Headline Highlights: European Policy & Regulation

Throughout April, the Energy Council have been focusing on Europe’s energy policy and regulation outlook for 2024 and beyond. With geopolitical tensions mounting, and concerns surrounding energy security and affordability at odds with decarbonisation pressures, the sector requires a nuanced approach to policy-making that combines subsidies, tax breaks, and supportive regulations to foster the development of supply chain and manufacturing infrastructures crucial for the energy transition. Without such supportive policies, there’s a risk of stalling investment in critical energy transition technologies and infrastructure, further exacerbating the policy inconsistencies that have historically impeded progress in the sector. Here's a quick look at some of the headlines making waves in this space over the last few weeks.

“The future in the Barents Sea is here now”

A few years in the making and Norway’s plans to open up additional oil and gas blocks in the Barents Sea took a positive step forward, with news that the Johan Castberg ship will soon commence operations, marking the presence of three producing fields in the region by year-end. Add in the eight new production licenses recently awarded, and it looks like the Norwegian Continental Shelf is primed to ensure energy security in Europe for the foreseeable future.

“Commission launches the European Energy Efficiency Financing Coalition to accelerate private investment in energy efficiency”

The European Energy Efficiency Financing Coalition was launched last week, with the aim of mobilising private investment and enhancing market uptake for energy efficiency, aligning with EU directives and the European Green Deal objective of net-neutrality by 2050. Operating through political engagement, expert groups, and national hubs to develop financing solutions tailored to each market, its success is still contingent upon key financial institutions joining and establishing national hubs, but it goes a long way towards achieving sustainable energy investments in the EU.

“Northwest Europe’s ambitious targets for low-emissions hydrogen require a rapid scaling up of investment and policy support”

The push towards low-emissions hydrogen development continues, with Northwest Europe setting ambitious targets aiming to produce roughly 7 million tonnes per year by 2030, meeting 2% of the region’s energy demand. The downside? Only 4% are set to be operational by 2030, lagging a long way behind the likes of the United States and China. Will this be the “push” policymakers need to create better support mechanisms across the value chain to rapidly increase supply and stimulate demand?

“Five northern European countries conclude international arrangements on transport and storage of carbon across borders”

Hot on the heels of hydrogen development is the news that five northern European countries – Denmark, Norway, Belgium, the Netherlands, and Sweden – have reached agreements allowing cross-border transport and storage of captured CO2, facilitating the development of a European infrastructure for carbon capture and storage. The agreements build on previous collaborations (think energy cooperation in the North Sea), and marks significant progress towards establishing a functional carbon capture and storage market in the wider North Sea region.

“Three new CCS projects have been pledged support to capture and store biogenic CO2”

Speaking of Denmark, the Danish Energy Agency has completed the Negative CO2 emissions fund (NECCS), awarding contracts to three companies for new CCS projects to capture and store over 160,000 tonnes of CO2 annually from 2026 to 2032. The contracts, awarded to BioCirc CO2 ApS, Bioman ApS and Carbon Capture Scotland Ltd, aim to reduce emissions and contribute to negative emissions by permanently storing CO2 underground, demonstrating a growing interest in the market for capturing and storing CO2 produced from biomass.