Advancing Energy Security

In its new paper, the ZOE-hosted Energy Independence Council underscores the critical role of the private financial sector in driving fossil gas independence in Germany and Europe. The interdisciplinary panel of experts working on fossil gas independence calls for a mobilisation of private capital to significantly reduce the reliance on fossil gas. In Germany, 526 billion euro of private investment could reduce fossil gas dependency by 78%, according to the experts’ calculations. The paper outlines six strategic measures designed to foster a robust regulatory framework, improve access to capital, and integrate the real and financial economies. These measures aim to support private homeowners, businesses, and municipal utilities to overcome financial barriers, particularly amid challenging economic conditions.

In light of current geopolitical tensions and Europe’s dependency on imports from Russia, Qatar, Azerbaijan, USA and Algeria, the EU’s fossil gas usage poses a threat to European energy security. Currently, Europe is highly Accelerating the transition away from fossil gas is a decisive milestone for European open strategic autonomy and a future-proof competitive economy, as Jonathan Barth, spokesperson of the Energy Independence Council, emphasizes:

“Europe cannot rely on having a stable and secure supply of fossil gas in the future. Heat from electricity offers a tested opportunity to reduce Europe’s dependency on fossil gas. The financial sector holds the key to unlocking Germany’s and Europe’s path to energy security. Mobilizing private capital can not only mitigate future energy crises but also make Europe’s economy future-fit and competitive. Governments need to act now to enable banks and insurance companies to play a pivotal role in the journey towards energy security.”

The publication proposes six measures to encourage private finance to invest. One share of the measures aims to strengthen the exchange between businesses and the financial sector – for example by harmonising transition plans for businesses and developing sector-specific standards. The other recommendations focus on making investments more attractive, for instance by providing state-backed default guarantees for vulnerable households’ loans.

“To empower the financial sector to play a central role in achieving fossil gas independence, it is crucial to establish an ambitioned and coherent framework that provides transparency on risks and opportunities”, says Kristina Jeromin, member of the Energy Independence Council and Member of the Sustainable Finance Advisory Board of the German Federal Government.