The European Union’s REPowerEU response to Russia's weaponising of gas supply has been widened to allow its funding provisions to apply to post Covid recovery plans, energy transition and diversification of energy supplies away from Russia, according to a European Council communication.
Representatives from the European Parliament and the EU Council agreed on Wednesday to allow EU countries to add a REPowerEU chapter to their post-Covid national recovery and resilience plans.
The REPowerEU is a plan that was hatched by the Commission in response to Moscow’s war on Ukraine and can make available up to €225 billion ($240 billion) in unused funding to help economies recover after the Covid slump as well as facilitating energy transition and diversifying energy supplies away from Russia.
The provisional agreement included a €20 billion boost in funding. The scope of financing can include:
• decarbonising industry
• increasing production and uptake of sustainable biomethane, and renewable or fossil-free hydrogen
• increasing the share and accelerating the deployment of renewable energy
• improving energy infrastructure and facilities to meet immediate security of supply needs for gas
The scope of gas-related energy infrastructure financing includes liquefied natural gas projects that serve the EU interest in diversification of supply.
When it comes to oil infrastructure, requests for financing under the programme will need to be a response to pressing and immediate concerns on security of supply.
Under the fine-tuned provisional agreement, an EU state request on financing oil infrastructure and facilities would come under special scrutiny, becoming “subject to the exceptional temporary derogation due to its specific dependence on crude oil and geographical situation”.
Funding of the grants will be allocated from Innovation Fund and Emissions Trading Scheme (ETS) allowances.
“I am very pleased that the Czech Presidency (of the EU Commission) is now delivering on one of our key promises: ending the EU’s dependence on Russia’s fossil fuels and paving the way for a radical overhaul of the Union’s energy sector, said Czech Republic Finance Minister Zbynek Stanjura.
“REPowerEU is going to enable us to finance the necessary investments and reforms.”
The provisional deal is still subject to approval by the European Council and the European Parliament.