The Brussels Conversation: A New Green Era Threatens Gas

Ursula von der Leyen, the German ex-defence minister who will lead the European Commission from 1 November 2019, has said her main priority will be to make Europe the world’s first climate neutral continent by 2050. She intends to put this ambition into law in her first 100 days in office, calling it “the greatest challenge and opportunity of our times”.

To make it happen, von der Leyen wants to raise the EU’s greenhouse gas emission reduction target for 2030 from 40% to 55%, extend the EU Emission Trading Scheme (ETS) from power and industry to shipping, road transport and buildings, introduce a carbon border tax, create a new “just transition” fund to help out for fossil-heavy regions, and take forward the EU’s sustainable finance agenda, including at least doubling the European Investment Bank’s climate investments to 50% by 2025.

It all adds up to a “European Green Deal” that takes the top slot in her manifesto, ahead of traditionally more popular topics such as the economy and migration. Some complain – and others rejoice – that climate neutrality seems to be the lens for all policymaking in Europe right now. Movements like #FridaysForFuture have helped force climate and environment into the political mainstream, with a noticeable impact on elections for a new European Parliament in May too. 

“There was no green wave,” insisted the then president of the European liberals Hans van Baalen in the aftermath of those elections at a debate in Brussels June 5. True, the Greens did very well in some countries – Germany, France, Ireland, Portugal, Finland and the UK – but not everywhere. For example there were no Green MEPs elected in central and eastern Europe, nor in Italy. Overall however, they emerged a clear winner.

With MEPs from smaller parties also jumping on board post-election, the Green group grew its parliamentary presence from 52 to 75 seats to make up almost a tenth of the new Parliament (total: 751 MEPs). In Germany, the Greens won one in five votes, nearly twice that five years ago, coming in second after Angela Merkel’s centre-right CDU/CSU. They beat all three existing far-right, populist and Eurosceptic groups, whose gains were in the end less substantial than opinion polls had predicted.

All in all the new parliament is a more progressive one than its predecessor. The Greens may not have got any of the top jobs, but their influence will be stronger as the fourth largest political group in a parliament where centre-right and centre-left have lost their historic majority. On top of that, the climate and environment agenda has powerful allies among the socialists and liberals too. It was these groups who got von der Leyen to go as far as she did in her climate promises - she needed their support to win the presidency.

The parliament’s environment (ENVI) committee, which will take the lead on climate legislation, will be headed up by Pascal Canfin, a French liberal who was director of WWF France until March and previously served the European Parliament as a Green. His first vice-chair is Bas Eickhout, a prominent Dutch Green who has led work on issues such as sustainable finance, CO2 emission standards for trucks, and biofuels. The ENVI committee is, wth 76 members, now the Parliament’s largest. 

Its sister committee, the energy, industry and research (ITRE) committee will be headed up by the ex-ENVI chair, Romanian centre-right MEP Adina-Ioana Valean. She was voted Brussels’ fourth most influential MEP this spring. ITRE will take the lead on energy legislation, including a new gas package foreseen for 2020. The two committees are likely to share responsibility on certain files however: ITRE will have a say on carbon neutrality by 2050 and ENVI could help define decarbonised or renewable gas, for example.

The parliament’s co-legislator, the Council of Ministers, is made up of the EU-28’s national governments and was as a result not directly affected by parliamentary elections in May. It remains deeply divided into north, south, east and west. Here, climate and energy issues are entangled with other priorities, such as rule of law and access to EU funds.

There is an interesting interplay between the national and European level. The German Greens believe that their influence on Germany in the Council may prove more important than the seats they won in the parliament, for example. The president of FranceEmmanuel Macron led a green campaign that swelled the ranks of the liberals in Brussels, but led to a narrow loss to right-wing Le Pen at home. Italy remains a wild card at home and abroad, and new elections threaten in Spain. 

European countries are in the process of putting forward candidates for the new college of 27 commissioners – the UK prime minister Boris Johnson has already said the UK will not be needing one – who are due to take over the EU’s political leadership under von der Leyen on 1 November. Who makes it through – and who gets which portfolio – will not be known until the autumn. MEPs will hold public hearings of the candidates after the summer break, in September and October.

Observers suggest France might make a bid for energy and climate however, or indeed the position of vice president for carbon neutrality, which some senior EC officials suggest should be created. The current climate and energy departments could be merged or re-organised more dramatically, for example mixing in industrial policy. Member states have asked the EC to come up with a new industrial policy strategy by the end of 2019. For some senior officials, it is clear that climate must be at its core.

Climate action is one of the EC's smallest departments, with just 185 staff at the start of 2019, compared with nearly 900 in industry and over 3,200 in development, the biggest. Its energy department has under 600 staff. If carbon neutrality is von der Leyen’s top aim, she will need to devote resources as well as political priority to it. Some senior officials would like to see insitutional reform to align with this aim in parliament and the council too, but so far there is no sign of this.

Yet the stage is set for a new EU policy cycle to chart out the path to net zero emissions in 2050. European leaders still have to sign off on that goal, of course, but Poland and its allies are widely expected to come on board as the EU wraps up its talks on the bloc’s next budget for 2021-27 at the end of the year.

Then von der Leyen will have to start acting on some of her promises. The European gas industry faces mixed prospects. It is currently benefiting from an EU carbon price that is close to €30/metric ton – that is triggering a coal-to-gas switch in power generation. But it faces the prospect of a carbon price on heating fuels and persistant doubt over its green credentials in the sustainable finance discussion. The latter is what is worrying the sector most. Trade association Eurogas has finally come out and signed up to carbon neutrality by 2050, but many wonder if the European gas industry can deliver.