EU Shifts Attention to Industry in Push to Deliver Green Targets

(Bloomberg) -- The European Union is turning to its industry to bolster support for the ambitious Green Deal in the face of growing concerns about the costs of the clean overhaul at a time of weaker economic growth, high energy prices and global competition.

The European Commission, the EU’s regulatory arm in Brussels, wants to reinforce its industrial approach when shifting the bloc to a sustainable economy over the coming years. Taking stock of a series of meetings with companies on areas including hydrogen, clean tech, energy infrastructure, clean transport, steel and critical raw materials, it pledged on Wednesday to work on key concerns that businesses raised as hindering the transition.

“Our decarbonization goals, green growth and European competitiveness go hand in hand,” said Maros Sefcovic, the commission’s executive vice president for the Green Deal. “Abundant and affordable clean energy as well as a global level playing field are indispensable for European industry to prosper.”

The EU wants to be the world’s leader in the fight against climate change and has a binding goal of zeroing-out greenhouse gases by the middle of the century. Its aims to cut emissions by at least 55% from 1990 levels this decade, an increasingly difficult goal in the face of high interest rates, an energy crisis triggered by Russia’s invasion of Ukraine and growing voters’ concerns about the bill for the transition.

The role of industry in the transition and its position in the global market is climbing up the EU political agenda as the 27-nation bloc is nearing elections on June 6-9. With right-wing parties — which often question climate-protection measures — set to gain more seats in the European Parliament, translating the ambitious targets into reality will become more challenging. 

The coming years will be critical for the Green Deal as national governments need to enact a massive package of measures agreed by the EU to ensure the 2030 targets are met. They range from creating a new carbon market for road transport and heating fuels to stronger energy efficiency requirements and a de facto ban on new passenger cars running on fossil fuels by 2035.

“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,” it said in a document published on Wednesday. “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 key building blocks that could support the industry in the transition include simplified regulation, affordable energy prices, easier access to finance and stronger internal market in a globally competitive environment, according to the commission. 

“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,” it said. “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 utilization infrastructure.”

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