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#WorldEnvironmentDay: EU goes green as it turns its back on Russian gas

Ahead of UN World Environment Day this weekend, Randeep Somel, manager of the Climate Solutions Fund at M&G Investments outlines the REPowerEU Plan which will potentially fast forward the green transition:

“World Environment Day 2022 is the United Nations day for encouraging worldwide awareness and action to protect our environment, the theme this year is Only One Earth, highlighting the need to live sustainably in harmony with nature by bringing transformative changes through policies and our choices. An example of a policy recently announced which will address the climate and nature crisis is the European Commission’s (EU) REPowerEU Plan, created in response to the hardships and global energy market disruption caused by Russia’s invasion of Ukraine.

“The RePowerEU plan has the dual aim to both decarbonise electricity generation and provide energy security for the 27 nation trading bloc. While the EU already had a decarbonisation plan in place, these goals will be brought forward due to the immediacy created by Russia’s invasion of Ukraine. As part of its plan to diversify its energy sources, the bloc is proposing to raise its clean energy target for 2030 to 45% from the current 40% and also boost its energy-efficiency goal, requiring member states to reduce energy consumption by at least 13% from projections made in 2020 versus the current 9%.

“The €210bn plan will slash red tape to get wind and solar projects online much sooner. The plan also includes production of 10 million tons of domestic renewable (green) hydrogen production and 10 million tons of imports by 2030. This will offer the ‘hard to electrify’ industries such as steel and cement manufacture an alternative to fossil fuels.

“There is some concern that part of the funding will be from selling €20bn of surplus EU carbon permits, causing the penalty for polluters to fall. However, this will raise capital to fund long term renewable projects and as short term measure, as we find ourselves in this extraordinary situation caused by the conflict, help alleviate the rising energy costs. World Environment Day, the UN’s flagship day, continues to promote worldwide awareness and action for the environment and the REPowerEU Plan is a key example of speeding up the green transformation and help tackle our climate crisis.”

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