We agree with the European Commission’s general diagnosis that increasing the share of electricity in overall energy consumption is necessary to achieve deep decarbonisation. However, it is not sufficient. If overall energy use increases, or if electricity generation does not decarbonise rapidly, then electrification may fail its decarbonisation role.
The European Commission has set out proposed terms and conditions for its auction on electrified /renewable industrial heat under the Innovation Fund (IF). We support the IF’s acknowledgment that indirect emissions are linked to the timing of electricity consumption rather than the source of electricity used. However, although it claims an intention to limit electricity use at hours of high marginal emission intensity, we are concerned that the proposed terms might lead to the opposite and significantly limit the scheme’s climate benefits.
This report examines how the climate impact of electricity use is shaped not just by its source, but also by its timing and location. It evaluates the EU’s RED III framework and associated hydrogen targets, using the RFNBO standard as a case study. The analysis shows that ill-timed use of renewable electricity (particularly for hydrogen production) can inadvertently drive fossil generation. It argues for more strategic use of electricity to avoid these unintended consequences and support genuine decarbonisation.
Industrial heat electrification is a key strategy for decarbonising energy-intensive industries by replacing fossil-based heat. We welcome the European Commission’s initiative to launch an auction to electrify industrial heat, while emphasising the need for careful design to prevent unintended increases in emissions due to electricity grid dynamics.
Electrification and flexibility are critical to decarbonising both industrial and electricity systems. But what happens when we combine the two? Industrial flexibility will play an increasingly important role as industry moves towards electrification.
On February 13th 2023, the European Commission released two pieces of legislation to provide criteria defining renewable hydrogen products. The so-called Delegated Acts matter because they set out how to comply with other regulations under review which will force ships, aircraft and heavy industry to use a minimum content requirement of the fuel, such as the Renewable Energy Directive, REFuelEU Aviation and FuelEU Maritime.