Brussels, 10 April 2024
Today, the Commission adopted a Communication taking stock of a series of Clean Transition Dialogues on transforming Europe into a clean, resource-efficient, fair and competitive economy. Commission President von der Leyen announced the launch of the dialogues in her 2023 State of the Union speech, to discuss with European industry and social partners how to strengthen and support the implementation of the European Green Deal, contributing to a reinforced industrial approach. The Dialogues have been chaired by Executive Vice-President Maroš Šefčovič. Today’s stocktake will feed into the discussion of EU leaders at the upcoming European Council on the next steps in Europe’s clean transition.
Commission President Ursula von der Leyen said,
“The European Green Deal is, and always has been, Europe’s growth strategy. Clean growth brings real benefits to our industry, and they have embraced it. Because in the European economy of the future, competitiveness and sustainability will go hand in hand. Now that a predictable regulatory framework is in place, the Clean Transition Dialogues are an important way to work together with industry and social partners to implement it in the most effective way. The Dialogues showed that our partners are committed to getting the job done and delivering on our ambitious and essential targets. Based on their insights, Europe will continue to support industry in building a business model fit for a decarbonised economy.”
Nine Clean Transition Dialogues have taken place so far. Industry and social partners confirmed their strong commitment to shape and implement the European Green Deal. Social partners highlighted the importance of ensuring the social fairness of the transition, to create good quality jobs as well as the need for reinforced structured social dialogue. The Dialogues have focused on hydrogen, energy-intensives industries, clean tech, energy infrastructure, critical raw materials, forest-based bioeconomy, cities, clean mobility, and steel.
A reinforced industrial approach: Building blocks and main elements
Today’s Communication highlights a number of key building blocks that have been identified through the Dialogues which could support a reinforced industrial approach to deliver on the European Green Deal: an effective and simplified regulatory framework for businesses to deliver on the transition; action on energy prices; modern infrastructure; easier access to finance; and a stronger Single Market in a globally competitive environment. The Commission will continue its engagement with industry and social partners through the Clean Transition Dialogues and it stands ready to engage in a thorough debate with Council and Parliament on the key factors that need to be addressed.
Delivery through effective implementation and simplification
The EU has delivered the policy and regulatory framework to achieve the 2030 targets and to keep Europe on track towards climate neutrality and a sustainable economy by 2050. This clear regulatory framework creates stability and predictability for all stakeholders. As the focus now switches to implementation, the Commission will provide further guidance to support industry and Member States in applying EU legislation and will strengthen the focus on burden reduction. The Commission will also publish on a dedicated platform a set of key indicators to monitor and measure progress of the green transition, competitiveness of the EU economy and the social transition. The Commission will further support industry in equipping the employees with the necessary skills for the transition, and will continue working with cities, regional and local authorities.
Abundant and affordable clean energy
Member States should make full use of the updated legal framework, notably the Renewable Energy Directive, to ensure the benefits of the clean transition flow to industry and citizens. Participants in the Dialogues stressed that securing the supply of abundant and affordable zero and low-carbon energy is a key condition to accelerate the decarbonisation of the EU economy and preserve the competitiveness of the European industry, and in particular energy intensive industries. Some industrial and transport sectors have called for additional innovative, transitory measures that secure energy at lower prices, while providing certainty to energy producers through long-term off-take. Industry also called for the creation of industrial clusters, that connect the largest manufacturing facilities and hubs with zero and low carbon generation plants, hydrogen and renewable- and low-carbon fuels producing facilities, or carbon capture, storage, transport and utilisation infrastructure. Participants in the Dialogues called on Member States to reconsider the level of taxes and levies on energy, including electricity. The Commission recalls that Member States need to take measures to eliminate fossil fuel subsidies, in line with recent COP conclusions and the Commission’s proposal to review the Energy Taxation Directive.
Modern infrastructure as backbone for industry
Closer coordination is needed between the Commission, Member States, local and regional authorities, network operators, industrial actors, regulators and financial institutions on the development of infrastructure for the clean energy transition. The Commission will adjust the existing formats to provide a platform for a regular and direct engagement with all key actors, with a focus on concrete infrastructure projects. Resilience requirements applicable to procurement and auctions will help create demand for EU-made equipment and components that meet high standards set for use in infrastructure development. The Commission will consider supporting industry in developing demand standardisation for cables, pipelines and technologies necessary for the development of the energy grid.
Unlocking finance for the transition
Private investment has not yet been sufficiently mobilised, but the private sector will continue to play a leading role in deploying investment in the clean transition. Participants in the Dialogues also stressed the need to reduce the cost of raising capital, diversify funding options for businesses, propose new innovative financial tools, and facilitate cross-border investing. A strong EU budget is needed to deliver higher quality investments and in this context the Commission urges swift progress on both the issue of innovative ways to use public funds to crowd in private investment, as well as the proposed ETS own resource. Overall, there is an urgent need to coordinate funding more at EU level, to create economies of scale, to enhance the efficient allocation of resources and make use of the single market. European institutions should strengthen their engagement with the institutional actors to mobilise private funding; the Commission should strengthen the political engagement and dialogue with the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), international financial institutions and private banks. Use of additional revenues from the EU Emissions Trading System, the Strategic Technologies for Europe Platform and auctions-as-a-service schemes like under the European Hydrogen Bank, are examples of promising funding tools put in place for the transition. Dialogue participants raised the important mismatch between the significant upfront investment costs of infrastructure development, and available funds.
Leveraging the clean Single Market in a globally competitive environment
The Single Market is the EU’s greatest strength, as it provides scale and promotes a high level of standards also outside Europe. Based on the positive result of the joint purchase of gas, the Commission will consider developing demand aggregation and joint purchasing for other strategic commodities and organising a pilot for hydrogen and the joint purchasing of critical raw materials. The Commission and Member States should make full use of policy instruments against unfair global competition, to ensure a level playing field on the internal and global markets. Implementing the Carbon Border Adjustment Mechanism and deploying more global carbon pricing through enhanced diplomacy are also important.
Background
To transform Europe into a clean, resource-efficient, and competitive economy, the Commission presented in 2019 the European Green Deal. This has been followed by a number of concrete initiatives; the majority of which are now embedded in EU law. The focus now shifts to implementation and delivery to make the Green Deal a success on the ground.
Europe’s industry and social partners should lead the transition of Europe’s economy. At the same time, industry is coming under pressure because of the worsening security, geopolitical, and economic context, as well as the lack of a level playing field.
The Clean Transition Dialogues were launched by President von der Leyen in the 2023 State of the Union speech as a new way for the Commission to engage with industry and social partners, to understand their current challenges, and to strengthen and support the implementation of the European Green Deal.
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Quote(s)
The European Green Deal is, and always has been, Europe’s growth strategy. Clean growth brings real benefits to our industry, and they have embraced it. Because in the European economy of the future, competitiveness and sustainability will go hand in hand. Now that a predictable regulatory framework is in place, the Clean Transition Dialogues are an important way to work together with industry and social partners to implement it in the most effective way. The Dialogues showed that our partners are committed to getting the job done and delivering on our ambitious and essential targets. Based on their insights, Europe will continue to support industry in building a business model fit for a decarbonised economy.
Our decarbonisation goals, green growth and European competitiveness go hand in hand. Today’s stocktake of the Clean Transition Dialogues underlines the need to deliver and invest in the clean transition now. This requires a reinforced industrial approach that ensures predictability for investors, strengthens a business case for investments to keep the Single Market attractive for industrial actors, innovates and makes the most of opportunities for industry that come with the European Green Deal. Abundant and affordable clean energy as well as a global level playing field are indispensable for European industry to prosper. A collaborative approach is paramount and the Commission will continue this engagement with industry and social partners through the Clean Transition Dialogues.
Executive Vice-President Šefčovič’ on taking stock of the Clean Transition Dialogues
Brussels, 10 April 2024
Good afternoon ladies and gentlemen,
The College adopted today a Communication taking stock of the Clean Transition Dialogues that took place in the past months aiming to strengthen the European industry with a view to a sustainable Europe that I will now present to you.
It was a very profound discussion in College because it was important to take stock of a series of nine clean transition dialogues, we held between October and April.
European industry as you know has a vital role to play in the green transition because the European Green Deal is – and remains – our growth strategy.
Moreover, the current geopolitical context has strengthened the case to maintain and boost Europe’s global position in strategic zero and low carbon energy technologies.
I therefore want to begin by appreciating that industry and social partners are committed to our collective climate goals.
They are also committed to stay and prosper in Europe – and to keep engaging with shaping and implementing the European Green Deal.
I also appreciate their positive feedback on the Commission’s work to put in place a regulatory framework that brings stability and predictabillity.
My main takeaway is that Europe’s decarbonisation must be increasingly driven by market forces, in addition to targets and regulation. We need to keep strengthening the business case for the clean tech sector and for the decarbonisation of our energy intensive industry.
This is particularly important as we are in the implementation phase of the Green Deal, which – from the industrial perspective – means the phase of scaling-up manufacturing capacities.
With this in mind, President von der Leyen launched last year a series of Clean Transition Dialogues to support key sectors in building their business models for decarbonisation.
The dialogues that I have chaired so far have been varied, addressing a wide range of industries. And this is how we need to keep working. Because no two industries face identical challenges.
However, there are a few common themes that keep coming up.
Our Communication today identifies five building blocks for a reinforced industrial approach to delivering the Green Deal.
These are requests that are shared by most, if not all, of our industries.
First, an effective and simplified regulatory framework: Stakeholders are broadly happy with the rules we have put in place, and they now know the direction that has been set. But they also seek our support to help them comply and deliver. The Commission will further focus on burden reduction and its ongoing actions, such as reducing burden from reporting requirements by 25% without undermining its political objectives.
Second, stable energy prices: We need to keep addressing uncompetitive energy costs, hampering investments in the clean tech sector and our energy intensive industries. We have a good regulatory framework, such as the Electricity Market Design, the revised Renewable Energy Directive and the Net Zero Industry Directive, accompanied by the Wind Action Plan, Girds Action Plan and other tools. However, we may need to debate additional targeted and temporary measures. This is a call that we have heard from the industry, and which we are attentive to. After all, our industry employs some 35 million people in Europe.
Third, modern infrastructure: The underdeveloped energy infrastructure, especially at the distribution level, can create bottlenecks in the green transition and electrification of our economy. We need to accelerate the roll out of energy and transport infrastructure.
Fourth, easier access to finance: The private sector will have a key role to play in deploying investment in the clean transition. But we must also provide greater public support to those clean tech sectors where market failures exist. Some sectors are not yet commercially viable, and we need to stimulate investment and help to build future markets. Like we are doing for example with the European Hydrogen Bank. Achieving a deep and integrated Capital Markets Union is another urgent priority to inject new funds into Europe’s green economy.
Fifth, a stronger single market: We must strengthen our actions towards creating a single market for clean tech in Europe and start rewarding companies investing in innovative and sustainable technologies as well as manufacturing with the lowest sustainability footprint. In practice, it includes boosting demand and off-take for these products to scale up manufacturing of clean products in Europe, improve the business case and consequently reduce the need for public support.
Lastly, our single market must be part of a global level playing field for European businesses: We should address the increasingly distorted global trade. We need to more efficiently and flexibly use our trade defence measures to address dumping of subsidised and unsustainably produced goods on the EU and global market. And we also need to urgently address the global carbon pricing, which remains essential not only for achieving our climate ambitions but also for preventing carbon leakage.
To conclude, the Clean Transition Dialogues we have held so far have been a valuable and enriching exercise – and I am sure not only for me but for all sides. This is the Commission’s contribution to the upcoming European Council. But I would like to reassure you that we will not stop here. A continuation of these Clean Transition Dialogues is part of our commitment to our stakeholders.
The Commission is therefore committed to working with Member States, the European Parliament, social partners, and other stakeholders to create a reinforced industrial approach in Europe and make the green transition a European success story.
Source – EU Commission