REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS State of the Energy Union Report 2024 (pursuant to Regulation (EU)2018/1999 on the Governance of the Energy Union and Climate Action)
Date: 2024-09-11
Institutions: Directorate-General for Energy, European Commission
Subjects: EU energy policy, carbon neutrality, energy cooperation, energy diversification, energy efficiency, energy supply, energy transition, renewable energy, security of supply, self-sufficiency in energy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 9.10.2024  COM(2024) 404 final/2  CORRIGENDUM  This document corrects document COM(2024) 404 final of 11.09.2024  Concerns all language versions.  Modification of footnote 54.  The text shall read as follows:  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS State of the Energy Union Report 2024                      (pursuant to Regulation (EU)2018/1999 on the Governance of the Energy Union and Climate Action)  
 
 
1.  INTRODUCTION 

Energy  policy  is  critical  for  European  competitiveness,  security  and  decarbonisation  towards 
climate neutrality by 2050, as well as for  the achievement of zero pollution, biodiversity protection 
and circular economy objectives. Under the European Green Deal, the EU has put in place a stable and 
ambitious  energy  policy  framework,  reflecting  the  fact  that  energy  accounts  for  around  75  %  of 
greenhouse gas (GHG) emissions. 

In 2023 and 2024, the Commission consolidated the policy framework needed to reach our international 
commitments, and the Union´s energy and climate targets. By reaching political agreements on all key 
legislative files in the Fit for 55 Package1, the European Union has paved a clear pathway to its 2030 
targets. 

Russia’s war of aggression against Ukraine and its weaponisation of energy, have threatened Europe’s 
energy security and, in turn, its economic security. In response, the EU launched the REPowerEU plan 
to  phase  out  dependence on  Russian  fossil fuels  and took the  emergency  actions  needed  to  achieve 
energy security and stabilise markets. 

Over the past few years, the pace of renewable power installation has been at a record high. The EU has 
also  reduced  its  dependence  on  Russian  fossil  gas,  and  energy  saving  has  limited  consumption. 
However, EU energy security still faces challenges ranging from import dependency and security risks 
to  growing threats  posed  by  climate change  and  environmental degradation. The  European industry 
faces a significant challenge to its competitiveness due to rising competition from China, high energy 
prices  differentials  compared  to  other  industrial  competitors  like  the  US,  and  potential  strategic 
dependencies on clean energy technologies. Likewise, citizens face high energy bills, which, combined 
with the rising cost of living, further reduces their purchasing power. 

Moreover, the pace towards the EU energy efficiency and renewable targets must be further increased 
to ensure their achievement. 

The clean energy transition is key to secure, sustainable, competitive and affordable energy for 
businesses and citizens to keep industry (hard-to-abate industrial and transport sectors and clean tech 
sectors in particular) and quality jobs in the EU, and for Europe’s economic security. The overall geo-
economic context requires the Commission and the EU to deliver concrete results. 

To reach climate neutrality by 2050, the EU has set an intermediate 2030 target of at least 55% reduction 
of net GHGs compared to 19902 with a full “Fit-for-55” energy and climate policy framework, and the 
European Commission has recommended an intermediate 2040 climate target of 90%3. As part of our 
commitment to be the first climate neutral continent by 2050, the European Union and its Member 
States  are  working  to  deliver  on  the  2030  climate  and  energy  objectives,  with  visible  positive 
results for citizens and business. 

The annual State of the Energy Union report measures the EU’s progress towards the objectives 
of the Energy Union, the REPowerEU Plan and the clean energy transition in line with the energy 
and climate targets. 

Following last year State of the Energy Union report4 dealing with the challenges and achievements in 
2020-2023,  this  year’s  report  updates  on  how  the  EU  successfully  acted  on  unprecedented 
developments and challenges in the last year of this Commission’s mandate. The report is structured 
in two parts. The first part shows how the high energy and climate ambition under the European Green 
Deal and the REPowerEU Plan provided the basis for the EU’s crisis response strategy. It also outlines 
steps to enhance the competitiveness of European industry. The second part analyses the state of play 
in the implementation of the Energy Union in all its five dimensions: decarbonisation; energy efficiency; 
energy security; internal energy market; research innovation and competitiveness. 

1      The Revision of the Energy Taxation Directive is being discussed at the Council.   
2   Regulation (EU) 2021/1119, Article 4 
3   COM(2024) 63 final 
4   COM(2023) 650 final 

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State of the Energy Union – key achievements  

-  The  EU  has  adopted  all  key  energy  and  climate  files  under  the  Fit-for-55  package,  including 
amendments stemming from the REPowerEU plan to rapidly phase out our dependencies, and the revision 
of  the  EU  ETS,  that  now  applies  to  maritime  transport  emissions,  amends  rules  on  free  allocation  to 
incentivise industrial decarbonisation, and mandates Member States to spend all revenues for climate and 
energy purposes.  
The EU’s greenhouse gas emissions have already fallen by 32.55% compared with 1990, while the EU 
economy has grown by around 67% in the same period, decoupling growth from emissions. 

- 

-  For emissions covered by the ETS, the data reported by EU Member States by 2 April 2024 show a 15.5% 
decrease in emissions in 2023, compared to 2022 levels. With this development, ETS emissions are now 
around 47% below 2005 levels and well on track to achieve the 2030 target of -62%. 

-  Measures at EU and national level have paid off and electricity and gas prices fell drastically compared 

to the peaks in 2022, both in wholesale and retail markets. However, they have remained high. 

-  The EU achieved 18% of gas demand reduction between August 2022 and May 2024.  This resulted in 
about  138  billion  cubic  metres  (bcm)  of  gas  saved.  With  EU  sanctions  banning  seaborne  imports  of 
Russian  crude  oil  and  refined  petroleum  products  as  well  as  Russian  coal,  imports  of  Russian  gas 
(pipeline & LNG) dropped from a 45% share  of overall EU  gas imports in 2021, to only 18%  up to 
August 2024. 
To quickly replace Russian gas supply and ensure Europe’s energy security in the short-medium term, 
the EU reached out to other international suppliers. Norway and the U.S. have become the EU's largest 
gas suppliers - for pipeline and LNG gas respectively- providing 34% and 18% of EU gas imports in the 
first half of 2024.  

- 

-  A  record  of  twelve  new  LNG  terminals  and  six  expansion  projects  of  existing  terminals  have  been 
commissioned  between  2022  and  2024.  Overall,  these  are  expected  to  increase  the  EU’s  LNG  import 
capacity by 70 bcm to 284 bcm by 2024. 

-  The EU Energy Platform contributed to EU diversification goals. It attracted more than 180 companies 
to bid and matched European buyers with external suppliers for more than 75 bcm of natural gas between 
2023 and 2024. 

-  EU gas storage levels were at 59% capacity on 1 April 2024, reaching a new high record for the close of 
the winter season; on 19 August 2024, the EU has achieved the 90% gas storage capacity target, over two 
months ahead of the 1 November deadline. 

- 

-  The  first  Union  list  of Projects  of  Common  Interest  (PCIs)  and  of  Projects  of  Mutual  Interest 
(PMIs)6 was adopted by the Commission in November 2023 to help build an infrastructure network across 
Europe that is fit for our ambitious diversification and decarbonisation objectives.  
The Grids Action Plan has been tabled and will address key challenges in expanding, digitalising and 
better using EU electricity transmission and distribution grids.  
The Net-Zero Industry Act and the Critical Raw Materials Act, which entered into force in 2024, will help 
strengthen  supply  chain  resilience  through  diversified  sourcing  and  build  a  strong  domestic 
manufacturing base for  net-zero technologies. The new harmonised EU rules for ecodesign will also 
contribute to reducing energy costs for European businesses and citizens. 

- 

-  Wind surpassed gas generation to become the EU’s second largest source of electricity behind nuclear.  
With 56 GW of new solar energy capacity installed in 2023, the EU has set yet another record from the 
additional 40 GW installed in 2022. Onshore and offshore wind energy in the EU had a total cumulative 
installed capacity of 221 GW (201 GW onshore; 19 GW offshore), with 16 GW installed in 2023.7  

5   Excluding international aviation and maritime emissions 
6   https://energy.ec.europa.eu/topics/infrastructure/projects-common-interest-and-projects-mutual-interest/key-

cross-border-infrastructure-projects_en  

7  Early  indications  (Ember)  show  that  in  the  first  half  of  2024  around  50%  electricity  generation  came  from 
renewables. In addition, wind and solar generated more electricity than all fossil fuels combined. 

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- 

- 

- 

The European Hydrogen Bank, financed from the EU ETS Innovation Fund, has been established and 
conducted  a  first  successful  round  of  EU  auctions  awarding  nearly  €720  million  to  seven  renewable 
hydrogen projects in Europe.  
In  early  February,  the  Commission  launched  the  European  Industrial  Alliance  on  Small  Modular 
Reactors (SMRs) which will accelerate the development, demonstration and deployment of the first SMR 
projects in the EU by early 2030. 
The Commission published in October 2023 a Communication on the revision of the Strategic Energy 
Technology (SET) Plan, the main instrument to implement the research, innovation and competitiveness 
pillar of the Energy Union. 

- 

-  Regarding the implementation of the national Recovery and Resilience Plans (RRPs), by mid-June 2024, 
the EU has disbursed more than EUR 240 bn to Member States to implement the measures in their plans. 
Over  EUR  184  bn  have  been  allocated  by    Member  States  to  support  energy  related  reforms  and 
investments since the launch of the Recovery and Resilience Facility. 
2021-2027  Cohesion Policy programmes have continued to provide key support for investments in the 
energy sector, with a total EUR 83 billion (including national co-financing) allocated to Energy Union 
priorities. Clean technologies can be further supported by cohesion funds with the Strategic Technologies 
for Europe Platform. 
Support measures introduced with the aim of providing relief for households and businesses against high 
energy prices, helped ease the impacts of the energy crisis on living costs. 

- 

- 

-  While the assessment of the draft updated national energy and climate plans (NECPs) in December 2023 
has shown Member States’ determination to step up action at national and regional level to meet the Fit 
for  55  and  REPowerEU  goals,  there  are  ambition  gaps,  including  bottlenecks  and  missing  links  for 
integrated infrastructures towards the Union’s 2030 targets and to enhance resilience to climate impacts.  
The Commission made recommendations and has been working closely with Member States to support the 
timely delivery  of the Union’s 2030 targets in the final updated NECPs. 
Supporting Ukraine, including its energy sector, has continued to be a top priority for the Commission 
and all 27 Member States. The  Union Civil Protection Mechanism (UCPM) has provided an estimated 
EUR 900 million in support to Ukraine. The Ukraine Energy Support Fund (UESF) has established itself 
as a key support tool to procure energy equipment, such as the delivery of thousands of generators and 
power transformers, and has mobilised more than EUR 500 million by August 2024. The EU’s EUR 50 
billion  Ukraine  Facility,  underpinned  by  the  Ukraine  Plan,  will  provide  consistent  funding  to  aid 
Ukraine’s recovery and bolster sustainable economic growth until 2027 and separately funding of EUR 
96 million to the UESF with additional funds for 2024 winter, to provide  support for Ukraine’s energy 
system. 
The EU has continued  international energy and climate diplomacy efforts to diversify energy imports 
and strengthen relations with international partners and to support its partners in their transition and 
access to energy. At COP 28 the EU announced the global pledge on tripling renewable energy capacity 
and  doubling  the  rate  of  energy  efficiency  improvements  by  2030,  which  has  been  endorsed  by  132 
countries,  and  its  objectives  have  been  recognised  by  the  decision  on  the  first  Global  Stocktake. 
Furthermore,  at  COP  28  the  EU  has  committed  to  phase  out  inefficient  fossil  fuels  subsidies,  and 
announced a Team Europe pledge of more than EUR 20 billion for the Africa-EU Green Energy Initiative 
(AEGEI)8 as part of Global Gateway Africa-Europe Investment Package. At the same time, 25 countries, 
including 12 Member States, also committed to triple nuclear energy capacity by 2050. 
The  EU  leads  global  efforts  to  reduce  methane  emissions  from  the  energy  sector  through  the  Global 
Methane  Pledge.  Its  spin-off,  the  Lowering  Organic  Methane  (LOW-Methane)  initiative,  addressing 
methane emissions from the waste sector, was launched at COP29. Moreover, the EU has continued to 

- 

- 

8 AEGEI is a Team Europe Initiative led by the European Commission, which has committed €3.4 billion in grants 
between  2021  and  2027,  and  supported  by  12  Member  States  (Austria,  Belgium,  Denmark,  Finland,  France, 
Germany,  Greece,  Italy,  Netherlands,  Portugal,  Spain  and Sweden),  as  well  as  the  European Investment  Bank 
(EIB) and the European Bank for Reconstruction and Development (EBRD). This Team Europe Initiative aims to 
support the deployment of at least 50 GW of renewable electricity in Africa and to provide at least 100 million 
people with electricity access by 2030. 

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play a key role in Mission Innovation, its key global forum to stimulate action and investment in research, 
development and demonstration to make clean energy affordable, attractive and accessible for all. 
Similarly, the role of the EU was key to adopt the Kunming-Montreal Global Biodiversity Framework, 
to address biodiversity loss, which is essential for climate mitigation and adaptation. 

- 

2.  ENSURING A SECURE AND COMPETITIVE  ENERGY AND CLIMATE TRANSITION 

THROUGH THE EUROPEAN GREEN DEAL AND REPOWEREU PLAN 

In May 2022, the Commission responded to the European Council’s demand to phase out Europe’s 
dependency on Russian energy imports as soon as possible by adopting the REPowerEU Plan. The 
objective was to rapidly reduce the EU’s dependence on Russian fossil fuels not only by saving energy 
and diversifying our supplies, but especially working towards the long-term objective to fast-forward 
the  clean  transition  via  the  acceleration  of  renewables  deployment  and  energy  efficiency  measures, 
joining forces to achieve a more resilient energy system and a true Energy Union. The same demand 
had come from the citizens in the context of the Conference on the Future of Europe9.  

In parallel, the EU adopted most of the Fit-for-55 and REPowerEU climate and energy files, enabling 
the achievement of the 2030 climate and energy targets as strengthened by REPowerEU. This is crucial 
to keep Europe on track towards climate neutrality, make progress in adapting to climate change in line 
with the European Climate Law, and to improve the resilience, competitiveness, and strategic autonomy 
of the EU economy in the face of a global clean technologies race. Moreover, through the Technical 
Support Instrument, the Commission has assisted10 17 Member States in implementing REPowerEU 
through identifying reforms and investments to phase out fossil fuel imports from Russia. 

Thanks to the actions already taken and the unity and determination showed in handling the crisis, the 
EU has so far collectively overachieved on most of the short-term REPowerEU targets, such as 
drastically reducing Russian imports, and has taken timely measures laying down a solid ground for 
the  achievement  of  the  European  Green  Deal  medium  to  longer-term  objectives.  However,  despite 
increased  ambitions,  efforts  are  still  needed  according  to  the  Commission’s  assessment  of  the  draft 
updated NECPs submitted in 2023, identifying an ambition gap in meeting climate, renewables and 
energy efficiency 2030 targets11. Furthermore, only 10 Member States have submitted their final plans 
to date, which is of a high concern.  

2.1.  Saving Energy and Reducing Russian fossil fuels imports 

Immediate  actions  focused  on  saving  energy  and  enhancing  energy  efficiency  as  the  cleanest  and 
cheapest way to address the energy crisis. Actions undertaken under REPowerEU allowed one of the 
steepest gas demand decline in history.  

In  parallel  to  EU  sanctions  banning  seaborne  imports  of  Russian  crude  oil  and  refined  petroleum 
products12 as well as Russian coal, imports of Russian gas (pipeline & LNG) dropped from a 45% 
share of overall EU gas imports in 2021 to only 18% in the first half of 2024 (from 150.2 to 25.4 

9 Notably proposal 18: “Reducing dependency of EU from foreign actors in energy”. 
10  Supporting  REPowerEU:  affordable,  secure  and  sustainable  energy  for  Europe  -  European  Commission 
(europa.eu) 
11 Assessment might evolve following final updated NECPs to be submitted by Member States by 30 June 2024. 
12 As a result, only 3 % of all EU crude oil imports in February 2024 came from the Russian Federation versus 
27,2 % in Q2 2022.  The outlook for the oil security of supply and oil prices is stable, as market tightness was 
partially  balanced  by  the  production  increase  from  non-OPEC+  countries,  mainly  the  US.  However,  the 
geopolitical tensions in Middle East and in Ukraine highlights the vulnerability of global oil markets.  Recently, 
the EU adopted the 14th sanction package to target tankers that are part of Russia’s dark fleet. 

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bcm)., and the yearly amount imported in 2023 declined by 72% from 2021. These are significant 
achievements, setting the EU on track to phase out imports of Russian fossil fuels as soon as possible. 
This also had large repercussions on Russia, whose revenues from selling both pipeline gas and LNG 
to the EU dropped by more than 70% since the peak of the crisis in 2022. Recently, action has been 
taken  to  target  Russia’s  LNG  revenues  more  specifically.  Following  the  14th  package  of  sanctions 
adopted on 24 June 2024, the EU will ban reloading services of Russian LNG in EU territory for 
the purpose of transshipment operations to third countries, and will prohibit new investments, as well 
as the provision of goods, technologies, and services for the completion of Russian LNG projects 
under construction, such as Arctic LNG 2 and Murmansk LNG.  

The  EU  has  exceeded  its  voluntary  target  of  reducing  gas  demand  by  15%  as  established  by  the 
emergency Regulation on EU Coordinated Gas Demand Reduction Measures13. Overall, the EU 
has reduced its gas demand by 18% from August 2022 to May 2024 with 138 billion cubic meters (bcm) 
of gas saved14. These savings are the combined results of the efforts of Member States, businesses and 
citizens, that helped to avoid supply shortages and ensure security of supply. Gas demand reduction 
efforts were prolonged through a Council Recommendation15. 

Figure 1. Natural Gas Demand Reduction16  

Source: European Commission based on Eurostat  

Moreover, the EU rapidly adopted obligatory gas storage filling targets to stay prepared for the winter 
seasons of 2023 and 2024, providing a strong reassurance both for security of supply and for the market. 
The Gas Storage Regulation17, required Member States’ underground gas storage facilities to be filled 
to at least 80% of their capacity by 1 November 2022, rising to 90% from 2023 onwards. On 1 April 
2024, gas storage levels were at 59% capacity, a record for the close of the winter season, and on 19 
august the EU has achieved the 90% storage capacity target over two months ahead of the 1 November 
deadline.  

13 COM(2022) 361 - Council Regulation (EU) 2022/1369. 
14 Source: Eurostat.  
15 C/2024/2476. 
16 The reference period is defined as the average of the previous 5 years for the period August 2022 to May 2023 
(as laid out in the demand reduction regulation). Therefore, for August-December it refers to 2017-2021, but for 
January-May to 2018-2022. 
17   COM(2022) 135 - Regulation (EU) 2017/1938 

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Over the years, the Commission together with Member States have also carried out collaborative work 
and a strong coordination, notably via the Gas Coordination Group and the Electricity Coordination 
Group, to ensure EU’s winter preparedness in a spirit of unity and solidarity.  

Both measures, together with the Fit for 55 and emergency legislative initiatives18, have contributed 
to stabilising energy prices. While retail gas and electricity prices are still above pre-crisis levels, they 
have declined substantially compared to peaks in 2022. 

These  emergency  measures  were  coupled  with  significant  progress  towards  the  EU’s  longer-term 
objectives, aligning key Fit for 55 legislation with the increased ambition of the REPowerEU Plan.  

Following the adoption of the recast Energy Efficiency Directive in September 2023, the Commission 
adopted  a  series  of  recommendations  to  ensure  implementation  and  help  Member  States  in  the 
transposition process. The Commission is also rapidly engaging in the implementation of the Energy 
Performance of Buildings Directive adopted in April 2024, which will rapidly enable to decarbonise 
our building stock, still responsible for about 40% of the EU’s total energy consumption, and ultimately 
increase  our  energy  security  and  reduce  our  dependence  on  imported  fossil  fuels.  The  European 
Mission on climate neutral and smart cities has continued to contribute significantly to the energy 
savings targets of the REPowerEU Plan. Thirty-three cities have now received a Mission Label, which 
recognizes their climate measures and investments plan to reach climate-neutrality by 2030. 

2.2.  Fast-forwarding the clean energy transition 

During 2023 and 2024, the EU has progressed significantly in fostering the clean energy transition with 
the  adoption  by  co-legislators  of  key  legislation  within  the  Fit  for  55  package19  and  the  setting  of 
important milestones towards the achievement of the REPowerEU objectives.  

In particular, the scale up of renewable energy production was at the centre of the REPowerEU Plan’s 
objective to build a secure and decarbonised energy system in the EU. The latest data show excellent 
results with the increase of installed wind and solar capacity by 36% between 2021 and 202320, saving 
approximately 35 billion cubic meters (bcm) of gas over 2 years. With 56 GW of new solar energy 
capacity  installed  in  202321,  the  EU  has  set  yet  another  record  surpassing  the  additional  40  GW 
installed in 2022. These figures represent important steps in the right direction, but further acceleration 
is needed to meet the REPowerEU targets under the EU Solar Energy Strategy22 and reach a total of 
at least 700 GW capacity by 2030, up from the estimated 263 GW installed at the end of 2023. Over the 
last years, the EU has taken several initiatives to strengthen the support to the European photovoltaic 
manufacturing  sector  by launching  the  European  Solar  PV  Industry Alliance23, adopting  a  Solar 

18   COM(2022)  473  -  Council  Regulation  (EU)  2022/1854,  COM(2022)  549  -  Council  Regulation  (EU) 

2022/2576, COM(2022) 668 - Council Regulation (EU) 2022/2758 

19   Directive  (EU)2024/1275  of  the  European  Parliament  and  of  the  Council  on  the  energy  performance  of 
buildings (recast); Directive of the European Parliament and of the Council on common rules for the internal 
markets  for  renewable gas,  natural  gas  and  hydrogen,  amending  Directive  (EU) 2023/1791  and  repealing 
Directive  2009/73/EC  (recast);  Regulation  of  the  European  Parliament  and  of  the  Council  on  the  internal 
markets  for  renewable  gas,  natural  gas  and  hydrogen,  amending  Regulations  (EU)  No  1227/2011,  (EU) 
2017/1938, (EU) 2019/942 and (EU) 2022/869 and Decision (EU) 2017/684 and repealing Regulation (EC) 
No  715/2009  (recast).  Regulation  (EU)  2023/2405  of  the  European  Parliament  and  of  the  Council  of  18 
October 2023 on ensuring a level playing field for sustainable air transport (ReFuelEU Aviation); Regulation 
(EU) 2023/1805 of the European Parliament and of the Council of 13 September 2023 on the use of renewable 
and low-carbon fuels in maritime transport, and amending Directive 2009/16/EC. 

20   Industry estimates. 
21   Solar Power Europe. 
22   EUR-Lex - 52022DC0221 - EN - EUR-Lex (europa.eu) 
23   Home - European Solar PV Industry Alliance (solaralliance.eu) 

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Charter, and setting up a public-private co-programmed partnership to support its coordinated 
R&I efforts. As for wind power, 16 GW of new capacity was installed in the EU in 2023, reaching a 
total  221  GW,24.  While  this  shows  good  progress,  the  power  sector  needs  to  increase  the  pace  of 
installation to meet the EU's ambitious renewable energy targets, a challenge to which the Commission 
has  responded  with  the  adoption  of  the  Wind  Power  Package25,  while  striving  for  a  balanced 
deployment in collaboration with local citizens to avoid that the energy transition is challenged because 
of concerns over landscapes, biodiversity, cultural heritage and lifestyles, especially in rural areas.  

Figure 2. Wind and Solar installed capacity 

Source: European Commission based on Eurostat, WindEurope, Solar Power Europe 

Based on the ambitions and projections set out in EU Member States’ draft updated National Energy 
and Climate Plans submitted in 2023/24, biogas and biomethane production could reach a range of 30-
32 bcm by 2030. While this outlines a positive trend, further efforts are needed to reach the REPowerEU 
target of producing 35 billion cubic meters (bcm) per year by 2030.. Based on the available data from 
industry for 2022, the  combined biogas and biomethane production  is reported to be 21 bcm out of 
which about 4.2 bcm of biomethane, that has reached 5.2 bcm in 202426. 

The heat pump market has been growing in the last 10 years with an acceleration in 2021 and 2022 
related to the gas prices and the Ukraine war: sales increased from about 700,000 units in 2015 up to 
1.5 million in 2020 and accelerated to 2.75 million in 202227. In 2023, sales maintained to similar values 
(2.77 million  units)28,  hit by  the decreasing  gas  prices and  a  depressed  building  sector.  Despite this 
steady growth, fossil fuel boiler sales still dominate the market for heating equipment.   

As for hydrogen, which is crucial for hard-to-abate industrial and transport sectors, Europe has the 
largest  pipeline  of  announced  hydrogen  projects  in  the  world.  recently  updated  under  the  European 
Clean Hydrogen Alliance. By the end of 2024, the EU could reach 0.8 GW of new electrolyser capacity. 

24   WindEurope. 
25    European  Wind  Power  Action  Plan,  COM/2023/669  final,  and  Communication  on  achieving  the  EU’s 

offshore wind ambitions, COM(2023) 668 final. 

26  Last  Biomethane  Map  published  by  the  European  Biogas Association    www.europeanbiogas.eu/european-
biomethane-map-2024/ 
27 REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Progress     
on competitiveness of clean energy technologies, COM/2023/652. 
28 European Heat Pump Association (EHPA), Market Report 2024, limited to AT, BE, CZ, DE, DK, EE, ES, FI, 
FR, HU, IE, IT, LT, NL, PL, PT, SE, SK. Including mainly space heating and sanitary hot water heat pumps.  

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Furthermore, European industrial consumers have launched procurement tenders for around 1 million 
tonnes  of renewable and low-carbon hydrogen since September 202329.  Despite a recent increase in 
finalised projects and final investment decisions taken, still too few projects move past final investment 
decision  on  the  supply  side,  notably  due  to  lower  than  anticipated  demand  for  green  hydrogen The 
approval of the four waves of Important Projects of Common European Interest (i.e. Hy2Tech, Hy2Use, 
Hy2Infra and Hy2Move) corresponding to a public investment of 18,9bn will support the deployment 
of  large-scale  projects.  To  stimulate  both  demand  and  supply,  the  European  Hydrogen  Bank  has 
conducted the first EU wide renewable hydrogen auction through the Innovation Fund, financed from 
EU  ETS  revenues,  with  a  budget  of  EUR  800  million. The  auction  attracted  132  bids  totalling  8.8 
million  tonnes  of  renewable  hydrogen  production  capacity  and  their  intended  off-takers  to  be 
operational by 2029 the latest. The seven awarded projects are expected to produce 1.6 million tonnes 
of renewable hydrogen in the first 10 years of operation. The Commission plans to organise a second 
auction before the end of the year with an increased budget of EUR 1.2bn to support the European 
hydrogen industrial ecosystem. European electrolyser manufacturing capacity has raised from 4.2 GW 
in 2022 to 6.8 GW in 2023, and is expected to reach 12.4 GW by the end of 202430.  In addition, the 
Commission is working on a pilot mechanism to support the development of the European hydrogen 
market and create market transparency. The mechanism will be in place for five years and will be part 
of the European Hydrogen Bank. In addition, strategic priorities and actions being implemented to 
have at least 50 Hydrogen Valleys31 under construction or operational by 2030 within the EU round up 
the EU’s efforts to create a hydrogen market32. While progress towards a hydrogen market at European 
scale has been recognised by the European Court of Auditors (ECA), a recently published report points 
out issues along the whole value chain, such as the need of completing the regulatory framework with 
the adoption of the Delegated Act on low-carbon hydrogen 33. 

renewables 

further  accelerate 

the  deployment  of 

On  top  of  these  sector-specific  actions,  the  Council  agreed  in  December  2023  to  prolong 
certain emergency measures on permitting, aimed at shortening and accelerating the permit-granting 
procedures for renewable energy projects. In May 2024, a new 'package' was adopted, including three 
targeted  measures to 
the  EU:  a 
Commission Recommendation  and  guidance  on  the  design  of  renewable  energy  auctions;  an 
updated Recommendation and guidance on speeding up  permit-granting procedures for renewable 
energy  projects;  and  a guidance  on  designating  renewables  acceleration  areas.  The  Commission 
launched  at  the  end  of  2023  an  initiative  to  support  timely  transposition  of  the  revised  Renewable 
Energy  Directive  in  the  Member  States  (Accele-RES)34,  including  bilateral  meetings  with  Member 
States to discuss transposition progress and to identify challenging areas where Commission can offer 
support. Under the Single Market Enforcement Taskforce, the Commission and Member States have 
addressed around 60% of the process-related barriers identified in national permit-granting procedures.  
However,  these  measures  do  not  solve  all  problems.  The  insufficient  staff  or  capacities  of  public 
administrations to deliver permits  remains  a  key  issue. The  Commission  constantly  invites  Member 
States to reinforce such capacities. 

in 

29 IEA (2024) Global Hydrogen Review. 
30 Data from BloombergNEF’s Electrolyser Manufacturing 2024 report as of March 26, 2024. 
31 Hydrogen Valleys are hydrogen ecosystems that cover a specific geography ranging from local or regional 
focus (eg industrial cluster, ports, airports, etc.). 
32 COMMISSION STAFF WORKING DOCUMENT Towards a roadmap for accelerating the deployment of 
Hydrogen Valleys across Europe: challenges and opportunities 
33 https://www.eca.europa.eu/en/publications/SR-2024-11  
34 European Wind Power Action Plan, COM/2023/669 final. 

8 

 
 
 
To enhance visibility and predictability for the whole value chain, an EU-wide renewables auctions 
platform was  launched  as  part  of  the  package, with  the  aim  of  consolidating information  on 
planned renewable energy auctions in all EU Countries. 

In addition, to address the main challenges in expanding, digitalising and better using EU electricity 
transmission  and  distribution  grids,  including  cross-border  interconnections,  -  an  indispensable 
condition to the completion of the Energy Union - the Commission published in November an Action 
Plan for Grids35,  that the Council, in its conclusions of May 2024, called on Member States to swiftly 
implement.  

The Plan identifies concrete and tailor-made actions to tackle the crucial issue of improving access to 
finance for grids projects, by increasing visibility on opportunities for EU funding programmes. Grid 
operators,  both  at  transmission  and  distribution  levels,  are  faced  with  an  unprecedented  increase  in 
investment needs, also necessary to achieve the 15% interconnection target by 2030, and therefore with 
their volume of capital expenditure,. For electricity EUR 584 billion in the overall investments by 2030, 
out  of  which  375-425  billion  of  investment  in  distribution  grids.  The  expected  steep  increase  of 
investment in grid  might put the current model of refinancing these investments through consumer 
tariffs under strain.  

The revised Emissions Trading System (ETS) Directive reinforced financial support to lower-income 
Member  States  to  modernise  their  energy  systems  and  improve  energy  efficiency  through  the 
Modernisation Fund. Total support from this Fund was raised to 750 million allowances, an increase of 
110 million allowances (representing around EUR 60 billion). Moreover, three more Member States 
became eligible to the Fund, bringing the total number of beneficiaries to 13. The total disbursements 
from the Modernisation Fund since it was established amount to around €12.7 billion.  

2.3. Diversifying our energy supplies through strengthened partnerships  

The EU has diversified its energy imports by  replacing Russian gas supply with imports from 
other international suppliers, benefitting from the existence of several newly built floating storage 
regasification units (FSRUs) terminals and enhancement of the trans-European gas networks.  

A record of twelve new LNG terminals and six expansion projects have been commissioned between 
2022 and 2024. Overall, these are expected to increase the EU’s LNG import capacity by 70 bcm by 
2024.  Norway  and  the  U.S.  have  become the  EU's  largest  gas suppliers - for  pipeline and  LNG 
respectively- providing 34% and 18% of EU gas imports in 2024 up to June36. 

Demand aggregation and joint purchasing of natural gas continued in 2024 under AggregateEU. The 
mechanism has been successful overall, attracting more than 180 companies and matching European 
buyers with external suppliers for more than 75 bcm of natural gas between 2023 and 2024. Building 
on  this  success,  demand  aggregation  and  joint  purchasing  has  been  incorporated  as  a  permanent 
voluntary  tool  under  the  hydrogen  and  decarbonised  gas  market  package.  In  June  2024,  the 
Commission launched the procurement for the IT provider for a permanent European Multiproduct 
Platform  for  the  joint  purchase  of  strategic  commodities  that  will  include  the  future  voluntary 
mechanism for natural gas, the separate pilot for hydrogen and a new mechanism for Strategic Raw 
Materials.    

The Commission has also worked on strengthening relations with international partners to address 
the  needs  resulting  from  the  decline  of  imports  of  Russian  gas.  The  EU  signed  14  Memoranda  of 

35 An EU Action Plan for Grids, COM/2023/757 final. 
36 COM/2024/63 final, Securing our future Europe's 2040 climate target and path to climate neutrality by 2050 
building a sustainable, just and prosperous society. 

9 

 
 
 
Understanding (MoU) with countries in its direct neighbourhood (Morocco, Egypt, Norway, Ukraine) 
and  beyond  (Azerbaijan,  Kazakhstan,  Namibia,  Japan,  Argentina  and  Uruguay).  A  Strategic 
Partnership with Ukraine on renewable gases was also established and the MoU on EU – Ukraine 
Strategic Partnership on Biomethane, Hydrogen and other Synthetic Gases was signed on 2 February 
2023.   

The  Commission  and  the  Euratom  Supply Agency  (ESA)  have  continued  pursuing  the  objective  of 
supply diversification as regards nuclear fuel, related nuclear fuel cycle services and spare parts.In 2023 
and 2024, two new EPR nuclear reactors have come on stream in the EU, which will be able to generate 
carbon-free electricity to cover the consumption of 6 million homes. In addition, in February this year, 
the Commission launched the European Industrial Alliance on Small Modular Reactors (SMRs), 
gathering about 300 members that aim to facilitate the deployment of the first SMR projects in Europe 
by early 2030s.. Moreover, the Euratom Research and Training Programme supports two projects 
that contribute to a swift and secure development and deployment of a European fuel solution for the 
so-called water-water energetic reactor (VVER) to facilitate diversification away from Russian fuels 
and promote security of nuclear fuel supply. 

Since the beginning of Russia’s full-scale invasion, supporting Ukraine has been a top priority for the 
European Union, and the Commission has continued its unwavering support to Ukraine’s energy sector 
to ensure its operation despite the continuous attacks on infrastructure. By 31 July 2024, over 40% of 
all Member States donations were dedicated to the energy sector. Over 8 189 power generators and 3 
348 transformers, along with millions of pieces of energy equipment, have been sent, with the Union 
Civil Protection Mechanism’s total contribution estimated at over EUR  900 million. 

The Ukraine Energy Support Fund (UESF), which was set up under Commission’s auspices and is 
managed by the Energy Community Secretariat, has established itself as a key support tool to procure 
energy equipment and has mobilised more than EUR 500 million by August 2024. The EU’s EUR 50 
billion  Ukraine  Facility,  underpinned  by  the  Ukraine  Plan,  will  provide  consistent  funding  to  aid 
Ukraine’s recovery and bolster sustainable economic growth until 2027. In 2022, the synchronisation 
of  the  Ukrainian  and  Moldovan  grids  with  the  Continental  European  Network  stabilised  Ukraine’s 
electricity system during the early months of the war. Today this facilitates close collaboration with 
ENTSO-E to secure and increase capacity for electricity exchanges, today set at 1.7 GW for commercial 
trade. It has also allowed Ukraine to use emergency imports, particularly following recent attacks on its 
energy infrastructure. Overall, close coordination is being made on electricity exports and on restoration 
with partners (notably US) to provide enough generation for the next winter. With an EU grant of EUR 
96 million and contributions of Member States and private donors through the Union Civic Protection 
Mechanism it is expected to restore capacity for 2.7GW.The Ukrainian National Energy and Climate 
Plan will be a key strategic document for transforming Ukraine’s energy and economic sectors, aligning 
it with EU standards and supporting EU accession. 

The EU has also provided an EUR 1 billion energy support package to the Western Balkans in 2023 to 
help the region face the energy crisis. 

2.4. Competitiveness and the clean energy sector  

The clean energy transition is key to secure, sustainable, competitive, and affordable energy for 
businesses and citizens, to keep industry and jobs in Europe and for Europe’s economic security. While 
policy action has significantly reduced energy prices from peak levels in 2022,  EU electricity industrial 
retail prices are still 2 to 3 times higher than in the U.S. (2021 to 2023) while historically they were 1.5 
- 2 times higher than the US prices. Gas prices are 3 to 6 times higher than those in the U.S., while 
historically they were 2-3 times higher. 

10 

 
 
 
The high spread of EU industrial power prices vis-a-vis countries like the US and China challenges 
Europe’s  competitiveness,  especially  for  energy  intensive  industries,  and  risks  increasing  critical 
dependencies.  To  provide  our  citizens  and  business  with  affordable  energy  it  is  paramount  to 
accelerate  the  roll-out  of  competitive  clean  energy.  The  EU  has  acted  to  lower  energy  prices 
structurally, through inter alia better market integration, investment in cross border interconnections 
and  the  recent  Electricity  Market  Design  (EMD)  reform  which  represents  a  fundamental  step  to 
accelerate the deployment and integration of more renewable energy in the energy system, promote the 
stability,  predictability  and  affordability  of  energy  prices  and  thereby  contributing  to  the 
competitiveness of EU industry.  

Competitiveness will continue to be a key objective in the years to come, with the European Council 
having  called  for  a  new  European  Competitiveness  Deal.  In  her  political  guidelines,  Commission 
President  von  der  Leyen  set  out  a  new  Clean  Industrial  Deal  to  combine  decarbonisation  and 
competitiveness. Its full focus will be on supporting and creating the right conditions for companies to 
thrive in Europe, including  by simplifying the regulatory environment, reducing energy costs, investing 
in clean technologies, and ensuring access to cheap, sustainable, and secure energy supplies and raw 
materials.. The Report from Mario Draghi on competitiveness and the  Report from Enrico Letta on 
“Empowering the Single Market to deliver a sustainable future and prosperity for all EU Citizens” also 
emphasised,  inter  alia,  the  need  to  strengthen  the  Single  Market  dimension  for  energy  and    the 
importance 
infrastructure  networks,  strengthening  cross-border 
interconnections, upgrading the electricity transmission  and distribution grids and expanding energy 
supply choices for industry.  

in  Europe’s 

invest 

to 

Based on screening of planning, reporting, and monitoring obligations under EU energy and climate 
law, the Commission identified several key actions in the rationalisation plans to identify new measures 
to reduce reporting burdens, including repealing reporting obligations on oil stocks37, reviewing the 
security of gas supply legislation38, and tertiary legislation under the gas and electricity internal market 
legislation  and  the  Regulation  on  Wholesale  Energy  Market  Integrity  and  Transparency39.  This  is 
complemented by several support measures to ease compliance. The rationalisation plans also noted the 
possible revision of the Governance Regulation as a means to further improve efficiency. 

The current geopolitical context has increased the importance of resilience and security in the net-zero 
industry, the economic relevance of which is also increasing sharply with global market for key, mass-
manufactured, net-zero technologies set to triple by 2030 with an annual worth of around EUR 600 
billion.  European  manufacturers  are  facing  intensive  competition  on  these  growing  global 
markets.Energy  technologies  are  one  of  the  ten  critical  technology  areas  for  the  EU’s  economic 
security40. 

With the Net-Zero Industry Act (NZIA) and the Critical Raw Materials Act, the EU took action to 
strengthen  the  competitiveness  and  the  supply  chains  resilience  of  its  clean  energy  technologies 
manufacturers. The  resilience  of  future  energy  systems  will  be  measured  by  a  secure  access  to  the 

37  Under  Article 6(2)  and  9(4)  of  Council  Directive  2009/119/EC  (Directive  -  2009/119  -  EN  -  EUR-Lex 
(europa.eu))  &  Article 26(1)a)  of  Regulation  (EU)  2018/1999  (Regulation  -  2018/1999  -  EN  -  EUR-Lex 
(europa.eu) 
38 Regulation (EU) 2017/1938 of the European Parliament and of the Council of 25 October 2017 concerning 
measures  to  safeguard  the  security  of  gas  supply  and  repealing  Regulation  (EU)  No 994/2010  (Regulation  - 
2017/1938 - EN - EUR-Lex (europa.eu)). 
39 Regulation (EU) No 1227/2011 of the European Parliament and of the Council of 25 October 2011 on wholesale 
energy market integrity and transparency Text with EEA relevance (http://data.europa.eu/eli/reg/2011/1227/oj). 
40 As identified in the Annex to the Commission Recommendation of 3 October 2023 on critical technology 
areas for the EU’s economic security 

11 

 
 
 
technologies  that  will  power  those  systems  -  wind  turbines,  electrolysers,  batteries,  solar  PV,  heat 
pumps, grid technologies and others. The NZIA will help the EU diversify its sources of supply for 
clean technologies and build strong domestic manufacturing capacity of clean technologies, enhancing 
competitiveness as we seek to reach climate neutrality by 2050. Since 2022, the Innovation Fund has 
been supporting the roll-out of clean-tech manufacturing with a dedicated budget envelope in its annual 
calls.  Clean  energy  technologies  already  supported  by  the  Innovation  Fund  are  set  to  deliver  a 
substantial  capacity  increase  in  solar  and  battery  production  as  well  as  electrolysers. The  Strategic 
Technologies for Europe Platform (STEP) is contributing to the development and manufacturing of 
advanced  clean  technologies  in  the  EU,  reducing  strategic  dependencies  and  bolstering  European 
innovation in such critical technologies.   

As the EU advances towards a net-zero future, it will be important to address emerging dependencies 
on  critical  materials  and  nuclear  fuels  to  enable  the  energy  transition  and  ensure  EU’s  economic 
security. 

The Strategic Partnerships on sustainable raw materials value chains that the EU is concluding 
with third countries are an integral part of the external dimension of the Critical Raw Materials Act to 
secure and diversify the EU’s supply on critical raw materials while ensuring local value addition in 
partner  countries.  To  date,  the  EU  has  signed  14  Strategic  Partnerships41.    Over  the  past  year,  the 
diversification of global supply chains for critical raw materials has advanced further through seven 
newly established, mutually beneficial partnerships including with vital energy partner countries such 
as  Norway, Australia  or  Serbia42.The  UN-convened  Panel  on  critical  energy  transition  minerals, 
launched in April 2024 and co-chaired by the Commission services, will bring together governments 
and  other  stakeholders  active  in  the  extractive industries  to  address  issues relating  to  human  rights, 
equity, transparency, investment, and sustainability and human rights in critical minerals supply chains, 
to ensure that the increasing demand for critical minerals will not exacerbate geopolitical tensions but 
instead foster a just and balanced energy transition.   

In  the  transition  towards  a  greener  economy,  skills  are  an  important  enabler  for  Europe’s 
competitiveness and innovation as the shift towards clean energy technologies requires a workforce 
with  additional  skills  compared  to  traditional  energy  sectors  .  Under  the  Net-Zero  Industry  Act, 
European  net-zero  industry  Academies43    are  either  already  launched  or  in  the  process  of  being 
established to address the issue by developing learning content in the Member States in sectors such as 
solar power, hydrogen,  and batteries, with further academies in raw materials and wind power to follow 
in the future. The Academies build upon  initiatives such as the Blueprints for Sectoral Cooperation on 
Skills44 and the EU Pact for Skills45, with its 3 Large-scale Skills Partnerships in the renewable energy 
ecosystem. Ensuring that workers acquire the skills in need would allow reaping the full employment 
potential of the REPowerEU targets which are estimated to create over 3.5 million jobs by 203046. 

41 Strategic Partnerships have been signed to date with Canada, Ukraine, Namibia, Kazakhstan, Argentina, Chile, 
Democratic Republic of Congo, Zambia, Greenland, Rwanda, Norway, Uzbekistan, Australia, Serbia.  
42 In 2024, diversifying global supply chains of critical raw materials has further advanced in line with the EU’s 
External Energy Strategy through five newly established, mutually beneficial partnerships with countries such as 
Australia, Norway, and Serbia. These partnerships are also strategically important for phasing out other EU energy 
dependencies. 
43 Net-Zero Industry Act  
44 Blueprint for sectoral cooperation on skills - Employment, Social Affairs & Inclusion - European Commission 
(europa.eu) 
45 Pact for Skills - Employment, Social Affairs & Inclusion - European Commission (europa.eu) 
46 For more information: Pact for Skills,  Launch of large-scale renewable energy skills partnership (europa.eu)  

12 

 
 
 
3.  TAKING  STOCK  ON  PROGRESS  TOWARDS  THE  2030  ENERGY  AND  CLIMATE 

POLICY GOALS AND AMBITION 

3.1. Decarbonisation  

In 202247, net domestic GHG emissions, including land use, land-use change, and forestry (LULUCF) 
and  excluding  international  transport  emissions,  decreased  by  2.5%  compared  to  2021.48  This 
translates into a reduction in GHG net emissions of 32.5% compared with the 1990 base year. Over the 
same period, there was a minor decrease in reported GHG net removals from LULUCF of 4 million 
tonnes of CO2 equivalent compared to 2021. 

For emissions covered by the ETS, the data reported by EU Member States  by 2 April 2024 show a 
15.5% decrease in emissions in 2023, compared to 2022 levels. With this development, ETS emissions 
are now around 47% below 2005 levels and well on track to achieve the 2030 target of -62%. 

However,  economy  wide  GHG  emission  projections,  recently  submitted  by  Member  States,  are 
expected  to  show  some  gap  with  the  EU  climate  ambition.  To  stay  on  track  with  the  EU  2030 
reduction target and climate neutrality by 2050, the EU needs to pick up the pace of change and increase 
the focus on areas where the required emission reductions are significant (e.g. buildings and transport) 
and  to  reverse  the  declining  trend  of  the  LULUCF  net  sink. The  Nature  Restoration  Law  and  its 
implementation  are  critical  to  ensure  the  achievement  of  LULUCF  targets,  which  are  essential  to 
remove the unavoidable emissions from hard-to-abate sectors, and to enhance adaptation. 

The assessment of the draft updated NECPs in December 2023 shows that Member States have taken a 
step in the right direction, but this is not yet sufficient to reduce net greenhouse gas emissions by at 
least 55% by 2030. The draft updated NECPs lead to GHG emission reductions of  -51%, a gap of 4 
percentage points. This is also reflected in gaps towards the Effort Sharing and Land Use Land Use 
Change  and  Forestry  2030  targets,  demonstrating  the  need  for  more  robust  measures  and 
implementation in the final NECPs to stay on track towards 2030. Furthermore, only a few  Member 
States  have  included  in  their  draft  updated  NECPs  detailed  plans  to  consider  adaptation  to  climate 
change in the context of the resilience of their energy systems. 

In 202249, the EU reached a share of 23.0 % of renewable energy in gross final energy consumption, 
an increase of 1.1 percentage points compared to 2021 (21.9%).50 In the context of the pathway towards 
2030, the 2022 share is slightly above the binding interim trajectory share of 22.2% for 2022 based on 
the previous 2030 target of 32%51. 

On average, the overall renewable energy share has been increasing by 0.7 percentage points annually 
over  the  last  10  years.  Progress  has  been  strong  in  the  electricity  sector,  with  an  increase  in  the 
renewables share from 25.1% in 2012 to 41.2% in 2022. The progress in heating and cooling (from 

47 Provisional data for 2023 will be presented in the 2024 Climate Action Progress Report. 
48   GHG emissions and removals for 1990-2022 are based on 2024 GHG inventory as submitted by EU Member 
States  to  the  Commission  by  15  March  2024.  In  2024,  however,  the  inventory  reporting  timeline  is 
exceptionally  extended  until  the  second  half  of  the  year  due  to  the  delivery  of  the  UNFCCC  Enhanced 
Transparency Framework (ETS) reporting tool. Member Staes will be able to submit an updated final GHG 
inventories  to  EEA  by  15  September.  Therefore,  figures  may  change  following  possible  resubmissions 
resulting from later reviews. Together with the aggregated EU-level emission data, the GHG inventory will 
be submitted to the UNFCCC under Regulation (EU) No 525/2013 by the 15 December 2024.  

49 Latest available data from Eurostat are from 2022. 
50   As reported by Member States in line with Eurostat SHARES. 
51   Reference point as set in Article 4 of the  Governance Regulation  based on  the previously EU-level target 

before the entry into force of the revised Renewable Energy Directive. 

13 

 
 
 
18.6% to 24.9%) and transport (from 5.8% to 9.6%) was more modest. The new 2030 EU target of 
42.5% (and even more so the aspirational target of 45%) will require a much faster growth in the coming 
years.  The  Commission  assessment  of  the  draft  updated  NECPs  identified  an  ambition  gap  in 
renewables consumption by 2030, with contributions 3-4 percentage points lower than the revised EU 
binding target of 42.5%52.  

The  renewable  energy  shares  in  2022  continue to  vary  widely  across  Member  States,  reflecting  the 
different starting positions and national targets set for each Member State in the original Renewable 
Energy Directive and the national contributions set in the national energy and climate plans. Sweden 
achieved  the  highest  renewable  energy  share  in  2022  (66%),  followed  by  Finland  (47.9%),  Latvia 
(43.3%)  and  Denmark  (41.6%). With  shares  of  less  than  14%,  Belgium,  Ireland,  Luxembourg,  and 
Malta had the lowest shares.  

Considering both national consumption and currently notified statistical transfers, three Member States 
had  a  2022  share  still  below  their  2020  binding  renewable  energy  target  under  the  original 
Renewable Energy Directive: France (2.7 percentage points lower than the 2020 target), Ireland 
(2 pp) and Austria (0.2 pp). Consequently, these Member States will have to take, within one year, 
additional measures to cover the gap within the next year53. Moreover, several Member States did not 
meet their reference point for the year 202254. Those Member States are expected to explain in their 
next integrated progress report how they intent to close the gap. 

The Commission currently  organises the second call for proposals under the  EU renewable energy 
financing mechanism. Luxembourg will again participate as the contributing country reinvesting the 
non-disbursed EUR 12.5 million of its previous commitment and adding another EUR 40 million into 
the mechanism. The host countries are Finland which will host solar PV projects, and Estonia which 
will host onshore wind energy projects. 

Since 2021, the CEF for Energy has a dedicated window for cross-border renewable energy projects 
(CB-RES). In 2023, the Commission has organised two calls for proposals to update the CB RES list 
and to co-finance works and studies. The evaluation of these calls for proposals is still ongoing, but the 
increasing number of applications indicates an increasing uptake of the programme. 

In  the  transport  sector,  ReFuelEU Aviation  and  FuelEU  Maritime  Regulations  were  adopted  in  late 
2023, which will replace fossil fuels with renewable and low carbon fuels and will decarbonise those 
two hard-to-abate transport sectors. The Commission also launched in 2022 the Renewable and Low-
Carbon Fuels Value Chain Industrial Alliance, which is a novel initiative dedicated to advancing the 
production and supply of those fuels for which the markets are at an early stage of maturity and require 
substantive investment to reach the targets from 2030 onwards. 

The agreed revision of Urban Wastewater Treatment Directive (UWWTD) includes a legally binding 
objective to reach energy neutrality55 for the sector by 2045 with interim targets.  

In May 2024, the new Methane Regulation was adopted, introducing new requirements on measuring, 
reporting and verifying methane emissions in the energy sector. 

52 Assessment might evolve following final updated NECPs to be submitted by Member States by 30 June 2024. 
53 In accordance with Article 32(4) of the Governance Regulation. 
54 Ireland (falling short by 6.2 pp), France (4.5 pp), Austria (2.4 pp), Spain (1.8 pp), the Netherlands (1.4 pp), 
Romania (1.1 pp), Slovenia (0.4 pp), Italy (0.2 pp) and Belgium (0.1 pp). Reference point as set in Article 4 
of  the  Governance  Regulation  based  on  the  previously  EU-level  target  before  the  entry  into  force  of  the 
revised Renewable Energy Directive. 

55 Energy generated from renewable sources equals energy used at urban wastewater treatment plants. 

14 

 
 
 
Energy efficiency 

The EU met the 2020 energy efficiency targets, both in terms of primary energy consumption and final 
energy consumption. After a considerable rebound in 2021 as the European economy was coming 
out  of  lockdown,  in  2022  the  EU  managed  to  showcase  a  systemic  decrease  in  its  energy 
consumption consistent with the downward trend of the last 15 years, also reflecting the EU’s collective 
effort to reduce energy demand following Russia’s war of aggression against Ukraine. 

In 2022, primary energy consumption in the EU reached 1 257 million tonnes of oil equivalent (Mtoe), 
a 4.1% decrease compared with 2021, moving closer to the new 2030 target of 992.5 Mtoe with the 
gap narrowing to 26.7% from the 2030 target. 

Final energy consumption reached 940 Mtoe in 2022, a 2.8% decrease compared with 2021. In 2022, 
final energy consumption was 23.3% away from the new 2030 target (763 Mtoe). Energy efficiency 
efforts will need a further step up to achieve the 11.7% final energy consumption reduction target by 
2030, as the Commission 2023 EU-wide assessment of the draft updated NECPs identified a reduction 
of only 5.8% compared to the 2030 projections.56 In 2022, final energy consumption decreased by 19.6 
Mtoe  (-7.5%)  in  the  EU  residential  building  sector  and  by  8.7  Mtoe  (-6.7%)  in  the  service  sector 
compared  to  the  levels  of  2021.  However,  the  decrease  is  largely  caused  by  a  milder  winter  and  a 
reduction in consumption, rather than by an improvement of the building performance itself, indicating 
there is room for improvements in the implementation of the national Long Term Renovation strategies. 
In practice, renovation rates and electrification of heating equipment across the board remain too 
low and national measures are insufficient to reach a  decarbonised building stock by 2050, for 
which a swift implementation of the revised directive for the energy performance of building will be 
absolutely key. 

Regarding energy savings achieved in 2021 by implementing energy efficiency obligation schemes, 
alternative policy measures, or both, various Member States reported savings being less than 60% of 
the needed savings, which will need to be compensated in the remaining years to 2030. 

Ecodesign and energy labelling are additional key policy instruments driving energy efficiency in the 
EU. About  50  regulations  covering  30  product  groups  are  estimated  to  save  annually  1,418  TWh 
primary  energy  and  139  MtCO2eq  in  2030,  as  well  as  157  billion  €  for  customers57.  This  roughly 
corresponds to the energy consumption of Spain in 2022. The new Ecodesign for Sustainable Product 
Regulation  (Regulation  (EU)  2024/1781)  is  expanding  the  possible  scope  beyond  energy-related 
products  and  allows  introducing  new  requirements  focusing  on  resource  efficiency,  circularity,  and 
sustainability. 

However,  concerns  about  the  compliance  of  energy-related  products  with  the  requirements  have 
emerged. In order to secure the energy, environmental and financial benefits of the policy, ensure the 
level playing field among economic operators, and protect consumers, it will be critical to pursue and 
intensify the efforts towards better compliance, both for EU-manufactured energy-related products 
as well as for imports, in collaboration with the Member States, and in line with the Letta report’ call to 
strengthen enforcement to uphold the Single Market integrity58. 

The  agreed  revision  of  the  EU  Industrial  Emissions  Directive  better  supports  EU  industrial 
installations to  become, amongst  others, more energy  efficient,  thus contributing  to tackle  the triple 
planetary crisis. 

56 Assessment might evolve following final updated NECPs to be submitted by Member States by 30 June 2024. 
57 Ecodesign Impact Accounting Overview Report 2023. https://europa.eu/!3cfvJd 
58 Enrico Letta - Much more than a market (April 2024) (europa.eu), in particular p. 128-129. 

15 

 
 
 
Energy security 

After two very challenging years in 2022 and 2023, 2024 has so far been a year of stabilisation for the 
EU energy system. Security of supply in the gas sector has substantially increased and the market 
fundamentals are now much more stable. This is notably thanks to demand reduction and the further 
implementation of the REPowerEU Plan, which allowed the EU to reduce its dependency on Russian 
fossil fuels. The EU went through the last winter with no major supply disruption, despite the outage of 
the Baltic connector between Finland and Estonia and the geopolitical turmoil in the Middle East.  

The improvement in EU security of gas supply is also reflected in the decision of several Member 
States (Estonia, Finland, Sweden, and Denmark) to decrease their crisis levels. Currently, there are 
still eight Member States in early warning, and one in alert level.59 Building on lessons learnt and a 
reinforced security of supply framework, the EU is well prepared for the next winter and the end of the 
gas transit agreement between Russia and Ukraine. 

The  Commission  works  closely  on  gas  international  security  of  supply  with  its  strategic  partners, 
notably IEA members. A pilot project for enhancing communication on gas security matters within the 
group has started in Autumn 2023 with the objective of building a shared understanding of problems 
and their effects on partners. The Commission actively monitors and discusses market behaviours of 
various actors on the EU and global LNG markets. 

The March 2024 Commission Communication on managing climate risks highlights the increased risks 
for  energy  security,  in  particular  electricity  disruption  due  to  heat,  wildfires,  droughts,  and  floods 
affecting peak demand, all of which impact production, storage, transport, and distribution60. Climate 
risk planning needs to be strengthened within the energy sector. 

Even though some local events, owing to extreme weather conditions (e.g. winter storms) or failure in 
some infrastructure elements resulted in disturbances in some regions, over the last year, no major 
electricity  incidents  or  adequacy  issues  threatening  the  security  of  electricity  supply  were 
observed at EU level. Owing to good cooperation and coordination between all stakeholders across the 
EU, these local events did not spill over. Increasing renewable capacities help in ensuring local power 
generation  and  security  of  supply  by  reducing  imports  of  fossil  fuels  in  the  EU. At  the  same  time, 
availability of nuclear generation has been good thus far, and the same can be said on hydropower. The 
winter period risk assessment is being carried out.  

In the energy sector, the volume of cybersecurity incidents remained stable with no noteworthy 
events or incidents of significant impact reported during the last year. On infrastructure, the Estlink 
2 electricity transmission cable link between Finland and Estonia was disconnected from the grid on 26 
January due to a malfunction. The cable is expected to be  repaired by mid-September. The recently 
adopted  NIS  2  Directive  and  Critical  Entities  Resilience  Directive  will  contribute  to  increasing  the 
resilience of energy infrastructure. Additionally, the Commission has analysed the reports of the stress 
tests in the energy sector carried out by Member States and has proposed follow-up actions to Member 
States, who will decide on the way forward. 

To  strengthen  the  resilience  and  protection  of  critical  maritime  infrastructure,  including  inter  alia 
undersea  pipelines,  against  hybrid  and  cyber  threats,  the  Commission  has  revised  the  EU  Maritime 
Security Strategy and its Action Plan in October 2023.  

59 The gas SoS Regulation allows member states to activate three different crisis levels: “early warning” (an 
event is likely to happen), “alert” (disruption has occurred but the market can cope) and “emergency” (gas 
supply is insufficient and non-market-based measures are needed). 
60 COM(2024)91 final. 

16 

 
 
 
Given  the  significant  societal  and  economic  importance  of  energy  security,  energy  is  explicitly 
prioritised  also  in  the  context  of  the  Joint  Commission  /  High  Representative  European  Economic 
Security Strategy. Since  June 2023, both resilience of supply chains and the physical and cyber security 
of critical infrastructure have been prioritised in such a Strategy.  

3.4. Energy markets, including energy poverty 

Over  the  past  few  years,  the  Commission  has  led  significant  and  far-reaching  reforms  to  the 
European energy market organisation in the form of the recent Electricity Market Design (EMD) 
reform,  the  Hydrogen  and  Gas  Markets  Decarbonisation  Package  and  the  reform  of  the Wholesale 
Energy Market Integrity and Transparency (REMIT) Regulation. The recent legislative packages will 
all  require  extensive  revisions  of  tertiary  legislation  to  trigger  the  necessary  changes  on  the 
ground.  For  gas,  this  concerns  the  areas  of  capacity  allocation,  congestion  management  and 
tariffication. For electricity, new tertiary legislation is being developed concerning demand response in 
wholesale electricity markets and the use of flexibility solutions by grid operators. To further enhance 
the development of flexibility in the power system and the electricity markets, the Commission has 
closely engaged with Member States to follow-up on the implementation of the Electricity Directive, 
particularly the provisions related to demand side flexibility. 

Several key policies have been put into place with the purpose of identifying and speeding up 
cross-border  and  national  infrastructure  development.  The  European  Network  of  Network 
operators of Hydrogen was created to develop non-biased and targeted EU hydrogen ten-year network 
development plans. The EU grid action plan and the first list of Projects of Common and Mutual Interest 
were adopted and accelerated permitting provisions were put in place through Emergency Regulations, 
the revised REDIII and TEN-E requirements. 

Regarding energy poverty, in 2023, 10.6% of the EU population declared that they were not able 
to keep their home adequately warm. Compared with 2022, this share increased by 1.3 percentage 
points61,  in  a  context  of  energy  crisis  and  inflation.    The  situation  varied  across  the  EU  countries 
promoting measures to protect households.62 The  new energy market legislation will better safeguard 
vulnerable households and those affected by energy poverty from disconnection. In case of a natural 
gas price crisis, EU-level emergency measures can help to protect consumers  through interventions on 
retail price caps.  Member States can also act to ensure access to essential services and shield vulnerable 
consumers from excessive costs, addressing energy poverty directly. 

The Social Climate Fund, which entered into application in 2024, will mobilise at least euro 86.7 bn of 
EU ETS revenues for the period 2026-2032, including 25% Member State co-funding, to contribute to 
a socially fair transition towards climate neutrality. The Fund will finance measures and investments 
which the  Member  States will  compile  in  their  Social  Climate  Plans  by  June  2025  and  should  help 
compensate the expected increase in energy bills due to the introduction of carbon pricing for heating 
and  transport.  The  Commission  has  established  an  expert  group,  where  the  Commission  and  the 
Member States share good practices and exchange views on the preparation of the Fund. Since June 
2024, the Commission provides support to 10 Member States for the preparation of their Social Climate 
Plans through the Technical Support Instrument. 

Research, innovation, and competitiveness 

61   Source EU SILC survey. 
62   The highest shares of people unable to keep their home adequately warm were reported in Spain (20.8%), 
Portugal (20.8%), Bulgaria (20.7%) and Lithuania (20.0%). In contrast, Luxembourg (2.1%), Finland (2.6%), 
Slovenia (3.6%) and Austria (3.9%) reported the lowest shares. 

17 

 
 
 
EU  manufacturers  face  growing  competition  in  net-zero  technologies  on  global  and  domestic 
markets. Compared to 2022, EU production value of Li-ion batteries and heat pumps increased the 
most in 2023 (around 30%), followed by fuel cells (18%), ocean energy technologies, biofuels (ethanol) 
and CCUS (nearly 10%)63. While Li-ion batteries have the highest production value in the EU in 2023 
(EUR 21 billion), the EU also had its largest trade deficit in this technology (nearly EUR 19 billion). 
Solar PV showed a similar deficit, yet at a much smaller EU production value (EUR 2.1 billion). In the 
case of batteries, the trade deficit increased by 21% compared to 2022, while for solar PV it declined 
by 13%. From the net-zero technologies with a trade surplus in 2023, the most prominent was wind 
(EUR 1.7 billion), where imports fell by 65% and exports increased by 50% compared to the previous 
year.  Heating  and  cooling  networks  had  the  second  largest  surplus  (EUR  1.3  billion)  followed  by 
hydropower (EUR 0.2 billion). During 2021-2023, EU exports of wind rotors held the largest share in 
global exports of the technology (67%), followed by solar thermal and hydropower technologies with 
around 40%. 

The  Commission  revised  the  SET  Plan  in  2023  and  included  it  in  the  Net-Zero  Industry  Act, 
strengthening its role in implementing the research, innovation and competitiveness pillar of the Energy 
Union  and  recognizing  its  contribution  to  the  EU’s  manufacturing  capacity  of  strategic  net-zero 
technologies. 

Research & innovation (R&I) remains key to ensure the future competitiveness of EU companies 
in  cutting-edge  net-zero  industry  technologies.  In  this  context,  the  continued  implementation  of  the 
2022 EU Action Plan on the Digitalisation of the energy system64 contributed to foster digital innovation 
in the EU, for example by developing a digital twin of the EU’s electricity grid and by defining smart 
grid indicators to promote a faster uptake of smart and innovative grid technologies.  

To bridge the gap between research & innovation (R&I) and market uptake in new or early-stage 
clean tech sectors, the Commission will continue to support  R&I in close partnership with Member 
States through the Strategic Energy Technology (SET) Plan and its Implementation Working Groups to 
define joint research and innovation agendas in strategic sectors as the recently published one on solar 
technologies65. It is also critical to foster partnerships with industry and transport sectors to accelerate 
the development of net-zero technologies, accelerate market-uptake of R&I results and strengthen the 
EU’s manufacturing base, for instance by developing strong links between the European Technology 
and Innovation Platforms and industrial alliances (the European Battery Alliance, the European Clean 
Hydrogen  Alliance  and  the  Solar  PV  Industry  Alliance),  to  promote  the  development  of  viable 
investment projects and manufacturing capacity in clean energy technologies in the EU, and to address 
market,  regulatory,  infrastructure  and  technological  barriers  to  their  large-scale  deployment.  The 
Innovation Fund, with its estimated budget of around EUR 40 billion until 2030 from the sale of EU 
ETS allowances, plays a crucial role in this regard. The clean transition dialogues2 with industry and 
social  partners  helped  to  strengthen  and  support  the  implementation  of  the  European  Green  Deal, 
contributing to a reinforced industrial approach. 

Co-benefits of the energy transition 

Beyond  decarbonisation,  increasing  energy  efficiency  and  the  use  of  non-combustible  renewable 
sources of energy helps to reduce pollution in line with the goals set out in the Zero Pollution Action 

63 Calculations for the forthcoming 2024 reports of the Clean Energy Technology Observatory (CETO). For 
more information: Clean Energy Technology Observatory. 
64 COM(2022) 552 final. 
65COMMISSION STAFF WORKING DOCUMENT Solar energy joint research and innovation agenda with 
Member States in the context of the European Research Area (ERA).  

18 

 
 
 
 
Plan66,  e.g.  by  tackling  air  pollution  and  reducing  the  associated  premature  deaths  and  ecosystem 
impacts. Ambitious measures will thus help Member States to deliver on targets linked to clean air, 
including the more ambitious air quality standards of the revised Ambient Air Quality Directive. The 
(ongoing)  evaluations  of  the  Governance  Regulation  and  of  the  National  Emissions  reduction 
Commitments  Directive  2016/2284  are  an  opportunity  to  streamline  the  links  between  energy  and 
climate and clean air policy further.67  

4.  CONCLUSIONS 

During the past years, the EU has proven to live up to its commitments, by taking firm actions to ensure 
its security, progress in the clean energy transition and unwavering solidarity to Ukraine. It has acted in 
unity to achieve the objectives of the REPowerEU Plan, with a view to building a more secure and 
decarbonised energy system for all Europeans.  

Such an objective is far from easy, especially in view of the rapidly evolving geo-political context and 
unprecedented crises faced by the EU. Nevertheless, as shown by the data presented in this report, the 
timely, concerted action at Member State, EU and citizen levels, has avoided the worst effects of the 
energy crisis by saving energy, diversifying our supplies and taking action to address the drivers of EU 
structural  weaknesses  by  strengthening  measures  towards  climate  neutrality,  and  a  genuine  energy 
union, centred on the ramp-up of clean energy.  

In an increasingly geopolitically divided world, the importance of security of supply, energy security, 
sustainability and resilience issues combined with increasing impacts of climate change on preparedness 
within the energy sector, have come to the fore, such as the challenge to the competitiveness of the EU’s 
industry, transport and supply of critical raw materials. Here the EU has swiftly acted by strengthening 
its international partnerships and by adopting of the NZIA and the Critical Raw Materials Act, but also 
by inviting strategic reflections of Mario Draghi and Enrico Letta 

With a solid foundation forged by relentless cooperation and solidarity, the EU is better prepared to 
navigate the profound changes and challenges that are ahead,  

Yet, new and emerging challenges such as the ambition gap in renewables and energy efficiency targets, 
the increase of energy poverty, the energy price differential compared to other global competitors and 
the risk of new strategic critical dependencies require in the next years a decisive policy response and  
a  step  change  in  efforts  both  at  EU  and  Member-State  level,  through  more  coordination,  market 
integration and joint action..  

The  Member  States  submission  of  their  final  updated  National  Energy  and  Climate  Plans  (NECPs) 
present a crucial milestone in this regard as they will both need to live up to the ambition of the 2030 
EU targets and further accelerate the implementation towards these targets and are thus at the centre of 
the EU and Member State delivery strategy towards the Energy Union’s objectives.  In the context of 
increasing focus on implementation of EU climate and energy legislation, all Member States must step 
up efforts to ensure a sufficient level ambition and ensure that the European Union is on track towards 
its collective energy and climate targets for 2030. The Commission urges the remaining Member States 
to submit their plans without delay to enable a swift and comprehensive assessment at EU level, while 
proving  a  solid  springboard  to  address  bottlenecks,  discuss  best  practices,  and  improve  regional 
coordination and enable a rapid and agile delivery of our 2030 objectives. 

66 COM(2021) 400 
67 More evidence will be published in the next Zero Pollution Monitoring and Outlook scheduled for end 2024.   

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