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The 26th UN Climate Change Conference, taking place in November 2021, and the recently published EU proposals on the Carbon Border Adjustment Mechanism have been at the top of the agenda, this summer, for the majority of Russian energy and other industrial corporations. The green agenda has never been so acute in Russia, the current level of business engagement in the preparations for negotiations on the implementation of Article 6 of the Paris Agreement cannot compare to the one during the Kyoto Protocol period.

All countries have had to deal with the intensifying effects of climate change in recent years. As a direct response, we are in the process of moving toward a low-carbon future. The Paris Agreement and the EU’s Green Deal have already urged all sectors to take measures to reduce carbon emission levels, and the energy transition movement is rapidly growing. COVID-19 has also hastened this global movement.

After a year of unprecedented health and economic challenges, the global economy is trying to recover, and the energy transition needs to be at the heart of this. As a lifeline out of the COVID-19 pandemic, the European Union has proposed the Green Deal, which focuses on achieving zero net emissions by 2050. Can oil and gas companies also lead the transition to a net-zero future in more traditional and heavily carbonized economies, such as Poland?

Over the past years, Ukraine expressed its intention to step on the energy transition pathway, develop energy efficiency measures, phase out fossil fuels, and switch to renewable energy sources (RES). The development of green hydrogen production (based on electrolysis of water using renewable electricity) is part of the chosen direction. Therefore, the Ministry of Energy of Ukraine and more than 20 Ukrainian companies have joined the European Clean Hydrogen Alliance to coordinate efforts to develop hydrogen energy.

As the Czech government signed off on the EU “Green Deal”, which aims to cut carbon dioxide emissions to zero by 2050, the Czech Republic needs to find ways to achieve this goal, or at least to get close to it. Even though certain legislative and other supporting measures are currently being undertaken towards transitioning to low carbon energy – changes to the Czech Act on supported sources of energy, state subsidies for the (re)construction of power plants – given its geographical specifics and historical background, nuclear power is likely to play a key role in replacing coal-burning power plants. Under current state policy, construction of new nuclear reactors is to begin shortly. The first new reactors, to be located at the current Dukovany power plant, should begin operations by 2037. The Dukovany project took precedence over the construction of new nuclear blocks at the Temelin power plant, a priority at the beginning of the 21st century.

Gas is of particular economic importance for Austria. In addition to production, infrastructure (including the Baumgarten gas hub), transportation, trade, and supply-secure coverage of gas demand play a major role. Yearly demand of roughly 80 to 90 terawatt-hours, constant over the last ten years, is generated by the manufacturing and energy sectors, non-energy consumption, agriculture, private households, power plants as conversion applications, transport, and the service sector. With a share of about 15%, gas also plays an important role in Austria’s electricity generation, primarily by providing flexible capacities that can be utilized at short notice to stabilize the power grid.

In 1874, a French writer, forerunner of science-fiction literature, named Jules Verne (1828-1905) wrote in his famous novel The Mysterious Island about a world where “water will one day be used as a fuel, that hydrogen and oxygen, which constitute it, used alone or simultaneously will provide an inexhaustible source of heat and light of an intensity that coal cannot have.” More than 110 years after his death, hydrogen is a hot topic in the global energy industry.

The end of 2020 saw landmark legislative interventions in Greece, mainly aiming to create the prerequisites for the widest possible adoption of the EU Target Model (the creation of a single EU energy market) and boost the penetration of renewable energy sources, in a regulated and rational way. According to the government, these interventions “establish the framework for a more rational operation of the sector, on more competitive terms, to the benefit of the consumers and of the Greek economy in general.”

Bulgaria is just a stone’s throw away from completing the electricity market liberalization that has been in progress in recent years. The main goal of the Bulgarian Government is to gradually eliminate regulated electricity prices by the end of 2025 and to fully transition to market conditions by promoting market competition.

Hungary has adopted the integrated energy policy guidelines of the EU, which aim to decrease greenhouse gas emissions by at least 40% compared to the ‘90s level, increase the proportion of renewable energy in energy consumption to 32%, increase energy efficiency by 32.5%, and further the increased interconnection of the EU electric energy system. In that context, renewable energy is currently a hot topic.

On June 23, 2021, the lower chamber of the Parliament of the Federation of Bosnia & Herzegovina, the House of Representatives, passed a decision instructing the Government to “analyze the existing legal framework in relation to the construction of small hydroelectric power plants and to initiate the parliamentary procedure of amending the existing laws in order to protect the rivers and the environment.” Such a broad and generic decision comes after months of campaigning by several NGOs, supported by local and Hollywood celebrities, aimed against the construction of SHPPs on Bosnian rivers, citing environmental concerns.

The fiscal regime of companies and contractors operating onshore in the exploration & production segment of the oil and gas industry in Albania was fundamentally changed by Law no. 153/2020 On the Fiscal Regime in the Hydrocarbon Sector (the Hydrocarbon Fiscal Law or HFL), that came into effect on February 2, 2021.

In 2016, Kosovo adopted Law No. 05/L-082 on Natural Gas (the Natural Gas Law). The purpose of the law was to lay down a legal basis for the establishment of a legal framework that will govern the transmission, distribution, supply, usage, and storage of natural gas. The Natural Gas Law is deemed to be aligned with EU law, including Directive No. 2009/73/EC on common rules of the internal European natural gas market and Regulation No. 715/2009/EC on conditions of access to natural gas transmission networks.

The energy market in Latvia is in a constant process of development, on both the regulatory and business sides. The following highlights suggest the energy sector will remain active in the foreseeable future, providing new opportunities for potential investors.

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