Accelerating Renewable Energy Production and Carbon Removals: Key Policy Changes and Challenges Ahead

The European Union is taking significant steps to increase renewable energy production and combat climate change with the introduction of RED III. This initiative aims to fast-track the permitting process for renewable energy projects by considering them to be of ‘overriding public interest’. This means that approvals for new renewable energy plants, grid connections, and storage facilities could be expedited.

Currently, the EU needs to add almost 600 GW of solar PV capacity and over 500 GW of wind capacity to meet its climate targets. To achieve this, 48 GW of solar PV and 36 GW of wind capacity need to be added annually until 2030.

RED III will work in conjunction with the EU Reform of the Electricity Market Design initiative to protect consumers and producers and boost renewable energy. Consumers will have the right to multiple contracts, including forward contracts to lock in future prices. Power Purchase Agreements will be promoted to protect against price volatility and encourage investment in renewables. Additionally, two-way Contracts-for-Difference will provide price stability for power producers and shield industries from price fluctuations.

In the transportation sector, the EU aims to reduce greenhouse gas emissions by 90% by 2050 compared to 1990 levels. Zero-emission vehicles, particularly electric vehicles (EVs), are crucial to achieving this goal. However, the infrastructure for charging stations and capacity enhancement needs to be widely available. The EU estimates a need for three million charging points by 2030, but the current number is less than 500,000. The introduction of the AFIR will set binding deployment targets for recharging stations for cars, vans, heavy-duty vehicles, and hydrogen refueling at maritime ports and airports.

Furthermore, the EU is expected to approve the Carbon Removal Certification framework in 2024, which will certify high-quality carbon removal activities such as carbon farming, permanent storage, and carbon storage in long-lasting products. This framework will enhance the voluntary carbon market by ensuring projects are of high quality and removals are quantified, monitored, and verified.

Despite these advancements, there are still challenges that need to be addressed, including funding gaps, emissions accounting challenges, and mitigating emissions beyond a company’s value chain. The European Commission estimates that €1.25 trillion will need to be invested by 2030 to meet climate and energy security needs, with the majority of funding expected to come from the private sector.

In conclusion, the EU’s efforts to accelerate renewable energy production and combat climate change are commendable. With initiatives like RED III and the Carbon Removal Certification framework, the EU is paving the way for a greener and more sustainable future. Companies are encouraged to take action now by reducing carbon emissions across their value chain, focusing on electrification, renewables, and green infrastructure, and investing in projects that mitigate emissions beyond their own operations.