POLICY BRIEFING 04 October 2019

EUROPEAN PARLIAMENT HEARING SUMMARY Kadri Simson, Commissioner-designate for Energy

Hearing of Kadri Simson, Commissioner-designate for Energy – 3 October 2019 – Joint ITRE/ENVI hearing:

Kadri Simson, Commissioner-designate for Energy with her introductory statement:

• she reflected the citizen concerns for tackling the issue of climate change and stressed the key role that Energy policies would play in this fight; • she complimented the work done the last five years as a great legacy to build on. However, the work was far from done, as attaining climate neutrality by 2050 was mandatory in order to prevent irreversible damage. Von der Leyen proposed the European Green Deal which would be taken forward with the supervision of Mr Timmermans; • she referred to her experience as Minister for Energy, working in the adoption of Estonia’s long-term energy action plan with a greenhouse gas (GHG) reduction target of 70% by 2030 that would see a jump in the share of renewables from 33% in 2020 to 42% in 2030; • in order to provide energy actors with certainty and predictability, the Commission would propose a European Green Deal in the first 100 days in office, with its central piece, the Climate law which would be accompanied by a Just Transition Fund. This would set the direction and the next steps would be to build on the success of the Energy Union; • she emphasised her commitment to working hard in the proper implementation of the Clean Energy Package, which would lead to a 45% GHG reduction by 2030, and underlined that there were more than 100 delegated and implementing acts yet to be adopted. Similarly, she would ensure the delivery of ambitious NECPs by end of the present year and work together with MS to reach the desired goals; • Von der Leyen had committed to a GHG reduction of at least 50% by 2030 and planned for moving towards 55% in a ‘responsible way‘. In order for this to happen, she would evaluate the way the existing energy legislation could deliver more ambitious targets and assess its possible review, as well as she would contribute to the work on the carbon border tax and the revision of the Energy Taxation directive led by Mr. Gentiloni; • further developing a properly functioning single market would be essential in the promotion of the development of renewables as she was able to contribute to as a Minister, when she worked in the synchronisation of the network of Baltic states to the continental network. She called for the completion of the Energy Union by the end of the present mandate and stressed the need to further developing energy storage as well as to ensure that the interconnectivity targets are reached; • she would focus on the gas market, which would play an important role in the transition towards climate neutrality, focused on how to develop an infrastructure that was fit for the future through the use or renewable gases, such as hydrogen, renewables and the promotion of LNG, which had subject to a fruitful cooperation with the US; • there was a significant structural challenge, 200 Billion were needed until 2030 for the investment on completing the electricity market. In this same issue, she announced the review of TEN-E by 2020; • all available instruments should be harnessed in order to attract private funding for the vast amount of future-proof investments needed, combined funding under the next MFF could reach 132.2 Billion euros;

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• energy efficiency was of utmost importance, among which she highlighted the improvement of the energy performance of the building stock as a ‘game changer’ and pointed to more options to be explored for its financing; • she stressed that competitiveness had to be preserved in parallel with the transition so that special attention is paid to the energy prices for consumers and energy-intensive industries. Certain regions and sectors would experiment swift changes for which the Just Transition Fund would be instrumental in the transformation of the economies and job creation. • in her view, it was not acceptable that a 8% of European population were unable to heat their homes and wanted to make use of the Energy Poverty Observatory in order to implement its legislative provisions; • R&I was of pivotal importance for the emergence and scaling up of new green technologies and stressed her commitment to work together with Ms. Gabriel in gathering higher investments for this; • she stated her will to develop the digitalisation of energy sector with smart grids and interoperability, but also looking into AI or cybersecurity; • Europe needed to stimulate the commitment to the Paris agreement of other major emitters, she called for using energy dialogues in order to open markets for EU clean businesses and for connectivity projects; • she encouraged the Trilateral talks in Ukraine so that an agreement could be reached by the end of 2019; • finally she hoped to play her part in a ‘Europe that strives for more‘ and called for building ‘together‘ a Europe that leads the world climate action.

Jerzy Buzek (EPP, PL)

• the first task was the full and swift implementation of the legislative files that were passed in the last five years; • he asked Ms Simson how to facilitate green investments in low emission energy, for which he highlighted district heating, from EU and private sources, such as European Regional Fund or European Investment Bank, and how to ensure that the potential of gas is fully used in the energy transition.

Kadri Simson, Commissioner-designate for Energy

• she agreed that the biggest obstacle in the transition to climate neutrality was the need for investments, among which she highlighted energy efficiency, however, she was confident that the mainstreaming climate investments in the next MFF would alleviate this deficiency; • she reflected that the European Investment Bank was undergoing an analysis on its future lending procedures, which would be in the direction of becoming a ‘climate bank’ and stated her compromise to working together with Mr. Gentiloni on this.

Jerzy Buzek (EPP, PL)

• he emphasised on the importance of efforts to be made on regards to district heating and reflected that the proper implementation of the revision of the gas directive despite the ‘protest of Russia’ as this would play a great role in the district and individual heating of up to 15 MS.

Kadri Simson, Commissioner-designate for Energy

• gas was very important in the energy transition and even more so in district heating, due to its cost- efficiency when replacing coal based plants or facilities;

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• in her view diversification of energy sources was the way ahead but reflected that she did not foresee natural gas playing a role in the near future but more so the case of biogases and hydrogen, and the many possibilities that sector coupling offered in heating, industrial or transport.

Carlos Zorrinho (S&D, PT)

• he focused on the impact on the social consequences of the energy transition, which was a priority for his political group, considered that the Just Transition Fund would be of great importance on the matter and asked Ms Simson how she was planning to support Ms Ferreira in her mission; • he wondered if the Just Transition Fund would be a stand alone policy or rather part of a bigger plan.

Kadri Simson, Commissioner-designate for Energy

• she reiterated that the concept just transition would be at the core of her programme as she reflected that it should be of extreme importance in coal regions or small islands, which are isolated. She stressed however, that there would not be a ‘one size fits all approach‘; • the Just Transition Fund would be presented by Ms Ferreira, but reminded that it should incorporate efforts from MS and private capital as well. The fund would be operational before the phasing out period in order to cushion the effects and create new opportunities.

Carlos Zorrinho (S&D, PT)

• just transition should be about bringing along regions that depend on the extraction of polluting forms of energy; • he enquired more detail on the level of ambition Ms Simson envisioned for this fund, reflected that perhaps 4.8 Billion euros would not be sufficient and wondered that loans could play in this.

Kadri Simson, Commissioner-designate for Energy

• the Fund aimed at the most affected regions with the phase-out of fossil fuels; • measures that would ensure the affordability of energy prices were another relevant instrument to acknowledge in this matter; • she emphasised that locally-produced renewable energy should not be more expensive than fossil fuels that had high volatility in their prices and stressed that energy efficiency should be fundamental as well.

Morten Helveg Petersen (RE, DK)

• she noted that renewables needed to play a bigger role, wind and solar prices had been going down substantially, allowing for them to be competitive without subsidies; • he called for further development of off-shore wind and reflected that perhaps this should need to increase fivefold and asked Ms Simson for her plans for this further development of wind energy, particularly in the North Sea.

Kadri Simson, Commissioner-designate for Energy

• more capabilities were needed for renewables, she connected this with public acceptance, as this was higher for offshore facilities and reflected that the best locations for onshore wind were ‘already taken’; • need for close cooperation between MS and she anticipated a cooperation mechanism that would assist in the construction of joint facilities as part of the CEF. Another formula she supported was the organisation of auctioning mechanisms, in which a host MS could partner with other MS that may not have the same possibilities, for which she highlighted the cooperation between Luxembourg and Estonia.

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Morten Helveg Petersen (RE, DK)

• he wondered how she planned to ensure that financial mechanisms are in place in order to foster regional cooperation on energy, like in the North and Baltic seas; • he referred to Mr Buzek‘s question and enquired for more details on the role of loans in green development.

Kadri Simson, Commissioner-designate for Energy

• in the framework of regional cooperation, she believed that most projects would qualify for CEF funding but believed that their big dimension would require the search of co-financing from the EIB or private banks. She was positive, however, of the lowering of the prices that technology was allowing and hoped for the extra support schemes to not be necessary.

Ville Niinistö (Greens/EFA, FI)

• his political group was worried about her ‘climate credentials’ since, according to him, Ms Simson’s party rejected that Estonia would commit to the 2050 carbon neutrality target and due to her support to the oil-shale industry, a very polluting one. He highlighted that the Estonian government was trying to subsidise 1 Billion euro for this sector and the Estonian presidency supported the continuation of subsidies to the fossil fuel sector; • having this in mind, he questioned for Ms Simson’s commitments to the climate targets, having this ‘track record’.

Kadri Simson, Commissioner-designate for Energy

• she referred back to her opening remarks and underlined the Estonian commitment for a 70% GHG reduction by 2030. She stressed that an impact assessment was done at a national level and that climate neutrality for 2050 was being discussed at that same moment in Estonia.

Ville Niinistö (Greens/EFA, FI)

• he regretted not having an answer on his question about fossil fuel subsidies; • Von der Leyen commitment for 55% GHG reduction by 2030 was not enough and the NECPs showed a marked gap on efficiency and renewables. He asked Ms Simson about concrete measures that were needed to ‘promote the climate goals’.

Kadri Simson, Commissioner-designate for Energy

• oil-shale was historically Estonia’s source of energy and was declining in favour of renewables; • as regards to the EU 2050 strategy, she believed that with proper implementation, the energy sector was able to deliver what was promised at that time and after this, an agreement should be reached in order to attain the increased targets.

Markus Buchheit (ID, DE)

• in his view, the initiatives on sustainable finance would create market imbalances in the private sector, he would like to know Simson’s thoughts on how this was compatible with the principle of free market.

Kadri Simson, Commissioner-designate for Energy

• she believed that the private sector would benefit from the phase out of fossil fuels and from the R&I that bring new jobs and raise Europe’s competitiveness;

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• shifting to renewables would increase EU’s energy security but should be done in a cost-effective way;

Markus Buchheit (ID, DE)

• he reformulated his question, he referred to legislative packages that were asking industry to support certain policies in sectors in midst of major transitions, and he believed that this would indeed affect energy prices.

Kadri Simson, Commissioner-designate for Energy

• she believed that energy prices would stay competitive by investing on grids, by relying on an open and competitive market, by a truly interconnected energy market.

Zdzisław Krasnodębski (ECR, PL)

• he referred to the recent ECJ ruling on the Opal gas pipeline in which there was reference to the principle of energy solidarity; • he enquired if Ms Simson would think about applying this principle further with the creation of obligatory stress tests on the impact of the security of supply applicable to each new energy infrastructure also in line with the gas directive.

Kadri Simson, Commissioner-designate for Energy

• speaking about the set up of the future gas market, she considered that the principle of solidarity should be a main pillar; • she reminded that diversification of energy sources was desirable, as it was the case for Poland.

Zdzisław Krasnodębski (ECR, PL)

• he enquire about the way to ensure the consistence in the principle of technological neutrality in the transition to a carbon neutral economy, allowing each MS to decide its own energy-mix.

Kadri Simson, Commissioner-designate for Energy

• she confirmed that the energy mix was decided by each MS; • she stressed that investments in the gas network should be energy-proof, encouraging the investment in hydrogen and biogas.

Marc Botenga (GUE/NGL, BE)

• he referred to her mentions to using LNG at the greatest possible extent and enquire about which concrete measures did she have in mind, also on regards to investments on gas infrastructure; • on regards to the revision of the energy taxation directive, he enquired if this was going to be directed to reduce GHG and, if so, which fuel would it focus on and what exact measures.

Kadri Simson, Commissioner-designate for Energy

• she highlighted the fact that LNG would enhance the security of supply and referred to project in Croatia or Poland that contributed to this; • on energy taxation, she stressed that the current directive was outdated and not in line with climate targets. She reflected that certain tax exemptions that fossil fuels had left renewables in a disadvantageous position and the revision would tackle this.

Marc Botenga (GUE/NGL, BE)

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• he asked for a strong commitment in favour of renewables; • he was afraid that the citizens would end up ‘paying the bill’ of the energy transition.

Kadri Simson, Commissioner-designate for Energy

• shift of investments was needed indeed, with EU funds, next MFF, the new climate role of EIB or with the blending private capital through loans, about which she highlighted a scheme that would be managed by Mr Dombrovskis;

András Gyürk (EPP, HU)

• a successful implementation of climate goals needed public support, which required transparency and solidarity; • he asked for quantifiable analysis by the Commission on the feasibility of 2050’s target, taking every region on board and ensuring that energy prices would remain affordable.

Kadri Simson, Commissioner-designate for Energy

• different starting point across MS would mean different costs across MS, she committed herself to close cooperating with Mr. Timmermans, who will provide with the climate law. A thorough impact assessment and a comprehensive plan for attaining the 2050 targets would be ready by 2021.

András Gyürk (EPP, HU)

• on the matter of technological neutrality, in Central Europe region, nuclear energy was indispensable to eliminate fossil fuels without compromising security of supply and energy affordability; • he asked if Ms Simson agreed with the assessment made by the IEA in which the energy transition would become significantly more expensive without nuclear and asked for her opinion on the role which nuclear energy would have in the sustainable investment plan.

Kadri Simson, Commissioner-designate for Energy

• she reiterated that nuclear part would be part of the energy mix and highlighted that some MS were opening nuclear plants while others were phasing out; • at EU level, the priority was the safety of nuclear plants, in the EU itself and its neighbouring countries.

Niels Fuglsang (S&D, DK)

• he referred to her written reply in which she stated she would look into reviewing existing legislation in order to achieve the 55% GHG for 2030; • with this in mind, he enquired for her thoughts on raising the existing target for share of renewable energy for 2030, in line with what NGOs were calling for, which currently stood at 32% towards 45%.

Kadri Simson, Commissioner-designate for Energy

• she noted that the targets for 2030 were just negotiated and NECPs should be delivered at the end of the year, which should give more information on how exactly each MS would reach those goals. However, she emphasised that some MS decided to voluntarily raise their targets for renewables, in the Energy Council that took place the previous week; • it should be possible for some MS that do not have satisfactory ‘environmental conditions’ to cooperate with other MS in this regard.

Niels Fuglsang (S&D, DK)

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• he emphasised his question, and enquired if Ms Simson would review the RED in order to raise the renewables target for 2030.

Kadri Simson, Commissioner-designate for Energy

• she gave the example of Estonia, which raised significantly their targets on this regard; • she emphasised needed transformations such as investments in R&I, for energy storage, working at regional level so that renewables would reach the whole EU electricity market; • she underlined the important role to play by the cooperation mechanism she referred to earlier.

Claudia Gamon (RE, AT)

• her political group believed that time was running our for reaching the climate goals; • she reflected that, for some sources of energy such as hydropower or wind energy depended on the decisions of other Commissioners, and asked what she had in mind to unlock the full potential of these sources, as well as what she had in mind the cooperation with other DGs in order to build regulatory frameworks that would assist in this process.

Kadri Simson, Commissioner-designate for Energy

• she agreed that more facilities were needed in order to raise the percentage of renewables, for which investment was needed; • environmental restrictions and problems with public acceptance stood in the way; • planning processes for building infrastructure should become more swiftly; • cooperation was needed with Commissioners responsible for land use, in the case of biomass, or with the one responsible for fisheries, in the case of hydro power, for which she highlighted the existence of guidelines which were approved last year.

Claudia Gamon (RE, AT)

• coordinating all the efforts done at MS level in developing these projects on time, since they faced massive time delays and increases in costs, she would like to know what she had in mind to support this processes.

Kadri Simson, Commissioner-designate for Energy

• targets for renewables on 2020 would not be met, due to delays in implementation and for too optimistic calculations; • having annual data in reports from each MS would allow the Commission much more room for monitoring and assessing what needed to be done for ensure that initiatives were not delayed.

Peter Liese (EPP, DE)

• he regretted the opposition of Estonia to the 2050 target and enquired Ms Simson for her personal role on this and her personal position; • he asked if she did not trust the Commission analysis, back on November 2018, as she mentioned that the Estonian government was conducting their own analysis; • referred to a previous question by Mr Buzek on Russian interference in an ECJ gas case.

Kadri Simson, Commissioner-designate for Energy

• she explained that since March 2019 she was not a Minister any more so that her role in the Estonian position;

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• she focused on the ambitious Estonian climate plan adopted 2 years ago, which went through their parliament with a 80% GHG reduction target; • the Estonian government was on the verge of joining the 2050 climate neutrality target that week (it actually happened the same day of the hearing) and hoped for unanimity in the Council on the 2050 target by the end of the year

Peter Liese (EPP, DE)

• he insisted on her personal position, even not being a Minister, if she was part of a parliamentary majority that believed that Estonia could not commit to this target.

Kadri Simson, Commissioner-designate for Energy

• she believed that this question did not come in the Estonian plenary but rather on the EU affairs committee and clarified that the Estonian position was not to be against but rather to leave time for their procedures to be conducted; • she believed that after conducting their national impact assessments, they were in a much clearer situation than other MS when deciding their NECP; • she clarified her support to climate neutrality as to avoid the raising of the temperature above 1.5 degrees.

Josianne Cutajar (S&D, MT)

• the recent attacks on Saudi oil refineries demonstrated the fragile nature of security of supply; • efforts to diversify energy supply from third countries did not solve the underlying problem. Here she used the example of LNG to reduce dependency on Russian gas, whilst increasing oil prices could increase dependency on Russian oil; • she called for energy supply policy to speak about other aspects of the Energy Union, in particular the goal to reach a carbon-neutral economy, and asked what concrete measures the Commissioner- designate would propose to make the security of supply compatible with such other dimensions, in particular the decarbonisation of the energy system.

Ms Kadri Simson

• she acknowledged Europe’s dependence on energy imports. Imports of gas and oil would stay, also during the transition period; • at the same time she underscored that the protection of energy security was one of the EU’s principles and for that reason, energy sources and routes must be diversified; • she referenced previous questions about investments in gas infrastructure given the lack of investment in renewables. In her view, some of the investment in gas infrastructure, both for interconnections and LNG terminals, were part of the EU’s energy security. Situations where routes would be even more concentrated into the Baltic Sea and where the main supplier would get a bigger share were not in accordance with EU energy policy.

Josianne Cutajar (S&D, MT)

• her question about concrete measures regarding other dimensions, such as the decarbonisation of the energy system, had not been answered; • also connected to energy security, there were other new modern threats, for example the cybersecurity of grids, which could also be state-driven, or ensuring the resilience of infrastructure to climate change.

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What would be the Commissioner-designate’s initiatives in this area she asked, and were these dimensions at the top of her agenda. What would her legacy on energy security be, she questioned.

Ms Kadri Simson

• different energy sources did not come for nothing. She believed that certain investments should be done, especially in research and innovation; • if they were talking about gas right now, then this tended to mean natural gas. Hydrogen was not compatible with other energy sources and 95% of it came from natural gas. Only 5% of hydrogen derived from renewables, so research into hydrogen would be one of the research priorities; • there was also a need for research and innovation in storage, because higher amounts of renewables needed new options for storage and transportation.

Bronis Ropė (Greens/EFA, LT)

• he expressed concern about the Belarusian nuclear power plant that was being built near the EU border with Russian funds. EU stress tests, which had revealed problems in the structure of the plant, were being ignored; • what action could the Commissioner-designate take to avoid a new Chernobyl catastrophe he asked.

Ms Kadri Simson

• she acknowledged that the building process of the Astravyets nuclear power plant was an important political question for all Lithuanians as it was built very close to the capital; • as regards new nuclear power plant sites built in third countries, assistance could be provided so that the building and maintenance would take place under the highest security standards. Financial assistance to the sites in third countries could also be provided and they could insist that all their test results were taken seriously; • the Astravyets nuclear power plant would be operational, but guidance would be provided on how to fulfil all the security requirements according to the highest security standards. At the same time, the EU would provide support to Lithuania in case of a potential emergency.

Bronis Ropė (Greens/EFA, LT)

• he had hoped for a more specific supply to his first question; • he explained that the Belarusian power plant mentioned would generate electricity for the EU market but Lithuania had declared that it would not allow the import of electricity due to the low security standards • in this regard, he asked how would other MS react, including Estonia, and would the European Commission act to ensure a ban on electricity imports by countries who did not satisfy security standards.

Ms Kadri Simson

• Estonia, Latvia and Lithuania were together in EU energy policy and the three still belonged to the BRELL (Belarus, Russia, Estonia, Latvia, and Lithuania) synchronous area. They were working closely on synchronisation towards continental Europe. This synchronisation process should be ready by 2025; • at the same time, the problem of cross-border electricity trade was not only about nuclear power plants but also power plants that used coal without paying a CO2 price. This was why they had a competitive advantage compared to European power plants and was a question they would have to look at closely.

Paolo Borchia (ID, IT)

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• although the EU should strive towards a renewables-based economy, as set out in the Clean Energy Package, as acknowledged by the Commissioner-designate, natural gas was still an important part of everyday life; • despite this, there was no clear regulation concerning the integration of the European gas market; • he explained that MS such as Italy were still dependent on energy imports from both third countries and other MS, and high costs were affecting the competitiveness of Italian SMEs; • he therefore asked how the Commissioner-designate planned to ensure that MS national gas policies did not work against competition rules.

Ms Kadri Simson

• there were European-level agreements on how to open markets towards cross-border trade, and the Clean Energy Package demonstrated how it was possible to solve market restrictions in the energy market; • she also added that there was an expectation for the gas market to mirror some of the elements achieved in the electricity market, in particular regarding consumer empowerment. In her view, this was a good idea.

Paolo Borchia (ID, IT)

• the transition to a decarbonised economy would have a social and economic impact in every MS; • he asked would the Commission introduce supporting instruments for every national system affected by the transition, or would it limit support to some specific areas; • he agreed that gas infrastructure needed to be maintained, and asked for views on the decision by the EIB to stop funding related to gas infrastructure projects by the end of 2020. Would the internal gas market be sustainable even in the absence of EIB financial support, he questioned.

Ms Kadri Simson

• several infrastructure projects would be financed by the SEFI fund and some of them would also need co-funding from the EIB. She therefore hoped that their lending policy would be in accordance with EU energy policy; • the social impact of the transition would be supported she confirmed. Almost half of heating depended on gas and energy efficiency was an important tool in terms of lowering costs for households. One of the main investment targets would therefore be renovation of the building stock all around Europe and especially for multi-apartment buildings.

Jessica Stegrud (ECR, SE)

• she highlighted her background in the energy industry and experience working with energy investments and analysis of consumer behaviour. Speaking from experience, she believed the Commissioner- designate’s goals ‘to make sure that Europeans have access to affordable secure, reliable and clean energy’, were contradictory and difficult and that priorities would have to be set; • her question focused on how to remedy the low share of women in the energy sector, which was on average 22% in the global oil and gas industry and 32% in renewable energy.

Ms Kadri Simson

• she challenged the assumption that affordable, secure and clean energy was not possible, referencing her own experience of obtaining cheap energy from Nordic hydropower plants that was definitely clean, affordable and secure;

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• on the role of women in the energy sector, in all sectors burdens should be removed if they were there, and this was a good example. In the traditional energy sector the difference between women and men was obvious, however in the clean energy sector, where there were new technologies, research and innovation, there was more involvement from both sexes, and this was one of the additional benefits of moving towards renewables in her view.

Jessica Stegrud (ECR, SE)

• she responded that if everyone had access to hydropower, there would not be a problem at all. However, as this was not the case, the Commissioner-designate would have to set priorities; • she repeated her question about the gender balance in energy. Why did she consider it a problem, and what would be a fair and good number.

Ms Kadri Simson

• she replied that she did not set these kinds of targets. In terms of future numbers, the amount and type of jobs created by climate neutrality targets was an important issue for everyone. Positions in industry and also in research and innovation were equally suitable for both sexes and these kinds of new jobs would be created if Europe remained in the leading position on climate neutrality.

Seán Kelly (EPP, IE)

• she had indicated that the EP had played a key role in the 32% target for renewable energy. Estonia were looking at 42% by 2030. One of the aspects of the legislation that had been set out was a framework for achieving targets. He • asked what measures she would introduce in relation to facilitate the deployment of new business models and markets on a decentralised and more local level and how would she further incentivise citizens and communities to manage their own energy consumption and switch to renewable energy.

Ms Kadri Simson

• she highlighted the role of solar panels which had decreased in cost; • in Estonia the ‘plug and play’ model had proved successful; • a data hub accommodated both producers and consumers which aided micro-producers.

Seán Kelly (EPP, IE)

• a criticism of the EU was too much red tape. He asked how she would ensure that any proposed legislation would not cause uncertainty and hinder industry, SMEs, or local authorities.

Ms Kadri Simson

• the clean energy package provided them with the right framework, especially in terms of micro- producers; • as regards energy efficiency the EPBD for example provided a framework. The instruments there and the onus was on the MS and implementation.

Mauri Pekkarinen (RE, FI)

• 40% reduction in emissions would be possible by 2030 although this was from ambition of 50% or 55%. Should ambition come from the ETS or from burden-sharing he questioned; • bioenergy was important to Finland as regards renewables and he asked for her views.

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Ms Kadri Simson

• 75% of GHG emission were coming from either production or consumption but other sectors needed to provide support; • the structure of the new Commission shows that emission reduction was a common goal; • she knew that VP Timmermans would look closely at the ETS and consider sectors such as transport and buildings that were not covered yet; • she saw the benefits of smart integration and provide a smaller carbon footprint for transport, industry, buildings and heating and cooling.

Mauri Pekkarinen (RE, FI)

• sequestration technologies had not made as much impact as had been forecast; • he raised the possibility of synthetic fuels and carbon storage and questioned whether she would support such bold carbon storage projects.

Ms Kadri Simson

• as regards CCS and CCSU this issue would be one of the technological mechanisms to achieve carbon neutrality by 2050. There were flagship project around the world but none in the EU. An offshore project could take place off Rotterdam port. The reason they did not have projects was due to “public awareness” and “doubts about storing carbon” and of course “changed targets.”

Ignazio Corrao (NI, IT)

• energy-intensive industries faced huge challenges. The heating and cooling of buildings would also be crucial as the renovation of buildings was being completed at a slow pace. He questioned what part the renovation of buildings would play in the circular economy; • citizens could produce energy and he questioned how she would ensure that legislation in this regards was implemented properly.

Ms Kadri Simson

• district heating was one of the biggest obstacles and they should get more energy efficiency out of district heating. One of the options would be effective co- generation. If both heat and electricity were produced, then already 10% of energy efficiency would be achieved; • using more bioenergy for heating was an option as would smarter integration between sectors – or sector coupling – and new innovations for big heat pumps; • district heating costs could be reduced, but the biggest reduction could come from building stock. Approximately 75% of apartment buildings were inefficient. They needed renovation. Buildings that were built in the 1980s compared with buildings that were built today, consumed twice as much energy. Sharing best practice between MS and smart ways to attract private finance would be crucial.

Ignazio Corrao (NI, IT)

• was she planning to use her DG and to use measures to move in the direction of the democratisation of energy.

Ms Kadri Simson

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• the Renewables directive already provided the instruments to do this. Prosumers would be important in order to achieve climate goals. It would be important to show that consumers would benefit from the energy transition; • solar tiles could be used when renovating buildings and this would provide both insulation and renewable energy.

Nicolás Gonzalez Casares (S&D, ES)

• there was a 15% interconnection target by 2030. In the Iberian peninsular it was only 2.8% currently. He asked what specific measures would be undertaken to achieve the target; • he questioned whether LNG was compatible with the Paris Agreement.

Ms Kadri Simson

• the interconnection target had already been postponed and was 10% by 2020; • the Bay of Biscay interconnection had received CEF funding so that was a start; • as regards LNG, as they moved towards climate neutrality they would have to work more for hydrogen and low CO2 levels, and also towards e-gases and biogases. And if they built a gas network, they would need to keep in mind that after 2030 it must be future-proof, which would mean considerable research on hydrogen.

Nicolás Gonzalez Casares (S&D, ES)

• he asked her to be more specific as regards interconnections and asked if measures would be taken by the Commission.

Ms Kadri Simson

• targets for interconnections were negotiated at EU level and the targets were for all the EU Member States – not only 15% by 2030, but there were also targets in place for that part of interconnection that should be open to the market. As there was regulation at EU level, then all the MS should work towards achieving it.

Pernille Weiss (EPP, DK)

• in her mission letter she had been asked to accelerate building renovations which currently stood at 1% annually. She questioned how exactly this rate would be accelerated and she asked if she would open up the directive .

Ms Kadri Simson

• the national energy and climate plans would be how this would be monitored. At the end of the year when the plans were submitted they would take stock. Financing would play a crucial role. The CEF would play a large part. The biggest portion of funds would come from the private sector. MS-level legislation would need to for example be in place for loans to be me made to buildings with several owners.

Pernille Weiss (EPP, DK)

• energy inefficient buildings were often habituated by those on a low-income. She asked how they would meet his challenge of renovation whilst maintaining affordable housing.

Ms Kadri Simson

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• four Member States had made national plans to invest in social housing renovations as these tenants were most affected by prices. The aim was that after the renovation, heating costs would be reduced and comfortable temperatures would be easier to achieve.

Sira Rego (GUE/NGL, ES)

• she raised concern over the climate emergency. A small number of companies dominated the market and were imposing their own models of distribution. She raised concerns over 50 million Europeans suffering from energy poverty. The energy transition was just business as usual. She asked for genuine measures.

Ms Kadri Simson

• the new Commission would be very committed as regards climate targets. This had been a commitment of the President-elect and would be an overarching priority. This would also be the main responsibility for Vice-President Frans Timmermans, responsible for the Green Deal; • she would be responsible for climate targets whilst also ensuring energy security. Customers would have affordable prices and European industry would remain competitive compared to other regions in the world. Convincing other regions do their share would be crucial. These were her tools. She would work with MS to increase ambition level and motivate them to raise their targets. • she would cooperate with the Commissioners responsible for funding and explain that the biggest lack of funding currently was for energy efficiency, but there also had to be a significant raising of funding for research and innovation. By 2050, Europe would be the first climate-neutral continent and she was committed to achieving this.

Sira Rego (GUE/NGL, ES)

• she highlighted the environmental costs and reiterated the role of industry; • she wanted a clear statement. “Was she on the side of Eni, ENGIE, ENEL, Iberdrola, Naturgy, E.ON, RWE, GasTerra, Vattenfall and CEZ Group” or on the side of those who try to safeguard a healthy planet for future generations.

Ms Kadri Simson

• energy consumers would be at the heart of EU energy policy; • affordable energy would come about by diversifying sources, ensuring investment in grid infrastructure, and by building the missing links and interconnections.Everyone would benefit if there was closer cooperation, firstly at regional level but then on the internal market. A bigger market would deliver more competitive prices to consumers.

Theresa Griffin (S&D, UK)

• she raised concern that 50 million Europeans suffered from energy poverty and had to choose between eating and heating. Old people died as they could not afford to use air-con; • the National Energy and Climate Plans (NECPs) submitted by MS were insufficient; • she questioned how the Commissioner-designate would improve the NECPs and what mechanisms would be put in place for the expertise of climate stakeholders to be properly engaged in this process; • she asked what technical support would be put in place for MS.

Ms Kadri Simson

• the NECPs were currently draft plans so they would assess them when submitted;

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• as regards energy poverty this was measured by MS in different ways but she was confident the Energy Poverty Observatory would give them a clear definition of how to cover this topic in the same way all around the EU.

Theresa Griffin (S&D, UK)

• she asked hoe the draft plans could be improved; • she wanted to ask a kind of political question because she believed that energy should not be classed as a commodity but a basic social right. She questioned the Commissioner-designate’s views on this.

Ms Kadri Simson

• when discussing energy poverty, they were not talking about energy as a commodity, as such, but were also talking about taxes, levies, grid tariffs, so this needed to be viewed holistically when taking concrete steps to help those with trouble paying energy bills; • efficient heating was a concrete step; • different technologies would bring down heating costs and of course once again the renovation of a building stock would play an important role too.

Jutta Paulus (Greens/EFA, DE)

• she agreed with the Commissioner-designate’s statement that they needed less gas infrastructure and cautioned against stranded assets; • she asked if EIB funding would take an “energy efficiency first” principle.

Ms Kadri Simson

• investment would come from numerous sources including the EIB; • renewables, energy efficiency, and grid infrastructure should be the priority as regards investment; • as regards CEF funding there would be more renewables projects than gas projects and this trend was clear; • under the current Commission they would see the fourth round of PCI lists. There will be also a decrease of cost projects in that list compared to the previous one.

Jutta Paulus (Greens/EFA, DE)

• she asked what the methane strategy was and how this would impact climate targets; • she questioned what the strategy was regarding the diversification of supply.

Ms Kadri Simson

• methane was an issue and they were in a worse position than many others. There would be an initiative in the field of methane and methane leakage, and Members of the EP would be very closely involved in this strategy.

Katalin Cseh (RE, HU)

• she questioned what measures would be necessary in order to encourage those MS that were lagging behind with their commitments to revise their national targets in their NECPs.

Ms Kadri Simson

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• the just transition tool would help those member countries who had coal regions to prepare better for their exit of solid fossil fuels and this in her view was different to the Globalisation Adjustment Fund, which was activated after jobs were lost.

Katalin Cseh (RE, HU)

• she underlined problems in regions such as the Central Eastern European region, where transport and housing infrastructure tended to be less energy-efficient, representing a larger proportion of all emissions than in other regions. It would be important to develop a close cooperation with other Commissioners, such as Commissioner Ferreira in the regional development portfolio, and also the future transport Commissioner. She asked if there were plans on how to cooperate with them, and what kind of plans were in place for the future and how these would work.

Ms Kadri Simson

• she was a team player and looked forward to cooperation with fellow Commissioners. She saw smart integration with sectors like transport, housing, heating and cooling, but also in industry, and this is also the future structure of the Commission – that they would all work together under the overarching topic.

Maria Spyraki (EPP, EL)

• she asked for further details regarding the just transition fund; • she asked for further details on the carbon border tax.

Ms Kadri Simson

• the Just Transition Fund had been mentioned in my mission letter, but the Commissioner who brings forward the exact plan will be Commissioner Ferreira. Insofar as it concerned her, the Just Transition Fund would build on the project for coal regions in transition, and it will also help small islands which did not have connections with the mainland. This should help each region to be better prepared for the transition. The exact amount of this fund is under negotiation; • the carbon border tax question would require cooperation between several Commissioners who were responsible for trade and for financing, and she would provide input but could not elaborate further.

Maria Spyraki (EPP, EL)

• she asked if any work had been carried out as regards a carbon border tax.

Ms Kadri Simson

• the carbon border tax as a topic had to replace the current mechanism and it had to be better than the current mechanism that deals with carbon leakage. There was not a final plan as such, there are lots of ideas and there is also input from different MS that have the concrete problems with unfair competition. Any carbon border tax it had to be compatible with WTO rules and it could not be used as a disguise for restrictions in international trade; • they would need to view the carbon border tax with a regional and sector-based perspective as there had been cases where power plants were closed down but then replaced by importing coal power from countries that did not pay CO2 prices. There had been very clear cases of unfair competition between for example Spain and Morocco. These were the sectoral questions they would need to negotiate and analyse.

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Ms Kadri Simson made the following closing statement:

“Honourable Members of the European Parliament, fellow Europeans online, thank you all for this extremely important hearing, at least for me. It has been quite intense, but I hope I managed to respond clearly to many of your questions and that I managed to express my concerns. I am a firm believer in cooperation between Commissioners and the Members of the European Parliament. I do not take today’s dialogue as a one-off, but as a starting point for a strong and constant cooperation if I am appointed as Commissioner, and I look forward to working with you and meeting with you as a core part of my job.

I enjoyed our debates during the Estonian EU Presidency in 2017. As Commissioner in charge of a portfolio relying on a great amount of legislation, I will ensure that Members of the European Parliament are regularly updated, consulted and involved. Today’s hearing re-confirms that Parliament is a great ally in taking forward the European Green Deal, a partner in shaping the future of Europe.

You heard my ideas and goals for the future in my opening statement and amongst my answers to your questions, but please let me re-emphasise just a few points.

It is clear that at the top of your concerns is the question of our climate. Without taking concrete steps now, there will be no bright future, and we have to act now. That is why the President-elect has identified the European Green Deal as a leading priority for the next Commission. I find it obvious that energy policy will be essential to deliver on these priorities since 75% of CO2 emissions are linked to energy. The energy union will remain a solid foundation for the Green Deal, making sure that adequate levels of ambition are achieved in 2030 and beyond.

Effective implementation of existing legislation, in particular the clean energy package, will be key in the path towards increased ambition. I would also like to stress that I will strive to maintain a balance when working towards a real energy union and across all its five dimensions. With the energy union, the EU has created a unique opportunity to secure sustainable, reliable and affordable energy for our citizens and industry. It has created a unique legislative framework of energy and climate governance on which we have to build our future actions. My future actions will focus, in particular, on the ‘energy efficiency first’ principle and on speeding up clean energy deployment across the economy. Key elements will be the promotion of a power system largely based on renewables and the smart integration of electricity, heating, transport and industry.

An internal energy market based on regional cooperation and international energy dimensions are also important for achieving our ambitions.

Many of you also stressed the importance of technological advances. My focus will be on this. We cannot think that transition is only a matter of rules or regulatory frameworks. It is unthinkable that Europe can become climate neutral by 2050 without a colossal effort in research and innovation to develop new technologies. This is also a way to enhance our industrial potential.

Many of you mentioned the fight against energy poverty and for fairness. We cannot accept that millions of Europeans struggle to pay their bills or see their energy bill rising out of proportion. The fight against energy poverty is a matter of solidarity and also ensures that we have the public support needed for the transition. Every step we take from here onwards must be taken with one eye on the consumer. We have to have their support and understanding.

Many of you also asked about what the EU can do for specific national or regional situations, especially for more vulnerable regions and small countries. Together, we are all stronger. In our constant strive for a better future,

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POLICY BRIEFING 04 October 2019 not one single Member State or region can be left behind. For this, I will work to deliver a Just Transition Fund as part of the President-elect’s vision of a just transition where nobody is left behind.

It is my sincere honour to be here before you at a time when Europe is changing. The incoming President of the European Commission, Ursula von der Leyen, has set himself the goal of making Europe the first climate-neutral continent by 2050. I’m one hundred percent behind this endeavour. Energy plays an extremely important role in this and I am ready for work. I believe that, in cooperation with you, ladies and gentlemen, we will be able to achieve our goals. Thank you!”

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