Energy policies in the EU and the Clean Industrial Deal

Energy

Estimated time of reading: ~ 5 minutes

The need to boost industrial production in Europe, after a period of low growth and potential crisis due to global trade wars, is difficult to match with the lines of the European green agenda. For these reasons, the European Commission has decided to launch the Clean Industrial Deal, with the aim of accompanying the energy transition without losing industrial potential and leaving European companies behind in international competition. Specifically, the Clean Industrial Deal outlines concrete actions to turn decarbonisation into a driver of growth for European industries. Such a programme includes lowering energy prices and creating quality jobs and the right conditions for companies to thrive, as the EU Commission stated in its presentation of the deal. The main focus is on energy-intensive industries such as steel, metals, and chemicals “that urgently need support to decarbonise, switch to clean energy, and tackle high costs, unfair global competition, and complex regulations”. Another important feature of the Clean Industrial Deal is the clean-tech sector, which is “at the heart of future competitiveness and necessary for industrial transformation, circularity, and decarbonisation”.

In this perspective, a key asset is affordable energy, which can be considered as the foundation of competitiveness. It comes not as a surprise that, in order to lower energy bills for industries, businesses and households, the Commission adopted the affordable energy action plan while also promoting the transition to a low-carbon economy. Looking at the general picture, the energy action plan tries to speed up the roll-out of clean energy, accelerating electrification, and completing the internal energy market in the EU, favouring physical interconnections. Using energy more efficiently and cutting dependence on imported fossil fuels is another important step towards a real, affordable energy system.

Industries that have had a historic impact on the development of the European economy, such as steel and chemicals, have experienced a period of difficulty on the continent due to global competition. Ironically, the same thing is happening in the sector of clean technologies, such as heat pumps and wind energy, despite the large investments and experience accumulated in recent decades in several EU countries. Clearly one of the main problems for European companies is energy prices, which in recent times have been much higher than those recorded in the United States and China, where many of the competing companies are based. The most feared scenario in Europe is being overtaken in the race for clean technologies. This led to the issue of competitiveness, clearly highlighted by the former governor of the European Central Bank and former Italian prime minister, Mario Draghi, in its recent report on the matter, based on three pillars. According to Draghi, the European Union should work to close the existing innovation gap with the U.S. and China, developing at the same time a joint plan for decarbonisation and competitiveness while increasing security and reducing dependencies, as already done in respect of Russian hydrocarbons. Some of these tasks are already addressed in the Clean Industrial Deal, which contains support for new technologies, with over 100 billion euros in investments in clean tech manufacturing in Europe alongside measures to enhance public procurement and sales.

Written by: Francesco Marino

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