The European Union is at risk of wasting €29bn of taxpayers’ money on soon-to-be obsolete projects, a new report has suggested.
The report, published by data science firm Artelys, claims that the money would be overinvested in gas projects which will become unnecessary under the EU’s action plan against climate change.
Last year, the European Investment Bank pledged to transform itself into the world’s first ‘climate bank’ by ending its support for fossil fuels within the next 24 months. However, before those changes take place, another 32 gas projects are still eligible to receive funding.
According to Artelys the majority of these gas projects would waste billions of taxpayer euros as they would be left as ‘stranded assets’ as part of the process to transition to cleaner energy forms.
The report also warns that as Europe already has the infrastructure in place to meet the continent’s future requirements, the upcoming decades will see gas investments become completely unnecessary.
A Green Deal plan was set out by the European commission last year which strives to make the EU carbon-neutral by 2050, partly by increasing efficiency, as well as the amount of renewable energy being used.
Gas demand is set to fall by around 30% by 2030 in comparison to the levels seen in 2015 according to Europe’s climate action roadmap. However, even if demand rises more than expected, the report says that further investment in gas infrastructure would be redundant for the economy.
Europe’s current gas projects could even hold up against a range of extreme disruptions to supply lines, according to the report.
Luxembourg’s energy minister, Claude Thurmes, said that it ‘makes absolutely no sense’ for decision-makers within the EU to support investments into new gas infrastructure with public money.
“This report debunks the argument that these investments would be needed for the EU’s security of gas supply. We risk wasting €29bn on future stranded assets while locking our energy system into fossil gas addiction for the next 40 years,” Thurmes said.
The EU’s executive arm, the European commission, has overestimated the infrastructure needed by Europe for gas, according to Artelys. This is because there is separate handling of gas and electricity projects within the EU.
Modelling experts have said that the planning for future investments should involve an integrated approach, as the changes being made to tackle the climate problem will increase demand for renewable energy to replace gas within the energy system.
According to Thurmes, “We need to prioritise renewable energy investments over the interests of the European and international gas industry”.
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