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Last week saw a major push from the European Commission to boost the EU’s industrial competitiveness, with new laws to tackle high power prices, secure supplies of critical raw materials, and bring home clean technology production.
Hurriedly pulled together without the full cost-benefit analysis usually required for major legislative proposals, the move was prompted to a large extent by the US Inflation Reduction Act (IRA), which provides generous subsidies to companies located in the country.
Even the proposals themselves seem a little haphazard. The Net-Zero Industry Act, for instance, contained a target for the EU’s energy efficiency directive that was six days out of date on the day it was published.
The proposals were also marred by battles over the inclusion of nuclear, unexplained delays and a target in the critical raw materials act that even the commissioner announcing it said was too low.
There is no doubt, of course, that Europe needs an industrial policy to shore up industries such as steel, aluminium, and solar photovoltaic, which have largely fled to Asia in recent decades.
But for a continent that covets the title of “world’s first net-zero”, it is strange that this came as a reaction to external forces like the US green subsidy drive, China’s dominance in clean technology markets, and Russia’s manipulation of EU gas prices.
Looking back a couple of decades, Europe excelled at clean technologies. It was the birthplace of wind power and a leader in the solar industry.
But it lost its solar manufacturing to China and is in the process of losing its wind industry to the same country. And, while Europe still boasts strong research and development, a recent study by the Australian Strategic Policy Institute found that leading energy innovations are now increasingly taking place in China.
Similarly, China dominates the critical raw materials market, with a stranglehold on much of the world’s refining and mining capacity for critical raw materials like rare earths, a crucial component for magnets used in wind turbines and electric car batteries.
All of this begs the question: Is the EU simply too late to the party?
Rather than guarding its industry and reaping the rewards, it has to fight for it to return. In that respect, the proposals are like ex-lovers throwing stones at a window and singing about how they want to get back together.
But we are where we are – so are the latest proposals enough?
Well, taking the electricity market design, yes and no. There are strong elements, like a shift to more long-term contracts, that could lower prices and help prevent EU industry from moving to places with cheaper electricity bills.
But the missing impact assessment is causing concerns about whether the new ideas, like the “peak shaving” product to incentivise demand reduction at high-usage hours, are simply throwing ideas at the market.
The Net-Zero Industry Act has also been met with mixed reactions. The positives include quicker permitting that could boost Europe’s competitiveness and a wider focus on clean technology beyond green hydrogen.
However, there are already concerns from solar developers that EU-manufactured panels could send the price of the energy transition soaring. Buying European often means products with higher environmental standards, higher labour costs and, ultimately, bigger price tags.
Alongside this, the EU lacks the money to support its green industry goals. The Net-Zero Industry Act refers to finance from the European Sovereignty Fund, due to be proposed in the summer. But this could take a long time to get approved and already faces resistance from some EU member states.
Similar questions remain around how to build up the EU’s mining, refining, and recycling of critical raw materials to meet the 2030 targets. To do this, Europe will need to win over the public and protect EU industries from being undercut by cheaper external production.
The EU dropped the ball on its industrial competitiveness years ago, losing manufacturing and control of supply chains at the turn of the century.
The push to win it back feels like closing the door after the horses have bolted. There may be a few left in the stable, but the real question is whether Europe can coax the rest back in.
– Kira Taylor
BERLIN. Four in five German trees are ‘sick’. Some 80% of German trees suffer from crown dieback, according to the government’s annual forest report published on Tuesday. The report also draws attention to severe droughts in the country over the past few years. Read more.
ROME. Italy free from Russian gas by year’s end says minister. Italy will be independent of Russian gas by 2023, said Italian Enterprise Made in Italy Minister Adolfo Urso (Fdi/ECR), pointing to two regasifier ships, one of which arrived at the port of Piombino, allowing the country to rely on countries like Algeria, Azerbaijan and Libya for gas instead. Read more.
WARSAW. Coking coal remains on EU critical raw materials list after Polish pressure. Coking coal will stay on the list of raw materials critical for the European Union after Poland, a key producer of the energy source, succeeded in persuading the Commission after the latter published its proposal for a new Critical Raw Materials Act. Read more.
THE HAGUE. Dutch to introduce carbon cap at airports from 2025. Flights will have their CO2 emissions capped from 2025 depending on the airport, the Dutch cabinet announced on Friday without yet specifying the different thresholds for each. Read more.
BRATISLAVA. Slovakia joins ‘anti-combustion engine ban club’. Slovakia’s environment ministry must join Germany, Austria, Poland, Italy and the Czech Republic in opposing the EU’s de facto combustion engine ban from 2035, according to a resolution voted by Slovak lawmakers on Wednesday. Read more.
BERLIN. Industrial drop saves Germany’s compliance with 2022 climate targets. German industry reduced greenhouse gas emissions by 10% in 2022 compared to the previous year, enabling the country to stay in line with its overall emissions target despite additional emissions caused by an increased reliance on coal-fired power generation. Read more.
EU climate scientists issue recommendations on energy infrastructure. The European Scientific Advisory Board on Climate Change issued new recommendations on 15 March about methodologies for a harmonised energy system-wide cost-benefit analysis at EU level.
The advisory board found that the EU’s ten-year network development plan does not sufficiently address the rapid reductions in greenhouse gas emissions needed to achieve the bloc’s 2050 target of reaching net-zero emissions.
To tackle this, it recommends that priority must be given to “full decarbonisation, energy efficiency, and infrastructure resilience” as well as “rapid and widespread electrification combined with demand-side flexibility.”
More recommendations issued by the board for the European Networks of Transmission System Operators for Electricity and for Gas (ENTSO-E and ENTSO-G), the European Commission, and the European Union Agency for the Cooperation of Energy Regulators (ACER) to achieve the desired climate targets can be found here. (Valentina Romano | EURACTIV.com)
In this special episode of the Beyond the Byline podcast, we take a look at the EU’s packaging regulation – the issues it seeks to address, and whether it has any chances of succeeding where its predecessors failed.
The European Commission tabled its packaging and packaging regulation in November last year in a bid to cut waste, promote recycling, and reduce consumption of primary raw materials. As the draft regulation now reaches the European Parliament and EU member states for scrutiny, we look at the main aspects of the proposal with our guests:
- Nils Torvalds, a Finnish MEP from the liberal Renew Europe group in the European Parliament
- Jean-Pierre Schweitzer, a green campaigner with the European Environmental Bureau (EEB)
- and Annick Carpentier, from The Alliance for Beverage Cartons and the Environment (ACE)
How Europe plans to use nature to tackle climate change – by Kira Taylor and Miriam Saenz de Tejada
Nature is Europe’s … well, natural ally when it comes to tackling climate change. But EU nature is in decline. So how is Europe going to revive its nature and use it to fight climate change? Watch the video here.
- 22 MARCH. Consumers package:
- Substantiating environmental claims
- Sustainable consumption of goods – promoting repair and reuse (the right to repair)
- 22-24 MARCH. UN Water Conference, New York.
- 23-24 MARCH. European Council.
- 28 MARCH. Energy Council.
- 18-19 APRIL. Informal meeting of environment ministers.
- 17 MAY. Measures to reduce the release of microplastics in the environment.
- JUNE. European Parliament Plenary vote on the EU Nature Restoration Law.
- 6-7 JUNE. EU Green Week.
- 19 JUNE. Energy Council.
- 20 JUNE. Environment Council.
- 21 JUNE. Greening transport package.
- 29-30 JUNE. European Council.
- 30 JUNE. Deadline for European Member States to update their revised National Energy and Climate Plans (NECPs).
SECOND HALF OF 2023
- Q4. Revision of REACH regulation.
- 26-27 OCTOBER. European Council.
- 30 NOVEMBER-12 DECEMBER. UN Climate Change Conference (COP 28), Dubai.
- 14-15 DECEMBER. European Council.
[Edited by Zoran Radosavljevic and Frédéric Simon]