President Ursula Von der Leyen is expected to announce at least 55 percent target for greenhouse gas reductions in the State of the Union speech on 16 September. However, the European Commission needs to recognise the importance and urgency of decarbonising heating, particularly given that carbon pricing covers a major policy loophole, which gave fossil heating a significant competitive advantage over renewable energy solutions, particularly geothermal energy, one of the cheapest sources of heat.
Heating accounts for half of the EU’s energy consumption. 80 percent of this market is dominated by fossil fuels, which benefit from direct and indirect subsidies that lock out geothermal energy and other renewable energy technologies. A uniform carbon price across Europe can address this unfair distortion of the internal market.
“Extending the EU Emissions Trading System to heating is an important step in accelerating the energy transition in buildings and delivering carbon neutrality by 2050” said Sanjeev Kumar, Head of Policy, at EGEC Geothermal. “A robust carbon price sufficient to drive transformative change is key to the race against the clock to tackle the climate emergency.”
EGEC Geothermal supports all carbon pricing schemes alongside the immediate removal of direct and indirect fossil fuel subsidies. The inclusion of fossil heating and cooling suppliers in the EU Emissions Trading System (EU ETS) is an important feature of a comprehensive package of climate reforms. The revenues raised from the sale of EU ETS auction allowances can be recycled back into direct investments in renewable energy renovations, especially for the most disadvantaged households.