New EU legislation to decarbonise sectors across the economy is in the process of being finalised. As we start December, we look at latest progress.

We initially summarised the Fit for 55 and REPowerEU packages here and here and checked in on progress last month here.

Renewable Energy Directive

REPowerEU included a proposal to speed up the permit-granting process for renewable energy projects, including by establishment of renewables “go-to areas” in which Member States would be required to ensure that the permit-granting process happens particularly swiftly. “Go-to areas” have appeared again as “renewables acceleration areas”.

MEPs in the Industry, Energy and Research Committee have now voted to shorten the maximum period for the permit-granting process for new installations from 12 to nine months, if located in a “renewables acceleration area”. The MEPs consider that, outside of these area, the process should not exceed 18 months. The new permit-granting process would cover all administrative steps to build, repower and operate plants for the production of renewable energy, including hybrid power plants. It would cover storage, connection to the grid and the integration of renewables into heating and cooling networks. MEPs also want to see tighter deadlines for repowering of projects in “renewables acceleration areas”. This will next be considered by a plenary sitting of the Parliament. Further information is available here. The current position in this area is in Article 16 of the Renewable Energy Directive II.

In the meantime, agreement was reached to implement a temporary Regulation to facilitate faster delivery of renewable energy projects. We look at the Regulation here and further information is available here.

Energy Performance of Buildings Directive

The proposal will be considered in the plenary sitting of the Parliament on 12 December 2022. The opinion of the Parliament Committee on the Environment, Public Health and Food Safety was published and the Economic and Social Affairs Committee endorsed the text of the proposal.

Effort Sharing Regulation

Provisional agreement has been reached on revision of the Effort Sharing Regulation, under which Member States commit to reduce greenhouse gas emissions in sectors which to date have not been included in the EU ETS. Further information is available here, here and here. The Parliament is expected to adopt the draft at the next plenary session, following which the Council can adopt the Regulation, and it can be published in the OJEU and enter into force.

New Legal Package for Gas

The Commission published corrected versions of its proposals for a Regulation and Recast Directive on the internal markets in renewable and natural gases and hydrogen. The Parliament’s Industry, Research and Energy Committee is now considering the proposed texts of the Regulation and Directive.  ACER has published a study on future regulatory decisions for gas infrastructure, which considers some aspects of the proposed legislation.

Land Use, Land Use Change and Forestry

Provisional agreement has been reached on the proposal to revise the Regulation on Land Use, Land Use Change and Forestry. It now will be formally adopted by the Parliament and Council, following which it can be published in the OJEU and enter into force. This increases the 2030 target for net carbon removals by natural sinks from 268 to 310 million tonnes of CO2 equivalent. The “no debit rule”, under which emissions from land use are required to be compensated by an equivalent amount of CO2 removal, will continue to apply until 2025. In 2026-2030, removals should exceed emissions, and each Member State will have a binding national target for 2030. The agreement maintains the distribution of targets between Member States proposed by the Commission here. Further details from the institutions are available here, here, and here. Meanwhile, in the context of methane reduction, Executive Vice-President of the Commission Timmermans indicated that 40% of next year’s budget for the Common Agricultural Policy is dedicated to climate action.

Energy Taxation Directive 

The Economic and Financial Affairs Council will debate the proposal for a Recast Council Directive restructuring the Union framework for the taxation of energy products and electricity. The proposal seeks to align taxation with climate policies, for example by addressing exemptions and reductions in energy taxation. Questions to facilitate the debate have been published here.

Recovery and Resilience Funding

To address additional funding required to implement REPowerEU, the Commission proposed a Regulation to provide for REPowerEU chapters in recovery and resilience plans, with the intent of integrating the REPowerEU plans into Member States’ recovery and resilience plans. The Parliament has now approved its negotiating position and informal trialogue negotiations are expected to start. MEPs wish to secure additional funding from the EU ETS and other sources. Further information is available here.

Budget

The 2023 budget was signed into law with increased funding for energy and climate, including through the Connecting Europe Facility.

An overview of progress on the European Green Deal is available here.