EU Member States have inadvertently supported with their own subsidies the renewable energy targets of other Member States, a practice that violates EU internal market rules, explains Kim Talus at UEF Law School. He looks at how Denmark subsidised Danish biomethane producers who exported to Sweden, where Swedish consumers were benefitting from subsidies already. This promoted Danish biomethane producers at the expense of rivals. In December 2022 … [Read more...]
The EUās Carbon Border Adjustment Mechanism still has 5 serious flaws
Taxing carbon at the border is a lot more complicated than you may think, explains James Bushnell at the Energy Institute at Haas. The EUās Carbon Border Adjustment Mechanism (CBAM) imposes a tax on imported goods that is designed to reflect the carbon content of those goods. But CBAM has flaws that must be addressed. It taxes the carbon in imported inputs supplied to EU producers, but not the carbon of those same inputs if they are imported as … [Read more...]
The EUās inaugural Hydrogen subsidy auction. What have we learned?
At the end of April, the winners were announced of the first pilot auction to allocate subsidies for EU hydrogen production via the European Hydrogen Bank. The winning bids were between ā¬0.37 and ā¬0.48 per kg, much lower than the ā¬4 ā ā¬6 per kg estimated āgreen premiumā cost gap between renewable hydrogen and fossil hydrogen in Europe. The low bids mean companies applied for fewer subsidies than needed to bridge that āgreen premiumā gap because … [Read more...]
Low Emission Hydrogen: creating markets to get buyers to make firm commitments
Low emission hydrogen is expected to play an important role in global decarbonisation, though costs today are very high and must come down. Economies of scale will help, but production is yet to pick up pace as there are inadequate ādemand signalsā which result in financial risks for project developers. Kapil Narula and Luciano Caratori of Climate Champions Team, Laurent Antoni at IPHE, and Nigel Topping (former UN Climate Change High-Level … [Read more...]
Green Steelmakersā global future: importing the Iron from where Renewables are cheap, the Ore abundant
Governments in Europe have allocated around ā¬5bn to 10 commercial-scale hydrogen-ready DRI (direct reduced iron) facilities for steelmaking, but even with these generous subsidies steelmakers are struggling to reach final investment decisions, citing high costs for domestic hydrogen as a barrier. And when you consider that over ā¬400bn is needed to transition the entire European sector to hydrogen-based steelmaking, a totally new way of thinking … [Read more...]
Franceās ā¬100/month EV āsocial leasingā plan was oversubscribed, then closed. How to keep the momentum going
On January 1st France launched its flagship EV āsocial leasingā programme, at a typical price of ā¬100/month, targeting 25,000 users. Within six weeks it was oversubscribed, forcing the government to close the scheme and alter the subsidy regime to accommodate the new total of 50,000. The programmeās popularity demonstrates its relevance and justifies its future expansion. However, the system needs to change if it is to meet the challenges … [Read more...]
Whatās holding up EV adoption? European carmakers are focussing on more profitable SUVs, not affordable cars
European car manufacturers are focussing on more profitable SUV and premium EVs, and this is slowing down the adoption of EVs overall, according to an analysis by T&E. It also means consumers are paying far more than they should be for mass-market compact EVs. To make the point, T&E reveals that the average price of a battery electric car sold in Europe has increased by 39% (+ā¬18,000) since 2015 while in China it has fallen by 53%. If car … [Read more...]
France is subsidising made-in-EU EVs with low carbon footprints. Europe must follow
Last year, France announced new green eligibility rules for awarding subsidies to EVs. Starting this year, an incentive of ā¬5,000-ā¬7,000 will only be awarded to electric cars with a production carbon footprint below 14.75 tonnes of CO2. Itās a first in environmental policymaking which the EU should be delivering across the region, says Lucien Mathieu at T&E. And not just for environmental reasons. It will promote EVs made in Europe where … [Read more...]
Could big U.S. subsidies for Hydrogen create perverse incentives, raise emissions?
There is a danger that the U.S. Inflation Reduction Act (IRA) subsidies for hydrogen production (defined in provision 45V) may create perverse incentives that do not reduce emissions and may increase them. James Sallee at the Energy Institute at Haas explains why. The goal is to make āgreenā hydrogen powered by newly built clean energy. But what if the generously subsidised hydrogen is made from clean energy (new or not) that should be powering … [Read more...]
Belgium: commercially viable Rooftop Solar for social housing. No installation subsidies, lower bills
Rooftop solar is becoming a key component of the roll-out of clean energy. But whereas the decision to install is straightforward for homeowners, how do tenants in social housing blocks take advantage of the subsidies and lower electricity prices? Sven Van Elst at ASTER and Maarten Michielssens at Energy Vision, writing for WEF, describe their project that is installing rooftop solar, free, for 52,500 social rental homes in Flanders, Belgium. No … [Read more...]
Rooftop Solar: will subsidies benefit wealthy early adopters, while grid limits lock out the latecomers?
Subsidies encouraging homeowners to install rooftop solar are being won by the affluent who can afford to be first movers. And when the technology has come down in price, the remaining majority of households will be shut out of the benefits of own-generation because the grid wonāt have the capacity to integrate everyone. Thatās the argument made by Juan Jose Cuenca Silva, Barry Hayes and Hannah Daly at the University College Cork who summarise … [Read more...]
Germany to ramp up the decarbonisation of Buildings Heating from Jan 1st 2024. How?
Decarbonising heating is a major challenge for any country. Germanyās Building Energy Act (GEG) means that from 2024 every newly installed heating system, in new or existing buildings, must operate with a minimum of 65% renewable energy. Concerns over the costs to customers (installing new and expensive systems, or paying a penalty for fossil heating) has led to intense debates, hence the new law includes a range of subsidies, bonuses, discounted … [Read more...]
France plans the social leasing of EVs at ā¬100/month. Can it jump start affordable electric cars?
Social leasing of EVs could become the breakthrough example of climate action done right, explains William Todts at T&E. And Franceās president Macron has promised to do it, aimed at low-income households to counter criticism that even with subsidies EVs are still out of reach for many. Todts quotes T&E analysis that shows that between 2024 and 2030 around 900,000 low-income households could benefit from monthly leasing costs of ā¬70 to … [Read more...]
U.S. Heat Pump adoption is evenly spread across rich and poor. Surprised?
The problem with subsidising first-adopters of new technologies is that they can substantially benefit rich households. Theyāre the ones who buy the first EVs, rooftop solar, etc. Lucas Davis at the Haas School of Business presents data that shows that, in the U.S., heat pumps are being bought evenly across the income distribution. This is a surprise, not least to the author! Nationwide, 15% of households have a heat pump as their primary heating … [Read more...]
Germanyās proposed de facto ban on new fossil boilers from 2024 meets fierce resistance
Like many nations, Germany is struggling to find a way to replace fossil fuel-powered boilers in millions of homes and buildings with heat pumps and other cleaner alternatives. Heating accounts for a whopping 15% of the countryās emissions. As Sƶren Amelang at CLEW explains, the up-front cost of a new clean heater can be double that of existing mass-produced fossil equivalent, so home owners are resistant. In 2022, two thirds of all new heating … [Read more...]
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