Today the Commission adopted a communication*, taking stock of a number of clean transition dialogues on Europe's transformation into a clean, resource-efficient, fair and competitive economy. Commission President Ursula von der Leyen announced the launch of the dialogues in her 2023 State of the Union address, with the aim of discussing with European industry and the social partners how to strengthen and support the implementation of the European Green Deal by fostering a stepped-up industrial approach. The dialogues were led by Executive Vice-President Maroš Šefčovič. Today's assessment will feed into EU leaders' discussions at the next European Council on the next steps in Europe's transition to clean energy.
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 industry has embraced it. That is because, in Europe's 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 of working with industry and the social partners to deliver it in the most effective way. The dialogues confirmed that our partners are committed to doing their part and to meeting our ambitious and essential targets. Building on what we have learned, Europe will continue to support industry in developing a business model fit for a decarbonised economy.”
Nine clean transition dialogues have taken place so far. Industry and the social partners confirmed their firm commitment to shaping and delivering the European Green Deal. The social partners stressed the importance of ensuring that the transition is socially fair, of creating quality jobs, and of strengthening structured social dialogue. The dialogues focused on hydrogen, energy-intensive industries, clean technologies, energy infrastructure, critical raw materials, the forest-based bioeconomy, cities, clean mobility and steel.
A stepped-up industrial approach: building blocks and key elements
The communication published today highlights a number of key building blocks identified in the dialogues that could underpin a stepped-up industrial approach to delivering the European Green Deal: an effective and simplified regulatory framework for businesses to carry out the transition; action on energy prices; modern infrastructure; easier access to finance; and a stronger single market in a context of global competition. The Commission will continue to work with industry and the social partners through the clean transition dialogues, and stands ready to engage in in-depth debate with the Council and Parliament on the key factors that need to be addressed.
Meeting the targets through effective implementation and simplification
The EU has put in place a policy and regulatory framework designed to meet the 2030 targets and keep Europe on track for climate neutrality and a sustainable economy by 2050. This clear regulatory framework creates stability and predictability for all stakeholders. With the focus now on implementation, the Commission will provide further guidance to support industry and the Member States in applying EU legislation, and will step up its attention to reducing burdens. The Commission will also publish a set of key indicators on a dedicated platform to monitor and assess progress on the green transition, the competitiveness of the EU economy and the social transition. The Commission will continue to support industry in equipping workers with the skills needed for the transition, and will continue to work with cities and regional and local authorities.
Abundant and affordable clean energy
Member States should make full use of the updated regulatory framework, in particular the Renewable Energy Directive, to ensure that industry and citizens benefit from the clean energy transition. Participants in the dialogues stressed that, in order to speed up the decarbonisation of the EU economy and preserve the competitiveness of European industry — and of energy-intensive industries in particular — one of the key conditions is to secure an abundant and affordable supply of carbon-free and low-carbon energy. Some industrial and transport sectors have called for additional innovative transitional measures that would deliver energy at lower prices while providing certainty for energy producers through long-term offtake. Industry also called for the creation of industrial clusters linking major production sites and hubs with carbon-free and low-carbon power plants, hydrogen and renewable and low-carbon fuel production facilities, or carbon capture, storage, transport and utilisation infrastructure. Participants in the dialogues called on Member States to review the level of taxes and levies on energy, including electricity. The Commission recalls that Member States must take steps to phase out fossil fuel subsidies in line with the recent COP conclusions and the Commission's proposal to revise the Energy Taxation Directive.
Modern infrastructure as the backbone of industry
Developing the infrastructure for the clean energy transition requires closer coordination between the Commission, the Member States, local and regional authorities, network operators, industrial players, regulators and financial institutions. The Commission will adapt existing formats with the aim of providing a platform for regular, direct cooperation with all the key players, focusing on specific infrastructure projects. Resilience requirements applying to procurement and auctions will help create demand for EU-made equipment and components that meet the high standards set for infrastructure development. The Commission will consider supporting industry in developing demand standardisation for the cables, pipes and technologies needed to develop the energy grid.
Attracting finance
Private investment has not yet been mobilised sufficiently, but the private sector will continue to play the leading role in scaling up investment in the clean energy transition. Participants in the dialogues also stressed the need to lower the cost of raising capital, to diversify companies' financing options, to propose new and innovative financial instruments, and to facilitate cross-border investment. A strong EU budget is needed to secure higher-quality investment, and in this regard the Commission is urging rapid progress both on innovative ways of using public funds to attract private investment and on the proposed ETS own resources. Overall, funding urgently needs to be coordinated at EU level, economies of scale created, the efficient allocation of resources improved and the single market put to use. The European institutions should strengthen their cooperation with institutional players in order to mobilise private finance, and the Commission should step up political engagement and dialogue with the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), international financial institutions and private banks. The use of additional revenue from the EU Emissions Trading System, the Strategic Technologies for Europe Platform and “auctions-as-a-service” schemes, for example under the European Hydrogen Bank, are examples of promising financing instruments introduced to deliver the transition. Participants in the dialogues said that a significant mismatch remains between the substantial upfront investment costs of infrastructure development and the funds available.
Making the most of a clean single market in a context of global competition
The single market is the EU's greatest asset, as it delivers scale and promotes high standards, including beyond Europe. Building on the positive results of joint gas purchasing, the Commission will consider developing demand aggregation and joint purchasing for other strategic goods, and organising a hydrogen pilot project and joint purchasing of critical raw materials. The Commission and the Member States should make full use of the policy instruments available to counter unfair global competition, so as to ensure a level playing field in the internal and global markets. It is also important to implement the carbon border adjustment mechanism and to introduce more global carbon pricing through enhanced diplomacy.
Background
To transform Europe into a clean, resource-efficient and competitive economy, the Commission put forward the European Green Deal in 2019. It was followed by a series of concrete initiatives, most of which are now enshrined in EU law. The emphasis is now on implementation and delivery, so that the Green Deal is also a success in practice.
European industry and the social partners should lead the transformation of Europe's economy. At the same time, industry is under pressure from a deteriorating security, geopolitical and economic situation, as well as from the lack of a level playing field.
Commission President Ursula von der Leyen launched the clean transition dialogues in her 2023 State of the Union address as a new way for the Commission to work with industry and the social partners in order to understand the challenges they currently face and to strengthen and support the implementation of the European Green Deal.