EU expands recovery fund plan

The European Union has announced energy independence objectives as part of its €800bn pandemic recovery fund. The reform plan called REPowerEU, which was approved by the European Commission last year, aims to strengthen the EU’s strategic autonomy by promoting the use of renewable energy sources and reducing its dependency on Russian fossil fuel imports. With this reform, EU member states can now add a new REPowerEU chapter to their national recovery and resilience plans, giving them access to loans and grants under the €800bn fund.

The new plan will require 37% of the total expenditure to go towards green expenditure, with more than a third of spending assigned to cross-border projects including renewables and energy efficiency projects. To be eligible, updated national recovery plans with REPowerEU chapters must be submitted before 31 April, with the revised plans due to be in force by the summer. REPowerEU will also offer up to €10bn in financing for missing gas infrastructure, €2bn for oil infrastructure to stop the shipment of Russian oil to Europe and €20bn in additional grants to finance the exit from Russian fossil fuels.

The updated objectives in the REPowerEU plan will focus on increasing the uptake of renewables, including measures to make solar rooftops mandatory in new buildings and boosting energy efficiency and energy storage capacity. Fossil fuel infrastructure cannot amount to more than 30% of the overall REPowerEU spending, and the plan includes additional requirements to ensure EU spending directly addresses the security of supply issues. To finance the REPowerEU objectives, €5.4bn is being redirected from the EU’s Brexit adjustment reserve, while additional grants worth €20bn will be available from the EU carbon market.

The new plan aims to diversify the EU’s energy supplies and strengthen its strategic autonomy by reducing its dependence on Russian fossil fuel imports. With member states now able to access the REPowerEU fund, the EU is one step closer to achieving energy independence, and the region is poised to shift towards cleaner and more sustainable energy sources.

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