THE EUROPEAN GREEN DEAL AND RUSSIA
OPPORTUNITIES FOR A NEW BEGINNING THROUGH JOINT CLIMATE AND ENERGY POLICY
The European Green Deal and Russia 3
Contents
Foreword: Dr. Wolfgang Schüssel 4
Executive Summary ...... 5
1. The EU and Russia – Containment and cooperation ...... 8
2. European Green Deal and Russian Climate Policy – Opportunities for all . 10
3 Renewable energies – Enormous potential in Russia 16
4. Energy efficiency – Catch-up potential in Russia ...... 25
5. Hydrogen – Only with Russia can the EU meet its needs 29
6. Natural gas – crucial as a "transition fuel" 37
7. Nuclear power – Joint research on nuclear waste management . . . . . 46
8. Raw materials – Diversification partnership 54
9. Nine proposals to European politics ...... 59
Afterword: Prof. Dr. Friedbert Pflüger ...... 62
Abbreviations 63 Index of figures 64 Selected bibliography ...... 65 Legal and editorial details ...... 68 4 The European Green Deal and Russia
Foreword
In 1968, in the middle of the Cold War, Austria tise and, on the other hand, would be an ideal became the first Western country to sign a long-term partner with its vast potential of wind, solar and supply contract for Russian gas. Only a few believed biomass energy, some of which has yet to be tapped. at the time that this would turn into a productive Both Russia and the Union are aiming to be at the supply relationship which would last for more than forefront of hydrogen production. They could achieve half a century. It took three years for Germany and this by joining forces. Both a looming energy supply Italy to follow suit with similar collaborations. Today, gap in Europe and Russia falling behind could be just like back then, Europe and Russia still see a averted as a result. Incidentally, this is precisely geopolitical situation with growing tensions and where the much-criticized Nord Stream 2 pipeline confrontations, but at the same time also major can make a decisive contribution and also deliver global challenges that can only be overcome with large quantities of urgently needed hydrogen to the intensive cooperation. Such problems include the EU in the future. Compensation measures, such as climate issue and the transformation of our economy afforestation, carbon capture, utilization and storage and society. The Paris Agreement commits Russia, as (CCU & CCS), broadening supply chains and depend- well as EU members, to limit global warming below 2 encies on rare earths and raw materials all represent degrees Celsius. To this end, the European Commis- additional cooperation themes in such a "Wider sion has formulated the goal of creating the first European Green Deal". climate-neutral continent by 2050 with the European Green Deal. Last year, President Putin instructed the At this point, we would like to thank and acknowl- government to reduce greenhouse gas emissions to edge the authors of the study commissioned by the 70% (from 1990 levels) in ten years. These are highly Dialog-Europa-Russland and the United-Europe e.V. ambitious goals, but they also require sustainable We can only hope that the highly interesting political decisions. Europe and Russia could and proposals will be acknowledged and lead to concrete should join forces in a substantial partnership. The cooperations. Hugo Portisch, leading Austrian jour- Union is systematically advancing the development of nalist and writer, stated in his book “Russland und renewable energy sources, increasing energy effi- wir" published shortly before his death in April 2021, ciency, e-mobility as well as CO2 pricing. On the one that "Europe and Russia depend on each other and hand, Russia could benefit from the acquired exper- increasingly will." I fully agree with this.
Dr. Wolfgang Schüssel Federal Chancellor of Austria 2000-2007 The European Green Deal and Russia 5
Executive Summary
With the European Green Deal, the EU is pursuing Once before, half a century ago, it was energy the overarching goal of transforming Europe into the policy that paved the way for relieving tensions first climate-neutral continent by 2050. The far- during the Cold War. The natural gas pipeline reaching measures planned include increasing the deal, which the Brandt government brokered share of energy from renewable sources, developing together with German industry, paved the way for a European market for zero-emission hydrogen and peaceful coexistence and peacekeeping. Once boosting energy efficiency at all levels. The starting again, energy and above all climate policy could point for this huge effort is the Paris Agreement, with now pave the way for a new start in relations. its goal of limiting global warming to well below 2 degrees Celsius compared to pre-industrial levels. For these reasons, the EU should make Russia an offer within the framework of the European Green In line with the EU Member States, Russia has signed Deal to advance the transformation and decarboniza- the Paris Climate Agreement and is committed to tion of its own economy in the spirit of a low-emission reducing greenhouse gases: On November 4, 2020, climate, energy and resource partnership with the EU Russian President Putin issued a presidential decree and its Member States. The following areas are ideal instructing the government to reduce greenhouse gas for this purpose: emissions to 70% by 2030 compared to 1990 levels. This ambitious target is reasonable, but must be Renewable energies supported by appropriate measures to achieve it. The ambitious emission reduction targets of the European Green Deal will drastically increase the There are three reasons why Russia should be European demand for electricity generated from included in the European Green Deal: renewable sources. Within the EU alone, it will be virtually impossible to accelerate the expansion of Like most of the EU's neighbors and most coun- renewable electricity production due to technical and tries on Earth, Russia is far from meeting Europe's political challenges. level of climate policy ambitions. Close climate policy cooperation with the EU will make it easier This is one of the reasons why the European frame- for Russia to implement the Paris climate targets work for renewable energies explicitly supports at home. This would be a decisive cooperation with third countries in this step for the global climate policy. area. Due to its natural geographic Energy and climate conditions and huge surface area, Russia already accounts for a signifi- policy can play a Russia has enormous untapped poten- cant share of European energy decisive role in resuming tial for wind and solar energy as well as imports, but also holds enormous dialogue with Russia biomass, which makes it an ideal potential for the production and partner. export of emission-free gases and renewable energies. It can in turn also make it Individual obstacles that still exist in the context of much easier for the EU to meet its ambitious cooperation can be bridged by joint European-Russian climate targets. projects, for example, to improve the interconnecti vity of electrical transmission grids or increase the efficiency of plants. 6 The European Green Deal and Russia
Russia's huge potential for CO2 capture through Based on these technologies in particular, Russia has afforestation also represents a significant resource. reasonable ambitions with its companies and, in part- As such, it can make a decisive contribution to the EU nership, could help fill the huge projected European achieving net zero emissions by 2050 as part of Euro- supply gap with exports as well as localized produc- pean-Russian cooperation through tion in Europe. Conversely, Russia could integration into the EU's emissions benefit from European know-how, trading system. It is unambiguous that Russia has the world's especially in electrolysis technologies. it should be tapped for mutual benefit. largest wind potential, but due to technological Natural gas Close European-Russian cooperation on reasons, only a very In the short and medium term, natural renewable energy would not only small part of it is gas imports, especially from Russia, will advance European climate policy and commercially viable make up a key component of the Euro- energy security, but also contribute to pean energy transition due to signifi- the diversification of Russia's energy cantly declining domestic gas industry, boost the country's renewable energy production and the shift away from coal as an energy sector, and cement mutually beneficial interdepend- source. The continuation of the energy partnership encies even in times of declining European demand with Russia is also crucial in view of the European for fossil fuels. Green Deal and the resulting demand for hydrogen and emission-free gases. Energy efficiency Energy efficiency as a cross-sectional Opportunities for cooperation are task plays a major role both in the EU's Through afforestation emerging above all in the area of infra- energy policy within the framework of alone, Russia could structure through the completion of the European Green Deal and in Russia. sequester 8% of Europe's the Nord Stream 2 gas pipeline, which There is potential for cooperation annual greenhouse gas could also deliver large quantities of through joint energy-saving projects in emissions hydrogen to Europe in the future. There all sectors of the economy. They should is potential for technical cooperation in be supported and guided through the reduction of environmentally dialogue and cooperation at working level. harmful methane emissions and in the area of CCU & CCS technologies for natural gas as well as blue Hydrogen hydrogen for which there are already specific points Both Russia and the EU are aiming to establish them- of contact in the form of pilot projects and efforts by selves as pioneers in hydrogen technologies. In line the private sector for mutual cooperation. with the European Green Deal, the European hydrogen strategy envisages Nuclear power the rapid expansion of production The EU hydrogen sector The future role of nuclear power in the based on renewable energies. It also is slated to receive up EU is now a controversial issue. Despite allows other forms of emission-free to €470 bil. in funding virtually emission-free electricity pro hydrogen – for example, produced by by 2050, and the duction, some countries are attempting methane pyrolysis or with nuclear generation of an to classify nuclear energy as unsustain- power – on the European market (at additional renewable able under the taxonomy of the Euro- least for the time being). capacity totaling pean Green Deal, because the problem 120 GW is also in the of nuclear waste has not yet been pipeline solved. The European Green Deal and Russia 7
At the same time, research is already being Raw materials conducted into new reprocessing methods that could European demand for critical raw materials will con- create a closed cycle for highly radioactive residues in tinue to increase due to the technological require- the future and decisively mitigate the ments of the European Green Deal. Both final repository problem. Russia is at the EU and Russia are also pursuing the Around 300,000 tons of the forefront of global nuclear goal of expanding their own production, high-level radioactive research. particularly in the area of rare earths, waste are stored in diversifying international supply chains interim storage facili- Close European-Russian nuclear coop- and reducing the EU's dependence on ties; stakeholders have eration can promote the necessary China for rare earths and critical raw been searching for solu- research work concerning final repos- materials. A strategic raw materials part- tions since the begin- itory and the treatment of used nership between the EU and Russia ning of the nuclear age nuclear fuel (e.g. through partitioning would therefore appear to merit more than 80 years ago and transmutation technology) and consideration. promote nuclear power as a low CO2 technology in line with the European Green Deal sustainability goals. 1. THE EU AND RUSSIA – CONTAINMENT AND COOPERATION The European Green Deal and Russia 9
The close involvement of Russia in the implementa- despite all systemic differences. In this spirit, Chan- tion of the EU's core climate policy concerns is an cellor Helmut Schmidt also emphasized to US Presi- opportunity, not least in the light of historical and dent Jimmy Carter: "Those who trade with each other security policy considerations. EU and do not shoot at each other." Most NATO relations with Moscow are governments of the EU Member States strained following the annexation of The horror of two as well as the European Commission Crimea, which violated international world wars must never have essentially followed this basic law, Russia's hybrid war in eastern be repeated principle to this day. It has made a deci- Ukraine, cyberattacks to influence the sive contribution to what is now a political situation in Western states, 75-year period of peace. and the (very likely) poisoning of former double agent Sergei Skripal and opposition figure Alexei Navalny In addition to trade in oil, coal and raw materials, the (and his subsequent conviction). German-Soviet natural gas pipeline deal of February 1970 was of central importance for the whole of Whether and to what extent the West is partly to Europe, because mutual dependencies and interde- blame for these developments cannot be examined pendencies (Russia committed to supply at least 52 in detail here. In 2001, however, after Putin’s speech bil. cubic meters of natural gas, Germany 1.2 mil. tons – delivered in German – in the German Bundestag, of pipeline segments – Europe needs gas, Russia there was something resembling a needs foreign currency) built up trust spirit of optimism. Six years later, there between Moscow and the Western was obvious disappointment and alien- Europe's energy European states. This cooperation ation by the speech of the Russian partnership with Russia proved reliable even during the most President at the Munich Security has proven successful difficult phases of the Cold War. Conference. There are many indica- and sustainable since tions that both sides have made their the 1970s Just like back then, energy policy, and mistakes. along with it climate policy today, could play a decisive role in restarting However, one may scrutinize this in detail: The dialogue with Russia. After this first step, it is impor- horrors of the two world wars alone show us that tant to identify further fields of European-Russian there is no alternative to peace – this holds especially energy and climate cooperation and adopt concrete true against the background of nuclear arsenals. That joint initiatives. The goals of the European Green is why the message of NATO's 1967 Harmel Report Deal provide the ideal framework for this. still applies today: Alongside the capacity for self- assertion and defense, there must The goals of the European Green Deal always be a readiness to engage in are introduced below. In the subse- efforts to relieve tensions as well as Energy and climate quent analysis of the areas of renew- promote cooperation and arms policy can play a able energies, energy efficiency, control. decisive role in resuming hydrogen, natural gas, as well as coop- dialogue with Russia eration in the nuclear sector and raw Russia's economic integration is of materials, cooperation potentials are particular importance within this identified on which a future closer part- context. "Change through trade" was already German nership of the EU with Russia can be based. In the Chancellor Willy Brandt's motto. This spirit found its concluding section, nine proposals are made to Euro- way into the 1975 Helsinki Final Act of the CSCE, pean policy-makers for restarting dialogue with which created something like a European house rule Russia. 2. EUROPEAN GREEN DEAL AND RUSSIAN CLIMATE POLICY – OPPORTUNITIES FOR ALL The European Green Deal and Russia 11
Back in November 2018, the European Commission Other goals include transforming the economy for a presented its strategic vision for a sustainable, sustainable future while strengthening international competitive and climate-neutral economy by 2050. competitiveness and increasing resilience to the This vision was endorsed at the end of 2019 by the impacts of climate change by developing a solid then new Commission President Ursula framework for innovation and invest- von der Leyen with the European ment (see also Figure 1). The European Green Deal – the measures to reduce The goal of the Green Deal is to be gradually fleshed greenhouse gas emissions by 60% by European Green Deal out through legislative projects, initia- 2050 compared to 1990 were expanded. is the virtually complete tives, strategies and alliances. The goal is now the nearly complete decarbonization of decarbonization (net zero emissions) of the EU The decarbonization of the energy the EU by mid-century with a particu- system is crucial to achieving the goal larly ambitious intermediate step of a of a carbon-neutral economy. 75% of reduction of at least 55% by 2030 (a reduction of 24% greenhouse gas emissions come from the production had just been achieved by 2020), agreed in the trilogue and consumption of energy in all economic sectors of negotiations between the EU institutions in April the EU economy. 2021.
Figure 1: Comprehensive transformation of the economy – the European Green Deal Overview of the European Green Deal
Source: European Commission 12 The European Green Deal and Russia
To this end, the following guiding principles apply support investment in infrastructure, including gas. here within the framework of the European Green Above all, however, the EU is supporting projects in Deal: the energy sector through the European Projects of Common Interest with around €5.2 bil. in the period Prioritizing measures to increase energy from 2021 to 2027. In addition, the European Invest- efficiency; ment Bank is facilitating public investment of €25 to Developing an energy system that is largely €30 bil. in the same period by granting loans, based on renewable energy sources, promoting including in the area of energy infrastructure. electrification and the use of hydrogen, while keeping it affordable for consumers and That said, the required profound transformation of businesses; Europe's energy system could face strong opposition Supporting the use of decarbonized gases; that could seriously undermine the strategy. In Reducing energy-related methane particular, EU Member States that still emissions; heavily rely on fossil fuels for their Integrating and digitizing the Euro- It is becoming electricity generation and the provision pean energy market. increasingly clear that of thousands of jobs are expressing the EU will unlikely be distinct concerns about full decarboni- Particular attention will be paid to the able to achieve its zation. In 2019, for example, Poland, implementation of the European climate targets solely the Czech Republic, Estonia and Green Deal on the social equity of the through its own efforts Hungary initially rejected the adoption transition to a decarbonized economy, of an EU climate neutrality target for which will be supported by a €40 bil. 2050 at several European Council fund for diversification, innovation and retraining meetings. Therefore, it cannot be ruled out that measures by 2025. Investment aid worth €1.8 bil. far-reaching CO2 offsetting measures will be needed provided under InvestEU for this purpose will also by 2050 to achieve the net zero emissions target.
Figure 2: Reducing emissions – a considerable effort
EU greenhouse gas emissions (in mil. metric tons of CO2 equivalents) 6 000
5 000 EU 2020 target (-20%)
4 000
EU 2030 target (-40%) 3 000 EU 2030 target (-55%)
2 000
1 000
EU 2050 goal (approx.) 0 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
EU-27: Historical greenhouse gas emissions EU-27: Projections with existing measures (WEM) EU-27: Projections with additional measures (WAM) Source: European Environment Agency (EEA) The European Green Deal and Russia 13
Figure 3: Economy and emissions grow globally – Europe's share declines EU share of global greenhouse gas emissions
10,3 46,7 46,5 28,3
23,4 1990 2015
15,5
19,6 9,9
China USA EU Rest of the world
Source: Cologne Institute for Economic Research (IW)/International Energy Agency (IEA)
The EU's strong commitment to climate policy is still the time being due to concerns raised by the business reflected in a significant reduction in European green- community. A draft of a long-term development house gas emissions over recent decades (see Figure strategy for greenhouse gas emissions reduction 2 to 2020). It is becoming increasingly clear, however, submitted in March 2020 and a presidential decree that the EU will be unlikely to achieve its emissions issued in November 2020 are only geared toward reduction targets solely through its own efforts – implementing commitments under the Paris Agree- even if additional energy and climate policy measures ment and limit those emissions to 70% of 1990 levels are adopted (see projections in Figure 2). by 2030. The former, however, would still allow for a significant increase in the case of Russia compared to The EU's share of global greenhouse gas emissions current emission levels (compare Figure 4), with has also decreased by half from 19.6% in 1990, albeit enormous potential for further reductions in emis- largely due to global emissions growth rather than EU sions through measures to increase energy efficiency climate change mitigation efforts, to 9.9% in 2015 as well as the use of renewable energy. Russian (see Figure 3). This is another clear signal that Energy Minister Alexander Novak made the following comprehensive climate protection can only succeed comments in 2020: within the framework of international cooperation. "Russia is actively working on the use of new energy Most of the EU's partner and neighboring countries, sources, in particular on the development of renew- however, are still far from achieving the ambition able energy sources and hydrogen energy, including level of the European Green Deal. Russia, for example, in cooperation with foreign partners." only recorded a slight increase in greenhouse gas emissions after the abrupt deindustrialization of the President Putin was even more specific in his April 1990s (see Figure 4), but still struggles to implement 2021 State of the Union address, setting the ambi- its own climate initiatives: tious goal that over the next 30 years, Russia’s cumu- lative emissions would have to be smaller than those A proposal introduced in January 2019 for a national of the EU. emissions trading scheme will not be advanced for 14 The European Green Deal and Russia
Figure 4: Russia's emissions – stable below reference level
Russia's CO2 emissions (in mil. metric tons)
4 000
3 500
3 000
2 500
2 000
1 500
1 000
500
0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Two-thirds of the 1990 emissions level Source: World Bank
It is therefore of particular importance that the Euro- climate targets, but also to win them over as suppliers pean Green Deal reflects the global dimension of of low-emission energy. climate change and seeks cooperation with other countries accordingly. Without a pioneering role of The European Green Deal must therefore not only be the EU, it is likely that not only would significant consolidated within the EU, but should also be carried global impacts of European climate efforts fail to outwards at the same time. In particular, it should be materialize – the European economy implemented as a precautionary could also sustain severe damage due measure to reshape partnerships with to disproportionately higher energy Climate protection can those countries that are already among costs and the loss of jobs. only succeed within the Europe's most im- portant energy framework of suppliers today and can continue to Cooperation with G20 countries – i n - international coopera- play this role in the long term, even in cluding Russia – on climate protection tion; partner countries a low-emission future. strategies should therefore be must be supported by expanded and supplemented by joint funding and expertise This applies first and foremost to Russia, international initiatives. Within the which already supplies a substantial framework of so-called climate diplo- share of European fossil energy macy, both expertise and financial resources are to imports (see Figure 5), but also holds enormous be incorporated to encourage and support partner potential for the production and export of emission- and neighboring countries in setting and achieving free gases and renewable energies. The European Green Deal and Russia 15
The European Green Deal is likely to reduce the need for fossil fuel imports from Russia and realign the existing mutual interdependence – Europe as a buyer and Russia as a supplier. This circumstance poses the risk of economic damage for Russia due to declining fossil energy exports. On the other hand, it also offers potential for cooperation in trading emis- It is important to make sion-free gases and renewable energies. Russia an offer to continue the energy It is therefore important to continue the cooperation partnership within the and develop it within the framework of the European framework of the Green Deal that Russia can seize as an opportunity to European Green Deal drive forward the transformation and decarboniza- tion of its own economy in the sense of a low-emis- sion energy and resource partnership with Europe.
Figure 5: Russia – key supplier of EU energy imports EU imports of natural gas, oil and coal in 2018 by country of origin
Natural gas
Oil
Coal
0 % 20 % 40 % 60 % 80 % 100 %
Russia Others Source: Eurostat 3. RENEWABLE ENERGIES – ENORMOUS POTENTIAL IN RUSSIA The European Green Deal and Russia 17
The ambitious emission reduction targets of theEuropean Green Deal will drastically increase the European demand for electricity generated from renewable sources. Within the EU alone, it will be virtually impossible to accelerate the expansion of renewable electricity production due to technical and political challenges as well as the scarcity of necessary raw materials on the European market. This is one of the reasons why the European framework for renewable energies explicitly supports cooperation with third countries in this area.
Due to its natural geographic conditions and huge surface area, Russia has enormous untapped potential for wind and solar energy as well as biomass, which makes it an ideal partner. Individual obstacles that still exist in the context of cooperation can be bridged by joint European-Russian projects, for example, to improve the interconnectivity of electrical transmission grids or increase the efficiency of plants.
Close European-Russian cooperation on renewable energy would not only advance European climate policy and energy security, but also contribute to the diversification of Russia's energy industry, boost the country's renew- able sector, and cement mutually beneficial interdependencies even in times of declining European demand for fossil fuels.
Russia's vast potential for CO2 capture through afforestation also represents a significant resource. As such, it can make a decisive contribution to the EU achieving net zero emissions by 2050 as part of European-Russian cooperation through integration into the EU's emissions trading system. Hence, it is unambiguous that it should be tapped for mutual benefit.
3.1 Political framework
European Union It also introduces cooperation mechanisms whereby In the run-up to the European Green Deal, the EU the EU and its Member States can promote research, already adopted a total of eight pieces of legislation development, investment and support mechanisms in between 2018 and 2019 as part of the “Clean energy favor of renewable energy production in partner for all Europeans" package to facilitate the transition countries. This in turn contributes to strengthening away from fossil fuels to lower-emission energy and the economic viability and export capacities of these meet the EU's commitments under the countries in this field. The directive also Paris Agreement to reduce greenhouse provides for the option of counting gas emissions. Renewable energies electricity produced and imported from in partner countries are renewable energy sources outside the The development of renewable energy to be promoted and Union towards the Member States' in the EU is governed by the "Directive the electricity can share of renewable energy. on the promotion of the use of energy be imported into the EU from renewable sources", adopted in and credited However, imports from third countries 2018, which Member States must trans- can only be counted if the electricity pose into national law by the end of comes from renewable installations June 2021. Among other things, the directive sets a built or extended after 2008. This is intended to binding target for the share of renewable energy in prevent imports of energy from renewable sources the EU's final energy consumption of 32% by 2030. into the Union from reducing the share of such energy 18 The European Green Deal and Russia
sources in the total energy consumption in the third Russia country. For the amount of electricity produced and Russia is also fundamentally committed to the ecolo exported, a third country may not grant any support gical modernization of its energy sector. The "Energy other than investment aid for the instal- Strategy of the Russian Federation until lation. In line with the target of 2030" was launched in 2009. It was reducing greenhouse gas emissions by EU-Asia connectivity designed to gradually increase the at least 55% by 2030 compared to 1990 strategy also aims to share of renewable energies in electric- levels, as adjusted in the European boost grid development ity generation to 4.5% (excluding Green Deal and politically agreed in between regions hydropower) by 2020 through annual April 2021, the Renewable Energy tenders for the construction of solar, Directive is to be amended by a draft wind and thermal energy plants. In expected in the second quarter of 2021. 2019, however, this share was still below 1% (com- pare Figure 6). In 2018, the European Commission also published elements on an EU strategy in this area through a In the Russian "Year of Ecology" 2017, a program for communication campaign called "Promoting connec- the modernization of the energy industry was also tivity between Europe and Asia". The aim is to introduced, which was intended to support the ex- contribute to building efficient connec- pansion of renewable energies between tions and networks between Europe 2025 and 2035 with around € 5.7 bil. Of and Asia – including the energy sector – The EU is committed this, 37% is to be allocated to photovol- at the service of their respective econo- to protecting and taics and 55% to wind power. mies. Among other things, it envisages replenishing forests (financial) support for projects with worldwide The fourth "Energy Strategy of the significant investment needs that Russian Federation until 2035" issued support the modernization of the in April 2020, however, still assigns little energy system, the introduction of sustainable solu- significance to non-conventional energy sources. The tions, increased energy efficiency and energy connec- three fossil fuels, coal, natural gas and oil, are projec tivity between and with partners in Asia. ted to continue to be used for over 92% of primary energy between 2018 and 2035. By comparison, fossil The EU highly values the role of forests. Back in 2019, fuels still accounted for 70% of primary energy con- the European Commission put forward plans to step sumption in the EU in 2019, despite decades of effort; up global action to protect and restore in China, much praised for its expansion forests. In two Council resolutions, EU of renewables, the share was as high as Member States also explicitly emphasize Russia's energy strategy 88%. the importance of partner countries in still does not focus efforts to protect and reforest forests, heavily on renewable Although the role of renewable energies and highlight their own international energies ... has also made some headway in Russian commitments to increase forest politics over the last decade, fossil coverage worldwide, including through energy sources are likely to continue to afforestation and reforestation. play the central role in the short and medium term. This discrepancy in the energy policy objectives of Russia and the EU should be addressed by outlining the economic prospects of cooperation in the field of renewable energies. The European Green Deal and Russia 19
Figure 6: Plenty of room for improvement in Russia's renewables Russian electricity mix (2019)
0.1 % 15 % 17 % 1 %
Coal Crude oil 18 % Natural gas Nuclear energy
49 % Hydropower Other renewables
Source: IEA: World Energy Outlook 2020
Similar to renewable energies, the Russian Federation has not set very ambitious goals in the field of ... and should be offset afforestation. Within the framework of the national by highlighting project “Ecology”, the government allocated €32 mil. economic perspectives in 2019 through the sub-program "Conservation of of cooperation with the Forests", which should only raise reforestation to the EU in this field level of logging. In addition, about €300 mil. will be allocated by 2024 for various measures to combat forest fires. 20 The European Green Deal and Russia
3.2 Production and demand
European Union The European Green Deal's goal of completely elimi- than the average for the years 2014 to 2018 – for the nating the EU's CO2 emissions by 2050 will require an ambitious expansion path, it would even be 200% enormous increase in renewable electricity genera- higher. Such an acceleration is likely to pose enormous tion capacity (as well as additional grids and storage), challenges, both technically and financially. especially in the case of widespread electrification of transport, heating and Other factors are also limiting the cooling, as well as the supply of energy- The EU's installed possibilities for expanding renewable intensive industries and the implemen- renewable capacity energies within Europe: Suitable sites tation of the hydrogen strategy, despite would have to at least for turbines are becoming increasingly foreseeable efficiency improvements. triple, perhaps even scarce, bird protection and not-in-my- increase sixfold under backyard movements are effectively According to European Commission the European Green blocking or delaying the construction estimates, the installed capacity of Deal of new wind farms and the necessary renewable energies in the EU would transmission grids. In addition, even need to be expanded from the current some politicians are pleading against level of 424 GW to around 1,200 to 2,800 GW by "making the countryside greener" with wind turbines. 2050, depending on the underlying scenario (see Furthermore, the scarcity of necessary raw materials Figure 7). in intra-European production is an obstacle to the expansion of renewable energies. In contrast, Russia In order to achieve the expansion of installed renew- offers enormous potential for cooperation in this able capacity required in the conservative scenario, respect (see chapter 8). the annual growth rate would have to be 15% higher
Figure 7: Expansion of renewable energies – a mammoth task Installed renewable capacity in the EU and expansion scenarios (in GW)
3 000
2 500
2 000
1 500
1 000
500
0 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 Installed capacity Conservative expansion
Conservative expansion Expansion with current growth rate Source: European Commission The European Green Deal and Russia 21
Russia Geographically, the potential of wind power is fairly According to a study by the International Renewable evenly distributed across Russia, with the regions of Energy Agency (IRENA), the natural conditions in the Kola Peninsula immediately adjacent to Europe Russia offer enormous development potential for on the border with Finland and the North Caucasus renewable energies, which, however, has been having particularly high wind speeds. Accordingly, the sparsely promoted to date due to the country's rich potential for wind power in Russia is huge and should deposits and the associated dominant use of fossil be exploited through increased grid expansion, better fuels. Factors, such as isolated geographic and demo- grid connections and the use of more modern techno graphic location, would also need to be logy. For example, upgrading existing overcome to ensure the developability turbines alone would significantly and use of many sites. Russia has the world's increase production: for example, the largest wind potential, average wind turbine installed in Russia Russia boasts the world’s largest wind but due to technological has a capacity of 0.34 MW, compared potential, with an estimated maximum reasons, only a very to 1.85 MW in Germany. technical output of more than 50,000 small part of it is TWh per year. However, the lack of grid commercially viable In addition, almost all of Russia's sea- expansion, low remuneration and the coasts and the Far East offer the best technology used limit the currently theoretical locations for wind turbines economically viable share of this tech- – but these are largely in sparsely nical potential to just 260 TWh per year, which is still developed and sparsely populated regions of the equivalent to around 30% of the electricity generated country. It should be noted here, however, that the by all power plants in the country. However, the wind potential for wind energy, particularly in the north power actually produced in Russia covered only and east of the country, cannot be exploited all year 0.03% of total electricity consumption in 2019, at 32 round due to the partially extreme low temperatures TWh (see Figure 8). and associated technical limitations of wind turbines.
Figure 8: Russia utilizes only a fraction of its wind power potential Technical and economic potential and actual production of wind power in Russia (in TWh)
60 000 Technical potential 50.000 50 000 Economic potential
40 000 Effective electrical production
30 000
20 000
10 000
260 32 0
Source: Review of the Russian Wind Energy Market and Russian Regions Ranking 2019 (RAWI) 22 The European Green Deal and Russia
Russia also has vast areas suitable for the construc- potential for the economic use of biomass in Russia is tion of photovoltaic plants. The total annual hori- 802 TWh per year. zontal solar radiation for the enormous area of the country is between about 900 and 1,500 kWh and is Geothermal, hydropower and wave power are other thus comparable to Central Europe. Values similar to renewable energy sources whose potentials in Russia those in Italy and Spain can be registered, in the are likely to be very high. In the case of hydropower, southern regions in particular. Accord- they are already heavily used, but have ingly, with a similarly high density of not been sufficiently in- vestigated for photovoltaic systems as in Germany, With a similarly high a conclusive assessment. Russia could generate around 2,250 density of plants as is in TWh per year. This alone would be Germany, Russia could Finally, open spaces suitable for fores- sufficient to cover the additional elec- cover the additional try use can also contribute to Russia's tricity demand of the EU until 2050, as consumption in the ecological modernization. As President estimated in the course of the Euro- course of the European Putin recognized as much during his pean Green Deal. But even here, the Green Deal through speech at COP21 in Paris in 2015: lack of transmission network coverage solar power alone (less than 40% of the country's area) "The new agreement is expected to and the climatic conditions in parts of assign an important role to forests as the country have a negative impact on the economi- the main absorbers of carbon dioxide. This is espe- cally viable solar potential. cially important for Russia, which has vast forest resources and is working hard to preserve its forests." Russia also holds abundant resources for biomass energy generation – either as feedstock for biome- According to a study by the Swiss Federal Institute of thane or by combustion – from forestry waste to agri- Technology (ETH) in Zurich, Russia has by far the cultural as well as various forms of organic residues, largest global potential for reforestation, with 151 reaching a cumulative technical potential of about mil. hectares (see Figure 10). That makes up an area 1,500 TWh per year (see Figure 9). The estimated three times the size of Germany.
Figure 9: Sustainable energy from biomass – vast potential in Russia Technical potential for energy generation from biomass in Russia (in TWh per year)
1 800
1 600 139
1 400
1 200
1 000 942
800
600 Organic waste
400 Agriculture 558 200 Forestry 0 Source: International Renewable Energy Agency (IRENA) The European Green Deal and Russia 23
Figure 10: Russia – global leader in potential for afforestation Open space available for reforestation by country (in mil. hectares)
160
140
120
100
80
60
40
20
0 Russia USA Canada Australia Brazil China
Source: ETH Zurich
3.3 Potential for cooperation
The significantly increasing demand for renewable However, in light of a steadily increasing demand for energy within Europe as a result of the European imports of renewable energies and a prospective Green Deal, coupled with the explicit aim of cooper- intensification of cooperation with Russia in this area, ating with third countries to meet this the interconnectivity of the European demand, opens up a broad potential and Russian electricity grids should not field of cooperation between the EU The interconnectivity of be reduced but rather increased. and Russia. The aim should be to the European and develop Russia's renewable energy Russian electricity grid In the medium to long term, feasibility potential for the benefit of both should not be reduced, studies should also examine the partners. but rather increased complete synchronization of the two electricity grids as an economic as well Increasing electrical as a political lighthouse project. If interconnectivity feasible, such integration of electricity generation To a large extent, the electricity grids of the EU and and transmission would also significantly contribute Russia have not yet been interconnected (not to European energy security, since despite volatile synchronized). Only a selective number of electricity renewable electricity production over such a wide grids have been connected. For example, there are 12 area, a simultaneous blackout is almost inconceiv- interconnectors to Estonia, Latvia, Lithuania and able. Increasing interconnectivity between the EU Finland that, among other things, ensure the supply and Russia is also generally in line with the European of electricity to the Russian exclave of Kaliningrad and Commission's vision to improve connectivity with the connection to the Baltic states, which are (still) Asia. It should be possible to promote this connected to the Russian system. The Baltic synchro- accordingly. nization, however, is to be switched to the EU power grid by 2025. 24 The European Green Deal and Russia
Increasing the economically viable potential renewable energy projects. In Russia, resulting econ- of renewable energies omies of scale could boost the renewable sector, help Cooperation with the EU in the field of renewable diversify the economy and cement mutually benefi- energies can also lead to a larger share of Russia's cial interdependence, even during times of declining immense natural potential being made economically European demand for fossil fuels. viable. Afforestation Technology partnerships in the form of consulting As afforestation leads to so-called negative emissions services and joint ventures with European companies from natural CO2 capture, it is suitable as a compen- can help ensure that, for example, by sation measure for technically or finan- increasing the efficiency of generation cially unavoidable European CO2 through the use of larger Europe- Technology partnerships emissions (e.g. from agriculture). This an-made wind turbines (Siemens can make a larger share approach is also garnering increasing turbines, for example, now achieve of Russia's immense attention in Russia. For example, it is fifteen times the output of the average renewable energy already included in the medium-term Russian turbine), reducing losses in potential economically emissions reduction strategy of the transmission or introducing state-of- viable Russian oil company Rosneft. The the-art storage solutions or electrolysis company announced that it would be capacity for hydrogen production, able to offset up to 80 mil. tons of CO2 geographically remote but technically attractive loca- by 2035 through reforestation as well as achieve net tions can be increasingly developed for the genera- zero emissions by 2050. tion of renewable electricity. Here, too, the expansion of Russia's national transmission networks could fall Assuming a capacity to capture CO2 which, according under the objective of the EU-Asia connectivity to the Food and Agriculture Organization of the strategy and thus be promoted. United Nations (FAO), ranges from 0.8 to 2.4 tons per hectare per year for reforestation of Russian native Outsourcing European renewable boreal coniferous forest, Russia could electricity generation theoretically sequester up to 8% of the Finally, the concept of outsourcing Russia has by far the EU's total current greenhouse gas electricity generation to neighboring largest potential for emissions of around 4,400 mil. ton per countries, introduced by the EU reforestation in the year by reforesting the available 151 Renewable Energy Directive, should be world, with 151 mil. mil. hectares. initiated by pilot projects in Russia in hectares of land order to demonstrate the potential for This potential for CO2 capture could be fulfilling the European Green Deal. optimally exploited by EU Member States as well as companies by embedding it in the European partners can contribute not only techno- EU's existing emissions trading scheme in coopera- logical know-how and financial incentives, but also tion with Russia and certifying the regularity of decades of experience in managing large-scale afforestation by an international auditing company. 4. ENERGY EFFICIENCY – CATCH-UP POTENTIAL IN RUSSIA 26 The European Green Deal and Russia
Energy efficiency as a cross-sectional task plays a major role both in the EU's energy policy within the framework of the European Green Deal and in Russia. There is potential for cooperation through joint energy-saving projects in all sectors of the economy. They should be supported and guided through dialogue and cooperation at working level.
4.1 Political framework
Legal EU framework of achieving a sustainable energy supply, reducing Article 194 of the Treaty on the Functioning of the greenhouse gas emissions, improving security of Union serves as the legal basis for the Union's action supply and reducing energy import costs. The focus is in the field of energy efficiency. The reduction of broadened to improving the EU's competitiveness, as energy consumption and waste has become an in- energy efficiency receives special attention as one of creasingly important issue in the EU. In 2006, following five dimensions in the Energy Union Roadmap 2015 a decision of the European Council, the and a review of the relevant directives European Commission presented the is announced. Accordingly, the EU is "Action Plan for Energy Efficiency: Real- In 2018, the EU set a committed to the principle of "energy ising the Potential", which set a target reduction in energy efficiency first". The future strategic of re- ducing the Union's annual energy consumption of at least framework for the period after 2030 is consumption by 20% by 2020. In 2011, 32.5% by 2030 currently being discussed between the a revision took place with a new Energy institutions at the European level. In Efficiency Plan, which prioritized the June 2021, the Commission intends to targets in the "Europe 2020 Strategy for smart, present a proposal for revising the Energy Efficiency sustainable and inclusive growth". The Energy Effi- Directive. ciency Directive, which came into force in December 2012, then required Member States to set national Key areas of EU energy efficiency policy include energy efficiency targets to ensure achievement of cogeneration (simultaneous generation of electricity the overall EU target of reducing energy consumption and heat) and the energy efficiency of buildings as by 20% by 2020. A number of other directives set well as products. To this end, Energy Union measures standards for the energy efficiency of products and and a number of directives and regulations have been buildings. adopted in recent years, including the EU Strategy for Heating and Cooling, the Energy Performance of In 2018, the so-called "Clean Energy for All Europeans" Buildings Directive and the Regulation on Energy package set a more ambitious target of reducing Labeling (such as, standardized labels and product energy consumption by at least 32.5% by 2030. information). Energy efficiency is also taken into Increasingly, measures to improve energy efficiency account in the EU-Asia Connectivity Strategy (see are no longer considered solely from the perspective chapter 3). The European Green Deal and Russia 27
Energy efficiency policy in Russia It must be noted that Russian economic development The current regulatory framework of Russian efforts has taken a different path in 2021. Therefore, it to increase energy efficiency dates back to Presiden- seems unsurprising that qualitative progress in favor tial Decree No. 889 of June 4, 2008, which calls for of greater energy efficiency continues to be a long the design of regulatory measures under the condi- time coming, as the GDP has only grown by an aver- tion of reducing the energy demand of the gross age of around 2% over the past ten years. The gov- domestic product (GDP) by 40% by 2020 compared to ernment program to promote energy efficiency has the reference year 2007. suffered from chronic underfunding. Accordingly, at the current time, the 40% target does not appear Federal Law No. 261 of November 29, 2009, formed achievable until the 2040s. the legal basis for an integrated policy in the field of energy saving and energy efficiency. This is intended It remains true that the potential for energy savings to set legal, economic and organizational require- and greater energy efficiency in Russia is enormous ments, cover all levels of state control and provide and is particularly closely linked to the modernization the necessary incentives. of production and infrastructure. To the extent that the progress made was not "achieved" In 2010, this policy was subsequently by a crisis-related decline in industrial incorporated into a comprehensive Russia's ambition to production, the installation of modern government program aimed at reduc- increase energy machinery, which often replaces heav- ing the energy consumption of GDP by efficiency by 40% does ily outdated production facilities, is pri- 13.5% by 2020, although this target not seem achievable marily responsible for this. According was already the result of an interim until the 2040s to a report of the Russian Ministry of correction in 2014. Sector-specific tar- Economic Development, the energy gets further differentiated the intensity of the Russian economy in the approach. The underlying scenario for general eco- reporting year 2019 was about 44% higher than the nomic development assumed an average annual European level and 62% higher than the US-American growth rate of 6.5% up to 2020 compared with the level. The country's particular climatic challenges reference year 2007. In addition, a reduction in the should be taken into account when considering this. share of energy-intensive sectors in GDP and upgrad- ing, for example, mechanical engineering or various Most recently, in August 2020, the Ministry of Eco- services were expected. nomic Development updated the action plan to improve energy efficiency in the economy. It has also Various regulatory mechanisms have been imple- submitted a draft amendment to the Law on Conser- mented to make energy efficiency an integral part of vation of Energy and Improvement of Energy Effi- the Russian market economy. The coordinating ciency. responsibility for energy efficiency in the Russian gov- ernment has been transferred from the Ministry of Energy to the Ministry of Economic Development, which emphasizes the importance of an energy-effi- cient Russian industry. 28 The European Green Deal and Russia
4.2 Potential for cooperation
The goal of increasing energy efficiency in all sectors management companies and under the sponsorship of the economy, as formulated in the European of the respective ministries. Green Deal, offers another possible area of coopera- tion between the EU and Russia. Within this context, Dialogue at working level efforts should be made to exploit Russia's potential in The decision of the EU Member States to suspend the the field of energy efficiency, particularly within the EU-Russia Energy Dialogue in 2014 should be framework of institutional cooperation. respected. However, the serious political differences should not be an obstacle to progress on energy effi- Creating joint projects for the mutual increase ciency, which is necessary for climate policy. of energy efficiency Particularly in Russia, but also in the EU, there is At the working level, the area of internal market enormous potential for increasing energy efficiency issues in the framework of the former EU-Russia Gas in all sectors of the economy. On the Russian side, Advisory Council (GAC WS2) continues despite the there should be high energy-saving potential, for suspension of the formal energy dialog. The EU also example, in the supply of energy and district heating continues to hold ad-hoc talks with Russian interlocu- as well as through the stimulation of a tors where urgent issues need to be comprehensive modernization of the addressed. However, the cross-cutting aging power plant stock. The utility In the EU, 40% of energy issue of energy efficiency is of such companies will provide comprehensive consumption originates broad importance that a resumption of state subsidies for the installation of from the building sector, the thematic group on Energy Effi- new turbines. Furthermore, there is compared to 25% ciency at working level should be seri- potential for savings in the extraction in Russia ously considered. of raw materials and through the modernization of the energy grid infra- The basis for such an exchange could structure as well as the municipal infrastructure. be the recommendations of the Roadmap EU-Russia Energy Cooperation until 2050. They envisage the For both the EU and Russia, the areas of transporta- following aspects in the field of energy efficiency until tion and industrial production, as well as construction 2030: and modernization of housing and municipal infra- structure, offer vast potential for energy savings. In In-depth exchange of policy experiences and best the EU, 40% of energy consumption originates from practices; the building sector, compared to 25% in Russia. Many Identification and removal of remaining barriers buildings still originate from the Soviet Union housing to mutually beneficial exchange of technologies, construction program, which is why thermal insula- and information; tion as well as heating and ventilation systems are Continuation of joint development of training usually inadequately designed. programs involving academic institutions in Russia and the EU; To improve energy efficiency in the building sector, Explore ways to introduce coordinated systems of for example, projects between the EU or Member energy management, monitoring and statistical States and Russia should therefore be sought for data collection; continue gradual approximation knowledge exchange and practical application. In this of energy efficiency standards for equipment and regard, the German Energy Agency organized a work- products; and shop in 2018 on energy retrofitting of serial residen- Discuss a long-term program of EU-Russia cooper- tial buildings with regional Russian housing ation on energy efficiency 5. HYDROGEN ONLY WITH RUSSIA CAN THE EU MEET ITS NEEDS 30 The European Green Deal and Russia
Both Russia and the EU are aiming to establish themselves as pioneers in hydrogen technologies. In line with the European Green Deal, the European hydrogen strategy envisages the rapid expansion of production based on renewable energies. It also allows other forms of emission-free hydrogen – for example, produced by methane pyrolysis or with nuclear power – on the European market (at least for the time being). Russia is playing an increasingly important role both because of its vast resources and innovative technologies and because of its short supply routes. In particular, companies such as ROSATOM and Gazprom could help fill the huge projected European supply gap through exports and localized production in Europe as part of a partnership. On the other hand, Russia could become an important market, especially for electrolysis technologies
5.1 Political framework
European Union
In July 2020, the EU published its “Hydrogen Strategy will also be needed to rapidly reduce CO2 emissions for a Climate Neutral Europe." The long-term goal is and build a competitive market with the necessary to develop hydrogen production based on biomass, infrastructure. Hydrogen produced on this basis will wind and solar energy. be used primarily to replace currently emission-inten- sive hydrogen (see Figure 11) in industrial processes In the short and medium term, the strategy recog- and to decarbonize heat, air and heavy transport, nizes that other forms of CO2-free hydrogen – e.g. which are not suitable for using battery technology. produced using nuclear power or methane pyrolysis –
Hydrogen production technologies
.Steam reforming is the most common production method to date, in which natural gas is split into hydrogen and carbon monoxide under high pressure with the addition of heat. However, according
to an IEA estimate, this process produces about 10 kg of CO2 per 1 kg of hydrogen. If the CO2 is stored using carbon capture and storage (CCS) technology, this form of production is considered
CO2-free (blue hydrogen). So far, it is only used in the UK and Norway, but is considered by the IEA and the Intergovernmental Panel on Climate Change to be one of the most important means of achieving climate targets. Pilot projects are being planned in various EU countries and in Russia (see chapter 6).
In the electrolysis process, water is split into the elements oxygen and hydrogen. If the electricity
used comes from renewable sources or nuclear power, this method is CO2-free (green or pink hydrogen).
Methane pyrolysis can split methane into hydrogen and solid carbon (turquoise hydrogen). The
technology is also CO2-free, as the solid carbon is not released into the atmosphere - emissions of methane as a greenhouse gas are, however, possible during the transport of the raw material. The solid carbon can be used as a feedstock for the production of steel, batteries and carbon fiber, fur- ther increasing the economics of the process. The European Green Deal and Russia 31
Figure 11: 96% of hydrogen is produced from fossil sources Global hydrogen production
4 %
18 %
48 %
Natural gas Oil
30 % Coal Electrolysis
Source: International Renewable Energy Agency
The EU hydrogen strategy follows a three-phase Russian Federation approach: In 2020, the Ministry of Energy published the first document on Russia's hydrogen strategy: The Hydro- Phase 1: By 2024, there should be an electrolysis gen Roadmap 2021-24. The roadmap sets out a plan capacity of at least 6 GW, producing up to 1 mil. for the gradual development of Russian hydrogen tons of renewable hydrogen per year. production technologies through a series of pilot projects to be launched in 2021-24, as well as the Phase 2: By 2030, the electrolysis development of state support mecha- capacity should be extended to at nisms for the industry. The roadmap least 40 GW and efficiency should The EU hydrogen sector includes the following stages: be improved to produce up to 10 is to be supported with mil. tons of hydrogen per year. up to €470 bil. by 2050, 2021: The concept for hydrogen devel- and 120 GW of opment in Russia is to be finalized and Phase 3: By 2050, all hydrogen additional renewable measures to support pilot projects are produced in the EU should be capacity is also to to be developed. In addition, incentives produced from renewable sources. be created for hydrogen export and domestic consumption are to be introduced, and Renewable hydrogen production is to turbines with methane-hydrogen be subsidized with up to €470 bil. and fossil-based mixture are to be developed and tested. hydrogen with up to €18 bil. by 2050. This includes the cost of 120 GW of additional solar and wind 2021-23: Gazprom plans to explore the use of hydro- capacity needed in the future for renewable elec- gen and hydrogen-methane mixture in gas turbines trolysis electricity. as well as in the transportation industry.
2024: ROSATOM and Gazprom plan to launch pilot projects in Russia: ROSATOM in nuclear power plants and Gazprom in gas production sites and processing plants. According to the roadmap, Gazprom will focus on methane pyrolysis and ROSATOM on nuclear-based hydrogen. 32 The European Green Deal and Russia
In this context, the hydrogen concept was expected 5.2 Production and demand in the first quarter of 2021 (not yet available at the time of writing), which will include an analysis of the global hydrogen market and Russia's medium and In light of global climate policy developments, both long-term export targets. energy exporters and importers are expanding their hydrogen sector since hydrogen is the only fuel that
Although Russia's hydrogen industry – similar to does not emit CO2 when used and can be used rela- Europe's – is in the early stages of tively easily as storage for volatile development, initial plans suggest that energy sources. In the medium term, Russia could increase hydrogen exports Russia relies on nuclear hydrogen-based synthetic fuels (e-fuels) to as much as 7 mil. tons by 2035. power and methane will also be ready for the market for Initially, Russia will focus on steam pyrolysis for hydrogen heavy-duty transport, shipping and reforming with CCS and nuclear-based aviation and, in the long term, for use electrolysis. By 2050, hydrogen in the heating sector. produced from renewable electricity could account for up to 50% of exports. Global hydrogen demand has grown by 28% since 2010 (equivalent to 2.64% per year) and amounts to Recently, in his April 2021 state of the nation address, 112 mil. tons for 2020 (see Figure 12). President Putin also emphasized that Russia needs new, comprehensive approaches to developing its However, the share of zero-emission production is energy sector, including new solutions for nuclear negligible and has stagnated since 2015. On grounds generation in the promising area of hydrogen. of cost, 96% of global hydrogen is still produced from fossil fuels via steam reforming without CCS technolo- gies. China, for example, spends 5% of its coal con sumption to produce 22 mil. tons of hydrogen annually.
Figure 12: Steadily increasing demand for hydrogen Historic global hydrogen production (in mil. tons)
120
100
80
60
40
20
0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2018
Refining Ammonia Other pure Mixed together with other gases (Methanol, Steelmaking etc.) Source: IEA, WoodMackenzie The European Green Deal and Russia 33
European Union a significant supply gap of around 15 mil. tons, which In 2018, total hydrogen production in the EU will have to be met by imports. amounted to 9.9 mil. tons. Only a fraction of this, 0.04 mil. tons, was produced using electrolysis But the EU will hardly be able to achieve its ambitious processes with renewables as the power source. CCS European production target on its own. With an esti- technology was used in only 0.7% of the steam mated energy requirement for electrolysis of 55 kWh reforming plants. per kg of hydrogen, this would require enormous amounts of renewable electricity – up Accordingly, the current type of hydro- to 1,375 TWh in 2050, equivalent to a gen production in the EU is very emis- Europe’s annual third of Europe's current total electricity sion-intensive, reaching alone – based production of about production. on an IEA estimate of about 10 kg CO2 10 mil. tons of hydrogen per kg hydrogen – the level of Belgium's is estimated to emit as The investment in 120 GW of wind and annual emissions (about 100 mil. tons solar plants envisaged in the hydrogen much CO2 as Belgium
CO2). Most of this hydrogen is used as strategy will be far from sufficient to feedstock in European refineries and in meet the additional electricity demand. the chemical industry to produce up to 15% of the With an almost identical total installed renewable world's methanol and ammonia. Given the impending capacity for electricity generation, Germany, for decarbonization, a supply gap is unavoidable: The example, produ- ced only 244 TWh in 2019, one fifth blast furnaces of the German steel industry alone of the projected additional European demand. would require 2.5 mil. tons of renewable hydrogen annually. Moreover, electrolysis is a comparatively expensive form of hydrogen production that will even in the Taking aviation, heavy transport and heat into account, long term not fully catch up with zero-emission fossil hydrogen demand in the EU is expected to rise to technologies (see Figure 13), which could potentially over 40 mil. tons by 2050 – but domestic production affect the international competitiveness of European will only reach 25 mil. tons. This alone already creates industry.
Figure 13: Climate-neutral hydrogen has its price Projection of hydrogen production costs by production technology in 2050 (in $/kg)
3 Electrolyser
2.5 Power supply
Pipeline 2 Export terminal
1.5 Liquefaction Shipping
1 Import terminal
Investment costs 0.5
CO2 price
0 CO2 storage Electrolysis Electrolysis Electrolysis Algeria Natural gas Pyrolysis Germany wind Spain solar solar power, reforming Gas price offshore power, pipeline shipping import with CCS import
Calculation of a baseline scenario based on EWI Working Paper, No 20/04; Institute of Energy Economics at the University of Cologne. 34 The European Green Deal and Russia
Russian Federation The main industrial technological leaders of hydrogen Russia has decades of experience with the production production development in Russia are Gazprom and of hydrogen in military and space research. Russia ROSATOM. In 2020, Gazprom produced 0.36 mil. tons currently produces about 2 mil. tons of hydrogen per of hydrogen, including 0.29 mil. tons from steam year, most of which is produced in plants where there reforming, 0.06 mil. tons from petroleum reforming, is an industrial demand or where and 0.01 mil. tons through methane hydrogen is a by-product of oil and gas pyrolysis. In 2021, exports of up to production, metallurgy, or the chem- Existing gas infrastruc- 0.01 mil. tons from steam reforming ical industry. Hydrogen is produced ture allows hydrogen without CCS are expected to begin. At from natural gas by steam reforming blending of 20%, the same time, Gazprom is conducting and is primarily used for applications in modern gas pipelines, a feasibility study in cooperation with oil refineries and the steel and chem- such as Nord Stream 2 the Karlsruhe Institute of Technology ical industries. The largest producers in even up to 70% to bring the methane pyrolysis process Russia are currently the subsidiaries of to industrial scale. the world's leading companies Praxair, Air Liquide and Linde. ROSATOM plans to produce up to 50 mil. tons of hydrogen per year in 2050 through electrolysis with By 2050, ROSATOM plans to produce 50 mil. tons of nuclear power. By 2025, nuclear power plants will be hydrogen per year from electrolysis with nuclear equipped with facilities that will enable the commer- power, 3.5 mil. tons with surplus electricity alone cial production of hydrogen using surplus electricity Hydrogen production costs are comparatively low in when reactors would otherwise not be operating at Russia due to cheap domestic gas full capacity. This alone could produce reserves, and export to Europe is up to 3.5 mil. tons of hydrogen per already possible in a mixture with By 2050, ROSATOM year. Such an electrolysis plant is methane via the existing gas infrastruc- plans to produce 50 mil. already under construction at the ture. Studies by Gazprom indicate that tons of hydrogen per Kolskaya nuclear power plant with a the existing gas infrastructure allows year from electrolysis capacity of 1.76 GW, which will pro- hydrogen blending of up to 20%, and with nuclear power, 3.5 duce about 0.07 mil. tons of hydrogen modern gas pipelines, such as Nord mil. tons with surplus per year. In addition, storage and trans- Stream 2 even allow up to 70%. electricity alone port technologies for hydrogen are also Gazprom is the EU's largest supplier of being tested there. natural gas, accounting for about 40% of imports. Hydrogen therefore represents a great Russian Energy Minister Alexander Novak stressed in opportunity for the company's business model to an interview with Bloomberg in June 2020, that Russia diversify its product portfolio in the future in order to is well positioned to become one of the leaders in the accommodate the upcoming transformation of the hydrogen industry. It appears that the Energy Ministry, energy sector. which is working on Russia's hydrogen concept, has an understanding of the importance of hydrogen in It is also worth mentioning that research into the the global energy transition and the need for Russia application of hydrogen technologies is already to position itself as a potential leader in this industry increasing. For example, various institutes are as the shift from fossil fuels to green energy sources currently working on the development of a fuel cell accelerates. This is expected to manifest itself in for use in passenger cars or aircraft. In addition, in Russia's hydrogen strategy. September 2019, Russian Railways and Transmash Holding together with ROSATOM and a regional government signed an agreement to build locomo- tives powered by fuel cells. The European Green Deal and Russia 35
5.3 Potential for cooperation
Europe will continue to rely on energy imports in the Hydrogen production with nuclear power future, as renewable energy will not be sufficiently Although the European Hydrogen Strategy does not available. In this context, European industry needs explicitly mention hydrogen produced with nuclear new markets for renewable technolo- power, the European Commission gies, especially for offshore wind made it clear in November 2020 that power. Here, Russia has the greatest By means of methane this form of hydrogen is also considered potential for shallow water offshore pyrolysis, all types of low-carbon and should be used, at wind. Some of this can be transported methane can be least during a transitional period. back to Europe as "green" hydrogen via integrated and made Accordingly, it makes sense to support the existing infrastructure. As pioneers storable – Europe should ROSATOM's hydrogen production in hydrogen technologies, the EU and secure a pioneering role ambitions at an early stage in a part- Russia should cooperate intensively in for itself. nership with a view to Europe's future the development of technologies, huge import needs. infrastructure, standards and regula- tion. Despite differing priorities, close cooperation in To this end, Russia should be more involved in Euro- this area would produce synergies that would enable pean research projects and in CertipHy, the EU's the achievement of the respective targets set and, certification system for low-emission hydrogen. above all, lead to efficient and rapid reductions in global emission. Russia could benefit from European know-how: Russia’s largest electrolyzer today can supply 215 Methane pyrolysis in Europe tons of hydrogen per year.In Germany, for example, In December 2020, Gazprom proposed to build the world's largest plant with a capacity of 1,300 tons a methane pyrolysis plant in Germany near the per year is currently being built with the REFHYNE Nord Stream pipeline landing point in project. Lubmin. A Gazprom subsidiary was also established to focus on the production According to the Using CCU & CCS technologies in of hydrogen in Europe. Besides the European Commission, the production of blue hydrogen methane pyrolysis proposal, it is also hydrogen produced with The EU’s long-term goal is the produc- under consideration to produce nuclear power is also tion of hydrogen based on renewable considered low CO and hydrogen with steam reforming and 2 energy sources without CO2 emissions. should therefore be pump CO2 in the opposite direction of However, as a bridging solution, the the Nord Stream pipelines for storage used to meet Europe's production of blue hydrogen using in depleted oil and gas reservoirs. import needs natural gas through steam reforming should continue, as this production The opportunities for European plant method, in combination with Carbon manufacturers that could arise from cooperation Capture Utilization (CCU) and Carbon Capture Storage should be explicitly embraced and developed – not (CCS) technologies is considered CO2- free (see only as the cheapest zero-emission way to close chapter 6). Europe's supply gap, but also to create jobs in Europe and secure technological leadership. Finally, methane Taking this into account, a joint study by the Stiftung pyrolysis – as a method of avoiding emissions – is 2° and Agora Energiewende from March 2021 recom- likely to become the preferred technology in the long mended focusing more on these technologies in the run for exploiting the vast remaining global sources production of blue hydrogen and suggested creating of methane, such as natural gas, waste gasification, a European infrastructure within the framework of wastewater and agriculture. the "Important Projects of Common European 36 The European Green Deal and Russia
Interest". In this context, reference is also made to In order to realize the immense potential, technical international cooperation with countries such as challenges have to be addressed in the framework of Norway, for example, which is working on the devel- European-Russian cooperation in order to develop opment of storage methods in rock formations under solutions and modernize gas infrastructure: the seabed as part of the "Northern Lights" project with the participation of the Vattenfall company. Transport is complicated by the different densities of hydrogen and natural gas (as the hydrogen Modernization of the gas infrastructure for the content increases, the density of the mixture can transport of hydrogen decrease by a factor of 4 in extreme cases, which It is already theoretically possible to add at least 20% significantly reduces the effectiveness of pipeline – and, in the case of modern pipelines, such as Nord transport at constant pressure); Stream 2 and its European onshore extension EUGAL, even up to 70% – of Compression plants must first be hydrogen to the natural gas in the To enable hydrogen converted to hydrogen and existing transport networks between imports from Russia, the consume more energy; Russia and the EU. modernization of trans- mission networks needs Long-distance pipelines become Within Europe, the Italian transmission to be addressed jointly brittle when they come into contact system operator Snam has also with hydrogen; achieved a hydrogen share of up to 10%, although a higher concentration here was not Many European transmission networks are not targeted due to the stricter requirements of indus- designed for a natural gas-hydrogen mixture. trial customers. In 2019, the GRHYD pilot project in (Operators are already planning €64 bil. of adap- France also demonstrated that blending above 20% tation investments here by 2040). hydrogen in gas distribution networks is feasible. 6. NATURAL GAS CRUCIAL ROLE AS A "TRANSITION FUEL" 38 The European Green Deal and Russia
In the short and medium term, natural gas imports, especially from Russia, will be a crucial component of the European energy transition due to significantly declining domestic production. The continuation of the energy partnership with Russia is also crucial in view of the European Green Deal and the resulting demand for hydrogen and emission-free gases. Opportunities for cooperation arise particularly in the area of infrastructure – through the completion of Nord Stream 2 and technical cooperation in the reduction of environmentally harmful methane emissions – and in the area of CCS technology.
6.1 Political framework
European Union chapter 7), the classification is subject to a technical The position of the European institutions on natural assessment as part of the preparation of the dele- gas within the framework of European energy and gated legislation. The Commission's end-2020 draft climate policy is ambivalent. On the one hand, the sets a strict limit of 100 grams of CO2 equivalent per European Green Deal explicitly emphasizes the role kilowatt-hour for gas-fired power plants. of the coal phase-out and (decarbonized) gas as a complement to the development of an energy sector With a separate instrument, the European Regional largely based on renewable energy sources. To this Development Fund and the Cohesion Fund, adding up end, the European Commission aims to develop a to a budget of €242.9 bil., the picture is different: If forward-looking concept for a competitive decarbon- the per capita gross national income is below 60% of ized gas market that will address not the EU median income level and the only CO2 but also energy-related country covers more than a quarter methane emissions (mainly the so-called European Commission of its energy supply with coal, a methane leakage). seeks international maximum share of 1.55% of the funds dialogue to reduce can be used to invest in natural gas In contrast, natural gas is not explicitly methane emissions... projects of the transition phase mentioned in the Commission's March towards a largely renewable energy- 2020 proposal for a regulation "estab- based system. This specifically lishing the framework for achieving climate neutrality includes replacing coal-based heating systems and and amending the Regulation (EU) 2018/1999 (Euro- retrofitting gas infrastructure for use in combination pean Climate Change Act)". In the negotiations with low-carbon and renewable gases. To receive between the Commission, the Council and the Parlia- funding, projects must be approved by the end of ment on the Just Transition Fund in the course of the 2025. European Green Deal, the European institutions also decided not to allow any funding for natural gas Also in the December 2020 decision of the heads of projects from this funding pot. state and government on the European Commission’s European Green Deal to increase the emissions In the political agreement on an EU-wide classifica- reduction target to 55% by 2030, gas is mentioned as tion system for sustainable investments ("taxonomy") a bridging technology – thus also highlighting the at the end of 2019, natural gas – unlike coal and oil – relevance of the European gas grid for a stable is not excluded. As in the case of nuclear power (see energy transition. The European Green Deal and Russia 39
Aiming to reduce methane emissions in various Russia sectors, the European Commission adopted a In principle, the Russian government is also pursuing strategy in October 2020. For the energy sector, a climate policy initiatives relevant to the natural gas proposal for a regulation will be presented in the sector. For example, the Russian government's third quarter of 2021. The Commission plans to proposal for a national emissions trading system in include a commitment to better detect early 2019, which was not further pur- and repair leaks in gas infrastructure in sued, also affected natural gas sector the proposal. Prohibiting practices such ... in Russia, they are emissions. Reasons for the opposition as routine flaring and venting of gas, already strictly regu- of industry stakeholders included except in unavoidable circumstances lated and subject to fees concerns that companies would have (for example for safety reasons), is also to pay twice for methane emissions, as being considered. In this context, the methane emissions are regulated in Commission has signaled its intention to engage in a Russia as both a greenhouse gas and a toxic substance. dialogue with its international partners and to consider standards, targets or incentives and enforce- On that basis, companies are already obliged to apply ment instruments for its energy imports into the EU. for permits to measure their methane emissions and pay fees accordingly. However, the inconsistent regu- lation of methane emissions prevents a clear picture of emissions in Russia, as the two responsible depart- ments – the Ministry of Energy and the Ministry of Natural Resources and Environment – apply different calculation methods, which lead to diverging results.
6.2 Production and demand
Natural gas as an energy source will remain crucial to gas in developed economies, such as in the EU – the global energy supply in the medium term: it is contrary to the global trend – will fall slightly, but cheap, more climate-friendly than coal essentially remain stable. The potential and oil, less dependent on natural of gas as a long-term viable fossil fuel is conditions than hydropower, and – Gas imports will limited, as competition from renewa- thanks to its storability and turbine continue to play a bles, efficiency improvements, increa- power plants that can be ramped up crucial role for the EU in sing electrification and low-emission quickly – more flexible than wind the coming decades... gases intensifies. power or solar energy. In many regions of the world, the demand for natural In spite of this, even as Europe is in gas is likely to grow in the short term, if only for the midst of an energy system transformation, large reasons of climate protection, since a phase-out of quantities of natural gas will remain necessary for coal-fired power generation with simultaneous a stable transition – no forecast of the EU's future demand for base-load-capable power generation natural gas needs disputes that. The extensive Euro- could not be managed in any other way. pean coal phase-out and the further expansion of renewable energies can only be supported with a In fact, according to the International Energy Agency secure supply of natural gas. According to the Euro- (IEA), in the so-called scenario of the continuation of pean Parliamentary Research Service, even with current political decisions (STEPS), the demand for increased use of renewable energies, imported gas 40 The European Green Deal and Russia
will continue to play a decisive role in the EU's energy the Commission's 2019 estimates suggest that high mix in the coming decades – not least because levels of natural gas imports will therefore continue domestic production will decline sharply in the to be essential, despite a slight decline in European coming years. demand (see Figure 15). Taking into account the production stop of the Groningen gas field having Over the past decades, the Netherlands alone has been brought forward for 2022 instead of 2030, an been responsible for around half of Europe's natural essentially stable to slightly increasing import volume gas production, mainly due to its huge gas field in can be assumed. Groningen. With the downward trend of recent years and the forthcoming Imported natural gas has accounted for ...because production at total phase-out of Dutch production in the majority of the European Union's Europe's largest gas Groningen, the total volume of EU total consumption for two decades. field, Groningen, is production is also significantly declining: Europe benefits from a diversified falling faster than although the historically extremely low import supply and resulting low prices: demand due to the Dutch production volume of 26.6 Mtoe In addition to Norwegian and Russian production freeze. in 2019 is three times lower than just a natural gas and, more recently, few years ago, it is still three times supplies via the Trans-Anatolian and higher than that of the next largest EU Trans-Adriatic pipelines from Azer- producer, Romania (see Figure 14). baijan, liquefied natural gas (LNG) is present on the European market, especially from Algeria, Qatar and In order to compensate for the decline in Dutch pro- Nigeria. duction and to continue to meet European demand,
Figure 14: European natural gas production sharply declines Natural gas production in the EU-27 (in Mtoe for countries with minimum production of 5 Mtoe per year)
160
140
120
100
80
60
40
20
0 1990 1995 2000 2005 2010 2015 2019
European Union (-27) Denmark Germany Italy
Netherlands Romania Source: Eurostat The European Green Deal and Russia 41
Figure 15: Imports to remain stable in the medium term EU-28 natural gas consumption, production and imports (in Mtoe, projected from 2020)
500
400
300
200
100
0 2000 2005 2010 2015 2020 2025 2030
Overall consumption Production Net imports Source: European Commission
Russia has exported natural gas to Europe primarily In the long term, the European Green Deal's goal of through the Soyuz and Druzhba pipelines through climate neutrality by 2050 is expected to lead to Ukraine since the 1970s, the Yamal pipeline through reduced European demand for natural gas, according Belarus since 1999, and Nord Stream 1 to the IEA. Low-carbon gases, such as since 2011. Imports from Russia have biomethane and hydrogen, on the increased by about 50% since 1990, Europe has been other hand, will account for more than due to growing European demand – importing natural gas half of total European gas demand in but their share of total imports has from Russia since the 2050. European fossil fuel suppliers – significantly decreased over the last 1970s, the volume has led by Russia – will need to heavily three decades (see Figure 16). grown since then, while invest in innovative processes for the share of total sustainable use of fossil reserves and Since the commissioning of Yamal LNG imports has decreased zero-emission synthetic gas production in northeastern Russia in 2017, the significantly in order to remain competitive in the Russian energy company Novatek has European market. become another exporter of Russian natural gas alongside Gazprom. This increased An important incentive for this is the existing trans- competition is a positive development on the Russian mission grid infrastructure, which can potentially be side. used or repurposed for the injection of synthetic methane or hydrogen. 42 The European Green Deal and Russia
Figure 16: Russia remains the most important supplier, albeit has competitors Imports of natural gas into the EU-27 from the main countries of origin (in Mtoe) and Russian share
400 60 %
300
40 %
200
20 %
100
0 0 % 1990 1995 2000 2005 2010 2015 2019 Norway Russia Algeria Nigeria
Qatar Overall Share of Russia (%) Source: Eurostat
6.3 Potential for cooperation
Completion of Nord Stream 2 Ukraine after a potential completion of Nord Stream Nord Stream 2 is a prime example of the potential for 2 are unfounded, not least because Ukraine and Rus- cooperation with Russia. The pipeline is expected to sia agreed at the end of 2019 on a new transit con- help meet Europe's high import demand for natural tract until 2024 with guaranteed minimum volumes. gas in an economically viable way. In addition, the The EU has played a crucial role as a constructive capacity of Nord Stream 2 could be used for future mediator and should continue to seek an extension of imports of Russian hydrogen or emission-free meth- this contractual relationship until at least 2030. In the ane in line with the European Green Deal. It is also long term, the Ukrainian gas transit network could be imaginable that one of the four strands of Nord modernized with the participation of Russia, the EU Stream 1 and 2 could be technically repurposed to and Ukraine.
transport CO2 captured in the EU to Russia for storage as part of CCS. Even though opinions on the project differ within the EU, the following is true: Nord Stream 2 supports the The pipeline builds on the long tradition of Ger- objective of the European Green Deal and strength- man-Russian trade relations in the energy sector. The ens competition as well as security of supply in the German and European demand for Russian gas and European gas market. The completion of the pipeline the importance of raw material exports for Russia are should be seen as an expression of the open strategic just as relevant today as they were back then. Con- autonomy sought by the EU and as a signal of clear cerns that Russia could stop natural gas transit via rejection of encroaching US energy policy. The European Green Deal and Russia 43
Reducing methane emissions Satellite-based research on large concentrations of EU-Russia cooperation on natural gas transport infra- methane emissions presented in the latest World structure should also focus on technologies to reduce Energy Outlook 2020 suggests that Russian export methane emissions. Methane is very harmful to the pipeline routes to the EU are affected as well. climate in the short term because, although it only remains in the atmosphere for a few years, it has a Gazprom with its subsidiaries already has various much stronger damaging effect than CO2 in this short methods of measuring and preventing methane emis- period. sions for its production and transport infrastructure. They include helicopter Methane is emitted both intentionally Existing transmission and drone-based inspection of pipe- and unintentionally during the produc- grid infrastructure offers lines, as well as permanent monitoring tion and transport of natural gas. How- incentives for Russia of compressor stations using laser sen- ever, suitable technical measures can to push ahead with sors and on-site inspections with port- reduce emissions by up to three quar- emission-free able measuring equipment. Over the ters and thus significantly improve the production of gases last two decades, studies have also climate balance. According to the IEA, for the European been carried out with international such measures are the most economi- Green Deal partners and measures taken to stead- cally effective way to reduce the envi- ily reduce these emissions. ronmental burden of oil and gas opera- tions, as they account for about half of all emissions The EU and Russia could build on this and on the EU's from this sector. ambition for dialogue with partners in its methane strategy as part of the European Green Deal. Coop- A study by the German Federal Institute for Geo- eration could seek to target infrastructure upgrades sciences and Natural Resources on the climate bal- from production sites to landfall and distribution in ance of natural gas concludes that natural gas has a Europe as part of area-wide studies to further reduce directly better climate balance compared to coal- methane emissions, have them independently certi- fired power generation up to a maximum methane fied, and thus take advantage of a tangible opportu- loss of 3%. According to various studies, the methane nity for climate action in the natural gas sector. losses of Russian pipeline gas are significantly lower than this value, at around 0.3%. Carbon capture, use and storage Although the importance of LNG and (CCU & CCS) The completion of Nord the 30 European terminals for success- In order to achieve the goal of climate Stream 2 would be an ful diversification and energy security neutrality formulated in the European expression of Europe's efforts in Europe cannot be overem- Green Deal, avoiding CO emissions is a open strategic 2 phasized, the methane emissions in the fundamental component and should autonomy and a clear production chain of American LNG therefore be prioritized in all long-term signal of rejection of (including production and shipping), for EU energy policy efforts. In spite of encroaching US policy example, are nine times higher at 2.7%. this, CO2 emissions cannot be avoided in the case of energy sources such as On a global scale, however, there is an natural gas or blue hydrogen, which are unreported figure for methane losses from oil and extremely important in the short and medium term gas production, according to the IEA. The loss rates as transition fuels to a CO2-free energy economy. determined by the IEA worldwide, for example, were 80% higher than those reported by the companies. 44 The European Green Deal and Russia
For this reason, as also formulated in a joint study by In several EU Member States, these two technologies the Stiftung 2° and the Agora Energiewende think are already in use or planned, primarily in the heavy tank, a ranked list of priorities should be aimed for industry or energy sectors. For example, the "West- with regard to CO2 emissions: If such emissions cannot küste 100" project, with the participation of several be avoided, they should be used primarily in long- international companies, aims to produce jet fuel in lived products (CCU) or geologically stored (CCS) northern Germany from 2023 onwards, using CO2 where no use is possible. Norway is an international from regional cement production in the manufac- pioneer in CCS technology, with a plant in operation turing process. In the Athos project, CO2 from steel since 1996. production is to be stored under the seabed off the coast of the Netherlands from 2027 with the partici- pation of Gasunie, among other operators.
Technologies for the capture and subsequent CCS is also already being used extensively in Russia: use (CCU) or storage (CCS) of CO 2 Depleted gas and oil fields, which are available in Russia, are generally suitable for use as storage sites .Carbon Capture and Utilization (CCU) for captured CO in the context of CCS. The Russian involves capturing CO , primarily from indus- 2 2 energy company Lukoil, for example, is already plan- trial waste gases, and reusing it in chemical ning concrete investments: The first CCS hub is to be processes. This technology is used for energy built on Sakhalin Island in Russia's Far East and will storage and the production of e-fuels, espe- use renewable electricity to pump CO produced cially for aviation and shipping. Another field 2 during oil production back into the ground for of application is the mineralization of the storage. The Russian oil company Irkutsk Oil is testing captured CO , for example as graphite, which 2 blue ammonia production with CCS in a feasibility is used in a variety of applications, including study with Japanese partners. electrical engineering. The Russian energy company Novatek is also .Carbon Capture and Storage (CCS) also researching carbon capture options. The company refers to the initial capture of CO , primarily 2 recently completed an underground geological study from industrial exhaust gases. In contrast to at the South Tambey field to identify reservoirs suit- CCU; however, CCS does not reuse the cap- able for carbon storage. In addition to this field, tured CO but stores it in underground stor- 2 which supplies raw gas to the Yamal LNG plant at the age facilities. This storage can take place Port of Sabetta, old gas fields in Western Siberia are either on land, for example, in depleted oil also being considered. To this end, Novatek is seeking and gas reservoirs, or in rock formations to engage in talks with the Russian authorities on the under the seabed. regulatory process for the application of CCS. The European Green Deal and Russia 45
In the medium term, CCS is also to be offered on an international scale as a compensation measure for CO storage (CCS) in emissions. The Russian oil company Rosneft is also 2 depleted Russian gas working with BP to evaluate possible joint CCS and oil fields can projects. compensate for inevi- table EU emissions on In view of the European Green Deal's goal of the way to the net zero achieving net zero emissions by 2050, CCU and CCS target will have to play an increasingly important role for the EU as well, given the inevitable emission of green- house gases, for example in the production and consumption of natural gas or blue hydrogen. The renowned climate researcher Prof. Ottmar Edenhofer already advocated in 2019 that:
"Without CCS, it will not work. CCU, i.e. the use of
CO2 as a raw material, can also play a role, [...] It is therefore essential that policymakers address these issues now."
European-Russian cooperation should therefore prove beneficial in this area as well: Both sides can benefit from mutual knowledge exchange through technology and research partnerships and apply these promising technologies in different sectors, such as energy and agriculture. 7. NUCLEAR POWER JOINT RESEARCH ON NUCLEAR WASTE MANAGEMENT The European Green Deal and Russia 47
As a virtually emission-free electricity generation technology, nuclear power can make a constructive contribu- tion to European climate policy. Its sustainability is being assessed in an in-depth review based on theEuropean Green Deal taxonomy system in 2021.
The focus will be on nuclear waste disposal, which is still a subject of debate within the EU, with opponents of nuclear power highlighting its risks. Given the vital importance of nuclear power for the energy supply of several Member States, its exclusion from the European Green Deal would have serious consequences for its long-term sustainability.
At the same time, research is already underway into new reprocessing methods that could enable a closed fuel cycle in the future. Russia is at the forefront of global nuclear research. Close cooperation between Europe and Russia in the nuclear power sector can promote the necessary research and establish nuclear power as a low-CO2 technology in line with global practice and in compliance with theEuropean Green Deal sustainability goals.
7.1 Nuclear waste management as a global challenge
Whatever the future of nuclear power, its past is 80 years ago and is becoming more and more urgent linked to one of the most pressing global challenges: due to a number of expected newcomers (nuclear around 300,000 tons of high-level radioactive waste newcomers). Meanwhile, the volume of nuclear and millions more tons of low- and intermediate-level waste is growing every day and is kept in countless radioactive waste of various hazard classes are interim storage facilities worldwide, some of which produced worldwide (see Figure 17) – much of it in are rather questionable. Developing viable concepts Europe. for safe management of these deposits requires in- tensive research, and can only reasonably be achieved The search for safe solutions has been underway through international cooperation. since the beginning of the nuclear age more than
Figure 17: A serious legacy and a major challenge Classification of nuclear waste worldwide
3 % 7 %
Low-level radioactive waste: slightly contaminated materials, 1% of radioactivity
Intermediate-level radioactive waste: Components, residues, 4% of radioactivity
High-level radioactive waste: Depleted nuclear fuel, 95% of radioactivity 90 %
Source: World Nuclear Association 48 The European Green Deal and Russia
7.2 Political framework
Russia European Union After a restructuring phase, the Russian nuclear Nuclear power accounted for around 26% of EU elec- industry has been organized under ROSATOM since tricity generation in 2019, and was generated in 13 2007, a state-owned group responsible for the civil Member States (see Figure 19). Within the EU, 106 and military use of nuclear energy as a former federal reactors are currently online. Increasingly, the ministry. Today, ROSATOM operates 38 reactors in advanced age of European nuclear power plants is Russia, which meet around 20% of the making replacement investments country’s electricity needs, with a necessary, some of which entail further three under construction (see Research in Russia rampant costs and significant delays. Figure 18). The group encompasses the focuses on reactors entire nuclear value chain in an exten- that will facilitate All of the 27 current EU Member States sive infrastructure, and is undertaking extensive recycling are party to the European Atomic significant research efforts into techno- of nuclear fuels Energy Community Treaty (EURATOM) logical advancements. as part of the Treaty of Rome, and yet they each have their own unique histo- The development work focuses on next-generation ries of nuclear energy use that inform their current reactor concepts and on fast reactors that maximize attitudes to this form of energy production. nuclear fuel recycling capabilities (nuclear back-end) in operation. The strategic goal of the national energy To illustrate, here are a few examples: In France, strategy is a closed nuclear fuel cycle. nuclear power is closely associated with its political security status as a nuclear power, and its 56 reactors In a long-term strategic perspective, the Russian account for the lion’s share (70%) of France’s elec- nuclear industry is also working to position itself as a tricity mix. After decades of disputes, at times violent, one-stop shop for nuclear residue management, with over nuclear power, Germany is phasing it out by ROSATOM aspiring to act as a service provider across 2022, and Spain aims to end its nuclear age by 2035. entire global supply chains in this area. In Central Eastern Europe, nuclear power is often
Figure 18: Nuclear Russia in figures, 2019 Overview of nuclear power in Russia
MW(e) TOTAL NET TWh ELECTRICITY CAPACITY SUPPLIED 28578 196 19.7 %
Nuclear Production
NUCLEAR POWER 80.3 % Non-Nuclear Production 38 REACTORS
Source: International Atomic Energy Agency (IAEA) The European Green Deal and Russia 49
Figure 19: Nuclear Europe in figures, 2019 Overrview of nuclear power in the EU
Hard coal 6.8 % Gas 21.7 % Lignite 7.8 % Solar 4.2 % Other fossil 3.6 % Biomass 6.2 %
Renewables 34.6 %
Hydro 10.8 %
Wind 13.6 % Nuclear 25.5 % Source: Eurostat
linked to the shared Soviet legacy and plays an inte- Accordingly, the EU Member States ultimately diverge gral role in domestic power generation. This is regu- widely in their strategic positioning on the use of larly criticized by Austria, where a referendum nuclear power. Most of the nuclear nations express prevented the country from going nuclear. Poland is their firm intent to continue using nuclear power, looking for ways to phase out coal mining, and plans pointing to the largely balanced environmental foot-
a return to nuclear energy by building its own power print of this technology, with minimal CO2 emissions plant (see Figure 20). over its life cycle. Given the priority of climate change
Figure 20: Divided on nuclear power Overview of EU attitudes to nuclear power
Does not use nuclear Uses nuclear power, Uses nuclear power, Uses nuclear power, power wants to phase out wants to maintain wants to expand Denmark Belgium Bulgaria Finland Estonia Germany Netherlands France Ireland Spain Romania Slovakia Greece Sweden Croatia Slovenia Italy Czech Republic Cyprus Hungary Latvia Lithuania Luxembourg Malta Austria Poland Portugal Source: IAEA 50 The European Green Deal and Russia
mitigation and based on the 2018 United Nations The question of taxonomy – the central mechanism International Panel on Climate Change (IPCC) report, for determining environmental sustainability under which recommended using nuclear power to achieve the conditions of the European Green Deal – remains the ambitious climate target of limiting global unresolved for nuclear power. When EU members warming to 1.5 degrees, these arguments have grown failed to reach an agreement on the assessment of in significance. nuclear power in this context, the European Commis- sion was tasked with clarifying this issue in 2021. In In the social discourse on climate policy, several principle, however, EU Commission Vice-President prominent supporters also reiterate these argu- Frans Timmermans has declared his commitment to ments. In 2019, for example, Swedish climate activist avoiding a technology bias in this area: Greta Thunberg referred to the IPCC’s position in a high-profile Facebook message. Recent books by “The Commission is technology neutral, so if coun- James Lovelock, founder of the Gaia theory, Steven tries come to the conclusion that they want to use Pinckert, and Bill Gates have also emphasized the key nuclear energy then the huge advantage of it is, of contribution of nuclear power to global climate course, that it is emission-free. [But nuclear energy protection. has] two serious disadvantages [...]. The first is that you need fuel and you are left with waste that needs Within the EU, however, opponents of nuclear power to be treated. This remains a very complicated issue, currently vehemently reject these arguments with though we are making technological advances. reference to existential risks and the unsolved [...The] Commission will certainly not stand in your problem of the final repository for nuclear waste. way, and we will try and give some impetus to Contentious disputes over nuclear safety are not research in this area.” uncommon – for example in the case of plants close to borders. And yet, despite the obvious differences, General criteria for the qualification ‘environmentally it makes sense to speak of a single European nuclear sustainable economic activity’ and the ‘degree of industry, because nuclear power is environmental sustainability of an traded freely across national borders investment’ are set out in a European on the European internal market. Commission Vice- taxonomy regulation, with which the President Timmermans EU aims to tackle what is known as Nuclear energy as part of the has expressed a greenwashing (giving the appearance European Green Deal commitment to of sustainability) and to ensure an Differences within Europe with regard technology neutrality effective steering effect on its climate to nuclear power have also become and promised an policy. clear in the course of initial resolutions impetus for nuclear on a European Green Deal. Agreement research The taxonomy is to be applied in the on the EU’s climate target was only area of public funding – e.g. for reached because, in response to pres- resources from the Just Transition Fund sure from France, the Czech Republic, and Hungary, set up as part of the European Green Deal – and also the Member States were given extensive leeway in to further increase the share of sustainable invest- designing their energy mix and nuclear power was ments in the area of private funding. The feedback given a prominent role. effects from the financial sector are to stimulate a comprehensive structural change towards a sustain- able real economy in Europe. The European Green Deal and Russia 51
The final completion of the European taxonomy is While the taxonomy obviously excludes technologies scheduled for 2022, and a first sustainability report harmful to the climate – first and foremost coal-fired by financial market players will be required for the power stations – it allows for continued operation of 2021 financial year. Although the EU Commission has certain transitional technologies. Though the EU not yet finalized the criteria for all sub-sectors, a technical body responsible for this assessment (Tech- European Parliament resolution of June 2020 sets out nical Expert Group on Sustainable Financing) had pre- targets required to qualify investments as sustain- viously recognized nuclear power as almost CO2 neu- able, two of which must be fulfilled without signifi- tral, it pointed to the unresolved problem of nuclear cantly adversely affecting another waste disposal as a potential violation of the DNSH (do-no-significant-harm principle, DNSH): principle.
If this assessment were to prevail, the nuclear indus- try could lose access to long-term financing instru- Sustainable investment objective (tentative) ments, which are crucial to modernize its infrastruc- ture. This would lead to repeated lifetime extensions ..Climate change mitigation and adaptation and negative effects on nuclear safety, as many states’ energy supply currently is, and will remain .Sustainable use and protection of water and dependent on nuclear energy. marine resources . As a result, such an ambitious taxonomy would create .Transition to a circular economy, including a toothless tiger that would not achieve the sustaina- waste prevention bility goals of the European Green Deal, not least . because of an increasing risk of catastrophic damage. .Reduction and control of pollution . Meanwhile, the Joint Research Centre of the European .Protection and restoration of biodiversity Commission was unable to identify any fundamental and ecosystems violation of the DNSH principle in a March 2021 test report with reference to safe final disposal. Opponents of nuclear power, however, declared the body biased given its funding by EURATOM – the disputes are far from over. 52 The European Green Deal and Russia
7.3 Potential for cooperation
Given their highly developed nuclear and research Partitioning and transmutation (P&T) infrastructures, the EU and Russia in particular should cooperate more closely on nuclear safety and waste Research into concepts that can reduce the disposal research, as well as harnessing existing syn- degree of danger (radiotoxicity) of spent fuel ergies more consistently to use nuclear power as a elements and to allow the material to be recy- low-CO technology to help achieve the European 2 cled has been underway since the 1990s. Green Deal sustainability goals. Moreover, closer safety cooperation would be a highly visible vote of With P&T, the particularly long-lived minor acti- confidence and a valuable foundation for stable polit- nides are chemically removed from fuel ele- ical relations. ments – or partitioned – and then further broken down – or transmutated – with free neutrons to In the absence of alternatives, Europe is concentrat- significantly shorten their half-lives (see Figure ing on deep geological repositories, though potential 21). sites for such facilities require protracted negotia- tions and extensive exploration. In Germany, for Using special reactors, the process permits example, a final repository site is to be selected by energy generation and is a central component in 2031 with maximum public participation – and local the concept of closed nuclear fuel cycle. P&T is resistance is already mobilizing. Meanwhile, France at the research and development stage. The is the only country in the European Union to operate process has the potential to significantly reduce a nuclear fuel reprocessing plant, with a facility in the volume and necessary storage time of La Hague. nuclear waste. This could be immensely impor- tant for the safety of nuclear waste disposal, as it Russian state-owned company ROSATOM is concen- would facilitate planning in manageable time- trating its efforts on developing nuclear waste dis- frames. posal concepts towards a largely closed fuel cycle. While a deep geological repository is to be built in Zheleznogorsk, Siberia, with construction to com- mence in 2025, reprocessing of nuclear waste France shuttered its own national research efforts for remains the main focus, including partitioning and P&T as a recycling technology at the ASTRID research transmutation processes (see box). reactor in 2019. An international research consortium at the Belgian research center SCK CEN now expects results from its MYRRHA experimental reactor that could bring the technology to operational maturity in 2036.
Accordingly, P&T is also attracting attention in Euro- pean nuclear research and is being discussed by experts as a potential way to deal with nuclear fuels. Russia is continuing its consistent focus on P&T and is working hard to accelerate its development. The European Green Deal and Russia 53
Figure 21: Recycling of nuclear waste via P&T Development of radiotoxicity during P&T
100 000
10 000
1 000
100
10
1
0,1
0,01 10 100 1 000 10 000 100 000 1 000 000 Time (years) Uranium ore After transmutation Spent nuclear fuel
Source: Dirk Eidemüller, The Nuclear Age, Stuttgart 2012.
In order to accelerate scientific and technological contributor to reaching significant CO2 reduction progress in nuclear waste management and to iden- targets. However, disposal of nuclear waste remains a tify a sustainable solution, closer networking of Euro- problem, even in the USA. For example, there have pean and Russian nuclear research should be pursued been protracted debates on the establishment of a and Europe and Russia should sign a cooperation nuclear repository in Yucca Mountain, with deep agreement to further consolidate misgivings about its safety. existing joint research projects and partnerships. Modern fuel cycles could Meanwhile, the United States and mainstream nuclear Russia have maintained a direct coop- The resulting repository concepts and power as a safe and erative relationship on nuclear energy modern recycling processes within the low-CO2 form of energy for decades, including matters of framework of efficient fuel cycles can generation under the nuclear fuel management. Transat- firmly establish nuclear power as a safe European Green Deal lantic integration of climate policies and low-CO2 form of energy generation with a constructive role for nuclear in the future as part of the European power could therefore also focus on Green Deal and its taxonomy. This calls for a technol- the goal of a nuclear circular economy as envisioned ogy-neutral, non-ideological approach. by the European Green Deal and actively promote the necessary research and development together Finally, the transatlantic dimension of the European with Russia. In light of the conflict-ridden relation- Green Deal in the field of nuclear power must be ships between the nations, this could facilitate the mentioned. US President Joe Biden’s accelerated development of more constructive relations in a climate policy sees nuclear power as an important trilateral context. 8. RAW MATERIALS DIVERSIFICATION PARTNERSHIP The European Green Deal and Russia 55
Europe’s demand for critical raw materials will continue to increase due to the technological requirements of the European Green Deal. Both the EU and Russia are also working to expand domestic production, particularly in the area of rare earths, diversify international supply chains, and reduce their dependence on China. This would enable the EU and Russia to secure each other’s supply within the framework of a strategic raw materials partnership.
8.1 Political framework
European Union One specific measure in the Action Plan is to estab- In September 2020, the European Commission lish an industry-led European Raw Materials Alliance unveiled an Action Plan on Critical Raw Materials, to guarantee a secure and sustainable supply for the which aims to develop resilient indus- EU of raw materials, especially those trial value chains and reduce depend- that are essential for key European ence on imported critical primary raw Critical raw materials Green Deal industries such as renew- materials via circular resource use, are essential for key able energy and mobility, and largely sustainable products, and innovation. industries of the occur outside Europe (see Figure 22). It targets greater domestic sourcing of European Green Deal Against this background, the list of raw raw materials in the EU and diversifica- such as renewable materials considered critical by the EU tion of imports from third countries. In energies, storage has also been updated and expanded the spirit of the European Green Deal, technologies, and to a total of 30 items, with great this will play a part in the transforma- mobility economic significance and high-risk tion towards an environmentally market situations as their common friendly and digital economy on the denominators. New additions include one hand, while on the other hand increasing the lithium, which is a key resource in battery production resilience of the EU and its strategic autonomy in key and therefore crucial for the transition to e-mobility. technologies.
56 The European Green Deal and Russia
Figure 22: Europe’s significant dependence on imports of rare earths Rare earth deposits worldwide by country for 2018
3 % 1 %
7 % 6 %
37 % 10 % China India
Brazil Australia
18 % Vietnam USA
Russia Rest of the world 18 %
Source: U.S. Geological Survey
As part of the Action Plan, the European Commission also plans to develop strategic international partner- Rare earths ships to secure supplies of critical raw materials not found in Europe. To this end, it is exploring pilot part- Rare earths are a group of 17 shiny silver heavy nerships from 2021 onwards, for example with inter- metals, most from the group of lanthanide ested countries on the EU’s borders. chemicals, which occur only in small deposits, usually in combination with other minerals, and rarely in high concentrations. Despite their Russland name, some of these elements are widespread – The development of the rare earths and metals cerium, for example, is more common worldwide industry is part of the Russian Federation’s industrial than copper. Rare earths are used to produce strategy. Among other things, it provides tax incen- electronic components, lasers, magnets, and tives for investments in mining and processing glass, among other things. projects. Russia aims to increase its share of global production from currently 1.3% to 10% by 2030 with state investments totaling $1.5 bil. The European Green Deal and Russia 57
8.2 Production and demand
The EU is heavily dependent on imports of (critical) raw materials, which are needed as a priority to grow renewable energies as well as in battery production for electric mobility and grid-stabilizing electricity storage solutions. These areas will continue to gain importance, especially in the context of the European Green Deal.
Critical raw materials Russian share of global Example of usage according to the EU production Commission
Antimony 4% Lead batteries
Coking coal 7% Battery electrodes
Scandium 26% Solid oxide fuel cells
Titanium 22% High strength lightweight alloys
Vanadium 19% High performance batteries
Palladium 40% Fuel cells
Source: European Commission.
Russia has 12 mil. tons or 10% of global rare earth most of its other critical raw materials from there. By reserves and is targeting production of 7,000 tons per way of comparison: The EU’s dependence on natural year by 2024, self-sufficiency by 2025, gas imports from Russia, which is often and initial exports for 2026. the subject of public debate, was Though the EU sources around 38% in 2018, less than half its Although it already produces a variety 98% of its rare earths dependence on China for rare earths. of critical raw materials (see table), from China, its Russia has played only a relatively dependence on Russia However, the EU does import large minor role as a supplier for the EU to for approx. 38% of its quantities of aluminum and copper, date. For example, Russia accounts for imported natural gas is needed for wind power and photovol- only 1% of European scandium more often the subject taic plants, from Russia. Other raw imports, although it is responsible for a of public debate materials such as germanium, gallium, quarter of global production. This is strontium, hafnium and indium are due to the fact that the EU is 98% produced in large quantities in the EU, dependent on China for rare earths and also sources and the EU is even a net exporter for the last two. 58 The European Green Deal and Russia
8.3 Potential for cooperation
Critical raw materials tegic partnership within the framework of the Euro- The EU and Russia are pursuing similar strategies in pean Commission’s Action Plan on Critical Raw the area of critical raw materials. Both players want Materials. This could be flanked by European and to reduce their dependence on global market leader Russian companies through the European Raw Mate- China (see Figure 23), boost domestic rials Alliance, for example by coopera- production, and diversify their import tion in the Tomtor rare earths deposit portfolios. Not least the new Chinese A strategic partnership in the North of the Sakha Republic. five-year plan’s focus on achieving between Europe and Appropriate standards and inde- technological independence is also Russia on raw materials pendent certification could ensure that likely to increase Chinese demand for would build trust and mining in Russia is also efficient and critical raw materials. Particularly in reduce dependence on sustainable. light of the Chinese government’s plan China to impose export controls on rare Mutual interdependence in the form of earths, this creates an opportunity for reciprocal exports of rare earths and mutual hedging as part of closer cooperation metals vital to key industries could become a between the EU and Russia in this area. powerful trust-building measure and would also contribute to the common geopolitical goal of In order to set up a mutually beneficial cooperation avoiding unilateral dependence on China in the long of this kind, the EU and Russia should establish a stra- term.
Figure 23: China – dominant producer of rare earths Share of total global rare earth production by country for 2018
8 % 9 % China
12 % Australia
USA
Rest of the world 71 %
Source: U.S. Geological Survey 9. NINE PROPOSALS TO EUROPEAN POLITICS 60 The European Green Deal and Russia
This paper shows that integrating Russia as a cooper- 3. Exploiting the potential for energy ation partner will help achieve the ambitious Euro- efficiency gains in the EU and Russia pean Green Deal targets or even make some of them There is potential for cooperation on joint energy- possible in the first place. At the same time, integra saving projects across all sectors of the economy ting Russia as a partner would represent a major to increase energy efficiency on both sides. impulse for global climate policy. Dialogue and cooperation should be implemented at a working level to back this up. Ultimately, cooperation on climate policy could initiate a new trust-based dialogue between the EU 4. Continuing the natural gas partnership and Russia, gradually overcoming current tensions Completion of the Nord Stream 2 pipeline should with individual projects. be prioritized primarily due to the crucial role of natural gas as a transitional technology for the European policy makers can lay the foundations for energy transition compared to coal and oil as this with the following nine measures: fuels, and given the significant decline in domestic gas production. 1. Increasing the potential for renewable energy in Russia through cooperation In addition, Nord Stream 2 and other remaining As part of a partnership, the economic potential transmission grid connections with Russia as well of renewable energy sources in Russia could be as European distribution grids should be adapted increased through technical cooperation, and in close cooperation to transport hydrogen in the European production could be outsourced in medium term, due to their technical suitability for order to meet the EU’s demand for renewable transporting (partly high concentrations of) electricity and emission-free synthetic gases, hydrogen to Europe. There is also significant which will increase dramatically in the medium potential for cooperation in technologies to avoid and long term. methane emissions.
With a view to future imports of renewable elec- 5. Technology-neutral hydrogen partnership tricity from Russia, a feasibility study should be with Russia commissioned on increasing interconnectivity of In the light of Russia’s ambitious production electrical transmission networks and their effi- targets from methane pyrolysis and nuclear ciency over long distances. power, a hydrogen partnership can reduce the potential supply gap for emission-free hydrogen, 2. Afforestation to achieve climate neutrality especially in the electricity and mobility sectors. Private companies are increasingly recognizing Russia’s enormous afforestation potential as a The EU should consider methane pyrolysis as a
mechanism for capturing and storing CO2. To genuine alternative to electrolysis and publicly
compensate for unavoidable CO2 emissions and support pilot projects with Russia to secure a achieve its net zero emissions goal, the EU should pioneering role in this future technology. secure access to this valuable resource at an early stage within the framework of a partnership. The European Green Deal and Russia 61
6. Joint CCU & CCS projects 8. Nuclear research cooperation on nuclear waste management Should it prove impossible to avoid CO2 emissions, for example in the production and use of natural Nuclear power could potentially satisfy the do-no- gas or blue hydrogen, the resulting carbon dioxide significant-harm principle in particular through should be largely used via CCU or stored geologi- potential cooperation with Russia on nuclear cally via CCS. In the EU, several companies are waste management concepts, and should there- already working to apply both technologies in fore be included as an emission-free technology pilot projects. Lukoil, Novatek and Rosneft are in the European taxonomy and also approved as Russian pioneers in using depleted oil and gas a sustainable source of electricity for hydrogen fields for CCS as an emissions compensation electrolysis. measure; Rosneft is already working closely with British oil company BP. 9. Institutional cooperation To initiate the measures outlined, they should be The EU should actively promote similar coopera- embedded in an institutional framework. The tion projects between its own companies and following top-level consultation formats would Russian partners. Both sides can benefit from be suitable for this purpose in the near future: mutual knowledge sharing through technology and research partnerships and apply these prom- The UN Climate Change Conference in Glasgow in ising technologies in different sectors. November 2021 is an ideal opportunity for the relevant ministers of some EU Member States as 7. Raw materials partnership to reduce well as Russia to convene for a climate and energy dependence on China summit in the run-up to the conference. A raw materials partnership with Russia should be developed as part of the European Commission’s Ideally, this meeting would be accompanied by an Action Plan on Critical Raw Materials. This would EU-Russia summit with European Commission improve access to critical raw materials for President von der Leyen and Russian President companies, both European and Russian, in indus- Putin to set the framework for further tries essential to the European Green Deal, and cooperation. reduce dependence on China. In the medium term, a partnership of this kind could also have In addition, the following formats should be created a unifying impact on transatlantic relations. to consolidate cooperation in the long term:
A joint Green Deal Committee with top represent- atives from the European Commission and the Russian government.
Parliamentary cooperation on a joint Green Deal with the EU Parliament and the Russian Duma.
62 The European Green Deal and Russia
Afterword
When Wolfgang Schüssel asked me a few weeks ago good teacher. I have never forgotten this quick but if I would like to write a brief study on the European important lesson. And the message is as true today as Green Deal and Russia for the Dialog-Europa-Russ- it was back then: The energy partnership we entered land, I didn’t hesitate. It is an honor to be approached into in 1970 has endured to this day in spite of all the by one of the most important Federal Chancellors in ideological differences, and under no circumstances Austria’s history, and I also found the topic extremely should it be dragged into the vortex of current con- interesting: attempting to restart political relations flicts between Moscow and ‘the West’. On the con- from scratch through the medium of energy and cli- trary, we must do everything in our power to avoid mate cooperation. My fascination with this topic adding further fuel to the fire. derives from two early experiences: In 1992, I published the book “A Planet is being In 1987, as press spokesman, I accompanied Fed- Saved. A Chance for Man, Nature, Technology.” Klaus eral President Richard von Weizsäcker on the first Töpfer (CDU) and Joschka Fischer (Bündnis 90/Die state visit of a German head of state to the Soviet Grünen) presented it at the Bonn Press Club. Since Union. Andrei Gromyko, the then head of state of the then, the topic of climate change has stuck with me. USSR as Chairman of the Supreme Soviet (Gorbachev However, efforts to advance climate policy only make was already Secretary General of the CPSU), held a real sense if we think globally rather than nationally. dinner for the delegations on 6 July in the (beautiful) It is not enough for us to keep raising standards in our Palace of Facets at the Kremlin. I was seated next to own countries in the EU; we need the world to join in. the Board Spokesman of Deutsche Bank, Wilhelm The Paris Agreement and the European Green Deal Christians. During the meal, we talked in private offer the opportunity for them to do so. In this con- about the 1970 natural gas pipeline deal between text, we should add climate policy to our traditional Bonn and Moscow, which had been largely engi- energy partnership with Moscow. Also: If we work neered by Christians and Willy Brandt. I will never together with Russia to save the planet, we can use forget what Christians told me: When two countries this to lay the groundwork for a general political build a pipeline, they are in essence deciding to work détente. peacefully together for decades. Pipelines are not just connections between two points that you build I would like to thank the energy team from our con- once, they always need to be filled, emptied, super- sulting firm, Bingmann Pflüger International, first and vised, maintained, repaired, and so on. That means foremost David Lissek, Arash Duero, Sebastian Kiefer, they are by nature trust-building measures. Christians Cecily Bernstorff and Frank Heber for their excellent continued: “It was the best thing we could do for support in preparing our brief study. Thanks also to peace in Europe. We are creating a mutual depend- our former colleague, Alexandru Zagrea, for his good ency: the Russians need our technology and our for- advice. Most of all, I wish to thank Wolfgang Schüssel eign currencies, we need their gas.” Christians, who for his trust. was then already on his 28th visit to Russia, was a
Prof. Dr. Friedbert Pflüger Berlin, May 2021 The European Green Deal and Russia 63
Abbreviations
€ ...... Euro (currency) $ ...... US dollar (currency) Bil...... Billions CCS Carbon Capture and Storage CCU ...... Carbon Capture and Utilization
CO2 Carbon dioxide DNSH . . . . . Do-No-Significant-Harm principle of the EU taxonomy regulation ENTSO-E European Network of Transmission System Operators for Electricity EU ...... European Union EURATOM European Atomic Energy Community G20 ...... Group of 20 (of the important industrialized and developing economies) GDP ...... Gross domestic product GG ...... Greenhouse Gas GNI Gross National Income Gtoe ...... Gigaton (= 1 bil. tons) of oil equivalent GW Gigawatt IEA ...... International Energy Agency IPCC ...... International Panel on Climate Change of the United Nations IRENA . . . . . International Renewable Energy Agency kWh ...... Kilowatt hour LNG ...... Liquefied Natural Gas Mil...... Millions Mtoe Megaton (= 1 million tons) of oil equivalent MW ...... Megawatt NATO . . . . . North Atlantic Treaty Organization P&T ...... Partitioning and Transmutation Rare earths . . . Rare earth metals TWh ...... Terawatt hour US/USA . . . . . United States/ United States of America 64 The European Green Deal and Russia
Index of Figures
Page
Figure 1: Overview of the European Green Deal 11
Figure 2: EU greenhouse gas emissions (in mil. metric tons of CO2 equivalents) 12 Figure 3: EU share of global greenhouse gas emissions 13
Figure 4: Russia's CO2 emissions (in mil. metric tons) 14 Figure 5: EU imports of natural gas, oil and coal in 2018 by country of origin 15
Figure 6: Russian electricity mix (2019) 19
Figure 7: Installed renewable capacity in the EU and expansion scenarios (in GW) 20
Figure 8: Technical and economic potential and actual production of wind power in 21 Russia (in TWh)
Figure 9: Technical potential for energy generation from biomass in Russia 22 (in TWh per year)
Figure 10: Open space available for reforestation by country (in mil. hectares) 23
Figure 11: Global hydrogen production 31
Figure 12: Global demand for hydrogen, 1975-2018 32
Figure 13: Projection of hydrogen production costs by production technology in 2050 33
Figure 14: Natural gas production in the EU-27 (in Mtoe for countries with minimum 40 production of 5 Mtoe per year)
Figure 15: EU-28 natural gas consumption, production and imports 41 (in Mtoe, projected from 2020)
Figure 16: Imports of natural gas into the EU-27 from the main countries of origin 42 (in Mtoe) and Russian share
Figure 17: Classification of nuclear waste worldwide 47
Figure 18: Overview of nuclear power in Russia 48
Figure 19: Overview of nuclear power in the EU 49
Figure 20: Overview of EU attitudes to nuclear power 49
Figure 21: Development of radiotoxicity during P&T 53
Figure 22: Rare earth deposits worldwide by country for 2018 56
Figure 23: Share of total global rare earth production by country for 2018 58 The European Green Deal and Russia 65
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Bingmann Pflüger International GmbH The copyright is owned by Dr. Wolfgang Schüssel. Any form (responsible: Prof. Dr. Friedbert Pflüger) of distribution outside the copyright is not permitted.
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Author Prof. Dr. Friedbert Pflüger has been teaching climate and energy policy at the Center for Advanced Security, Stra- tegic and Integration Studies (CASSIS) at the University of Bonn since summer 2020. He heads up the European Cluster for Climate, Energy and Resource Security (EUCERS) there, which he founded in 2010 at King’s College London. Pflüger is Managing Director of consulting firm Bingmann Pflüger International, Senior Advisor to the Global Gas Centre, Geneva and Senior Research Fellow for the Atlantic Council (Washington D.C.) as well as a member of the Advi- sory Board of the Institute for Climate, Energy and Mobility (IKEM). He was a close associate of Richard von Weizsäcker from 1981 to 1989, and has served as press spokesman for the German President from 1985. From 1990 to 2006 Pflüger was a member of the German Bundestag. During this time he was, among other things, Chairman of the Bundestag Committee for EU Affairs and State Secretary in the first Merkel government.
Editorial team David Lissek Arash Duero Cecily Bernstorff Frank Heber Sebastian Kiefer
Design designlevel 2 www.designlevel2.de
Date 07/2021
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