Fortum's views on building the EU Energy Union

​(Summary) We see the development of the EU Energy Union as a very positive initiative. The current political uncertainty across the EU borders together with the prolonged economic recessions, concerns relating to the EU's economic competitiveness, enforced decarbonisation targets for 2030, as well as lessons learned from implementation of 2020 energy and climate policy are all issues that highlight the need for a stronger and more European energy policy.

The Energy Union should establish a political action plan for Europe, laying the groundwork for a gradual convergence of 28 national energy policies towards a genuinely common European energy policy. This development should go hand in hand with enforcing the powers of the key EU-level energy actors – the EU Commission, ACER and ENTSO-E.

We have created a proposal with various actions and measures for each five pillars of the EU Energy Union: security of supply, internal energy market, moderating energy demand, decarbonisation, and research and development.

Key findings (see full version in the links below):

- Security of supply requires implementation of the internal energy market which also means increased use of domestic energy sources.

- A properly functioning and sufficiently interconnected internal energy market that is based on harmonised rules is, without a doubt, the best way to improve the EU’s internal security of supply while simultaneously contributing positively towards competitiveness.

- To moderate energy demand, market pricing of energy products, including costs of externalities, should be implemented.

- The emissions trading system (ETS) provides decarbonisation in the most efficient way, primarily by promoting renewable and energy efficiency.

- Enforced research and innovation policy combined with adequate financing tools plays an important role both in developing new low-carbon solutions and innovative products and services for customers and in boosting the EU’s competitiveness.

These five pillars are very much interlinked and it is therefore important to ensure proper coordination between different policy areas.

There is still a ways to go, but the discussion on the EU Energy Union has clearly created new momentum in taking steps towards “Europeanisation” of the EU energy policy – it can encourage gradual development from better coordinated national policies towards a more harmonised European energy policy. It is now up to the EU Commission to fully utilise the positive momentum at hand.