Prime Minister Kyriakos Mitsotakis’ fireside chat with Economist and Columbia University Professor Jeffrey Sachs at the 1st Athens ESG & Climate Crisis Summit

Giannis Palaiologos: I will begin with you, Prime Minister. I will ask you about the plans of Greece to get rid of coal-fired power plants by 2028. You recently said that they could be moved up to 2025. And I wanted to ask you what are the grounds for your optimism and to what extent does the current energy crisis, with the huge increase in gas prices, complicate your planning, given that the gas is a very important transition fuel on our way to zero carbon?

Kyriakos Mitsotakis: Thank you for that introduction. And it’s a pleasure to have the opportunity to discuss with Jeffrey. Let me first point out that the decision to shut down our coal-fired electricity plans was taken by the Greek government in September 2019, before Covid struck and before the accelerated momentum in terms of a faster decarbonization path, which ended up with a commitment by the European Union to reduce our collective emissions by 55% by 2030. It was a bold decision. (((It is still the single biggest contributor))), it will be the single biggest contributor in our effort to reduce our emissions, and we intend to stay on that path regardless of the fact that we are currently experiencing a significant disruption in the gas market.

Of course this topic will be addressed at the level of the Council. You are well-aware that we have taken significant measures to mitigate the impact of this increase in terms of the electricity and gas bills, especially for vulnerable households. But we should not lose sight of the bigger picture. We need to be bold and aggressive if we are to meet our target to reduce emissions by 55%. And reducing our dependence on lignite is a key variable in this effort undertaken by the Greek government, which will result in a final plan -to be submitted to the Commission- our new national energy plan that will include very specific measures on how we will achieve this target by 2030.

Giannis Palaiologos: Mr Prime Minister, you mentioned “Fit for 55”. Perhaps not the ideal moniker but, as you mentioned, it speaks to a very high ambition, which is to reduce total emissions by 55% compared to the levels of 1990 by 2030. How complicated do you expect the upcoming negotiation to be, given the different interests and approaches of the 27 member states? And what will Greece try to secure? And in particular I’d like you to tell us about this new proposal that you put forth also in a letter to the President of the European Commission about how this can be achieved in the shipping sector, where Greece, as is well known, is an international superpower and where no widely available low-carbon technology is currently available.

Kyriakos Mitsotakis: I think that the proposal put forward by the Commission, as Jeffrey said, is bold, ambitious and comprehensive and in principle we agree with the ambitious targets and with the instruments proposed by the Commission to reach that goal by 2030. I do expect it to be a complicated discussion at the level of the Council, primarily for political reasons, and unfortunately the current increases in the price of gas will not help this debate, because there is a big concern and it’s a real concern. If people, especially vulnerable households, perceive that they will have to pay a significant short-term cost to achieve our long-term target, this situation will not be politically sustainable.

Giannis Palaiologos: Can I just ask? Do you find it worrying that we see different member states promoting their own pet theories about why we have this energy price hike and therefore this does not bold extremely well about the possibility of reaching a consensus?

Kyriakos Mitsotakis: Obviously this is a complicated problem and the answer is related to numerous different variables. There is no single explanation for the increase in the price of gas. We’ve seen a significant uptake in demand. We’ve seen problems with gas supply in Western Europe. Of course, Russia has also played a role in terms of taking advantage of the current situation. I think we pretty well understand what is happening. What is not clear is how do we respond to this problem? One of the ideas that has been proposed by Italy, but also by Greece, is to contemplate this idea of being able to purchase gas at the European level, to create some sort of monopsony that will have increasing purchasing power over the big gas suppliers.

But another important component, which is, of course, also very relevant to the geopolitics of the region, is how do we diversify our gas supply? So what is happening in the Eastern Mediterranean is particularly relevant for Europe. And it is relevant not just because Europe needs to stand by two member States whose sovereign rights are being violated by Turkey. It is also relevant because the Eastern Mediterranean -I am talking about Cyprus, Israel, Egypt- should be a new source of gas for the European Union. And a lot of the work that is taking place in the East Mediterranean Gas Forum is exactly directed towards making sure that we have an alternative source of relatively cheap natural gas.

But coming back to your question. There are various countries that have very specific problems, heavy dependence on coal. Look at Poland, for example. But in order to move away from coal you need to be able to put in place a coherent plan to convince people in the coal-producing regions that there is a better future after coal, which is exactly what we are trying to do with our plan for Western Macedonia, and Ptolemaida. We’re mobilizing close to €5 billion in resources to create a better future for these people and to also explain to them that the jobs that we will create in a post-coal economy will be better-paying and more sustainable than the jobs they currently have.

So, it is impossible to win this battle without also winning the hearts and minds of people. And in order to do that we need to make sure that this current dramatic increase in the price of gas does not translate into significant increases for electricity and heating. Otherwise what you could see is a turbocharged “gilets jaunes” movement across Europe, which will really make our political job of selling the “Fit for 55” proposals that much more complicated.

On shipping. Of course we have a special interest when it comes to shipping. We control more than 50% of the merchant fleet at the level of the European Union. I sent a letter to the Commission President laying out our positions vis-à-vis shipping. I think that Greek shipowners need to be at the forefront of innovation, research, but also financing of new technologies that will gradually decarbonize shipping. We don’t know what the answer will be. But our shipowners -and I see many of them in the audience today- have always been innovators, but they should also be innovators when it comes to the new technologies around shipping.

So, setting up a research center, but possibly also a fund that will invest in innovative ideas around decarbonizing shipping seems to me to be a reasonable approach taken by the Greek shipping industry. Then we have more technical issues regarding the allocation of ETS permits, questions as to whether the cost should be borne by the owner or the operator. My argument is that in any allocation we need to take into consideration the significant role that Greek shipping plays in the European shipping industry.

So, we want to lead this discussion and we want to lead in a way that is not defensive: recognizing the problem, recognizing that, yes, shipping contributes 3% of total emissions, but we will also need to do our part, but also to be innovators, technological innovators, working with the big players, the big engine manufacturers, the big shipyards. We really can be much more productive and constructive if we take that approach as a Greek shipping industry.

Giannis Palaiologos: And you’re convinced that the Greek shipping community is on board, including willing to bear the inevitable cost? It’s certainly been argued that until recently it had been quite resistant to the necessary changes.

Kyriakos Mitsotakis: Yes and no. Οur ship owners have been innovators in the past. I still remember that we were at the forefront of double-hulled tankers after the Exxon Valdez environmental disaster. I’m absolutely convinced that our ship owners will rise to the challenge. And given that we don’t know what the answer will be, we need to make sure that we keep our options open. But what I will not accept as Prime Minister of Greece is not to take into consideration the fact that we have a footprint in shipping that is significantly higher than our contribution to Europe’s GDP. So, this also needs to be taken into account.

Giannis Palaiologos: Prime Minister, last month in Marseille you announced a set of targets as part of Greece’s contribution to “The Mediterranean: Model Sea by 2030” project. I wanted to ask you how urgently is action needed in the Mediterranean. How much is that urgency shared by other countries in the region? And when will Greece complete its maritime spatial planning, which is something that’s required as part of an EU directive. Is it something that we should expect soon?

Kyriakos Mitsotakis: The answer is yes, for very obvious reasons. There are significant issues when it comes to maritime spatial planning that need to be resolved. Let me give you just two examples, which I think are particularly relevant. The first has to do with fish farming, which is a very dynamic industry. I’m a big believer that fish will play a much bigger role in terms of substituting for meat when it comes to protein-based foods. But you need to be very clear in terms of where you actually give permits for fish farms, for new fish farming installations.

We have more than 14,000 km of coastline. There should be a way to make sure that fish farming coexists with tourism and other important activities that are related to the sea. A second aspect of spatial planning has to do with offshore wind. Jeffrey mentioned it, we have significant offshore wind potential. This is a very complicated exercise because you need to take into consideration various issues, not just where the wind is blowing. We know that pretty well. But you also need to take into consideration maritime routes, connectivity issues, which are particularly important.

But we are almost ready in terms of putting up for public consultation a piece of legislation regarding offshore wind. The legal framework in order to be able to develop it. And my goal, Jeff, would be that we have at least 2 GW of offshore wind online by 2029, 2030. We want to be leaders when it comes to the institutional framework around offshore wind. This is going to become more and more important as we will have real difficulties finding more land for onshore wind. Most of the good land is already occupied. But when we look at our long-term plans, at least for 2030, I’m pretty sure that we can reach our targets for the contribution of wind.

The last point when it comes to our seas has to do with protecting our fish stocks. This is absolutely critical for very obvious reasons. Our fish stocks are being depleted as a result of systematic overfishing. As you know we’ve taken some difficult decisions to restrict some of the most aggressive or damaging forms of fishing that really destroy the marine ecosystem. But we need to go further.

We’ve made a commitment that by 2030 we would like 10% of our seas to be what we call “no-catch zones”. That means that no fishing is allowed. Obviously this is complicated, you need proper supervision, but it’s also something that we need to do in cooperation with neighboring countries. I’ve had this discussion with Mario Draghi to maybe work with Italy to start this project in the Adriatic, because we need cooperation with neighboring countries. Who knows, maybe at some point we can also work with Turkey on this topic, rather than having to deal with Turkey encroaching up on our territorial waters and engaging in all those fights around fishing.

It would probably be more constructive if we sit down and decide, as neighboring countries, to determine no-fishing zones. Because what is really happening is the amount of fish that actually reproduces, at a very fast pace, in those no-fishing zones more than compensates for the loss of fishing activity in those zones. I’m a big believer that this is the way we need to go forward, eager to work with neighboring countries that have an interest in doing that, but also actively committed to go on our own when it comes to Greek territorial waters.

One last point, an answer to what Jeffrey said regarding the power of the sun. Yes, I think when we look at the mix of solar and wind we need both. But I think that offshore wind and aggressive solar are going to drive rapid penetration of renewables in the future. And when we talk about the grid, we announced yesterday an agreement with Egypt to interconnect Egypt to Greece. This is absolutely critical, absolutely critical for the stability of the European grid. Egypt has tons of land that is essentially desert, no problems in terms of land usage. It can produce solar energy, probably even cheaper than Greece.

This solar energy could be used to produce hydrogen, but certainly the electricity produced in Egypt needs to find its way into the European grid. This project will go ahead. That is why our agreement with Egypt regarding the exclusive economic zone is so geopolitically important: we don’t need to ask anyone to interconnect our grid with Egypt. And I would hope that these types of projects also receive more European support. They’re absolutely indispensable for the future of our European grid.