trade obligations.
In order to reduce its reliance on Russian gas, the European Union also needs to boost biomethane
production to 35 bcm by 2030. This Staff Working Document presents a number of possible actions
to achieve this ambitious target. The actions cover four key areas and could unlock the full biogas andbio-methane potential that exists across all EU Member States.
The proposed measures would not only facilitate the increase in production of biogas but would also
boost its subsequent conversion into bio-methane, respecting strict environmental criteria agreed in the
REDII. Recognising existing barriers to entry, the actions also target the facilitation of biomethane
integration into the EU internal gas market. Further co-ordination of support to biogas and bio-methaneat the EU, national and regional levels is needed if we collectively want to achieve the 35bcm target.
Challenges also include improving infrastructure deployment, improving access to finance, andsupporting research, development and innovation.

3

2.

INVESTMENT NEEDS
1.

Reduction of gas demand and investments by technology

Achieving the objectives of the REPowerEU communication to reduce the dependence of Russian
fossil fuels will require significant investments to:

Reduce faster our dependence on fossil fuels at the level of homes, buildings, transport,
industry and the power system by boosting energy efficiency gains, increasing the share of
renewables and addressing infrastructure bottlenecks.
Diversify gas supplies, via higher LNG imports and pipeline imports from non-Russian
suppliers, and higher levels of bio-methane (domestically produced) and renewable hydrogen(domestically produced and imported).

Full implementation of our Fit-for-55 proposals would lower our gas consumption by 30%, equivalent
to 116 bcm, by 2030. Together with additional gas diversification and more renewable gases,
frontloaded energy savings and electrification have the potential to jointly deliver at least theequivalent of the 155 bcm imports of Russian gas by 2027.
For the purpose of this analysis, fossil fuels considered are coal, oil and refined petroleum
products (e.g. diesel) and, in particular, natural gas.
The analysis considered 3 dimensions for the menu of options:
1- How fast can these measures be deployed?
2- How cost-efficient are these measures (contribution to reducing the dependency, number of
bcm saved in the case of gas)?
3- How green? The measures should not lead to stranded assets and should be future-proof, to theextent possible.
Several policy actions can be considered both from the supply and demand side:In the short-termo Diversification of gas pipeline routes (incl. higher load factor of existing pipelines)
o Limited additional LNG under current infrastructure or floating storage regasification
units (e.g. import terminals and pipeline network)o Demand-side behavioural measureso Energy efficiency investments (including heat pumps)
o Industry gas prioritisation (emergency measure)o Price-driven fuel switchIn the medium-term:o Further energy efficiency investments and innovation (including heat pumps,
retrofitting and energy efficient industrial processes)o Development of bio-methane production and infrastructure4o Additional photovoltaic (PV), on-shore and off-shore wind deployment and enegy
system integrationo Additional investment in the power grid and storageo Limited new LNG and gas pipeline infrastructure and adapting the existing gas
networks to bio-methane and renewable hydrogen
In the longer termo Development of renewable hydrogen production and hydrogen infrastructure
The analysis looks at the investments needed to build a structurally new energy system that is
independent from Russia as a fossil fuel producer. Taking into account the above elements, the upfront additional investment needs, complementing the Fit-for-55 package, to reduce the dependence tozero would amount to €300bn from now until 2030 (or, approximately €210bn by the end of 2027).
Table 1 below focuses on a gradual decoupling from Russian gas and assesses the options for additionalgas demand reduction and associated investment needs compared to the Fit-for-55 scenario. It is basedon comparing results of modelling scenarios of REPowerEU and implementation of the Fit-for-55
package using the PRIMES model4. The investments listed in the table below cover notably the
implementation of all the measures in the REPowerEU Communication and the specific needs forgradual gas decoupling from Russia by 2027, new LNG infrastructure and gas pipeline corridors, andproduction, transmission and demand sides of the transition outlined in the REPowerEU
Communication including energy efficiency, renewables, heat pumps, renewable hydrogen including
electrolysers, biomethane. Those investments do not cover the impacts of sanctions, oil savings, oil
production or demand measures, curtailment of oil, natural gas or coal, nor investments in existing
infrastructures related to the diversification of gas supply. As the focus of the analysis is on gas, Table
1 does not include transport, and investments in transport are similar in REPowerEU and Fit-for-55
projections.

4

The additional investments beyond the Fit-for-55 proposals reflect both the impact of the REPowerEU measures andthat of the higher fossil fuels prices.

5

Table 1: Potential measures and investments to reduce dependence on Russian gas by technology,
in addition to the Fit-for-55 package

TimingMeasureFf55
savings
by 2030

Total of all Fitfor-55 measures

Shortterm
prepared-ness

Diversification(additional
LNG usingexisting
infrastructure)
Diversificationof pipeline
imports using
existing
infrastructure

Delayed phaseout and more
operating hours
for coal

Abandoned
phase-out
nuclear plants
Fuel switch in
the residential
and service
sectors
EU Save:
Demandmeasures(behaviour)
EU Save:
Industry
curtailment

5

bcm
(in
2030)

€ bn
investments(20222030)

116

Justification/
explanation of the bcm
figureEligibility underEU financial
programmes

Fit-for-55 modelling
estimates 30% natural
gas savings-

RePowerEU
Communication50-

COM(2022) 108 final

10

-

24

2

7

-5

In 2030, long term
contracts account for
about 110 bcm (of which
about 55 bcm are takeor-pay contracts)
Using existing capacity.
The investment refers to
CAPEX. The fuel cost(coal) is not included(OPEX). The total
expenditure of the switchfrom gas to coal is thesum of CAPEX andOPEX.
Recent politicaldecisions in BE and FR

-

-

-

9

Fuel switch driven by
price changes

(10)

-

Measure 9 of the IEA
plan on gas in the EU(gas saving counted
under energy efficiency)

-

-

-

Emergency measure-

Investments for nuclear long term operation are included in investments for other power technologies and infrastructure.

6

Timing

MeasureNew LNGinfrastructure
and pipeline
Mid-term corridors(until2027)

Additional
investments inthe power gridand storage
Biomass in
power
generation

bcm
(in
2030)

-

-

1

€ bn
investments(20222030)

Justification/
explanation of the bcm
figureEligibility underEU financial
programmes

10

These infrastructure andpipelines facilitate thefull effect of thediversification.
Compared to average EU
LNG imports of 7
bcm/month (in 2019-21),
the EU system could
absorb an additional 3.8
bcm/month (45.6
bcm/year) of LNG if
bottlenecks are removed.
However, there are
currently only 8 to 10
available Floating
Storage Regassification
Units LNG terminals in
the world.6

Modernisation
Fund7, RRF8,
CEF9, ERDF and
CF, for projects
on the 5th PCI list

39

2

The storage is about
10bn.
In line with thesustainability criteria of
the Renewable Energy
Directive.

CEF, InvestEU10,
HE11, ERDF12,
CF13, JTF14, RRF,
ETF Funds15
HE, InvestEU,
LIFE, ERDF, CF,
JTF, RRF, ETS
Funds, RES EU
FM, EAFRD16

6

As an example, the Wilhelmshaven LNG Import Terminal, scheduled to enter service by 2023 once completed could
deal with 10bcm of additional gas per year. The cost of the project is around €672m.
7
Natural gas transmission (and distribution as well as gas-fired energy generation) are capped at a maximum of 30% of
the overall Modernisation Fund allocation.
8

Recovery and Resilience Facility
Connecting Europe Facility
10
InvestEU Programme
11
Horizon Europe
12European Regional Development Fund
13
Cohesion Fund
14
Just Transition Fund
15
Refers to two funds established under the ETS Directive: the Innovation Fund and the Modernisation Fund. The
Modernisation Fund is available to 10 MS: BG, HR, CZ, EE, HU, LV, LT, PL, RO, SK
16
European Agricultural fund for Rural Development
97

Timing

Longtermneeds(by 2027&
beyond)Measure

bcm
(in
2030)

EnergyEfficiency andHeat Pumps

37

PV and wind

(21
bcm
See
justific
ation)€ bn
investments(20222030)
56

86

Sustainable biomethane

17

37

Reduced use inindustry

12

41

Renewablehydrogen27(domestic andimport)27

Justification/
explanation of the bcm
figureEligibility underEU financial
programmes

Incl. Energy efficiency inbuildings;
Lower final electricity
demand;In the scenario, about 12
bcm is achieved troughalmost 4Mt of additionaldomestic hydrogenproduction and 9 bcm
through additional
substitution of gs in the
power system. Thesebcm savings are
distributed across theother sectors in the table.
Increased use inhouseholds, industry andagriculture. The total(with Fit for 55) adds up
to 35 bcm in 2030.
Incl. Electrification,energy efficiency, andfuel substitution (incl.
hydrogen);Excl. the cost of
production of hydrogenand biogas/bio-methane;
Excl. refineries.

HE17, InvestEU,
LIFE, ERDF, CF,
JTF, RRF, ETS
Funds€27 bn is direct
investment inelectrolysers anddistribution of hydrogenin the EU.

17

HE, InvestEU,
CEF18, LIFE,
ERDF, CF, JTF,
RRF, ETS Funds,
RES EU FM19

InvestEU,
ERDF20, CF21,
JTF22, CEF23,
ETS Funds24,
EAFRD

HE, ETS Funds,
InvestEU, ERDF,
CF, RRFCEF, InvestEU,
HE, ETS Funds,
RRF, ERDF, CF,
JTF25

Horizon Europe
Here, eligibility would be possible under CEF-Energy cross-border RES envelope
19
RES EU financing mechanism
20
European Regional Development Fund
21
Cohesion Fund
22
Just Transition Fund
23
Connecting Europe Facility
24
Refers to two funds established under the ETS Directive: the Innovation Fund and the Modernisation Fund. The
Modernisation Fund is available to 10 MS: BG, HR, CZ, EE, HU, LV, LT, PL, RO, SK
25
Concerning the ERDF, Cohesion Fund, JTF the eligibility refers to RES hydrogen – under “promoting renewableenergy in accordance with Directive (EU) 2018/2001” according to Regulation (EU) 2021/1058 on the ERDF/CF
18

8

Timing

Measure

bcm
(in
2030)

€ bn
investments(20222030)

Justification/
explanation of the bcm
figureEligibility underEU financial
programmes(excludes the investmentof solar and windelectricity needed to
produce green hydrogen;and excluding theinvestments needed forthe imported renewablehydrogen )About 6.6 Mt is
produced domesticallyand included in the Fitfor-55 scenario.
RePowerEU increases
the domestic production
by 3.4 Mt while 6 Mt ofrenewable hydrogen andapproximately 4 Mt ofammonia are imported.
Out of the approximately
additional 10 Mt
hydrogen, 8 Mt replace
27 bcm of gas, whereas
the remaining 2 Mt
replace oil and coal.
Total
310
300
Note: bcm figures in brackets are provided for information but not included in the total.

9

2.

Drivers of natural gas demand reduction in RePowerEU

The March REPowerEU Communication states that the full implementation of our Fit for 55 proposals
would lower our gas consumption by 30%, equivalent to 116 bcm, by 2030. The higher long-term
gas and oil price paths reduce the natural gas demand further by about 40 bcm until 2030, whereas theimplementation of the RePowerEU measures completes it with almost an additional 100 bcm reduction
by 2030.
Together with additional gas diversification and renewable gases, frontloaded energy savings andelectrification have the potential to jointly deliver at least the equivalent of the 155 bcm imports ofRussian gas by 2027.
While there is currently some shift from gas to coal and oil, under the Fit-for-55 proposal, demand foroil and coal is projected to decrease by 28% and 50% respectively between 2019 and 2030 Under
REPowerEU, demand for coal is projected to decrease by 36% (2030 vs 2020). Demand for oil iscomparable in 2030 to the Fit-for-55 projections (since the focus of the analysis is on gas). The
reduction in coal demand is sufficient to fully replace Russian coal imports by 2027.
Three main drivers will change the energy system beyond the Fit-for-55 proposals:
1. The decoupling from Russian gas imports, leading to the need for alternative suppliers andentry points into the EU, alternative intra-EU pipeline routes and other infrastructure;
2. The REPowerEU plan further increases the ambition level beyond the Fit-for-55 Package forgas alternatives (bio-methane, renewable hydrogen), deployment of renewables, and structural
demand measures such as energy efficiency;o The renewables reach a 45% share in 203026;
o Energy efficiency reaches a 13% share in 2030;
o Bio-methane production reaches 35 bcm in 2030;
o Renewable hydrogen use27 reaches 20 Mt by 2030 (of which about 4 Mt as ammonia);o Respecting the at least -55% GHG objective of the Fit-for-55 package is achieved.
3. Prices are expected to be persistently higher than the reference (albeit lower than the peak
prices observed in 2021 and 2022). Experts expect that the current events will temporarily
fragment oil and coal markets resulting in higher prices, while these markets will rebalance inthe medium term. The fuel price trajectories used in the REPowerEU and Fit-for-55 scenarios
are provided in Figure 1 in Annex A.

26
27

Using the definition in RED III.
Including the use of e-fuels derived from hydrogen.

10

3.

Why should the potential for natural gas reduction be higher than 155 bcm?

The combined effect of the Fit-for-55 proposals, the measures announced in the March
Communication, a higher price trajectory for natural gas, and the LNG and pipeline diversification
have the potential to lead to a cumulative demand reduction of 310 bcm of natural gas by 2030
compared to 2020. By 2027, this corresponds to 235 bcm (including 60 bcm of diversification
measures).28
REPowerEU aims at improving the energy security in the EU, while respecting cost-efficiency and thedecarbonisation pathway. Therefore, it is in the interest of the EU to have a broad range of options toallow for sufficient flexibility and prepare for other unforeseen events, rather than a very narrowtransition path.
1. The objective should go beyond 155 bcm, which is a snap-shot of the Russian natural gas
imports in 2021. In various recent years, the Russion imports have been significantly higher(e.g. 195 bcm in 201929). Further, the domestic natural gas production continues to decrease by
several bcm every year in the EU (and its neighbourhood). And, while still helping the general
EU energy security, not all reduction in natural gas consumption will directly translate into lessimports from Russia (e.g. in the western part of the EU).
2. Another uncertainty are the price trajectories of natural gas and the other fossil fuels. Higher
than usual gas prices as in the price trajectory of Figure 1 drive about 40 bcm out of the EUenergy system by 2030 (e.g. by switching to coal). While lower gas prices would be beneficial
for the EU economy, the price incentive to use less gas would evaporate, possibly
compromising the decoupling from Russia, and putting the energy security of the EU at risk inthe longer term.
3. The REPowerEU measures combined with the Fit-for-55 proposals rely heavily on a quick andambitious deployment of fossil-free technologies. Various bottlenecks may put this deployment
and the energy security objectives at risk, such as the dependence on rare earths, supply chain
constraints, skilled labour shortages and financing. In particular, renewable hydrogen needs
new production capacity and dedicated transport infrastructure; and may only start to contributesignificantly after 2027. Nevertheless, renewable hydrogen projects serve both the long-term
EU energy security and the decarbonisation pathway. The project lead times justify starting
initiatives early on in order to be ready for the next stage of the decarbonisation pathway andany future energy security challenges30.
Additionally, the higher potential of gas reduction may allow the EU to roll back the temporary
measures before 2027, such as (i) the measure to reduce the thermostat with one degree (10 bcm), (ii)more operating hours and delayed phase out of coal power plants (24 bcm), and (iii) delayed phaseout of nuclear plants (7bcm).

28

The 60bcm of diversification measures can be achieved entirely by 2027; the remainder is multiplied by 70% (to bring2030 figures to 2027). Arithmetically, 235 = 60 + 70% * (310-60).
29
Total of 178 bcm of pipeline and 17 bcm LNG (ENTSOG)30
For example, at present no real hydrogen shipping capacity is available and needs to be quickly developed.

11

4.

A Changing Energy System

Our analysis suggests that the higher energy prices and the measures announced in the March
Communication will change the energy system, and its Fit-for-55 transition:- Gas use in the EU will decrease faster than in the Fit-for-55 proposals;- Fuel switch is a major driver of diversification. The higher gas prices increase the operating hours
of coal and nuclear power plants. In the longer term, the analysis shows more renewables (including
direct natural gas substitutes such as bio-methane and hydrogen), and more energy savings than in
the Fit-for 55 proposals.
On gas, coal and nuclear:






As a direct effect of sustained high natural gas prices, installed capacity of gas plants will
be approximately 8 GW lower by 2030 than anticipated in the Fit-for-55 proposals. The grosselectricity generated from gas power plants is 240 TWh lower (-67% in 2030) than in the Fitfor-55 proposals.
The utilisation of coal plants increases and the gross electricity generation is 105 TWh higher
for coal power plants in 2030 than in the Fit-for-55.
The analysis incorporates the operation of two Belgian nuclear units beyond 2025 andmaintained nuclear capacity in France. Gross nuclear electricity generation is 45 TWh higher
in 2030 than in the Fit-for-55 proposals.
Net imports of natural gas decrease by 97 Mtoe, but increase for solids (+13 Mtoe) and oil (+6Mtoe) compared to the Fit-for-55 (all fossil fuels imports decrease compared to today).

Figure 1: Gross inland consumption by fuel in 2019 and in 2030 in the Fit-for-55 and
REPowerEU scenarios (Mtoe)

Source: Eurostat (2019) and Primes (2030)

Regarding the potential of renewable energy sources and energy efficiency:
12








Compared to the Fit-for-55 proposals, the use of renewables and to a lesser extent coal increases
as a share of gross electricity generation (respectively +3.7 pp and +2.6 pp), while that of gas
decreases (-7 pp to 3.3% in 2030).
In this RePowerEU modelling scenario, most of the additional PV and wind production is usedby the increased domestic production of green hydrogen. However, if directly used to displacegas-fired power generation, investments of approximately 1.6 bn€ in wind or solar PV are
required to save 1 bcm of gas.
As a result, the share of renewable energy in 2030 is 45% (compared to 40% in the Fit-for55 proposal).
Driven by higher prices, dedicated policies and consumer awareness, energy efficiency also
improves. Final energy consumption in the EU in 2030 is 768 Mtoe, or 4.6% lower than in the
Fit-for-55 proposal.
The use of natural gas decreases significantly in the residential and services sectors. By 2030,
gas use in buildings decreases by 27 Mtoe (equivalent to approximately 32 bcm of gas). In
these sectors, natural gas is replaced mainly by electrification, heat pumps and bio-methanetransported in the existing gas network. Higher consumption of hydrogen in hard-to-abatetransport sectors, especially in heavy duty trucks and through the production of sustainable
fuels for aviation and waterborne sectors provides another opportunity to replace Russian fossil
fuels.

Figure 2: Final energy consumption by fuel in 2019 and 2030 in the Fit-for-55 and REPowerEU
scenarios (Mtoe)

Source: Eurostat (2019) and Primes (2030)

13

5.

Preparing for the next winter by Short-Term and Behavioural measures Energy
SystemThere are two types of short-term measures to reduce the dependence on Russian fossil fuels:
alternative sources of imports, behavioural demand reduction measures. Short-term measures can
reduce the demand for Russian natural gas by 70 bcm p.a. (without curtailment) and the demand for
crude oil by up to 850,000 barrels per day in the EU27.
Alternative sources of imports
Regarding natural gas, additional imports from alternative sources can reach Europe either by pipeline
or in the form of LNG. In the short term, i.e. by using only existing infrastructure, additional 10bcm
can be imported by pipeline and 50 bcm using existing LNG infrastructure.
Behavioural measures
Behavioural measures, in particular the reduction of thermostats by 1 degree Celsius, can save around10 bcm of natural gas, according to the IEA. To avoid double-counting, this reduction in thermal
comfort would have to come in addition to any price-induced demand reduction.
Table 2: Estimated Russian gas import reductions from some short-term measures
MeasureAdditional pipelines imports
LNG imports31
Behavioural measures
Total

Natural gas saved (bcm)
10
50
10
70

Table 3: Estimated oil savings from behavioural measures
MeasureOil saved (kb/d)

Reduce speed limits on highways by at least 10 km/h

160

Working from home up to 3 days where possible

115

Car-free Sundays in cities

80

Make the use of public transport cheaper and incentivise micro-mobility

105

Alternate private car access to roads in large cities

50

Increase car sharing and adopt practices to reduce fuel use

150

Promote efficient driving for freight trucks and delivery of goods

110

Using HSR and night trains instead of planes where possible

30

Avoid business air travel where alternative options exist

70

Reinforce the adoption of electric and more efficient vehicles
Total

35
85032

Source: Estimates from IEA’s 10-point plan to cut oil use, re-scaled to the EU
31

A 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas, IEA, March 2022.

32

This table lists the behavioural measures, estimated by the IEA (A 10-Point Plan to Cut Oil Use, March 2022), andadapted to EU27. The total is smaller than the sum of all measures. This is because if all measures are taken there is someoverlap, which we have accounted for.

14

6.

Costs and benefits

Higher fuel costs and the additional efforts to reduce gas consumption increase the cost of the energy
system33 by almost 10% to about €1900 bn per year.34 As a share of GDP, system costs increase
from 11.3% of GDP to 13.4%.
The joint implementation of the Fit-for-55 proposals with REPowerEU will generate a number ofbenefits too.
The Commission analysis estimates that with the Fit-for-55 and REPowerEU measures combined, theEU can save €80 bn on gas import expenditures, €12 bn on oil import expenditures and €1.7 bn on
coal import expenditures per year.
IEA experts suggest that the Fit-for-55 and REPowerEU measures will make gas prices converge tolower levels (albeit possibly higher than historic levels).
7.

Overall investment needs

The current analysis indicates that the investment needs to reduce the dependence to zero would
amount to €300bn from now until 2030 on top of the total Fit-for-55 investments (or, €210bn by theend of 2027). Not delaying the phase-out of existing coal and nuclear plants as officially announced
would lead to higher investment needs. Despite temporarily higher coal use in power generation, theclimate ambition levels are reached since REPowerEU leads to investments in renewables and energy
efficiency beyond the Fit-for-55 proposals. In this context, investments needed for scaling up the
production of clean energy technology components and equipment in the EU need to be facilitated atvarious policy levels, which would further help achieve EU’s decarbonisation, energy security, andresilience objectives.
Two trends drive investments with persisting high gas prices and reduced imports:
1.
As a response to high prices, users switch to other fuels. With existing capacities, thiscan be achieved with relatively little additional investments (e.g., when coal and nuclear power
plants increase operating hours).
2.
Users switch to new technologies (e.g., to renewable energy or heat pumps), or new
capacities are installed (e.g. new nuclear plants). This increases the investment needs.
A careful in-depth analysis is needed to disaggregate and quantify the two effects.
The current analysis indicates that the investment needs to reduce the dependence on Russian fossil
fuels to zero would amount to €300bn from now until 2030 on top of the total Fit-for-55 investments.
33

Including the cost of fuels (fossil, biomass, etc.), O&M costs and capital costs, but excluding the cost of carbon
emissions.
34
Average for the 2021-2030 decade (compared to the Fit-for-55 package) including the transport sector (values in €’22).

15

By the end of 2027, the investments add up to approximately €210bn. Table 135 shows the investment
needs for some of the measures proposed.
Table 4: Investment by 2030 for reaching the RePowerEU objectives
Investment areas
Installed wind capacity(GW)
Installed solar PV capacity(GW)
Installed heat pumps inresidential and services(million units)
Installed electrolyser
capacity (MW hydrogen)
Net imports of hydrogen(Mt)
Biogas used in power plants(Mtoe)
Biogas as transformation
input in industry anddistrict heating (ktoe)
Electricity grid investments
over the decade (bn€’22)
Annual renovation rate in
2030 (as % of entire
housing stock)
Annual renovation rate medium and deep
renovation in 2030 (as % ofentire housing stock)
Investment expenditure in
residential buildings in
2021-2030 (bn €'22)

REPowerEU

Ff55

Difference Diff. due to highprices

510

469

41

13

592

530

62

16

41.5

39.9

1.7

3.4

65

44

21

1.6

6.16

0.05

6.11

0

12.3

11.8

0.5

0.9

6.9

3.3

3.6

42

583.8

554.4

29.4

37

2.3

2.0

0.2

0

2.1

1.9

0.2

0

2068

2023

45

-

Implementing REPowerEU will require investments in several areas. The strong increase in the
consumption of renewable hydrogen translates in needs to increase the installed capacity ofelectrolysers, from 44 GW in Fit-for-55 to 65 GW36 in REPowerEU. Installed capacity of wind andsolar also need to increase to supply electriolysers with renewable electricity. In REPowerEU, there
are 41 GW of wind and 62 GW of solar in additional capacity. In addition to production, net importsof renewable hydrogen are also higher, at more than 6 Mt of hydrogen in 2030.

35

Costs and investment numbers are preliminary estimates and are subject to change.
Lower running hours would need up to 80 GW of installed hydrogen electrolyzers (cfr. hydrogen accelerator).
Running hours are determined by the electricity system, flexibility requirements and geographic location of electricity
sources, among others.
36

16

The use of biogas as transformation input in industry and district heating is twice higher in
REPowerEU. Investments will also need to occur in the buildings sector, with the annual renovation
rate higher in REPowerEU than in Fit-for-55. The electricity grid would need further reinforcement
and additional investments to the amount of bn EUR 29 bn over the decade. Beyond these investments
an additional investment of circa EUR 10 bn would be necessary for storage.

8.

Infrastructure Needs and Bottlenecks

The measures proposed for decoupling the energy supply from Russia constitute a significant
change to the energy system in terms of quantities, prices, and directions of energy flows.
As a result, the infrastructure needs for electricity, hydrogen and natural gas should adapt. These
infrastructure investments should solve the needs of the forthcoming decade in a coordinated manner,
avoiding creating stranded assets to the extent possible, facilitating the long-term transition to a carbonneutral economy. By 2030, €39 bn of additional investments (Table 1) are needed in the power grid(including transmission, distribution and storage plants), compared to the Fit- for- 55 scenario, in orderto balance the power grid and in line with the higher deployment of renewables.
The diversification of import sources is essential to eliminate natural gas imports from Russia. In
particular, it will be necessary to import sufficient additional natural gas from other pipeline suppliersand LNG ports. These new import routes and new intra-EU gas flows will require a sufficient level ofgas infrastructure (LNG terminals, pipelines, reverse flows) corresponding to € 10bn ofinvestments by 2030 additional to those necessary to achieve the Fit-for-55 objectives, in order toguarantee sufficient supply and a fluid distribution of natural gas across all Member States, such for
PCIs on the 5th PCI list and the Recovery and Resilience Facility for any additional infrastructure,supplementing the Trans-European Network policy. The need for any additional infrastructure should
be well assessed also at the regional and EU level, avoiding stranded assets. The resilience of theinfrastructure and the future use of the assets in a decarbonised energy system (e.g repurposing) should
be taken into consideration in the design of such projects. Simultaneously, the REPowerEU proposes
ambitious level of renewable hydrogen deployment, which also requires an acceleration of thedevelopment of renewable hydrogen infrastructure. Given the expected decrease in natural gas
demand and in order to avoid locking-in fossil fuel use, the gas and hydrogen infrastructure
investments should make use of synergies in order to be future-proof investments. Hydrogen networks
should enable a pan-European integration of hydrogen supply and demand. The development of asuitable hydrogen infrastructure is closely related to the deployment of renewable energy, the locationof electrolysers producing renewable hydrogen and the form in which hydrogen is to be transported orimported. In particular, ammonia is an important alternative to liquefied hydrogen for international
trade. There exists potential to modify regasification facilities to receive shipments of ammonia.

17

The further increase and integration of renewable energy requires an efficient and adapted electricity
network. REPowerEU increases and frontloads the renewable capacities compared to Fit-for-55, andthe electricity network should adapt accordingly, including offshore and onshore grid.
EU-level and regional action will continue to be discussed in well-established and dedicated groups
for EU-wide infrastructure planning such as the TEN-E policy regional groups, the relevant HighLevel Groups (CESEC, BEMIP, South-West Europe, NSEC), Gas Coordination Group and the LNG
platform to ensure that capital-intensive energy (particularly gas) network investments are optimised
across the EU avoiding duplication resulting in overcapacity and stranded assets. At the national level,
the REPowerEU component of the RRPs will need to support REPowerEU objectives, ensure thatinvestments and reforms fit with national contexts and avoid fossil-fuel lock-in and stranded assets.
Under the Technical Support Instrument, the Commission is helping Member States 37 to identify
additional investments and reforms to phase out the dependency on fossil fuel imports from Russia.

Commission’s Technical Support Instrument to help 17 Member States curb their reliance on Russian fossil fuels |European Commission (europa.eu)
37

18

9.

Industry

Compared to the Fit-for-55 proposals, we see additional scope for decreasing consumption of natural
gas in all industrial sectors by 2030. Implementing REPowerEU would, in addition to higher fuelprices, lead to a switch in the industrial sector from natural gas to hydrogen and coal, and to a lesser
extent oil.
As indicated in Table 5, natural gas consumption in industry is 35% lower in the REPowerEU analysis
compared to Fit-for-55. Natural gas consumption of the chemicals and non-metallic minerals sectors
is lower by 6.6 and 7.8 bcm respectively in REPowerEU compared to Fit-for-55, thus accounting forthe largest reductions together with refineries. Together, these three sectors account for approximately
60% of the reduction in gas consumption from the industry in the decade to 2030. Only about onetenth of the reduction in natural gas use by industry is driven by higher fossil fuel prices. In percentagechange, the changes are most significant in the non-ferrous metals (-46%), non-metallic minerals (63%), and paper and pulp (-49%) sectors.
Reducing the use of natural gas by the industry requires a coordinated action to activate all levers
including energy efficient industrial processes, integration of renewables and renewable hydrogen,electrification of industrial processes, digitalisation and industrial symbiosis.
Table 5: Natural gas use by industrial sector in 2030 (bcm)38,39
Diff. due
to highpricesChemicals
25.4
32.0
-6.6
-0.8
Engineering
6.7
10.0
-3.2
-0.8
Food, drink and tobacco
7.6
11.2
-3.5
-0.7
Iron and steel
4.3
6.7
-2.4
0.0
Non ferrous metals
1.7
3.2
-1.5
-0.1
Non metallic minerals
4.6
12.5
-7.8
-0.8
Paper and pulp
1.7
3.4
-1.6
-0.4
Refineries
1.2
7.4
-6.2
0.1
Textiles
0.9
1.3
-0.4
-0.1
Other industries
2.7
4.3
-1.5
0.2
Total
57.0
91.9
-34.9
-3.4
Source: Modelling using PRIMES. Note: conversion from Mtoe to bcm GCV uses a 1/0.84 factor.
SectorREPowerEU

Ff55

Difference

The decrease in natural gas use in industry is to a limited extend compensated by somewhat higher oil(+4%) and coal (+9%) use. For coal (but not for oil), much of this increase is driven by the different
price trajectories alone: the strong increase in gas prices creates incentives for industries to switch fromgas to coal. For the chemicals sector for instance, coal use is 28% higher in REPowerEU compared to38

The data in Tables 4 to 6 add up final energy consumption and fuel use as an input. In addition, Iron and steel includes
fuel use in blast furnaces. Refineries refers to own consumption by the energy sector in refineries.
39
Including refineries and the uptake of hydrogen and bio-methane.

19Fit-for-55, albeit from relatively low levels (Table 7). For engineering, non-ferrous metals and paper
and pulp, coal use is higher by more than 80% in REPowerEU. The slightly higher oil use in
REPowerEU compared to Fit-for-55 is not due to different fuel prices trajectories but by the
implementation of REPowerEU. For instance, oil use in the paper and pulp sector is higher by 180%,with only a marginal share driven by different fuel prices (Table 6).
Table 6: Oil use by industrial sector in 2030 (Mtoe)
SectorChemicals
Engineering
Food, drink and tobacco
Iron and steel
Non ferrous metals
Non metallic minerals
Paper and pulp
Refineries
TextilesOther industries
Total
Source: Modelling using PRIMES.

REPowerEU

Ff55

Difference

59.74
1.48
1.36
0.86
0.37
5.21
1.26
0.00
0.14
28.36
98.78

59.16
1.01
1.25
0.86
0.23
4.16
0.45
0.00
0.12
27.55
94.81

0.57
0.46
0.11
0.00
0.14
1.05
0.81
0.00
0.02
0.81
3.97

Diff. due
to highprices
0.23
-0.03
0.00
-0.02
0.00
-0.12
0.03
0.00
-0.01
-0.01
0.06

Table 7: Coal use by industrial sector in 2030 (Mtoe)
SectorChemicals
Engineering
Food, drink and tobacco
Iron and steel
Non ferrous metals
Non metallic minerals
Paper and pulp
Refineries
TextilesOther industries
Total
Source: Modelling using PRIMES.

REPowerEU

Ff55

Difference

2.10
0.12
1.06
15.42
0.17
3.16
0.79
0.02
0.03
1.76
24.64

1.64
0.07
0.78
15.82
0.09
2.39
0.34
0.02
0.03
1.50
22.68

0.46
0.06
0.28
-0.40
0.08
0.77
0.45
0.00
0.00
0.26
1.96

Diff. due
to highprices
0.09
0.00
0.05
1.28
0.01
0.04
0.05
0.00
0.00
-0.01
1.49

In REPowerEU the potential for renewable hydrogen use in industry is illustrated by a significantly
higher consumption in all sectors. Hydrogen consumption is higher by a factor of 3.7 in refineries, 4.8
in industrial heat, 2.5 in petrochemicals in REPower compared to Fit-for-55. Consumption of hydrogenin the transport sector is also higher by 1.4 Mt of hydrogen in REPowerEU, or about 2.5 times what it
would be in Fit-for-55 (Table 8). Without REPowerEU and with the influence of higher fossil fuelprices, the use of renewable hydrogen by the industry would be lower in 2030, notably in20

petrochemicals, blast furnaces, synthetic fuels and refineries. REPowerEU therefore plays a key rolein generalising the use of renewable hydrogen in industry.
Table 8: Hydrogen use by sector in 2030 (kt hydrogen)
Sector

RePowerEU

Bunker fuels0
Refineries
2273
Industrial Heat
3629
Transport
2319
Petrochemicals (Ammonia)
3232
Blast furnaces
1520
Synthetic fuels
1788
Power generation
105
Blending
1335
Total
16200
Note: conversion from ktoe to kt H2 uses a 2.87 factor.

Fit-for-55

Difference

0
613
756
882
1306
1152
1870
0
0
6579

0
1660
2873
1437
1925
368
-82
105
1335
9621

Diff.
due to highprices
0
-32
146
90
-116
-92
-63
0
0
-67

In addition to the RePowerEU analysis, a bottom-up assessment of existing projects indicates that theenergy intensive industries (EII) have various projects in the pipeline with high technological readinesslevel and high potential for decarbonisation and the reduction of Russian fossil fuels’ consumption.
The acceleration of investments could provide a substantial contribution in terms of energy savings,
both short term and long term.

10.

Skills, social, employment

To ensure a successful implementation of the REPowerEU Plan, and in line with the Fit-for-55
packages40 as well as the narrative of the European Green Deal to ensure that nobody is left behind,social and labour market investments as well as fair transition aspects have to be considered from theoutset. Moreover, skill shortages may slow down the implementation of the RePowerEU and Fit-for55. increased and accelerated green transition.

40

In particular COM(2021) 801.

21

3.

RENEWABLES AND ENERGY EFFIENCY FOR REPOWEREU
1.

Renewables

The RePowerEU scenario shows that the increase of the overall RES to 45% in 2030 leads to anincrease in all supply and demand renewable sectors – electricity, heating and cooling, industry,buildings and transport as illustrated in Table 9.
Table 9: Renewables in RePowerEU scenario
Renewables in RePowerEU

Renewables in Fit-for-55

Overall RES Target
EU binding

45%

40%

2.3 percentage point

1.5 percentage point*

2.3 percentage point

2.1 percentage point

60%

49%

Heating & Cooling
Average yearly
increase for 20202030 at EU level
District Heating &Cooling
Average yearly
increase for 20202030 at EU level
Buildings
EU RES Share in
Buildings in 2030 at
EU level
Transport
RES-T share in 2030 32% / 16%/ GHG intensity
reduction intransport

28% / 13%

Share of advanced
biofuels in 2030
(single-counted)

2.2%

2.2%

22

Share of RFNBOs in
2030 (single
counted)

5.7%

2.6%

Biomethane
35 bcmproduction beyond
the transport sector

18 bcmIndustry
RES share inindustry - Average
yearly increase for2020-2030 at EU
level

1.9 percentage point

RFNBOs in industry

78% of hydrogen consumed in 50% of hydrogen consumed inindustry is renewableindustry is renewable

1.1 percentage points* for the purpose of the RED, the heating and cooling target is divided into the annual minimum and top-ups.

By 2030, the renewable energy share in the electricity('RES-E') sector would reach 69% in the
RePower context. This implies that substantial acceleration will be needed.
During the same time period, the share of renewables in the heating and cooling sector ('RES-H&C')
would increase to 46% compared to the 38-40% observed in the Fit-for-55 proposals.
Of all sectors, transport has, in 2020, the lowest penetration of renewables with a share ('RES-T') of
10%41. By 2030, this needs to increase to reach 32%.
Between 2020 and 2030, the share of wind and solar energy in installed power production capacities
is projected to increase from 33% to 67%. In 2030, solar energy would be also the largest electricity
source in terms of capacity, with more than half expected to be solar-rooftop capacities. Wind energy
would have a 31% share of installed capacity in 2030, with an increase of 12 p.p. from 2020. Figure 3
shows PRIMES modelling projections of the net installed power capacity in REPowerEU in 2030.
In this context, boosting the capabilities in Europe for manufacturing clean energy equipment acrosstheir value chains would help ensure that EU climate objectives are not jeopardised by creating importdependencies elsewhere, as well as improve EU energy security and resilience prospects. This will
require diversifying the supply of renewable energy equipment, reducing sectoral dependencies,

41

According to Articles 25-27 of Directive 2018/2001/EC (revised RED) where specific caps and multipliers apply for different
renewable fuels. If the share was to be calculated according to the methodology in Directives 2009/28/EC and 2015/1513/EC (RED up
to 2020) it would be equal to 7%.

23overcoming supply chain bottlenecks and expanding the EU’s clean energy technology manufacturing
capacity.
Figure 3: Net installed power capacity in REPowerEU in 2030 (GWe)

Source: Modelling using PRIMES.
2.

Energy Efficiency

The combined effect of high fuel prices and policies designed to reduce gas dependence will affect theway energy is used in Europe. The effect of high fuel prices alone is twofold. The price increase isparticularly high for natural gas prompting a shift towards fuels with lower conversion efficiency (e.g.,coal). This shift tends to increase primary energy consumption. Secondly, in final consumption sectors,
high prices tend to promote energy conservation reducing final energy consumption. These two effects
tend to counterbalance each other: by 2030, in a scenario driven by high prices alone, Gross Inland
Consumption is slightly higher (+0.4% compared to the Fit-for-55 scenario) while Final Energy
Consumption is slightly lower (-0.6% compared to the Fit-for-55 scenario).
Additional policies aimed at reducing gas consumption further promote energy efficiency. Fuel shift
from gas to coal and oil still take place, but it is now more than compensated by a deeper reduction inenergy consumption. Compared to the Fit-for-55 scenario, both Gross Inland Consumption and Final
Energy Consumption is significantly lower by 2030 (-3.8% and -4.8% respectively).
In all scenarios (including the Fit-for-55 scenario) consumption of all fossil fuels is significantly lower
compared to 2020. However, by 2030, the fuel shift prompted by high prices and security of supply
policies is significant: compared to the Fit-for-55 scenario, consumption of natural gas is 48% lower
while consumption of coal is 41% higher. Gross electricity generation is slightly higher in 2030
compared to the counterfactual. Power generations the residential sector consume a high share ofnatural gas and are particularly affected. Table 11 illustrates the change in final energy demand bysector.
With respect to the projections in the EU Reference Scenario 2020, final energy consumption is 13%
lower (compared to nearly 9% in the Fit-for-55 scenario).

24

In the residential sector, additional energy efficiency measures reduce energy consumption by morethan 6% compared to the Fit-for-55 package. The increased gas price delays investments aimed at
replacing heating systems using coal and oil resulting in the fuel shift described above. Electrificationis only slightly higher as additional demand for electricity is compensated by reduced energy use.
Average energy consumption per square meter is slightly lower in the residential sector. Annual
renovation rate is higher: 2% in the Fit-for-55 scenario compared to 2.25% in REPowerEU. Energy
related expenses for household are higher by almost 60€ per year, this difference being due to the effectof high prices. Energy use in the service sector is similar to the residential sector, but with slightly
higher energy savings.
Table 10: Energy consumption in final demand sectors (Mtoe)
Final energy
consumption ysector

RePowerEU

Fit-for-55

Difference

Diff. due to highpricesIndustry

196

203

-7

-1

Residential

174

186

-12

3

Tertiary

121

130

-9

-2

Transport

221

229

-8

-5

Total

712

748

-36

-4

Source: Modelling using PRIMES.

25

4.

HYDROGEN ACCELERATOR
1.

Scaling up the production and import of renewable hydrogen to 20 Mt by 2030

Demand side
The European Commission has already proposed minimum levels of renewable hydrogen uptake inindustrial applications and the transport sector in the Renewable Energy Directive (amounting to 5,6
Mt renewable hydrogen by 2030). In view of moving away from the use of Russian fossil fuel imports
in the EU, the EU needs to accelerate ramping up both demand and supply of renewable hydrogen.
The focus of hydrogen demand should primarily remain on applications in hard-to-decarbonise sectors
in industry and transport. European Commission modelling (PRIMES) results show that the scaling
up of renewable hydrogen use in the EU to 20 Mt in 2030 creates opportunities for the uptake of higher
volumes in certain industry and transport sectors. According to this modelling, upscaling the use ofrenewable hydrogen, ammonia and other derivatives would accelerate decarbonisation and greatly
reduce the EU’s dependence on natural gas (by approximately 27 bcm), oil (by approximately 3.9
Mtoe) and coking coal imports (approximately 156 Kt) from Russia42 43.
To unlock investment in renewable hydrogen use in industry, the Commission will double the funding
for the Innovation Fund’s 2022 Large Scale Call this autumn to around 3 billion EUR, financed byhigher revenues expected in 2022 and 2023 from the Emissions Trading System. This year’s Call willcontain also a window focused on innovative electrification and hydrogen applications in industry.
Furthermore, in the review of the EU Emission Trading System it is proposed to allow the Innovation
Fund to cover 100% of the relevant costs in the case of competitive bidding. On this basis theInnovation Fund will also be able to support hydrogen uptake by industry through an EU-wide schemefor (Carbon) Contracts for Difference.
According to Commission modelling (PRIMES) the uptake of higher volumes of renewable hydrogenin the priority sectors identified for the Fit-for-55 targets translates into higher shares of renewablehydrogen and renewable fuels of non-biological origin in the industry sector, increasing from 50 toabove 75%. In particular, hydrogen production based on natural gas should be replaced in ammonia
production and in hydrogen use by refineries by 2030 and the steel industry should see the start of theshift from the use of coking coal to hydrogen. The share of hydrogen and derived fuels (renewablefuels of non-biological origin) in the transport sector would also increase to above 5%. Higher
consumption of hydrogen in hard-to-abate transport sectors, especially in heavy duty trucks andthrough the production of sustainable fuels for aviation and waterborne sectors provides anotheropportunity to replace Russian fossil fuels. The concept of hydrogen valleys can be further promoted
as they are key to igniting and increasing hydrogen supply and demand44, especially around industrial
clusters where hydrogen applications could be shared amongst multiple users in close proximity.
Today there are 23 hydrogen valleys across Europe in 10 Member States. Substantial investment is42

According to Eurostat in 2020 about 12% of coking coal used in the EU was imported from Russia.
Repower EU scenario: the figures correspond to the increased use of renewable hydrogen to replace the use natural gas,oil and coal until 2030 in hard-to-decarbonise sectors as initially envisaged under the fit-for-55 scenario as well as anincreased role for blending hydrogen in the existing gas grid.
44
One of the main priorities of the EU is the development of so-called hydrogen valleys that bring together – in a limited
geographical area - all the elements of renewable hydrogen production, storage and end-use into an integrated ecosystem.
Hydrogen valleys can vary in size and scope thus proving to be very flexible in adapting to local energy needs.
43

26

needed to double the number of hydrogen valleys by 2025 in order to accelerate the energy transition
across the EU.
Beyond using renewable hydrogen in industry and transport, it is necessary to look at other sectors
where hydrogen uptake could be increased without causing harm. The Commission reiterates its
position that blending hydrogen into the natural gas grid requires careful consideration as it
diminishes gas quality, can increases overall system costs and the costs of heating for the residential
sector, and it is in most applications a less efficient alternative to direct electrification. Nevertheless,blending up to around 3% by volume of renewable hydrogen in the gas grid may absorb about 1,3
million tonnes of hydrogen and replace 4,7 bcm natural gas. This requires however considering all
consequences and costs of blending, including overall system costs and adaptation costs for household
and industrial end-users45. For example, the costs for end-users and infrastructure operators to adapt
to a 5% blending level (by volume) would amount to around € 3,6 billion per year46.
Figure 4: Hydrogen use by sector in 2030

Source: Modelling using PRIMES.

45

Blending already low volumes of hydrogen into the natural gas network can cause significant problems and additionalcosts for end-users. The costs to adapt to a certain level of hydrogen blend include the adaptation costs at end-users (changeof end-use appliances, e.g. furnaces, turbines, engines, household boilers), at the level of infrastructure (change ofcompressor stations and measuring equipment/comptographs), the increased cost of gas quality management and theincreased overall system costs (i.e. replacing more efficient applications e.g. for space heating) and higher subsidy needs(in view of lower willingness to pay when cheaper alternatives are available).
46
Annex 7, Gas quality: Hydrogen blending cross-border framework of the Commission SWD Impact Assessment Reportaccompanying the Proposal for a Directive of the European Parliament and of the Council on common rules for the internalmarkets in renewable and natural gases and in hydrogen (recast) and Proposal for a Regulation of the European Parliamentand of the Council on the internal markets for renewable and natural gases and for hydrogen (recasts),
https://op.europa.eu/en/publication-detail/-/publication/23b8497d-5d8b-11ec-9c6c-01aa75ed71a1/language-en.

27

The Commission modelling carried out for REPowerEU is based on the assumption of 10 Mt
renewable hydrogen produced in the EU and 6 Mt of renewable hydrogen imported from third
countries (with the expectation that supply capacity for transporting hydrogen into Europe isestablished). Higher levels of consumption, up to the 20 Mt of hydrogen announced in the REPowerEU
communication is assumed to be delivered from third countries in the form of ammonia and potentiallyin the form of other hydrogen carriers and derivatives. The chart above shows the results of the
REPowerEU modelling compared to the modelling results for the Fit-for-55 package.
To support such an increase of renewable hydrogen use in these sectors, a progress report on the
production, transportation and uptake of hydrogen in the different sectors should be prepared regularly
starting in 2025, in close cooperation with Member States and strengthening collaboration within the
Hydrogen Energy Network (HyEnet).
The EU Strategy for Standardisation of February 202247 identified standards to support the roll-out of
the hydrogen value chain as a standardisation priority. This becomes highly relevant because hydrogenquality issues are expected to emerge once hydrogen is injected into the hydrogen network fromdifferent production processes and transported through a meshed network, including cross-border. To
tackle this issue, a mandate for the standardisation of hydrogen quality in the dedicated hydrogen
network to accelerate the uptake of hydrogen in the priority sectors will be developed.
Supply side
Stepping up our renewable hydrogen ambition requires further additional investments in renewableenergy production requiring around 500 TWh of additional power generation in 2030. Total investment
costs are expected to be in the range of € 335-471 billion, with € 200-300 billion needed for additional
renewable electricity production.
Furthermore, the European electrolyser manufacturing capacity must be scaled-up significantly tomeet the expected demand for renewable hydrogen production. Electrolyser manufacturers in Europe
set the objective to have in place by 2025 a combined annual electrolyser manufacturing capacity inEurope of 17.5 GW, and to further increase that capacity by 2030 in line with projected demand forrenewable and low-carbon hydrogen48. To support these objectives, the European Commission will
put in place enabling regulatory framework, facilitate access to finance and promote efficient supply
chains. The upscaling of the electrolyser manufacturing capacities will require investments estimatedat up to €2bn.49
The Commission supports renewable hydrogen investments in the context of the Innovation Fundby mobilising increased financial resources, defining specific windows within the next call to reflect
the REPower EU priorities (notably maximizing the impact in terms of decarbonizing industry andmoving away from imported fossil fuels) and by initiating specific focus on priority areas, such as

47

An EU Strategy on Standardisation - Setting global standards in support of a resilient, green and digital EU single market,
https://ec.europa.eu/docsroom/documents/48598.
48Electrolyser Summit Joint Declaration 2022, DocsRoom - European Commission (europa.eu).
49
European Commission services estimate based on actual industry project costs.

28

renewable hydrogen-based applications in industry and clean-tech manufacturing, such as ofelectrolysers..
The Commission will also do its utmost to assess state aid related to renewable hydrogen, while
ensuring a level playing field and considering technology neutrality, including in the framework ofImportant Projects of Common European Interest (IPCEIs).50
To speed up permitting procedures for renewable electricity generation, renewable hydrogenproduction and for infrastructure development, on 18 May 2022 the Commission put forward alegislative proposal on permitting and a related recommendation51. Furthermore, under the hydrogenand gas markets decarbonisation package a number of measures have been proposed to expedite
authorisation procedures for the repurposing of existing natural gas infrastructure for the transport andstorage of hydrogen as well as procedures for newly constructed dedicated hydrogen infrastructure.
Member States are encouraged to work pro-actively on adopting some of these measures, or similarones, in their national law in view of facilitating the transposition of the hydrogen and gas markets
decarbonisation package, once it is finalised in the co-decision process.
To gain further insight in applicable permitting rules and procedures for the construction and operationof future infrastructure dedicated to the production, storage and transport of pure hydrogen, thepreparation of a guidance document should be considered. This guidance should support Member
States in (further) streamlining and expediting permitting procedures for renewable hydrogen projects.
Furthermore, the European Clean Hydrogen Alliance is working to deliver industry recommendations
and best practices to accelerate the authorisation procedures for hydrogen projects to be presented at
the June 2022 Hydrogen Forum.
Europe’s world leadership in clean hydrogen technologies can only be maintained through increased
research and innovation efforts at both EU and national level. The Clean Hydrogen Partnership under
Horizon Europe is raising the ambition with an EU support of EUR 1 billion for the period 2021-2027,
complemented by at least an equivalent amount of private investment (from the private members of
the partnership), bringing the total budget to above EUR 2 billion.
The Commission provides technical support to Member States for the implementation of REPowerEU,
including for the enhanced roll-out of renewable hydrogen and hydrogen solutions for industry.
Emphasizing the additional fresh water needs that correspond to the enhanced roll-out of renewablehydrogen52 production, compliance with the Water Framework Directive is of key importance inchoosing the location for the roll-out of additional production capacities.
To enable scaling up demand and supply of renewable hydrogen in Europe, the Commission envisages
working closely with Member States and stakeholders in a structured way to understand thedevelopments and barriers to the scale up of hydrogen use on the ground. The temporary Hydrogen
Platform could scope topics related to market operation and to technical questions (e.g. capacity
50

European Commission Communication: REPowerEU: Joint European Action for more affordable, secure and sustainableenergy
of
8
March
2022,
https://eur-lex.europa.eu/resource.html?uri=cellar:71767319-9f0a-11ec-83e101aa75ed71a1.0001.02/DOC_1&format=PDF
51
Add the reference once available.
52
Around 20 l of water is needed per Kg of H2.

29

allocation, balancing, cyber security, interoperability, quality standards) as proposed in the hydrogenand gas markets decarbonisation package.
2.

Scaling up the development of hydrogen infrastructure in the EU

A rapid development of energy infrastructure that connects supply and demand is a key ingredient for
the envisaged acceleration of hydrogen production and use in the EU and beyond. This concerns
transport via pipelines, as well as non-network based options using, for example, adapted
LNG terminals, and storage.
The revised TEN-E Regulation, entering into force in June 2022, is a unique instrument for European
energy infrastructure planning. It enables a coordinated and timely development of trans-European
hydrogen networks, by selecting key infrastructure projects of cross-border relevance based on a robust
methodology, in line with EU policy objectives, including hydrogen pipelines, storage facilities,
electrolysers and hydrogen terminals, covering as well hydrogen embedded in other chemicals. The
stepped-up renewable hydrogen ambition also requires the identification of a limited number ofhydrogen import pipelines in that context. For reaching our long-term decarbonisation goals, it is
crucial to ensure that new natural gas infrastructure needed today to become independent from Russian
gas imports avoids lock-in into longer-term fossil imports. To support the development of hydrogen
infrastructure priorities, the European Commission will work with stakeholders to identify possible
challenges for European hydrogen infrastructure development and implementation. Based on the TENE Regulation, starting early this autumn, the Commission together with the Member States, national
regulatory authorities, the European Agency for the Coordination of Energy regulators (ACER), theEuropean Network of Transmission System Operators for Gas (ENTSOG), promoters and otherstakeholders, will discuss trans-European hydrogen infrastructure needs. Work will be organised
within three hydrogen priority corridors. This step will be followed by a cost-benefit assessment ofcandidate hydrogen projects expected to be submitted by early October 2022. The process will deliver
preliminary hydrogen infrastructure needs by March 2023. The first list of infrastructure Projects ofCommon Interest (PCI) between Member States, and Projects of Mutual Interest (PMI), between
Member States and third countries, will be in place by the fourth quarter of 2023. The upscaling of thehydrogen transport infrastructure will mainly rely on repurposed pipelines, complemented by newly
built ones. This will be prepared by assessment of which gas infrastructure will become available forsuch repurposing.
The European Clean Hydrogen Alliance identified a pipeline of over 750 investment projects that its
members indicated to undertake by 2030. Projects are located in almost all EU Member States andinclude the production of hydrogen (projects for the installation of over 50 GW electrolysers),
transportation and its usage by industry, mobility applications, energy systems and in buildings. The
European hydrogen industry estimates a need of around 120 GW of electrolyser capacity in the EU by
2030, which would suffice to meet the objective of producing 10 million tonnes of renewablehydrogen.
With its Communication on Important Projects of Common European Interest (IPCEI), theCommission has set out criteria under which Member States can grant state aid to transnational projectsof strategic significance for the EU under Article 107(3)(b) of the Treaty on the Functioning of theEuropean Union (TFEU). The Commission is in close contact with all interested Member States andfacilitating the coordination between Member States towards IPCEIs in the area of new hydrogen30

related technologies and infrastructure. The Guidelines on State aid for climate, environmental
protection and energy (CEEAG) and the state aid general block exemption Regulation (GBER) provide
additional important EU frameworks under which Member States may allocate financial aid toinfrastructure projects.
The consumption of 20 million tonnes of renewable hydrogen will also require accelerated
investments in hydrogen infrastructure to bring renewable hydrogen production in areas with highrenewable energy resources to the end-consumers. The development of port infrastructure and theirconnection to both industrial and transport users in the vicinity will be of critical importance.
Therefore, the Commission considers as crucial support for the development of necessary port
infrastructures to receive imports of hydrogen, including in the form of renewable ammonia and otherrenewable hydrogen by-products.
Many EU financing sources could be relevant for European hydrogen infrastructure projects, ranging
from the RRF as a performance-based instrument, the Connecting Europe Facility (programme
specifically dedicated to cross-border infrastructure), the InvestEU Programme, the Innovation Fund,the Life Programme and programmes under shared management such as ERDF, including Interreg,
the Cohesion Fund, Modernisation Fund and Just Transition Fund. Estimates for the necessary
investments for hydrogen infrastructure vary significantly. To promote investments in hydrogen
infrastructure in a cross-border, interregional and transnational context, the Commission, together withMember States, builds on cooperation frameworks such as the EU macro-regional strategies.
A Commission estimate of investment needs for key hydrogen infrastructure categories by 2030 points
to about € 50 – 75 bn for electrolysers, € 28 – 38 bn for EU-internal pipelines and € 6 – 11 bn EUR
for storage. Related additional funding needs for cross-border hydrogen infrastructure could require
increasing the budget available for CEF Energy by 2 bn EUR.
3.

Stepping up our international engagement on hydrogen to scale up renewablehydrogen imports

As set out in the EU external energy engagement strategy adopted on 18 May 2022 53, cooperation withthird countries is essential, both to accelerate their energy transition, including the transformation anddecarbonisation of their energy systems, while enhancing their energy security, as well as to importhydrogen to the EU. International renewable hydrogen cooperation should follow a comprehensive
approach supporting partner countries in their energy transition notably by supporting the deploymentof renewable energy sources. These renewable energy sources must benefit in priority local
populations, in particular in countries where access to electricity is not generalised, while avoiding
increasing water stress in third countries to produce hydrogen by electrolysis, a water-intensive
technology.
A clear focus should be on renewable hydrogen, both for the domestic market and for export to theEU, as well as on strengthened cooperation with all partners on regulatory issues. This should include
in particular certification in accordance with the EU requirements for import to the EU and full life
cycle GHG emissions approaches, to ensure a level playing field with renewable hydrogen producedin the EU. Geographically, the focus should be on the EU neighbourhood while establishingpartnerships with other potential suppliers in the Southern Neighbourhood, Sub-Saharan Africa, the53

Add the reference once available.

31Middle-East, the Gulf, Chile, but also the US and Australia. Studies indicate that until 2030 the importsof hydrogen to the EU are most cost efficient via pipelines from the neighbourhood and in the form ofammonia through ships over longer distances. To support such developments, the Commission could
facilitate coordinated EU action in cooperation with industry to develop by 2030 three major
import/hydrogen corridors to North Africa, to the North Sea area and as soon as conditions allow to
Ukraine.
The situation we face today offers an opportunity to address existing vulnerabilities in our energy
security. The current situation in the gas market demonstrates how third country governments canimpact EU energy prices simply by limiting the free flow of energy goods. The Commission’s aim isto reinforce its partnerships with reliable third countries to ensure open and undistorted trade andinvestment relations for renewable and low carbon fuels, preventing distortions in these future markets.
This will strengthen our energy security as our respective economies transition to these new energy
goods.
To support the creation of a regulatory framework for renewable hydrogen partnerships, facilitate EUwide coordination on international hydrogen projects and incentivise European and global renewablehydrogen production, the Global European Hydrogen Facility should be established in cooperation
with the Member States. The Global European Hydrogen Facility should create investment security
and, hence, business opportunities for European and Global renewable hydrogen production, and, atthe same time, reliable supply and transparency for European hydrogen usage. The Global European
Hydrogen Facility should be coherent with intra-EU measures and market functioning.
The Green Hydrogen Partnerships promote the import of renewable hydrogen from third countries
and should incentivise decarbonisation and the development of renewable energy production fordomestic use in the partner countries, while encompassing policy dialogue, including on sustainability
standards. Together the Green Hydrogen Partnerships and the Global European Hydrogen Facility
should deliver a framework to ensure that partnerships established by the Members States and by theindustry provide a level-playing field between EU production and third country imports, and that thesepartnerships are not set up in isolation. At the same time, such EU level coordination should becomplementary to the activities of Member States and industry, such as the many agreements andMemoranda of Understanding that they concluded with international partners on hydrogendevelopment, innovation, transport and potential import.
The EU takes a leading role in international cooperation on renewable hydrogen research andinnovation through Mission Innovation, the global initiative to accelerate efforts in renewable energy
innovation. Under Mission Innovation, the European Commission co-leads the Clean Hydrogenmission that aims at reducing the costs of hydrogen and to develop at least 100 hydrogen valleys
worldwide by 2030.

32

4.

Conclusions:

Based on the above


The Commission considers developing regular progress reports, starting in 2025, on the
production, transport and uptake of renewable hydrogen in industry and transport.



Based on the EU Strategy for Standardisation of February 2022, a mandate for the developmentof harmonised standards for the quality of hydrogen to support its uptake in the priority sectors
will be prepared.



The Commission stands ready to provide further guidance on applicable rules and proceduresfor the construction and operation of future infrastructure dedicated to the production storage
and transport of pure hydrogen. This would support Member States in expediting and (further)streamlining permitting procedures for hydrogen projects.

The hydrogen and gas markets decarbonisation package provides for a Hydrogen Platform,
which would enable scoping hydrogen market operation and technical issues as a first step
towards setting up the European Network of Hydrogen Network Operators.



Based on the TEN-E Regulation, the Commission will cooperate closely with stakeholders toensure the development of European hydrogen infrastructure priorities via the TEN-E process,leading to needs identification by March 2023 and a first list of Projects of Common Interest
and Projects of Mutual Interest by end 2023.

To enable increased renewable hydrogen imports, the Global European Hydrogen Facility
should be established in cooperation with the Member States. The Facility should be coherent
with intra-EU measures and market functioning as well as our trade and investment policy
objectives to support the creation of a regulatory framework for renewable hydrogen
partnerships, facilitate EU-wide coordination on international hydrogen projects andincentivise European and global renewable hydrogen production.

Double the number of hydrogen valleys by 2025 through topping up Horizon Europe
investments on the Hydrogen Joint Undertaking to offer solutions with citizens’ engagement,in regional innovation ecosystems, cutting across the entire hydrogen value chain.

33

5.

ACHIEVING THE BIOMETHANE TARGETS

This section explores the actions that could be envisaged to achieve the target of 35 bcm annual biomethane production by 2030 as set out in the
REPowerEU Communication54 of March 2022. Therefore, the proposed actions would aim at both supporting production to a sustainable maximum
potential volume of biogas with the aim to further upgrade it to biomethane, as well as direct biomethane production from waste and residues. The
actions could also aim at creating the preconditions for sustainable upgrading and safe injection of biomethane into the gas grid. The productionof sustainable biomethane should be waste-based, avoiding the use of food and feed feedstocks that would lead to land use change problems. In
addition, by 2024, Member States have to collect separately organic waste, which can be valorised in anaerobic digestors. This is an opportunity
to upscale the production of biogas and biomethane sustainably, creating income opportunities for farmers and foresters.
Area of action

Type of action

Content

Promote thesustainableproduction and use of
biogas andbiomethane at EU andnational/ regional
level and the injectionof biomethane into thegas grid

1. Create a biogas
and biomethane
industrial
partnership/ forum
promoting theirsustainableproduction anduse

The overarching goal of the partnership/ forum is tosupport the achievement of the EU target on
biomethane production for 2030 and to create thepreconditions for a further ramp up of its potential
towards 2050 through closer involvement of
stakeholders.

54

Possible actors

EC, MS, industry
representatives,
NGOs, ETIP
Bioenergy,
representatives ofprimary
The partnership would create a platform for strategic producers
discussion among key stakeholders along the wholevalue chain on how to best support the production anduse of biogas and biomethane. This would promotestakeholder engagement and public acceptance. The
partnership would provide effective support for
identifying, further developing and mainstreaming ofbest practices in policy making and support to the
production of biogas and biomethane, and related tothat infrastructure development, projects andinfrastructure financing and promotion. The

COM(2022)108 final.

34

Area of action

Type of action

Content

Possible actors

partnership could also discuss policy gaps at EU level
and identify support needs as regards infrastructure
and RND&I projects.
In this endeavour, the platform should take into
consideration and create synergies with ongoingcomplementary work, in particular the work of theEuropean Technology and Innovation Platform
Bioenergy (ETIP Bioenergy), the SET Plan Action 8Integrated Workgroup on Bioenergy and Renewable
Fuels (IWG 8) and international cooperation.
2. Develop national
strategies onsustainable biogas
and biomethane
production anduse or integrate abiogas andbiomethanecomponent in the
National Energy
and Climate Plans(NECPs)

The aim of such national strategies would be to assess MS, EC
the Member States’ national potentials for biogas andbiomethane production and the effective integrationof the latter into the grid. The strategies should
provide a trajectory to reach the identified national
potentials by 2030 and 2050.
The development of the national strategies should
focus on the most sustainable paths, based on wastebased production (e.g. agricultural and agro-industry
waste and residues, forest and forest-industry waste
and residues, food industry waste, energy andchemical industry biogenic CO2 effluents and waste,industrial wastewater, domestic organic waste), andthe evaluation of the preconditions to further promote
the potential of sustainable biomass coming fromsequential or cover cropping or other innovative
sources of biomass including from marginal lands and35

Area of action

Type of action

Content
contaminated lands through phytoremediation and therelated technology development needs. This
assessment should be done by taking into account thecascading principle of Article 3(3) of the proposal fora revised Directive (EU) 2018/2001 (RED II)55. The
promotion of sustainable waste-based biogas andbiomethane production would contribute to theobjective of cutting methane emissions in line with the
Waste to Energy communication of 201756 and theMethane Strategy of 202057.
The national strategies should evaluate any barriers
for the production or injection of the biomethane into
the grid in the national or regional context andintegrate actions for lifting these barriers. They should
further evaluate the standardisation needs and theneed for harmonization of market regulation withother Member States.
Such national strategies should be closely linked with
the integrated National Energy and Climate Plans
under Regulation (EU) 2018/1999, and progress inachieving the strategy and its contribution to nationaland Union targets should be reported as part of thebiennial reporting under Regulation (EU) 2018/1999.

55

COM(2021) 557 final.
COM(2017) 034 final.
57
COM(2020) 663 final.
56

36

Possible actors

Area of action

Type of action

Content

Possible actors

The national biogas and biomethane strategies should
be reflected in the national Recovery and Resilience
Plans (RRPs), in coordination with support envisaged
in other strategic planning documents (e.g. Common
Agriculture Policy National Strategic plans or
National programming documents for EU structural
funds).
The Commission can support Member States in thedevelopment and implementation of these strategies,
including through the Technical Support Instrument.
3. Consider
broadening thescope of the fuelsupply obligationin the Renewable
Energy Directive

Biomethane is currently eligible to be used as a EC, MS
renewable transport fuel under the fuel supply
obligation set out in Article 25 of the Renewable
Energy Directive. While maintaining the primary
focus of the supply obligation, its scope could be
increased to cover all uses of biomethane. This option
should be further looked at and could be considered ina future revision of the Renewable Energy Directive.

4. Promoteparticipatory
multi-stakeholder
engagement

A number of events, in particular conferences, EC, MS, NGOs,
workshops and trainings, would be organised to raise Industry, local
awareness, provide training and technical assistance, authorities
and promote multi-stakeholder involvement in aregional/ local dimension in implementing andpromoting European cross-border integrated projects,
as for example Integrated Projects of Common
European Interest (IPCEIs).

37

Area of action

Type of action

Content
The Commission might consider the option ofdeveloping an EU strategy for energy transition inrural areas as a tool to support the implementation ofsuch integrated energy solutions in rural areas, taking
advantage of numerous decentralized small biogas
plants operating in the EU and integrating them in theoverall renewable energy mix, by also addressing
related environmental and social aspects. The existing
local infrastructure such as the development andimplementation of Local Development strategies(supported through rural development funds of theCommon Agriculture Policy or structural andcohesion policy as relevant, e.g. through Community
Led Local Development) and of farmers’ cooperative
structure could be used. In addition, other multistakeholder structures, such as energy communities,
could be used; the work in this area should build on
the Rural Energy Community Advisory Hub.
The concept of developing urban-rural linkages would
be looked at by trying to enhance synergies between
policy support in both areas (e.g. EU and national
support in rural and regional development by among
others further encouraging Member States andrelevant authorities to boost complementarities
between the EU’s rural development funds on the one
hand and structural or cohesion policy funding on theother hand and thereby pooling rural development andstructural and cohesion policy resources).

38

Possible actors

Area of action

Provide incentives forbiogas upgrading into
biomethane

58

Type of action

Content

Possible actors

5. Reduce red tapeand speeding up
permitting

All issues that currently delay the process, including MS, EC
increasing the capacity in local municipalities dealing
with permitting as well as streamline good practices
as establishing one-stop shops for biomethane related
permits and defining a maximum processing time for
permitting applications should be assessed, in linewith the permitting legislative proposal adopted by theCommission on 18 May 202258.

6. Promotesustainable biogas
and biomethane
co-operation withneighbouring andenlargement
countries

Biogas and biomethane development in EU EC, UA, EnC
neighbourhood and enlargement countries, including
through the EU-Ukraine renewable gases partnershipand in co-operation with the Energy Community,
should be supported. Further explore the possibility ofjoint projects between Member States and partnercountries as RED II currently limits joint projects
between EU and third countries to electricity.

1. Reduce the costs
for economic
operators, whichcurrently prevent
biogas upgrading
into biomethane

The action would look into the high costs of biogas EC, MS, NRAs,
upgrading as a barrier of entry for individual TSOs/DSOs
economic operators into the biomethane production.
Part of these costs are the costs of upgrading, gridconnection and grid injection. When it comes to thecosts related to grid connection, a more proportionate
scenario for cost sharing of such costs should beconsidered. The lifting of injection costs is already

Add the reference once available

39

Area of action

Type of action

Content

Possible actors

part of the hydrogen and gas markets decarbonisation
package of December 202159.
The content of existing promotion schemes at national
level for electricity production from biogas should
also be reviewed to focus on support for biogas
upgrading. In this context, the benefits of developing
take-off agreement tools or other incentives, to ensurethat there are long-term benefits for biogas plants
currently providing electricity to be converted into
biomethane plants as well as for new biomethane
investments, should be considered. This would bridge
the price gap with natural gas and would provide anunderstanding to investors for longer term
investments beyond only transitional ones andcontribute to the creation of a stable policy andinvestment framework.
Promote theadaptation andadjustment of existing
and the deployment of
new infrastructure forthe transport ofincreased shares ofbiomethane throughthe EU gas grid59

1. Carry out regional
assessment of
networkdevelopment andmatching it withthe potential ofsustainablebiomethane
production

This action would tackle issues related to the network
capacity development in the Member States and atregional level. The outcome should be an assessmentof the network development needs, matching themwith the potential of increased biogas and biomethane
production derived from the national biogas andbiomethane strategies. The analysis should beundertaken by the distribution system operators(DSOs), in coordination with transmission system
operators (TSOs) and national regulatory authorities.

COM(2021) 803 final and COM(2021) 804 final.

40

MS, TSOs and
DSOs (inparticular forgas), NRAs,
ACER

Area of action

Type of action

Content

Possible actors

As a result, regional maps with the highest potential
for biogas and biomethane production due to theavailability of raw materials (i.e. waste/ residues),
existing operating biogas plants and current
connection capacity should be established.
This action should take into account the permitting
legislative proposal adopted by the Commission on 18
May 2022, in particular the mapping andidentification of ‘renewables go-to areas’ as regards
biogas and biomethane production plants.
2. Assess challenges,
bottlenecks andother possible
measures from theinfrastructure
perspective forcost-efficient
deployment of
biomethane

National (regulatory) authorities, TSOs and DSOs
should assess potential investment challenges toincrease the uptake of biomethane and connect
decentralised production sites with consumption
centres over large distances.

MS, gas TSOs
and DSOs,
NRAs, ACER,
TEN-E smart gas
grid thematic area
TSOs and DSOs should assess the capacity and grouppotential cost of injection of biomethane and how tostreamline planning and coordination among them as
regards the integration of biomethane.
In addition, national (regulatory) authorities, TSOs
and DSOs should in the framework of the TEN-E
smart gas grids thematic area group identify andassess candidate projects for the future lists of Projectsof Common Interest (PCI) in line with the criteria of
the TEN–E Regulation.

41

Area of action

Type of action
3. Address gas
qualitystandardisation
issuesContent

Possible actors

Barriers exist today preventing or at least hampering MS, EC, CEN
cross-border flows of biomethane. The problem is standardisation
related to the uncoordinated application of existing committee
CEN gas quality standards across borders (e.g.
accepted level of oxygen content).
Based on the analysis in the national strategies andwork on European level, the Commission supports the
update of the CEN gas quality standard to ensure thecross-border flow of biomethane (in addition to thestrengthened cross-border quality coordination
provisions proposed in the Hydrogen and Gas Markets
Decarbonisation Package of December 2021) while
ensuring the protection of sensitive end-users.

Address RND&I gaps

60

1. Provide further
support to thedevelopment ofinnovativetechnologies forthe production ofsustainable biogas
and biomethane

Continue supporting innovative technologies for the EC, MS
production of sustainable biomethane based on
gasification of biogenic residues and wastes from all
sectors and industries, biogenic CO2 effluents andwaste, organic part of industrial waste waters andmunicipal sludge, as well as feedstock from marginal
and contaminated lands through phytoremediation60.
Special focus should be given to improving
technological efficiency and cost effectiveness of
small-scale solutions that would not hamper EU foodand feed production, as well as to environmental andsocio-economic sustainability and looking forI.e. any technology readiness level (TRL) before commercialisation from 3 to 7.

42

Area of action

Type of action

Content

Possible actors

alternative materials61 where today scarcity might
block scaling up.
2. Provide further
support toinnovativetechnologies forthe upgrade ofsustainable biogas
to biomethane

Continue supporting innovative non-commercialised EC, MS
and small-scale technologies for biogas upgrading,including the biological or catalytic conversion of thebiogenic CO2 in the biogas to biomethane, withsynergies with renewable hydrogen production anduse. Special focus should be given to increasing costeffectiveness and efficiency of small-scale upgrading
technology (i.e. upgrading technology for small-scalebiomethane production) building on UBI project62.

3. Provide further
support toinnovative
solutions andresearch on
barriers andintegration ofsustainablebiomethane to thegas grid

This action should focus on integrating results from EC, MS
previous research projects (e.g. Horizon 2020 project
REGATRACE on a pan-European methane grid
access action plan and project BIOSURF on
methodologies and guidelines for certification andregistration of biomethane) as well as organising callson outstanding issues regarding barriers and enablers
to the deployment of biomethane. The barriers
identified in the national plans should be taken into
account and serve as a basis for future research work.

4. Further support
the expansion ofThis action should seek ways to enlarge the EC, MS
sustainable biomass feedstock for achieving the 2030

61

A portfolio of about 20 Horizon 2020 projects adding-up to M€ 120 can provide information on innovative bio-methane production technologies and on barriers andintegration of bio-methane into the gas grid. In addition, the 2021 Horizon Europe Call provides a top-up for the innovative bio-methane production topic to support
5 projects of about M€ 50 using reserve-list budget.
62
H2020 project on Biological Integral Biogas Upgrading.

43

Area of action

Type of action

Content

the sustainablebiomass potential
to ensureavailability ofresources forreaching thebiomethane
production target

target for biomethane without hampering foodsecurity.

Possible actors

It would identify regions where biomethane
production can be sustainably increased from locallysourced secondary feedstock (crop residues, manure,organic waste) and from additional sustainably
produced biomass from sequential or cover croppingor biomass from marginal and contaminated lands63,
boosting regional bioeconomy development anddecentralized renewable energy development anddeployment. For sequential crops and cover crops, theimpact on the cultivation of e.g. green manure and thesubsequent use of mineral fertilizer, should beconsidered. A case-by-case analysis of the economic,
social and environmental factors for the use of aparticular area for the production of sustainable
feedstock should be undertaken as well.
Furthermore, this action should support thedevelopment of other innovative sources of biomass
including aquatic.

Access to finance63

1. Provide access togrants and loans

Provide access to grants and loans from existing EU EC, MS, EIB
funds, i.e. rural development funds under the
Common Agriculture Policy, structural and cohesion
policy funds, National Resilience and Recovery Plans,

H2020 projects FORBIO, BIOPLAT and MAGIC, GOLD and TELEGRAM can provide information on the distribution of such lands, innovative crop growing and utilization
methods, case studies, policy recommendations on sustainable growing and utilization of crops on marginal lands and phytoremediation technologies for growing andusing crops on contaminated lands.

44

Area of action

Type of action

Content

Possible actors

Horizon Europe, Innovation and Modernisation
Funds, LIFE funding, and other national funding inline with State aid rules. In particular, Member Statesand stakeholders can use the opportunities of thecurrent and future programming of the Common
Agriculture Policy and of the cohesion policy toinclude, where relevant, support to biogas andbiomethane in their programmes and strategies (e.g.
also through financial instruments).
The funding under Horizon Europe should be
increased by reallocating resources freed up by nonparticipation of UK partners in the next calls to new
biomethane topics (e.g. unlocking community energy
potential to support market uptake of biomethane).
2. Innovation Fund

Innovative production and use of biomethane and EC, EIB
biogas projects can apply for the Innovation Fundfinancing. Further support for innovative precommercial projects (above-mentioned technologies
and others) is being considered in the Fund throughfrontloading and extending the type of support tocompetitive bidding.

3. Access to otherfinancial
instruments

Develop and provide access to financial instruments EC, EIB(e.g. EIB with InvestEU support). Further increase thetargeted support for pre-commercial plants under EIB
and InvestEU.
The EIB Group already launched financial products tofinance innovative and green investments. Existing45

Area of action

Type of action

Content
financial products under InvestEU to support
investments contributing to REPowerEU goals(renewable energies; energy efficiency; hydrogen;decarbonisation of industry and support of innovative
green companies) can be scaled-up if further resources
for risk-taking are provided to InvestEU, thus
mobilising additional private finance for REPowerEU
purposes.

46

Possible actors

6.

LIST OF TABLES AND FIGURES

Table 1: Potential measures and investments to reduce dependence on Russian gas by technology, in
addition to the Fit-for-55 package.................................................................................................................... 6
Table 2: Estimated Russian gas import reductions from some short-term measures............................... 14
Table 3: Estimated oil savings from behavioural measures ........................................................................ 14
Table 4: Investment by 2030 for reaching the RePowerEU objectives....................................................... 16
Table 5: Natural gas use by industrial sector in 2030 (bcm), ....................................................................... 19
Table 6: Oil use by industrial sector in 2030 (Mtoe) .................................................................................... 20
Table 7: Coal use by industrial sector in 2030 (Mtoe) .................................................................................. 20
Table 8: Hydrogen use by sector in 2030 (kt hydrogen) .............................................................................. 21
Table 9: Renewables in RePowerEU scenario .............................................................................................. 22
Table 10: Energy consumption in final demand sectors (Mtoe).................................................................. 25

Figure 1: Gross inland consumption by fuel in 2019 and in 2030 in the Fit-for-55 and REPowerEU
scenarios (Mtoe) ............................................................................................................................................... 12
Figure 2: Final energy consumption by fuel in 2019 and 2030 in the Fit-for-55 and REPowerEU
scenarios (Mtoe) ............................................................................................................................................... 13
Figure 3: Net installed power capacity in REPowerEU in 2030 (GWe) ..................................................... 24
Figure 4: Hydrogen use by sector in 2030 ..................................................................................................... 27

47

7.

ANNEX ON PRICE TRAJECTORIES BETWEEN 2020 AND 2050 FOR GAS, OIL AND COAL

Figure 2 shows the price trajectories between 2020 and 2050 for gas, oil and coal. Oil and coal prices are basedon historical data for 2020-2021, combined with estimates of prices in 2022 and complemented by a linear
interpolation to the long-term trajectory assumed in the EU Reference Scenario 2020 for the following years.
The same approach is followed for gas prices except that these are expected to remain higher than in the Fitfor-55-scenario in the long run.
Figure 2: Fuel price trajectories used for REPowerEU and Fit-for-55 analysis

48