Resolution of the European Committee of the Regions — REPowerEU: cities and regions accelerating the energy transition

(2022/C 301/02)

THE EUROPEAN COMMITTEE OF THE REGIONS (CoR),

— having regard to high and increasing energy prices, which have been eroding the purchasing power of households and enterprises since Summer 2021, driven by the global demand for energy, in particular gas, as we recover from the COVID-19 pandemic;

— having regard to the Communication and toolbox of the European Commission (EC) on tackling rising energy prices, of 13 October 2021;

— having regard to the unprovoked and unjustified invasion of Ukraine on 24 February 2022 by the Russian Federation, with the support of Belarus;

— having regard to the EC Communication on REPowerEU: a joint European action for more affordable, secure and sustainable energy of 8 March 2022;

— having regard to the Versailles Declaration issued by the EU Heads of State or Government at the informal meeting held on 10 and 11 March 2022;

— having regard to the EC Communication on Security of supply and affordable energy prices, the Proposal for a Regulation on gas storage, and the Temporary crisis framework for flexibility under State aid rule, of 23 March 2022;

— having regard to the joint Task Force on Energy Security to be immediately established by the European Commission and the United States;

— having regard to the Presidency conclusions of the European Council of 24 and 25 March 2022;

— having regard to its current work on the Fit for 55 package delivered through opinions and the Green Deal Going Local working group;

On facing multiple crises

1. welcomes the initiatives envisaged by the European Commission to address the current high energy prices, which have been increasing since summer 2021, exacerbated by the Russian Federation’s illegal, unprovoked and unjustified war in Ukraine; underlines that it is not sufficient simply to phase out our dependence on the supply of fossil fuels from the Russian Federation only, but considers the REPowerEU plan a way to accelerate the energy transition, to reduce the EU’s dependence on imports of energy and raw materials in general and thus to diminish the political, economic and security risks resulting from these imports; nevertheless, deeply regrets the lack of clear reference to the role of cities and regions, both in terms of facing the current energy crisis and of providing long-lasting solutions to it;

2. also expresses its concern about the expected asymmetric regional impact of the energy crisis on EU cities and regions reflecting their different abilities to respond to the disruption of energy supplies and rising energy prices and calls on the European Commission and Member States to take these asymmetries duly into account when devising and implementing the respective measures;

3. is deeply concerned at the findings presented in the latest IPCC report on Climate Change 2022 — Impacts, Adaptation and Vulnerability ( 1 ) , which confirms that many of the impacts of climate change are already irreversible; underlines the importance of not further delaying adaptation and mitigation measures, in which local and regional authorities are key actors;

4. highlights that the objective of energy security should ultimately support the objective of climate neutrality and the energy transition. The pathway to secure, affordable and sustainable energy is the only future-proof approach to the present crisis; in this context, calls on the EU’s co-legislators to be more ambitious and to accelerate the adoption of the ‘Fit For 55 package’, which takes special account of the CoR opinions on the revisions of the Renewable Energy Directive (RED) and the Energy Efficiency Directive (EED) and on the Energy Performance of Buildings Directive (EPBD);

5. everyone has access to all the energy services they need and a fair share of the energy services they want whilst, at the same time, the impacts of the energy system do not exceed environmental limits ’; welcomes the recognition of energy efficiency as a first principle and reiterates the crucial role of EU regions and cities in boosting energy efficiency gains; calls on the Commission to include in its strategy the concept of energy sufficiency ( 2 ) — an approach that aims to achieve a situation where ‘’;

6. highlights the key role played by the existing innovative governance tools for cooperation and capacity-building such as the Covenant of Mayors, the Energy Poverty Advisory Hub, the European Climate Pact, the Clean Energy for EU Islands initiative, and similar EU initiatives to enhance the much-needed transition towards affordable, sustainable and secure energy;

7. calls on the Commission and Member States to support the creation of one-stop-shops to implement the REPowerEU plan at regional and local level, in close cooperation with the European Investment Bank;

8. calls on the Commission to promote the systematic replication of current best practices through dedicated technical and financial support for LRAs, with the aim of reducing the initial cost burden of energy efficiency measures, paying particular attention to vulnerable households, micro and small enterprises and consumers;

9. considers that the Toolbox for tackling energy prices ( 3 ) has made a first attempt to propose tools to mitigate the social consequences of the current energy crisis, but has not proven to be as effective as needed, and should be reinforced; considers that emphasis should be placed on long-term solutions for a fossil fuel-free and energy-independent Europe, with transformative changes in all sectors to eradicate energy and mobility poverty;

10. asks the Commission to take into account the challenges of regions that depend on fossil fuels and that cannot connect to the continental network — such as the outermost regions — when providing long-term solutions for energy sufficiency;

On boosting renewable energy, energy efficiency and energy savings together through the REPowerEU plan

11. calls on the Commission and Member States to ensure that massive investments and concrete measures to accelerate the deployment of renewable energies and to boost energy efficiency, energy saving and research in alternative sustainable fuels are prioritised and fully coupled together;

12. looks forward to the upcoming EC proposal to ensure a faster permit-granting procedure, in compliance with the principle of subsidiarity in the field of renewable energies and calls for similar action to be put in place for key energy efficiency projects; calls on the Commission to strengthen existing tools that provide technical support to local and regional authorities; therefore welcomes the proposal for a European Solar Rooftops Initiative in the upcoming EC communication on solar energy strategy scheduled for June; calls on the Member States to put in place purchasing incentives, such as short-term grant programmes for consumers;

13. highlights the decisive role that public acceptance of infrastructure projects plays in accelerating planning and permit-granting procedures and calls on the Commission and the Member States to encourage the dissemination of good practices in this field, such as those mentioned in the recent infrastructure report by the CoR’s Network of Regional Hubs;

14. considers the decarbonisation of public and private buildings to be a central part of the European Green Deal and a key part of the solution to the current crisis to slash gas demand; urges the Commission to speed up both the rollout of heat pumps ( 4 ) as part of the REPowerEU plan and research into innovative solutions that make our building stock as smart and climate-neutral as possible;

15. calls on the Commission also to facilitate public-private building renovation consortia of industries and local and regional authorities to showcase integrated renovation packages of heating and cooling upgrades for buildings, to set up an industrial insulation programme to capture cost-effective investments with short pay-back times and to support the training of the renovation workforce;

16. notes that the potential for energy savings is underleveraged in the REPowerEU communication and calls on the Commission and Member States to consider measures such as campaigns to encourage behavioural change;

17. regrets the delay in the adoption of the Nature Restoration Law and stresses that the protection and restoration of biodiversity is inherently linked to climate adaptation and must remain a key pillar of the green transition under the European Green Deal; asks the Commission to fully involve regional and local authorities in the identification of ‘go-to’ areas for the deployment of renewable energy projects in accordance with the principle of subsidiarity, with a view to ensuring that they fully comply with the ‘ do-no-harm’ principle;

18. believes that energy security and climate neutrality can only be achieved if the European Union relies on a robust and fully interconnected internal electricity market and a well-functioning carbon market; highlights that any short-term temporary actions, such as improved fossil gas storage and increased LNG imports, should not create additional lock-in and should be ‘green gas ready’, to prepare for climate neutrality with renewable hydrogen and other renewable fuels; urges that our gas, hydrogen and electricity interconnections be completed and improved throughout the European Union, including the full synchronisation of power grids;

19. stresses the importance of fully encompassing and benefiting from the contributions of ‘prosumers’ and local renewable communities and suggests a less restrictive definition of smart grids within the Trans-European Networks for Energy (TEN-E) framework and infrastructure; underlines that there is a need to connect new small-scale producers to the low- and medium-voltage networks; calls on the Commission to provide a framework for the aggregation of several smaller projects, with flexibility especially for border regions, to be able to set up certain aggregated cross-border projects and to potentially obtain financing for these efforts; highlights that European Groupings of Territorial Cooperation (EGTC) can play a significant role in these projects; points to the indispensable role played by rural areas in renewable energy production;

20. highlights that the current energy crisis represents an opportunity to significantly increase electrification and the production of renewable hydrogen as clean solutions to decarbonise our economy; calls on the Commission to put forward ambitious and concrete actions to implement the Hydrogen Accelerator, including a fixed timeline for each action; as a key action in this connection, calls on the Commission to establish an EU initiative for hydrogen valleys that should strengthen hydrogen valleys, provide structural support for European networking and cross-border cooperation, and comprise funding from the EU Innovation Fund as well as increased funding via the Clean Hydrogen Partnership Joint Undertaking; welcomes the proposal for a Global European Hydrogen Facility and calls for the structural involvement of those EU regions that are already active in the field; calls on European legislators, when adopting the ‘Fit for 55’ package, including the legislative package on the decarbonisation of the gas market, to support the accelerated uptake of green hydrogen in a consistent way;

21. calls for an update of current State aid rules to make them optimal for the co-funding, operation and further development of electric public recharging infrastructure and considers that related investment costs should be eligible for public support, as was put forward in the recent infrastructure report by the CoR’s Network of Regional Hubs;

Towards a REPowerEU plan in partnership with cities and regions

22. stresses that the upcoming REPowerEU plan should include a plan on financing and channelling existing or new EU funding to support implementation by local and regional authorities; calls on the Member States to redirect unused funds from the Recovery and Resilience Facility to support local planning for energy security and investments in renewable sources;

23. calls on the Commission to be included as institutional partner within the newly established Energy Poverty and Vulnerable Consumers Coordination Group, in order to facilitate the exchange of information and coordination between the Commission and Member States on questions relating to the design and implementation of the upcoming REPowerEU plan, Union legislation, programmes and policies addressing vulnerable households and consumers affected by energy and mobility poverty at all levels. The CoR stands ready to contribute to this interinstitutional cooperation through its Working Group Green Deal Going Local by identifying bottlenecks, ways and means to frontload and ramp-up the Fit-for-55 measures at local and regional level, including through exchange of best practices, experiences and expertise;

24. notes that the European Regional Development Fund (ERDF) regulation requires a minimum level of 30 % of resources in all categories of regions to be dedicated to making Europe and its regions greener, low-carbon and resilient; calls on the Member States and regions to make use of the possibilities offered by the European Structural and Investment Funds (ESIF) to finance projects on the energy transition, including on energy efficiency, renewable energy, and developing smart energy systems, grids and storage outside the TEN-E framework;

25. welcomes the launch of a special call under the Technical Support Instrument (TSI) to support Member States in phasing out their reliance on fossil fuels from Russia but regrets the short deadline for the submission of requests for this specific support; calls on the Commission to make the TSI more readily available to support local and regional authorities, especially those in less-developed regions facing the largest capacity gap, as this discourages them from making the best use of RRF support when implementing investments and reforms; stands ready to support the Commission in ensuring the effective uptake of this instrument by cities and regions;

26. recognises carbon pricing as a crucial tool for driving the EU’s increased climate ambitions and supports an all-sector approach to making these ambitions a reality; welcomes the fact that the Commission recognises these risks and the proposals to address them, such as amending the EU Emissions Trading System State aid Guidelines; highlights that some of the proposed measures, such as increased taxation of windfall profits, may not provide reliable support; is aware that the introduction of emissions trading in the road transport and building sector (ETS II), in combination with insufficient investment in these sectors and the increase in fuel prices could exacerbate the risk of energy and mobility poverty; therefore calls on the Commission and the co-legislators to introduce an obligation for Member States to set a minimum percentage threshold of at least 20 % of revenues generated from the auctioning of ETS allowances to be managed directly by local and regional authorities;

27. welcomes the adoption of the Temporary Crisis Framework to enable Member States to use the flexibility provided for under State aid rules to support the economy in the context of Russia’s war in Ukraine; highlights that the possible negative effects on competition and distortion of the Single Market must be carefully monitored. Notes that the recent CoR RegHub infrastructure report ( 5 ) touches upon State aid and expresses the view that the current State aid rules are not optimal for the co-funding, operation and further development of electric public recharging infrastructure; a future review should consider investment costs to be eligible for public support;

28. notes with concern that the current crisis will have a major impact on public finances, and therefore calls on the Commission to extend the application of the general escape clause of the Stability and Growth Pact (SGP) until a new economic governance framework is agreed, and at least until the end of 2023; public investments in support of the environmental transition, and in particular energy efficiency and renewable energies, should not be counted as structural expenditure in the economic governance framework;

29. welcomes the measures provided for in Article 5 of the Electricity Directive regarding the electricity market, as well as the guidelines given ( 6 ) on the possibility for Member States to intervene in setting prices for electricity supply; considers that, in view of the current geopolitical situation and its consequences for the energy market, with the increase in and volatility of electricity prices, Member State intervention will be essential, with the dual aim of protecting vulnerable households and micro- and small enterprises and of enhancing competition, to the benefit of consumers over the long term. Nevertheless, it reiterates ( 7 ) that these measures must be limited in their duration, linked to the emergency aspect of the energy crisis and must never become a structural change that could undermine the liberalisation of electricity market management; in light of the increasing low cost of renewable power generation, suggests considering decoupling gas and electricity as a possible measure to prevent high gas prices from affecting power prices;

30. welcomes the legislative proposal to ensure an adequate level of energy storage in the EU for next winter and beyond; underlines that the establishment of such minimum levels should take regional risk assessments into consideration;

31. stresses the need for a better understanding of regional re- and upskilling needs and opportunities; calls on the Commission to use initiatives such as Erasmus+ and Horizon Europe to ensure closer collaboration between industry and the academic world and to launch the Pact for Skills in key industrial ecosystems such as the hydrogen, solar, heat pump and wind sectors; calls on the Member States to accelerate their use of the European Social Fund+, the Just Transition Fund and the Recovery and Resilience Facility (RRF) to boost the reskilling and upskilling of the workforce, in line with the need to adapt professional practices to circularity, the use of low-carbon materials and new technologies.

Brussels, 28 April 2022. The President of the European Committee of the Regions Apostolos TZITZIKOSTAS

(1) https://report.ipcc.ch/ar6wg2/pdf/IPCC_AR6_WGII_FinalDraft_FullReport.pdf

(2) https://www.energysufficiency.org

(3) Tackling rising energy prices: a toolbox for action and support, 13 October 2021 (COM(2021) 660 final).

(4) Heat pumps, which resemble air conditioners and are placed outside buildings, warm homes by moving rather than producing heat. Using electricity, they extract and concentrate heat either from outdoor air, the ground or water and then ‘pump’ that warmth into the house.

(5) https://cor.europa.eu/en/news/Pages/reghub-launches-consultation-on-21st-century-rules.aspx

(6) See Annex 1 of the European Commission’s REPower EU Communication.

(7) See CoR Opinion on ‘Renewable energy and the internal market in electricity’ (OJ C 342, 12.10.2017, p. 79), by D. Matoniene (LT/ECR), Article 20.