European MEP Shares Complex State of Energy Policy

It has been a busy period for energy policy in the EU. The bloc continues to navigate the choppy waters of energy transition, energy security and energy affordability. Energy Intelligence has been in conversation with Green Member of the European Parliament (MEP) Jutta Paulus to discuss pressing energy issues at the EU level and in home market Germany — including the ever-increasing complexities of the conversation.

For one, some recent energy developments, including proposals for a net-zero industry act and a critical raw materials act, have protectionist aspects that could run counter to free market rules. Paulus notes this is a “tricky subject," adding “I'm totally in favor of saying we need to make sure that we are not completely dependent on China or any other country if we think of that, because things can change very, very quickly. But we have to acknowledge that we will probably never find sufficient resources in Europe for certain minerals, even in a more circular economy.”

Whether in the EU or outside, Paulus supports partnerships “based on fair terms." Paulus also notes there shouldn’t be any overexploitation of the global south again. “They are entitled to being part of the transition. Why shouldn't Namibia or Morocco or whoever produces the green steel have more profits in their country, instead of just exporting commodities.”

Fuels and Fragmentation

Transportation, in particular, is a tricky subject. Germany and other countries supportive of e-fuels, including Italy, managed to get e-fuels included in the 2035 ICE ban agreed this week. This highlights the influence of Germany on EU energy policy and a wider issue of fragmentation, where member states lobby for domestic measures that may not be popular with other bloc countries. Many see Scholtz' support for e-fuels as a concession to the country's powerful auto industry and going against his election campaigning, where he pushed a green agenda. “Chancellor Olaf Scholz campaigned as the climate chancellor and he is now not fulfilling his duty. I am really afraid about the long-term damage that this might do to the political process." Germany had previously agreed to support the ICE ban completely but withdrew its support this month, saying it would only back the ban if there was an amendment that allowed e-fuels. The timing of the e-fuels amendment was controversial because Germany and the other EU states had agreed the ICE ban through trilogue negotiations and Coreper, the Committee of the Permanent Representatives of the Governments of the Member States to the European Union. "At the last minute, we say, we decided otherwise now. Everyone is really afraid of the damage it could do to our political process in the EU.”

Russia Situation

In terms of the geopolitical situation, the EU is doing well diversifying away from Russian pipeline gas, and there is growing support for a ban on Russian LNG. “I don't see a scenario of the EU buying gas from this Russia again. I would love to see the EU being completely independent from Russian commodities today rather than tomorrow. And also, I'm not convinced that we need all this new LNG infrastructure, especially in my home country Germany. I do understand why it is done in a lot of member states, less from an energy policy point of view, but rather from a geopolitical point of view,” says Paulus.

Eyeing Methane

Paulus is heavily involved in pushing new methane regulations through the system and feels negotiations are making “pretty good progress." A European Council spokeswoman tells Energy Intelligence “the Parliament hasn’t reached a negotiating position yet. Once it has a position, the Council and Parliament can start negotiations on the final text." Last December member states backed a proposal to “introduce new requirements for the oil, gas and coal sectors to measure, report and verify methane emissions at the highest standard. Operators will need to carefully document all wells and mines, trace their emissions and take appropriate mitigation measures to prevent and minimize methane emissions in their operations."

Paulus is fighting to get methane emission regulation extended to imports, especially LNG. “That is my main goal, saying this regulation should be applied to importers. If you are an importer who brings oil and gas into the EU, then you have to make sure that your supplier company abroad applies the same rules to its methane emissions, as we are doing inside the European Union.”

Germany's Goals

Germany is considering building double-digit gigawatts of new gas-fired power stations, albeit with an understanding they will be hydrogen-ready. Paulus says Germany will need back-up open-cycle units when there is not enough wind or solar PV availability. “Germany has a lot of critical infrastructure that requires constant electricity supply, such as furnaces used in glass production. Hydrogen-ready gas turbines can be used, but currently these can only run on a maximum of 80% hydrogen, so natural gas will still be needed,” warns Paulus.

Germany plans to increase LNG terminal import capacity to diversify away from Russian pipeline gas and eventually LNG. “A lot of people say we shouldn't have built a single terminal. I think this is not a good idea. From a geopolitical point of view, we really should make this very clear statement. We are never again going to become so vulnerable. The LNG import capacity may be too large just for Germany, but we also have to think of landlocked countries such as Romania, Austria, Czech Republic, Slovakia, which don't have sufficient capacities, and which so far have been supplied through pipelines from Russia,” says Paulus.