Why Europe’s decarbonisation is failing

The EU’s shift to clean energy and transportation sources is continuing apace. Just looking at the annual additions of solar and wind power could even instil some optimism, as some countries are on track to reach their renewables targets. 

But going green is the easy part. Decommissioning the vast fossil-fuel infrastructure has proven far more difficult. It is here that the road to net-zero by 2040 appears most arduous. According to the EU Commission the bloc will also miss the more achievable 55-percent reduction target for 2030.

Current commission pathways continue to rely “heavily” on unproven technologies such as carbon capture and storage (CCS) that bake in fossil-fuel use for decades, including in the power sector, where it is “absolutely not needed” as noted by Climate Action Tracker. 

Dismantling the main source of modern wealth was never going to be easy. But the transition is made infinitely harder by powerful fossil-fuel interests fighting tooth and nail to slow the process down. 

It is a well known fact that after Washington, “Brussels is the biggest lobbying centre of the world,” the EU Ombudsman concluded in 2022. The question is: how do they operate, and how effective are they? 

Pipelines of Power

To get a clearer picture of how they operate, Transparency International analysed EU lobbying data of some of the largest fossil fuel companies, including Shell, Total, Eni, Equinor, ExxonMobil, BP and Chevron. 

Because like rivers, the ‘Pipelines of Power’ tend to shift if left unattended. And fossil-fuel lobbyists have expanded their toolkit in recent years. 

At first glance, the ‘Big Seven’ barely make it into the top 10 in terms of private meetings with top EU officials — Shell is top, among oil and gas giants, with 60 meetings. 

This may seem like a lot. But compared to big tech companies fossil fuel companies appear restrained. For example,  EU Transparency Register figures show Google held 281 meetings with commission officials in 2022 alone, while Microsoft and Meta each had more than 170. 

But according to Transparency International, this does not show the true extent of fossil fuel lobbying. Only when factoring in the extensive lobbying networks these oil and gas giants are part of does their influence become clear. 

The Big Seven are members of over 50 lobby organisations, including the EU’s top employers organisation, Business Europe, and the association Hydrogen Europe. 

Their executives are board members in a third of them. Shell and Total alone have nine employees sitting on these boards — which is more than any other organisation.

For comparison, Boeing, Airbus and L’Oreal only have one. With a lobbying budget of nearly €64m, and a total of 1,033 meetings with the European Commission between December 2019 and May 2024, this puts oil and gas companies at the top of the influence list. 

And Transparency International concludes this is “merely the tip of the iceberg” as most lobbying occurs via lower ranking commission officials which are not reported. 

Most climate policies don’t work

There is little doubt their main concern is climate-change policies. Two-thirds of the meetings with the commission concerned the Green Deal, the bloc’s umbrella for climate legislation. 

Hydrogen and carbon capture and storage (CCS), two technologies that promise a second lease on life for existing fossil-fuel infrastructure and pipelines, are the two most recurring subjects of those meetings. 

It is hard to gauge how big the impact of these meetings on Europe’s decarbonisation policies really is. The first indicator is to look at the overall effectiveness of emissions reduction.

96 percent of government climate ‘solutions’ do not work

Mercator Research Institute on Global Commons and Climate Change in Berlin recently analysed 1,500 climate policies, and concluded that 96 percent of government climate ‘solutions’ do not work. 

The few policies that are effective are combinations of subsidies (carrots) with taxes or other pricing mechanisms (sticks). Europe has implemented the world’s only functioning emissions trading system.

But by keeping in place tax exemptions on aviation and shipping and other fossil fuel subsidies, the pricing system is undermined, slowing down the energy transition. 

Another insight from the study is that direct bans and phase-outs in general work well. This is especially true in the building sector and the transportation sector. 

It is here that the influence of fossil fuel on EU decarbonisation plans is powerfully felt.

‘Network within networks’

The EU has agreed on a ban on combustion engines in 2035, and on gas boilers in homes from 2040. But both policies have been either weakened or are under threat from lobbyists. 

Last week, Germany and Italy joined the automotive lobby in a call to overturn the ban on combustion engines. Similarly, loopholes were added to the 2040 gas boiler ban, which has been made non-binding. 

As investigative journalism platform DeSmog has previously shown, these loopholes are the result of lobbying efforts by gas companies.

One example of this is a May 2022 joint position paper, where Gas Infrastructure Europe (GIE) promoted the continued use of fossil gas technologies in the EPBD, including gas boilers and hybrid heating systems.

While the Big Seven are not a member, the GIE represents gas distributors such as the Netherlands' Aardolie Maatschappij (NAM), which in turn is fully owned by Shell and ExxonMobil. 

Lobbying networks thus “allow corporations to multiply their entry points into EU policy,” said Raphaël Kergueno, author of the Transparency International report. “A privilege most non-commercial organisations do not have.”

The hydrogen distraction

Another way EU decarbonisation is delayed is through distraction. As already highlighted, clean hydrogen and carbon capture and storage (CCS) are the two most recurring subjects of fossil fuel companies’ meetings with the commission. 

Influenced by intense lobbying, EU decision-makers are aiming to build a network of 28,000km of hydrogen pipelines by the end of this decade, to move around or import 20 million tonnes of clean hydrogen. 

These plans have been criticised by academics and experts, including the usually rather reserved EU Court of Auditors for needing a “reality check.”

Despite already allocating €18.8bn in subsidies, the watchdog warned that the EU has never done a “robust analysis” of the market to ensure that its clean hydrogen expansion plans align with expected demand. 

In fact, EU hydrogen targets were based on "off the cuff" calculations made by a Dutch hydrogen lobbyist who had befriended Diederik Samsom, former Green Deal commissioner Frans Timmermans’ cabinet chef and the driving force behind the EU’s Green Deal. 

The risk of sloppy analysis and exaggerated hydrogen expansion is that it diverts attention and money away from policies that lower emissions more rapidly — a point frequently made by energy expert and hydrogen critic Michael Liebreich.

Both Equinor and Shell have recently cancelled their plans to supply Germany with hydrogen produced from natural gas, because it is: uneconomical, and there is no prospect of future demand. McKinsey also recently slashed its outlook.

And a 2019 Potsdam Institute analysis of 11 industrial sectors in Europe (representing 92 percent of emissions) concluded that 99 percent of hydrogen use can be directly electrified using technologies currently available or under development.

This leaves much uncertainty over clean hydrogen’s future use. 

The question is whether the EU can still prevent further distraction and turn its hydrogen expansion plans around. "I'm not sure we can,” said Andreas Graf energy export at the think tank Agora Energiewende on social media. “[But] we should course-correct sooner, rather than later.”