Central and Eastern Europe advance an options-based strategy: Key climate and energy takeaways from GLOBSEC 2024
GLOBSEC Forum – renowned as one of Europe’s foremost dialogue platforms that focuses on pivotal aspects of Central and Eastern Europe’s growing significance and role, hosted this year by Czechia’s President Petr Pavel in Prague, was a mix of retrospections, celebrations, and a reinvigoration of Central and Eastern Europe’s (CEE) role for the European future. Marking the 20th anniversary of the EU accession of many countries in the region, the Forum offered an opportunity to reflect on key challenges and opportunities ranging from cybersecurity and the energy transition, to defence and Ukraine’s resilience.
In her first public speech as newly re-elected president of the European Commission (EC), Ursula Von der Leyen gave a refreshing perspective on the CEE’s role:
The new reality is that Central Europe is not only geographically at the heart of Europe. But it is also politically and strategically central to the future of the European Union. The resilience of most Central European countries in the face of Russia’s war of aggression in Ukraine was and is remarkable. So, when we talk about competitiveness, I think Europe’s West has a lot to learn from Europe’s East.
European Commission President Ursula Von der Leyen
Diversifying away from Russian fossil fuels has been a litmus test of CEE’s resilience in recent years. Looking at the pre-war data makes the scope of the recalibration especially prominent. The good news is that foundational shifts are well underway thanks to deepened cross-country collaboration, accelerated and more pragmatic clean energy deployment plans, and diversified international partnerships. Structural challenges persist, however.
Dependence on Russian gas in 2020
Climate pragmatism
Zooming in on energy transition conversations, pragmatism has been a cross-cutting topic. The European Commission president has made it clear that a dichotomous approach should be overcome with a complementarity narrative: “When we speak about our energy, we have to produce more of our own energy – more renewables, more nuclear, more efficiency.”
While attempts of villainization or extreme valorisation of certain decarbonisation technologies were still vocal across panels and coffee break conversations, more balanced, evidence- and systems-based perspectives were common as well – reflecting growing awareness that Europe will need more climate solutions on the table to achieve its goals, not fewer. As Albéric Mongrenier, Executive Director at European Initiative for Energy Security noted, “energy security [has] a different meaning than 20 years ago. [The] EU needs to improve interconnection and make technology decisions based on economics and decarbonisation potential not ideology.”
Make it or break it
On the sidelines of GLOBSEC Forum, Clean Air Task Force hosted the session, Strengthening Central and Eastern Europe’s Economic and Energy Security, where pragmatism on decarbonisation was coupled with a more nuanced understanding of energy security and need for a reality check across key decarbonisation technologies.
Andrei Covatariu, Research Fellow at Centre for Regulation in Europe helped to peel back the energy security narrative to three core layers:
- Management of local resources (mostly fossil fuels and water).
- Physical and commercial ties with those countries that have abundance of these resources.
- Focus on deploying renewable and clean technologies, that includes the component of critical raw materials – the capacity to mine, refining them, refine them, and/or manufacture clean technologies from them.
While navigating towards the target of midcentury climate neutrality remains the modus operandi, we need to remind ourselves of two things:
- That the world does not cease to exist in 2050, so we must keep innovating and scaling up the needed solutions whose timeline extends beyond it.
- The four P’s — pragmatism, planning, partnerships, and people — should underlie the energy transition and no single country in CEE or by and large in Europe, can deal with this challenge on its own. We therefore should encourage more collaboration, capacity building, and talent retainment in the region and support long-term planning and evidence-grounded, fact-based conversations.
Where do we go from here?
Getting real on hydrogen
Since the publication of the EU Hydrogen Strategy in 2020, Europe has seen significant headwind placed behind scaling up a clean hydrogen industry for the continent’s energy transition. Further emphasis had been placed on linking hydrogen to energy security efforts, following the launch of the revised, ambitious hydrogen production and imports targets included in the 2022 RePowerEU Plan. And while this year’s GLOBSEC Forum covered many aspects of energy security for the region, hydrogen was raised a few times in various interventions, including Commission President Von der Leyen’s opening remarks.
Whilst clean hydrogen has the opportunity to play an important role in Europe and the CEE region’s decarbonisation efforts, it will not be the panacea to solve the entire problem and its contributions to energy security will be limited. This lies at the fundamentals of hydrogen being an energy vector, not an energy source, requiring vast amounts of energy to liberate the molecule from a compound state.
Hydrogen is not something new to us: it is already being produced and consumed in large quantities today across Europe, contributing to around 2% of Europe’s total energy consumption. Yet almost all of this is unabated “grey” hydrogen produced by steam reforming of natural gas that releases large quantities of CO2. Hydrogen therefore must be viewed as part of the decarbonisation challenge as well as a potential solution to unlocking climate neutrality across Europe.
A further hurdle is that Europe does not have abundant firm energy sources – at least not in the way it once was – including clean energy. It relies heavily on natural gas imports and despite an increase in renewable energy generation, it will be constrained by total capacities, both land and total energy output potential. Limited supplies risk potential resource competition, where available wind and solar will be needed for cleaning up the grid and producing clean hydrogen – especially pertinent when bloc-wide political pursuits are focused solely on supporting renewables-powered electrolysis. The EU has set some ambitious targets for hydrogen, but building enough low-carbon stock will take time – particularly when focused on only one production pathway – and faces cost challenges to be competitive against today’s grey hydrogen.
Most of today’s hydrogen consumption is as a feedstock and fuel in European industry, so we are presented with a real opportunity to supplement existing hydrogen supplies with a low carbon alternative to begin cleaning up some of the dirtiest parts of our economy. There is also opportunity for it to play a future role in sectors where it is not yet used – like in steel or maritime shipping – that are facing limited to no other realistic decarbonisation options.
CEE has a large industrial and transportation base, but it is dispersed across many regions. It must therefore seek cooperation across borders to develop a portfolio of hydrogen production and transmission infrastructure that will get the clean hydrogen to the sectoral demand hubs that need it the most. Not everyone will be an equal hydrogen producer and consumer, so it’s important to strike the right cooperative balance across the region so that there are no winners or losers.
Whilst hydrogen may not be the answer to our energy security problems, its development and deployment can contribute to our economic security. Supporting clean hydrogen deployment in the right sectors will ensure a dual approach of retaining and sustaining our industrial base and competitiveness in Europe, as well as decarbonising the economy and meeting net zero goals.
Read more about developing clean hydrogen work in CEE.
Nuclear energy: A useful carbon-free energy option for Central and Eastern Europe
The world is going to need more energy, not less. Global electricity demand is expected to grow by about one-third to three-quarters by 2050, requiring strategies that limit increasing emissions while meeting this additional demand. Renewable energy sources like wind and solar will be critical to this effort worldwide, but they can be constrained by daily as well as seasonal variability and large land footprints, requiring additional clean firm power options to limit overall system cost and enhance energy security. Additionally, in the face of geopolitical uncertainty and complex socioeconomic challenges, European policymakers should adopt a climate and energy strategy that is de-risked, long-term, and inclusive of diverse options.
Nuclear energy is one such option. It is a carbon-free, energy-dense technology capable of producing electricity and heat from a small land footprint, making it a suitable complement to renewables and a useful carbon-free energy alternative on its own. While it can be deployed in many locations, sites near large bodies of water are preferable for optimal economics.
Central and Eastern Europe plays a critical role in achieving the European Union’s goal of climate-neutrality by midcentury. Countries in the region are facing compound challenges encompassing an aging infrastructure and fiscal constraints, among others. However, geopolitical realities ensuing from the war in Ukraine have demonstrated the exceptional capacity of the region to pivot and innovate.
Nuclear energy is already well-established in the region. For example, Bulgaria (44%), Czechia (36%), Hungary (46%), Romania (18%), Slovakia (54%), and Slovenia (37%) have been generating substantial portions of their electricity from nuclear power plants for decades. Multiple nations across the region are looking to further develop nuclear generation to achieve a number of objectives, including meeting decarbonisation goals, increasing energy independence and security, and boosting economic growth in the region.
Nuclear energy technology can boost energy security of supply on multiple levels starting off with geographically spread-out selection of technology vendors; through very low dependence on critical minerals, to global, stable and abundant uranium markets. Additionally, presence of nuclear in the power system can reduce electricity price volatility during the long operational life of the plant of up to 80 years, potentially lowering electricity prices (based on our study for Poland).
Read more about role of nuclear energy in supporting Central and Eastern Europe’s decarbonisation and energy security here.
Future-proofing Central and Eastern European industries with carbon capture and storage
As the dates to reach climate targets rapidly become closer, the need for deploying carbon capture and storage (CCS) technologies to tackle industrial emissions and enable permanent carbon removals is becoming ever clearer. Deploying these technologies is no longer a choice, as it will be virtually impossible to meet climate targets without these technologies. With many industries lacking cost-effective alternative options to fully decarbonise their processes, deploying CCS at a large-scale over the coming decades is imperative. Furthermore, in order for Europe to meet its target of climate neutrality and negative emissions thereafter, permanent carbon removals utilising geological storage will be required to counterbalance those residual emissions and remove historical CO2 that is already having damaging effects on our climate.
CCS is particularly relevant for the CEE region’s industries to decarbonise and maintain their industrial competitiveness in the face of rising carbon prices. The scale of the challenge of deploying CCS cannot be understated. The EU’s own analysis has estimated around 300 to 600 million tonnes a year of CO2 may need to be captured by 2050, which is about 11% to 22% of the EU’s CO2 emissions in 2021. This will require a rapid scale up of carbon capture installations, and the required CO2 infrastructure to transport and permanently store these emissions.
Industries in most CEE countries still provide a considerably higher share of employment and gross value added (GVA) than the EU average, making its decarbonisation not only an environmental priority but also a socio-economic necessity to ensure a just transition to a climate-neutral Europe.
With industrial emissions of 90.4 Mt/yr4 many countries in the CEE have substantial industrial bases that will be increasingly exposed to rising carbon prices under the EU Emissions Trading System (ETS). For some of these industries, such as cement and lime, applying CCS is either the only or one of the cheapest paths towards complete decarbonisation.
The work needed to ensure that CCS is available at scale for industrial emitters and as an option to tackle residual emissions through carbon removals must begin in earnest now. Collaboration across the region on developing and planning CO2 infrastructure, sharing best practices and project learnings, and overcoming regulatory barriers such as those caused by the London Protocol and the Helsinki Convention, will require dedicated work from governments across CEE. This work will pay dividends, helping to ensure future-proofed industries in the region and maintaining a level-playing field in the EU.
The carbon price won’t wait for industries in the CEE region to deploy CCS. This brings challenges for the region as a whole, which is falling behind in deploying these technologies. Investing in CCS now can secure the industrial competitiveness of CEE’s critical industries.
Read more about role of CCS in retaining CEE’s industrial base here.
With much more to reflect on and follow up on post-GLOBSEC Forum 2024, one thing is clear: There is an increased sense that Central and Eastern Europe can and should play a more decisive role in shaping Europe’s decarbonisation and energy security narrative, and they can best embody that role by helping advance a European strategy that matches the realities of the region and the complexities of the challenge.
