European Energy for European Homes and Industry

Geopolitics are forcing different levels of government (European, national and local) to see gas imports as Europe’s Achilles heel. The solution is European energy for European homes and industry.

-Last year, 15 Member States called for a new EU heating and cooling strategy.

-In January, 10 Member States called for a ban, or at least strict limits, on Russian LNG.     

-In February, the incoming German chancellor Friederich Merz was clear on the need for European independence from the US (the EU imported 51 bcm of US LNG in 2024).

-And at EU level, the European Commission has proposed a plan to save €45b in 2025 on importing oil and gas (increasing to €130b annually by 2030).

European cities are leading the charge to reduce gas use in buildings

Lyon has reduced CO2 emissions from their buildings by a whopping 36.6% in the last four years. Munich’s plan will see uninterruptable, zero carbon geothermal energy take centre stage. Jan Rosenow has a great article on how other German cities are planning to phase-out gas. 

Add up all the countries above and 21 of 27 EU member states are on the record for taking big steps on the supply or demand of gas in Europe. Of the remainder, the Dutch have already empowered cities to decommission gas grids, Belgium abstained as it is a regional competence, Bulgaria has been embroiled in national politics and Hungary has seen explosive growth in solar according to recent reports.

“Self-sufficiency in the energy sector, as any other sector, is critical for Europe in the future.”

Finland’s Climate Minister, Sari Multala put it quite clearly in Politico.

Moving away from gas

The result of all this activity is a clear majority at EU level and between different levels of government that we need to slash gas consumption.

Buildings in the EU consumed roughly 120bcm of gas per year between 2011 and 2022 according to the IEA. In 2023 the EU imported a total of almost 100bcm of gas from the US (56.2bcm of LNG) and Russia (25.1bcm by pipeline, 17.8bcm of LNG).

Put simply, a successful drive to replace imported gas with European energy for European homes would deliver energy independence from the US and Russia.

“Munich has worked very hard to plan its shift away from fossil fuels for climate reasons – but there is also a clear benefit that we will be less and less dependent on international energy markets. Our plan is to use European energy to keep European homes and businesses warm.”

Christine Kugler, Head of Climate and Environmental Protection Department, Munich, Germany.

Which European energy will replace gas will vary by city, region and country.

Implementing local heating and cooling plans

Local, low carbon energy resources will be identified through the local heating and cooling plans for cities over 45,000 citizens if they are done well. This is a plan mandated by the recent Energy Efficiency Directive, which directs cities to identify energy demand and energy supply within their cities and develop a plan to shift away from fossil fuels. 

Electrification will do much of the heavy lifting here but with a significant contribution from waste industrial heat, geothermal, district heating, solar thermal and other technologies.

That’s why the EUs upcoming heating and cooling strategy must reduce the barriers to implementing district heating and cooling as well as geothermal projects. These projects typically have high upfront costs, greater risk and demand a significant level of administrative and planning resources from cities. Factors that are well rewarded through greater resilience, dependability, low emissions and good jobs. 

There remains a risk that some of these local heating and cooling plans, in some cities that lack the means, will be box ticking exercises. Duly written out by consultants and then put on a digital shelf never to be looked at again. That’s why the EU must help to develop local heating and cooling plans as bankable, implementable projects at local level by Introducing an EU Heating and Cooling Facility based on the existing EU City Facility.

Equally important will be the support offered by EU Member States to their cities to get these plans done and implemented. Two important steps will be adapting energy taxation to drive heat decarbonisation and urgently transpose the Energy Efficiency Directive. Currently transposition is slow as shown in the Energy Cities transposition tracker, and very worryingly, no EU country has a legal framework for cooling. Cooling will have a massive impact on our energy system and the quality of life for millions of Europeans.

The world has become significantly less friendly in recent weeks. It will not get any friendlier in the foreseeable years. 

Energy is at the heart of Europe’s security challenge. Dependence on gas is its greatest strategic vulnerability. For a time it seemed this vulnerability could be lessened with US LNG. No longer.

In its place is the urgency to achieve genuine energy security by prioritising European energy for European households and industry. 

How fortunate then that progressive, ambitious cities in the Energy Cities network have already made significant progress in building the resilient, low carbon, cost-effective energy system we need.