THREAD:
1/ The EPSC - the European Commission's @ECThinkTank - has launched a new report on key trends shaping climate & energy policy in the short- to medium-term (2025-2030). The publication is aimed at laying the groundwork for upcoming discussions on stronger implementation.
1/ The EPSC - the European Commission's @ECThinkTank - has launched a new report on key trends shaping climate & energy policy in the short- to medium-term (2025-2030). The publication is aimed at laying the groundwork for upcoming discussions on stronger implementation.
2/ The publication identifies 10 key trends in total, which I will try to summarize here in condensed form. However, I encourage you to also take a closer look at the publication and follow @EPSC @phil_offenberg @AndouraSami if you are interested in digging deeper.
3/ Trend 1: The impacts of climate change are real in the EU today, no longer a distant threat.
Global warming has already reached 1°C above preindustrial levels and is increasing at approximately 0.2°C per decade leading to weather-related disasters (€290 bn in losses '17).
Global warming has already reached 1°C above preindustrial levels and is increasing at approximately 0.2°C per decade leading to weather-related disasters (€290 bn in losses '17).
4/ Climate change is also increasingly having a human toll (loss of life, displacement, health impacts).
Despite potentially vast common benefits, the world is not on track to limit global warming well below 2°C/1.5°C. But, inaction is driving local and legal action.
Despite potentially vast common benefits, the world is not on track to limit global warming well below 2°C/1.5°C. But, inaction is driving local and legal action.
5/ Trend 2: The energy mix is shifting from fossil fuels to renewables in the EU and globally.
Renewables will soon make up 20% of final energy consumption in the EU, and fossil fuels have declined from 81% (1995) to 72.6% (2016). The EU's new renewables target is 32% by 2030.
Renewables will soon make up 20% of final energy consumption in the EU, and fossil fuels have declined from 81% (1995) to 72.6% (2016). The EU's new renewables target is 32% by 2030.
6/ The cost of wind & solar (-70% vs 2010) has fallen dramatically, one reason why the power sector has seen the highest uptake of RES despite barriers to project development and grid integration.
RES for heat and transport have a longer way.
Fossil fuels still get €$.
RES for heat and transport have a longer way.
Fossil fuels still get €$.
7/ Trend 3: Clean technologies are opening up new opportunities for industry and investors.
Climate friendly business is not just CSR, but big business (€1 trillion p.a. globally).
Low-carbon technologies are a major trade opportunity, especially between the EU & Africa.
Climate friendly business is not just CSR, but big business (€1 trillion p.a. globally).
Low-carbon technologies are a major trade opportunity, especially between the EU & Africa.
8/ However, capital markets are slower to align with the climate economy (esp. large institutional actors).
Innovative investment tools(eg green bonds) are gaining traction, but held back by a lack of common definitions and standards, and insufficient long-term risk management.
Innovative investment tools(eg green bonds) are gaining traction, but held back by a lack of common definitions and standards, and insufficient long-term risk management.
9/ Trend 4: The environmental economy is growing fast – but not for everyone.
EU employment in renewables surpassed 1.4 million in 2017 (Globally: 10 million), and is set to grow +1.5 million net jobs by 2030.
However, traditional, fossil- fuelbased industries are struggling.
EU employment in renewables surpassed 1.4 million in 2017 (Globally: 10 million), and is set to grow +1.5 million net jobs by 2030.
However, traditional, fossil- fuelbased industries are struggling.
10/ The switch to electric cars risks could make many jobs in the
car production & maintenance workforce redundant. Moreover, new jobs in clean tech will require new skills, and skillsets are trailing.
Energy costs will need to be fair and manageable for the poor and industry.
car production & maintenance workforce redundant. Moreover, new jobs in clean tech will require new skills, and skillsets are trailing.
Energy costs will need to be fair and manageable for the poor and industry.
11/ Trend 5: Energy demand is being transformed to become more efficient and responsive.
A shift in policy from the supply- to the demand-side (incl. mandatory standards) has strongly reduced energy intensity and consumption in Europe with large economic and climate benefits.
A shift in policy from the supply- to the demand-side (incl. mandatory standards) has strongly reduced energy intensity and consumption in Europe with large economic and climate benefits.
12/ A shift towards more circular modes (eg. reuse/recycling) of production and consumption is driving a complementary shift towards energy and carbon efficiency.
However, growing global demand (wealth/population) and the potential for rebounding energy demand are challenges.
However, growing global demand (wealth/population) and the potential for rebounding energy demand are challenges.
13/ Trend 6: Digitalisation is key for energy transition, but comes with risks.
Digitalisation is accelerating, and can enable and empower consumers.
Global investment in smart grids is 📈 (€40 bn in 2016).
The # of energy tech companies and platforms is growing.
Digitalisation is accelerating, and can enable and empower consumers.
Global investment in smart grids is 📈 (€40 bn in 2016).
The # of energy tech companies and platforms is growing.
14/ However, digitalisation also brings risks and can 📈 energy demand.
In past years, several major cyberattacks have targeted energy companies. In future they could become more destructive and serve political purposes.
Interconnected grids could allow cascading effects.
In past years, several major cyberattacks have targeted energy companies. In future they could become more destructive and serve political purposes.
Interconnected grids could allow cascading effects.
15/ Trend 7: Renewables & electrification are driving democratisation & decentralization, but also pose challenges.
The📈 in RES (especially small-scale solar) is enabling millions of consumer to self-produce electricity, democratising and deconcentrating energy investment.
The📈 in RES (especially small-scale solar) is enabling millions of consumer to self-produce electricity, democratising and deconcentrating energy investment.
16/ However, this trend is driving more complex ownership structures, beginning to threaten incumbent utilities, and posing new technical challenges to current grid operational practices and regulatory
frameworks primarily designed for a centrally-controlled system.
frameworks primarily designed for a centrally-controlled system.
17/ Trend 8: Energy demand is rapidly growing in Asia, which is also driving innovation.
China will have massive growth in oil & gas demand and is the world's largest GHG emitter. Asia-Pacific accounts for nearly 50% of GHG emissions. But clean tech also sees massive investment.
China will have massive growth in oil & gas demand and is the world's largest GHG emitter. Asia-Pacific accounts for nearly 50% of GHG emissions. But clean tech also sees massive investment.
18/ China is the world’s largest destination for energy sector investment. It leads globally on solar PV production, EV sales, and soon battery cell manufacturing.
China is also investing massively in energy infrastructure and resources abroad, including in Africa and Europe.
China is also investing massively in energy infrastructure and resources abroad, including in Africa and Europe.
19/ Trend 9: A shift to clean tech may reduce traditional import dependencies, while creating new supply risks
With declining domestic production of oil, gas & coal, a shift to clean technology will help minimize the EU's dependence on fuel imports and diversify energy supply.
With declining domestic production of oil, gas & coal, a shift to clean technology will help minimize the EU's dependence on fuel imports and diversify energy supply.
20/ However, a large 📈of batteries, turbines and other clean tech will require stable supply of critical raw materials (eg. rare earths&cobalt) at low cost. Recycling & reuse can help, but imports of raw materials and intermediary components will 📈. Trade partnerships are key.
21/ Trend 10: The goal of 'net zero' emissions by 2050 is difficult, but increasingly achievable
While challenging, the EU long-term strategy shows that research, innovation & investment into innovative decarbonisation technologies could put carbon neutrality within reach.
While challenging, the EU long-term strategy shows that research, innovation & investment into innovative decarbonisation technologies could put carbon neutrality within reach.
22/ But, while EU public sector R&I funding is strong and private sector investment in R&I has been growing, the EU ranks last among major economies in terms of investments per GDP, often fails to bridge the gap from research to market, and risks losing its early-mover advantage.
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