In the fight against climate change, the existing energy models based on fossil fuels should eventually be abandoned and converted to sustainable energy sources such as solar and wind. In recent years, this transformation has been led by developed countries and serious gains have been so far achieved. Despite the rules and principles regarding the Paris Agreement, 2021 concluded with the European Union’s energy crisis, which had such an impact that various segments began to question the bloc's climate policies.
Undoubtedly, one of the most important reasons for the crisis is the decrease in the impact of the COVID-19 pandemic on world economies. Because of the failures in the global supply chains, some unexpected fluctuations were experienced in the general levels of prices, and the energy sector also took its share.
It would not be wrong to say that the crisis came from natural gas prices, compared to the crises caused by oil prices in the past. The demand for natural gas, which is a relatively cleaner alternative to coal, has increased as a result of the tendency of countries to remove coal from their energy mix within the framework of bilateral relations and international platforms such as the G-7, G-20 and the U.N. meetings in order to combat climate change. The transformation in the energy composition also affected the EU, which has been making plans in this direction for years. In the EU, a leading actor in global climate policies, there were periods in 2021 in which natural gas prices increased by 600%. Considering that more than 20% of electricity production in the EU is based on natural gas and more than 15% of energy products imports are made up of natural gas, it would not be wrong to say that these price movements can have serious effects on economies. As a matter of fact, record inflation figures from EU member states already confirm this.
In addition, the current natural gas stock in the EU was at very low levels compared to last year, which made the winter more difficult for the bloc. The International Energy Agency (IEA) also addressed this issue and called on Russia to increase gas supplies to Europe, inviting Russia to alleviate the crisis. Finally, unlike its neighbor Germany, France's energy giant Electricite de France (EDF), announced that it would close its nuclear facility due to technical problems in the nuclear power plants, increasing the pressure on the energy supply of the union.
While these developments were taking place, tensions between Russia and Ukraine, which are very closely related to the energy supply security of the union, emerged as a new risk item. Russia's controversial weight in the energy policy of the bloc has been on the agenda for some time. While the Nord Stream 2 submarine natural gas pipeline project, which will operate between Russia and Germany, was supported by a group of countries led by Germany, opposition country groups were lobbying for the cancellation of the project, stating that a step should be taken to end dependency on Russia.
In the light of all these developments, it is safe to say that the EU has found itself in a very serious impasse on the axis of energy and climate change. Therefore, in contrast to the cold winter, the EU will have to resort to policies that will yield results in the short term for the future in a geography that is getting warmer. Within the framework of its commitment to reduce greenhouse gas emissions by 55% compared to 1990 levels by 2030, and to have a carbon-neutral economy by 2050, under the European Green Deal, one of the most important shares in the EU's achievement of this goal is expected from the transformation to be realized in its energy composition. In this context, in the “Fit for 55 package” announced by the EU, the bloc plans to meet at least 40% of the total energy composition from renewable energy sources by 2030. In the light of the developments in recent months, it has become possible to say that this transformation may not be as easy as anticipated.
The EU has been a very important actor for a long time in the fight against climate change, both with the decarbonization steps it has taken within its borders and with the financial support it has provided to developing countries on an international scale. Therefore, in order to understand how to find a way out of the difficulties created by the current conjuncture, it is useful to go back a little and examine the current reflections of the steps taken by the EU in the last few years in the fight against climate change.
After the European Green Deal was announced in 2019, a very comprehensive environmental transformation program has begun in the EU. In this direction, the bloc plans to take action in many areas such as biodiversity, circular economy and sustainable food systems, as well as climate change. The three main goals of the green deal are to achieve net-zero emissions, to separate economic growth from resource use and to promote the transition to an inclusive green economy.
Undoubtedly, for a large regional union consisting of 27 countries, such a transformation also requires serious cost planning. In this direction, the European Green Deal Investment Plan has been announced. The main pillar of the plan is the EU’s long-term budget (also known as Multiannual Financial Framework – MFF) for the period between 2021 and 2027, and the package called "NextGenerationEU" adopted with this framework. While 30% of this budget package is to be allocated in the context of combating climate change, thanks to the private sector’s contributions under the InvestEU program, it is expected that a total of at least $1.09 trillion of investment will be realized over a 10-year period.
As of current developments, at this point, it would be useful to open a parenthesis to the InvestEU program. Because the private sector investments to be mobilized through the program and the discussions on the taxonomy to be implemented within this framework are at the top of the agenda. InvestEU is a program that focuses on the medium and long-term policy priorities of the union. It has been decided that the 30% of the investments under the program will be allocated to projects on the environment and climate.
As stated many times in international climate change negotiations, although states will take the lead in overcoming the climate crisis by using public resources, it is very difficult to achieve success in a structure that is not accompanied by the private sector. In this direction, more and more countries are taking steps to direct their private sectors to green investments. For this reason, the private sector received more interest than ever at the U.N.’s climate gathering in Glasgow last year, and the summit was even considered as the “most commercial climate summit” by various segments.
The EU undoubtedly accompanies this trend observed in the private sector on a global scale. In this framework, an EU-wide classification system has been established in order to provide a common understanding of which investments and activities can be qualified as green for the private sector. This classification, which we call taxonomy, will also be used by InvestEU and will play an important role in promoting sustainability practices among public and private sector investors and project implementers. In this way, it is expected that private sector investments will accompany the achievement of the goals of the European Green Deal in a healthy and sustainable way.
The bloc’s energy crisis has once again reiterated the importance of access to affordable energy and security of supply, and in this context, it has once again brought the issues of accelerating the clean energy transition and increasing the integration of the EU energy market to the top of the agenda. In this direction, the EU seems to have taken action to switch island or peninsula member states, which were first described as isolated, to sustainable energy. In this regard, upon the proposal of the European Commission, the EU countries agreed to invest approximately $1.09 billion in the five cross-border infrastructure projects within the scope of the Connecting Europe Facility (CEF) for trans-European energy networks.
In the past years, while determining the climate change and energy policies to be implemented throughout the union, we have always witnessed the efforts of countries such as Poland and Hungary to ensure that coal or natural gas do not lose their place in their energy mix. So far, all these efforts have been fruitless. In the energy crisis that the EU is going through today, the bloc has again started to discuss nuclear and even natural gas-based energy production to be used in the transition process.
Within the framework of these discussions, with the decision taken by the European Commission on Feb. 2, 2022, nuclear and natural gas investments in the EU will begin to be considered in the sustainable investment class, albeit temporarily. This decision, which points to a very serious paradigm change, caused a lot of discussions but was enacted as a result of both geopolitical and economic difficulties. According to the decision, these two energy sources will be considered sustainable if they meet certain criteria, and it is foreseen that this regulation will be valid until 2045 for nuclear energy and until the end of 2030 for natural gas. In this context, if the safe elimination of radioactive waste in the nuclear power plants to be built until 2045 is guaranteed, it will be appropriate to classify the investments to be made in the mentioned nuclear power plants as sustainable. In the context of natural gas, it has been decided that investments in natural gas power plants will be considered sustainable as long as they will be built by the end of 2030 to replace the power plants that pollute nature more and built in compliance with the threshold values to be determined in terms of greenhouse gas levels.
For a long time, the EU has been playing a leading role in taking the most ambitious steps on climate change, both within the bloc and in the international arena. The European Green Deal plan put into practice in this direction was the most important indicator of this. However, at the point we have reached today, it seems possible to attribute the EU's stepping back from its previous stance by classifying natural gas and nuclear energy as sustainable to a climate policy designed in a way that is not suitable for geopolitical and socioeconomic realities. Undoubtedly, not only the EU but all countries need to take serious steps as quickly as possible to decarbonize their economies.
On the other hand, wrong and hasty plans will not only disrupt this critical process for our humanity but will also reverse the progress made. In fact, giving the private sector and other investor groups the implication of taking a step back after the declarations that the energy transformation has started with determination will bring about a re-questioning of the policies to be implemented in the future. At this point, the EU needs to explain its new paradigm very well to households, private sector investors and its partner countries in the fight against climate change.
Being aware of the requirements of its geopolitical position, our country continues to implement its climate and environmental policies by taking into account all socioeconomic and diplomatic factors. As President Recep Tayyip Erdoğan also announced, Turkey will put the two units of the country’s first nuclear power plant, Akkuyu, which is being built in the southern Mersin province, into service in 2023.
In addition, Turkey will achieve great prosperity in the field of energy as of 2023, with the outstanding achievements of state-of-the-art drilling and seismic exploration vessels in natural gas exploration. Therefore, the policies so far clearly show the importance we attach to energy security as a country. Undoubtedly, Turkey will resolutely advance toward the target of 2053 net-zero emissions under the leadership of Erdoğan. Recognizing that reaching the 1.5 degrees Celcius (2.7 degrees Fahrenheit) target underlined in the Paris Agreement is extremely important for the future of our planet, Turkey will continue to implement its environmental and climate change policies in a balanced and assertive manner, without subjecting its people to the economic burdens of transitioning to a carbon-free economy.
