Oireachtas Joint and Select Committees

Thursday, 2 June 2022

Joint Oireachtas Committee on Climate Action

Engagement with the EU Commissioner for Energy

Ms Kadri Simson:

We want to send a clear message to our trading partners that they can be our trustworthy partners if they take care of the environmental considerations. That is why I mentioned earlier that methane is the second most potent greenhouse gas, with carbon dioxide being the first. We are sending a clear message to our trading partners that are producing natural gas that they have to take care of venting and flaring. We are strong supporters of the International Methane Emissions Observatory. This is a topic we discuss regularly with our US counterparts. US companies are committed to taking care of the methane leakage. Having said that, Russia, as a producer, has been relatively non-transparent about how it is reducing its fossil fuels.

Replacing their production with alternatives does not necessarily mean that we will end up in the situation where our emissions are growing. On the contrary, we will try to find alternatives that are renewable.

On the global level, high fossil fuel prices are impacting us a lot but some poorer regions will be impacted even more. Of course, we are monitoring the direct connection between high crude oil prices and what the impact is on food prices. At a certain level this might mean there are countries that cannot afford sufficient food for their inhabitants. This is a serious risk. Together with our partners, we have developed and made attempts to control the world market prices. The committee will know that all EU members states have strategic oil reserves. Together with our International Energy Agency organisation partners, twice this year we have made the decision to partially release these reserves. By doing that, we aim to stabilise the volatile crude oil market globally so that poorer regions will benefit from it. By doing that, we also compensated the decline in oil that is coming from Russia. As I mentioned, we have put in place already six sets of sanctions, the first of which is aimed at Russia's ability to produce oil or to import the necessary technology equipment for their refineries. This is already impacting the world crude oil markets. By releasing our strategic reserves we have attempted globally to control the market price, but there are some expectations that the market price will be higher than it is right now.

On the electricity markets, we tasked our European regulators to analyse what we can do to open our electricity market design in a way that it would be more resistant to unwanted volatility. Our aim is to incentivise investments into renewables. Renewables will deliver most of our electricity and lower prices. There might be hours, however, when there is a volatility because of peak demand. This also requires fossil fuel power generation to come into the market. Our aim is to achieve a market where the average price is lower compared to the situation where power generation comes from fossil fuels.

I missed the third question.

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