US Urges Eastern Europe to Split From EU Energy Transition Aims

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ENB Pub Note: Net Zero and the Green New Deal spending have been disastrous for energy prices and the ecological impact on the globe. 

1. McKinsey Estimate (2021–2050):
   • McKinsey’s 2022 report estimates that achieving net zero by 2050 requires $9.2 trillion annually in capital spending on physical assets (e.g., renewable energy infrastructure, EV charging networks, and industrial retrofits) from 2021 to 2050, totaling $275 trillion over 30 years. This is $3.5 trillion more per year than current spending levels.
   • About 7.5% of global GDP annually would be needed, with front-loaded spending in the 2020s being critical. This includes:
     • Power sector: Investments in wind, solar, and grid infrastructure.
     • Industry: Decarbonizing steel, cement, and chemicals via hydrogen or CCS.
     • Mobility: Scaling EV production and charging infrastructure.
     • Buildings: Retrofitting for energy efficiency and heat pumps.
     • Agriculture and land use: Sustainable farming and reforestation.
   • As of 2023, actual spending was significantly lower, with McKinsey noting that only $5.7 trillion annually was being invested in low-emission assets, leaving a gap of $3.5 trillion per year.
2. International Energy Agency (IEA) Estimates:
   • The IEA’s 2021 Net Zero by 2050 report estimates that $90 billion in public funding is needed by 2030 for demonstration projects of emerging technologies (e.g., green hydrogen, advanced batteries, CCS). As of 2021, only $25 billion was budgeted globally, indicating a significant shortfall.
   • In 2023, global clean energy investment reached $1.8 trillion, with $1.1 trillion in advanced economies and $700 billion in emerging markets. This includes solar, wind, nuclear, EVs, and energy efficiency but excludes fossil fuel investments. The IEA notes this is a record high but still insufficient to meet 2030 targets.
3. BloombergNEF and Other Sources:
   • BloombergNEF reported in 2023 that global investment in the energy transition (renewables, EVs, hydrogen, etc.) hit $1.1 trillion in 2022, with China leading at $546 billion, followed by the EU ($180 billion) and the US ($141 billion).
   • The EU’s Net Zero Industry Act (2023) and the US’s Inflation Reduction Act (2022) are mobilizing significant funds. The US act allocates $369 billion in tax credits and subsidies for clean energy through 2032, while the EU’s green package targets €1 trillion in public and private investment by 2030.
4. Country-Specific Spending (Spain, Portugal, France, Germany):
   • Spain: Spain invested €11.2 billion in renewable energy and green projects in 2023, supported by the EU’s Recovery and Resilience Facility (€69.5 billion allocated to Spain through 2026, with 40% for green transition). This includes €2.5 billion for renewable energy auctions and €1.2 billion for green hydrogen.
   • Portugal: Portugal’s 2021–2026 Recovery and Resilience Plan allocates €3.1 billion for climate transition, with €1.4 billion for renewable energy and €0.9 billion for sustainable transport. In 2023, €0.8 billion was invested in wind and solar projects.
   • France: France’s France 2030 plan commits €54 billion by 2030, with €8 billion for green hydrogen, €4 billion for low-carbon industry, and €2 billion for renewables. In 2023, France invested €10 billion in clean energy, including €4 billion in offshore wind and solar. The Green Budget methodology ensures 10% of national expenditures align with net zero.
   • Germany: Germany’s Climate and Transformation Fund allocated €57.6 billion in 2023 for renewables, EV infrastructure, and industrial decarbonization. Total green investment reached €200 billion from 2020–2023, with €15 billion annually for wind and solar. Germany’s net zero target is legally binding for 2045.
5. Global Public vs. Private Spending:
   • Public spending is critical for early-stage technologies, but private investment dominates deployment. In 2022, private sector investment in clean energy was 70% of the $1.1 trillion total, with public funds (e.g., subsidies, grants) covering the rest.
   • Developing countries face challenges, as they require 1.5 times more spending relative to GDP than advanced economies due to economic growth and infrastructure needs. Sub-Saharan Africa and India, for example, need $1 trillion annually by 2030, but current flows are only $200 billion.

1. Global Emissions Trends:
   • Global CO2 emissions from the energy sector were 41.3 GtCO2 in 2023, a 1.1% increase from 2022, despite record clean energy investments. This suggests that while investments are reducing emissions growth rates, they are not yet sufficient to reverse absolute emissions.
   • The IEA’s Net Zero by 2050 pathway requires a 45% reduction in global emissions by 2030 (from 2010 levels) to limit warming to 1.5°C. Current pledges, even if fully implemented, would achieve only a 10–15% reduction by 2030, indicating a significant gap.
   • Methane emissions from fossil fuels dropped 75% in some scenarios due to targeted abatement measures (e.g., leak detection), showing that specific investments can yield outsized impacts.
2. Sector-Specific Reductions:
   • Power Sector: The shift to renewables has driven significant reductions. For example, global wind and solar capacity grew by 510 GW in 2023, avoiding 1.5 GtCO2 annually compared to fossil fuel alternatives. In the EU, power sector emissions fell 76% since 1990 due to renewables, with Germany’s wind capacity (60 GW) and Spain’s solar (20 GW) playing key roles.
   • Transport: EV adoption, supported by $100 billion in global subsidies, avoided 0.3 GtCO2 in 2023. The EU’s 1.5 million EV sales in 2023 contributed to a 5% reduction in transport emissions. Portugal’s 1,000 electric buses (planned by 2035) are expected to cut 0.1 MtCO2 annually.
   • Industry: Decarbonization efforts (e.g., green hydrogen, CCS) are nascent, with only 0.1 GtCO2 avoided globally in 2023. Germany’s €10 billion for industrial CCS is projected to cut 0.05 GtCO2 by 2030.
   • Buildings: Energy efficiency retrofits and heat pumps, backed by $50 billion globally, reduced emissions by 0.2 GtCO2 in 2023. France’s €2 billion for heat pumps avoided 0.02 GtCO2.
3. Country-Specific Reductions (Spain, Portugal, France, Germany):
   • Spain: In 2023, Spain’s 50.3% renewable electricity share avoided 40 MtCO2 compared to fossil fuel reliance, with wind and solar contributing 80% of this reduction. Total emissions fell 15% from 2010 levels, partly due to €20 billion in green investments since 2020.
   • Portugal: Portugal’s 61% renewable electricity (90% in early 2024) avoided 10 MtCO2 in 2023. Investments of €5 billion since 2020 in wind, solar, and EVs reduced emissions by 20% from 2010 levels.
   • France: France’s low-carbon electricity (70% nuclear, 20% renewables) avoided 100 MtCO2 in 2023. Green investments of €30 billion since 2020 cut emissions by 10% from 2010, though nuclear maintenance limited further gains.
   • Germany: Germany’s 46% renewable electricity share in 2023 avoided 120 MtCO2. Total emissions dropped 46% since 1990, with €200 billion in green spending since 2020 driving half of this reduction.
4. Challenges in Attribution:
   • Emissions reductions are not solely due to net-zero spending. Economic shifts (e.g., post-COVID recovery), energy price spikes, and behavioral changes also play roles.
   • Offsetting controversies muddy the waters. Some countries (e.g., Spain) use carbon credits, which may not reflect real reductions if projects lack additionality. The Oxford Principles for Net Zero emphasize prioritizing direct reductions over offsets.
   • Data gaps exist, especially in developing countries, where emissions inventories are less robust. Only 5 of 41 countries tracked by the Climate Action Tracker have “acceptable” net zero targets with clear reductions, covering just 7% of global emissions.

• Global Spending: Approximately $1.8 trillion was invested in clean energy in 2023, with projections suggesting $5.7 trillion annually in low-emission assets. Achieving net zero by 2050 requires $9.2 trillion annually, totaling $275 trillion by 2050. Spain (€11.2 billion), Portugal (€0.8 billion), France (€10 billion), and Germany (€57.6 billion) contributed significantly in 2023.
• Emissions Reductions: Clean energy investments avoided 2–3 GtCO2 globally in 2023, with renewables and EVs leading. Spain avoided 40 MtCO2, Portugal 10 MtCO2, France 100 MtCO2, and Germany 120 MtCO2. However, global emissions rose 1.1%, indicating insufficient scale. Current pledges achieve only 10–15% of the 45% reduction needed by 2030.
• Gaps and Challenges: Spending falls $3.5 trillion short annually, with developing countries underfunded. Emissions reductions are limited by weak policies, reliance on offsets, and rising energy demand. Robust, transparent targets and front-loaded investments are critical.
• Nothing has been gained by the trillions spent on green energy, except more fossil fuels being used, and now solar and wind farms are facing major setbacks without subsidies, and who is going to pay for the land reclamation? 
• Deindustrialization follows the Green Energy policies like the grim reaper looking for souls.
• The more money spent on wind, solar, and hydrogen will lead to an increased use of fossil fuels – “Turley’s Law.” 

The partnership between the U.S. and Poland is one of steadfast friendship and shared values. Today’s signed agreement to advance the building of civil nuclear reactors in Poland marks a significant milestone for two American companies, Poland’s energy security, and a safer, more… pic.twitter.com/IP6e6F3Wd5

— Secretary Chris Wright (@SecretaryWright) April 28, 2025

The US wants central and eastern European countries to join its path of “energy freedom” instead of following the wider region’s transition to a net zero economy, Energy Secretary Chris Wright said in Warsaw.

The Energy Secretary told the Three Seas Business Forum — which numerous leaders from the region attended Monday — that western Europe chose the wrong path of expensive “top-down imposition of enforced climate policies.” He argued that renewables investments weigh on growth and boost revenues of foreign companies, and that eastern Europe should pick a different path.

“Central Europe faces a time for choosing,” Wright told conference participants. “We warmly welcome you to join us on Team Energy Freedom and Prosperity for Citizens.”

Under President Donald Trump, the US has started to withdraw from the Paris Agreement, a landmark 2015 deal that aims to slow down global warming. The administration also announced a series of measures to expand mining and use of coal, and wants to help increase oil and gas production.

Wright said that while climate change is “a real physical phenomenon,” it’s not the world’s most “urgent problem.”

“In fact, the clarion conclusion from economic studies of climate change is that net zero 2050 is absolutely the wrong goal,” he said. “Not only is it unachievable, but the blind pursuit of it will cause, is causing far more human damage than climate change itself.”

President Trump has repeatedly called on Europe to buy more American energy products if the bloc wants to avoid tariffs.

Wright came to Poland as US firms Westinghouse Electric Co. and Bechtel Group Corp. signed the extension of their development contract for the country’s first nuclear power plant. Westinghouse also has plans to build reactors in other parts of the region.

“The two biggest climate solutions in the coming decades are the same as they were in the last two decades: natural gas and nuclear,” Wright said. “For the simple reason that they work. They supply affordable, reliable, secure energy.”

Source: Bloomberg

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