New REPowerEU energy deal a step forward – but not far enough

EPSU banner New REPowerEU energy deal a step forward – but not far enough

(20 December 2022) The Council of the European Union and European Parliament have struck a series of deals aimed at diversifying Europe’s energy supplies, accelerating the deployment of renewable energy and reducing emissions.

The provisional agreement on the REPowerEU aims to increase the resilience of the EU’s energy system by reducing dependence of fossil fuels and diversifying energy supplies, including by increasing the uptake of renewals, energy efficiency and energy storage capacity. On many levels, REPowerEU recognises several EPSU positions by acknowledging the critical impact of rising energy prices and its contribution towards inflation as well as pledging to address energy poverty. The deal is a strong step forward for renewable energies, including green hydrogen and biomethane. It also outlines the acceleration of the permit-granting process and deployment of renewable energy projects, measures which EPSU and the social partners in the electricity sector believes are fundamental to achieving just transition

The REPowerEU agreement, however, does not place enough value on workforce strategy. The shifts towards renewable energy envisioned by the strategy require significant investment in skills – including upskilling and reskilling. Social dialogue and collective bargaining are crucial to ensuring quality of jobs. There can be no transition towards renewable energy without workers, and further legislative proposals must reflect this.

The plan is also missing deeper reflection on the liberalisation practices that have created our current energy model. In 2019, EPSU presented an analysis of the impact of liberalisation on the energy market, concluding that the process was overwhelmingly negative for both workers and users. If the EU is to succeed in strengthening the resilience of its energy market, these failures must be rectified.

EPSU welcomes the EU’s initiative to reform the electricity market and is looking forward to engage with the European institutions to offer alternative models of electricity supply. It is essential that decision makers stop the dogmatic pursuit of liberalisation and competition as an end in itself. Public control and planning are key if we want to provide clean, affordable, reliable energy to Europeans, public services and industry.

An agreement has also been reached on the EU Emissions Trading System for heating and transport – against calls for its rejection by EPSU, the ETUC and the Right to Energy coalition. We maintain our position, adopted at the Utilities Standing Committee in May 2022, that the improvements in emissions from the measure will be only minor. At the same time, this market based system is likely to create further financial hardships for low-income households, who are often least able to afford renovations.

The new agreement, however, comes with the establishment of a Social Climate Fund to support those impacted by the ETS system, including vulnerable households. Following our calls for greater ambition from the Social Climate Fund, we welcome the news that budget has been raised to a more ambitious €86.7 billion, up from €65 billion.

More promising than further market based approaches is the European Performance of Buildings Directive (EPBD). However, the recent position taken by EU’s energy ministers is another step backwards for Europe’s workers and citizens, undermining the potential that the Directive has to contribute to a fair and just transition. As part of the Right to Energy coalition, EPSU recently called on the European Parliament to support the implementation of ambitious Minimum Energy Performance Standards to protect those vulnerable to energy poverty from unaffordable energy bills.