Brussels, 22 February 2024
A very warm welcome to all of you for the third Clean Tech Transition Dialogue. I am very glad to see so many representatives of different industries, of renewables, of EV charging stations, batteries, green steel, and we also have the social partners, and the financial sector.
At the beginning of this week, on Tuesday, I was at the European Industry Summit in Antwerp. It was organised by the Belgian Presidency. It was an excellent summit. The main message was: Yes, the industry supports the climate goals of 2050 and 2040. We support the Green Deal. It is not a discussion about the ‘what’. We want to be involved in the discussion about the ‘how’ we are getting here. And this is exactly why we are sitting here today, and this is our task. We have the legal framework, now we have to fill it with life. And this is a very important phase. Because now we write for example, the guidelines, the interpretation of the law. And here, we want to listen to you. What you need to be successful in reaching the climate goals. So that the framework and the environment are tailored for your success. So what you need is predictability, you need clarity. And this, of course, then creates the confidence we also need.
This takes place in a context of geopolitical tensions and of course the pressure of climate change. And therefore, let us have a look at the beginning what the state of play is. As I said, all 27 Member States have agreed and decided on the climate goals. We have the climate law, so the goals are cast in law 27 times. That is very good because we have full unanimity on that in the European Union. We also have separate targets for renewables, for hydrogen, for CCUS, for clean-tech manufacturing. Why is that? Because we think only what gets measured really gets done. You know it from your business. You need facts and figures to see, ‘are we on track or do we have to speed up? Or are there other obstacles we have to overcome?’ This takes place in an environment and an economy that is remarkably resilient. You know the figures. We have the lowest unemployment rate ever – actually, it is below 6% right now – and an employment rate above 75%. It is a big success, but also hidden in this is the beginning of the effects that we have a lack of skilled labour. I would even say we have a lack of labour.
So this is also something to discuss in this group. Inflation is progressively falling, that is good, back towards the 2% target, and the GDP growth is expected to reach 1.7% in 2025. This is all good against the backdrop – and that we should not forget – that we just overcame a severe pandemic. We were barely recovering when Putin started his war in Ukraine, and then we were hit by a massive energy crisis. If you see the economy against this backdrop, you understand that it is a robust economy that we have. But I want to have a look at three topics where we can support you more and better: one is energy, the second is funding and the third is international partnerships.
Let me first reflect on energy. The situation, as I just said, after this severe energy crisis, actually the worst energy crisis since 40 years, has stabilised. That is good. We are back to pre-war levels. But it is structurally still higher than in other regions of the world. And you know that it is for you a question of competitiveness. We should not forget that a year ago, the energy crisis was just slowing down. We should not forget that the energy prices went up tenfold in summer than what they were before the beginning of the war. And together, we have moved mountains. We have, first of all, asked our friends to help us. And immediately, the United States, Norway and others stepped in with LNG and pipeline gas. Secondly, we have saved energy. Energy efficiency has increased. We have built the necessary infrastructure, interconnectors, terminals that were necessary. You have done an outstanding job in convening all the different Member States – and even more – for a joint procurement platform. And you will later on certainly talk about the extremely successful results that we have at the moment being.
But the most important part in all this was the third element, and that was that we massively invested in renewable energy, that is homegrown and cheap energy that creates good jobs here and is accessible for us here on the European continent. Let me give you a few figures: Two years ago, one in five units of energy consumed in the European Union came from Russia. Today, it is one in 20. That says a lot. For the first time ever, we were able last year to produce more electricity from sun and wind than from gas. Actually, it is 44% of our electricity that now comes from renewables. And of course. Not to forget, nuclear energy also plays an important role. So the principle is that we, first of all, had diversified away from Russia, so more diverse supply chains for the traditional energies. But over time, the direction of travel became absolutely clear: Go into the renewables and homegrown energy. This is not only good for the planet, but it is also good for our energy security and thus for our independence.
Of course, the job is far from done. We still have to work on structural solutions, so that the energy prices compared to the rest of the world are lower. We have now measures in place to make this happen. You are familiar with the new Renewable Energy Directive. We created the Wind Package, we have the Net-Zero Industry Act and we have the taxonomy for nuclear energy now. So this is not only, as I said, about climate change, but it is also a lot about energy security.
My second point is on funding. We have mobilised unprecedented sums of public funds, also to leverage private investment. The first big part is NextGenerationEU. You recall, this is the EUR 800 billion fund we created during the pandemic to smoothen the economic downturn of the lockdowns. And here, 37% of the funds have to go into the green transition. Actually, the Member States are overshooting, they have now planned 40% into the green transition. And this is combined with REPowerEU, our answer to Russia’s blackmail. And if you look at the figures today, the European Union and the Member States have committed EUR 150 billion of these two funds into the clean energy transition and the investments for that.
The second point is: We see that clean tech is one of the biggest beneficiaries of the European Innovation Fund. That is good. For example, last December, we committed EUR 3 billion from the Innovation Fund for Europe’s battery value chain. We have now the new Hydrogen Bank, with also EUR 3 billion in it. And earlier this month, Member States and the European Parliament reached an agreement on the so-called STEP. STEP is a fund where we want to generate investments in critical technologies of around EUR 50 billion. And the idea is not only to generate the EUR 50 billion but also to use the funds we do already have in the European Union and to make them accessible for you.
Today, your problem is that you have a jungle of funds in front of you and you wonder, ‘how do I access this one or this one? And which one is the right one for me?’ We want to help you here. We create a one-stop shop where you go and show your potential product. Then if you are eligible as a clean technology for one of these different funds, you get a seal.
So we turn it around. It is not you who has to find the way through the jungle, but it is us, the ones who have the knowledge, who have to support you through this. What you have to bring is the product, the idea, the potential field of investment. And we do our job on our side. Of course, always with the goal to crowd in private investment, too.
My third point is international partnerships. We have learnt the bitter lesson that I just described with the overdependency on Russian fossil fuels. And we have understood that this is not healthy. So we have to make sure that you have access, for example, to critical raw materials, that you have access to the elements you need in the different supply chains. And for us, it is very important to diversify our supply chains, thus to strengthen them. We have created Global Gateway, which is our EUR 300 billion strategy for investment in infrastructure abroad. And here, with Global Gateway, we create comprehensive partnerships with different regions of the world and different countries to diversify our supply of, for example, critical raw materials. And therefore, to secure your access to these critical raw materials.
Let me give you one example. We have observed that China, over the last 20 to 30 years, has strategically bought mine after mine globally. They take the raw material, they have the processing procedures in China and then they have the monopoly for this raw material. Take lithium: 97% of the lithium we use in the European Union is from China. So we are totally dependent on this one on China. What we do now is talk to other countries in the world, like for example Chile with whom we have just made an agreement on lithium, to diversify the supply chains so that we don’t have again a situation like with Russia, an overdependency and then the potential for blackmail. But that you are free to look at the different strong supply chains that we create together with our partners, so that you have the security of access.
There is a second element where we should be vigilant. That is when there is no fair play, no level playing field. You are very familiar with that topic. If I take China again, the electric vehicles on our market are heavily subsidised. And China has an enormous overproduction, overcapacity which they channel mostly to the European market, because the United States are closing their market already to Chinese vehicles. So we have to be very careful that the market here is not flooded by electric vehicles that are dumped on our market because they are so heavily subsidised.
For us, it is important that you compete on fair ground, on a level playing field, on quality, for example, but it has to be fair. And therefore, if this is not the case, we have to take our instruments to support you to create this level playing field. This is the big topic of economic security that we have developed. And indeed, the last point is that we support our industry to compete on quality, if not on price: And here we have resilience and sustainability requirements that are included, for example, in the Net-Zero Industry Act that we have just adopted in Parliament and in Council.
There is still a long way ahead of us, we need to focus on the enablers for a clean power system. We need to invest in smart grids and energy storage. We need to give you more access to the capital markets. And we have to boost nascent technologies such as those included in our recent Industrial Carbon Management Strategy – just to highlight the tasks that are ahead of us. Here again, the goal is that we have this Clean Tech Industry Dialogue to understand what is it that hinders you to reach the common goals that we have. How can we support you? What is typical for your sector, and not in others? And therefore, I put a lot of emphasis on this one here: We will have a report on the outcome of the strategic dialogues in April, so ready to go before the next meeting of the European Council. And therefore, your input counts today.
Thank you all very much for being here. Maroš Šefčovič has done an outstanding job already with the other strategic dialogues. He is well known to you. He will take over now, but I am very curious and interested to listen to the first inputs from your group.