Next EU legislative term must reconcile climate and industry, says French think tank

Équilibre des énergies (EdEn), a French think tank, issued its recommendations for the next EU term of office (2024-2029). In exclusivity for Euractiv France, the group stresses the need for a European industrial strategy that is properly geared towards the climate and the economy, rather than a collection of targets.

The current European Commission’s heritage will for sure be the Green Deal, a series of policy initiatives aimed at putting the EU27 on track to reaching climate neutrality by 2050.

Following the European elections in June, a new set of politicians will take over from the current Commissioners and Members of the European Parliament (MEPs).

According to EdEn, a French think tank specialised in industrial policy, this renewal is an opportunity that should not be missed in order to achieve Europe’s 2030 climate and industrial targets.

On Wednesday (7 February), the think tank published a report entitled “Fit for 55… what next?” aimed at future decision-makers.

The document contains 35 recommendations divided into nine key areas and two priorities: the effective reduction of greenhouse gas (GHG) emissions and the reindustrialisation of the EU by 2030.

Cutting emissions, without dogmatism

“The first imperative now is to take action,” the report reads.

This means “putting an end to the row between nuclear and renewable energies” and moving from a renewables directive to a low carbon directive, argues Jean-Pierre Hauet, chairman of EdEn’s scientific, economic, environmental and societal committee.

In December, a group of 11 member states, led by France, had already expressed similar views in a letter to the European Commission.

The EU has “remained too much along the lines set out in the Treaties: energy savings and new energy,” Hauet explains. Now however, “the principle of ’emissions reduction first’ must guide action,” the report says.

In other words, the next legislative term “must not spend too much time on discussions about the 2040 objective.” Instead, it must act to achieve the targets set for 2030, i.e. a reduction of 55% in GHG emissions compared to 1990 levels.

On Tuesday (6 February), the Commission unveiled its recommendation for the EU’s future 2040 climate target: a 90% net reduction in GHG emissions compared to 1990.

But a new target could “fuel public fatigue if reindustrialisation and changes in behaviour do not follow these targets,” warned Cecil Coulet, head of European affairs at EdEn.

Without calling for a “regulatory pause,” like French president Emmanuel Macron did, “we must not allow for a dichotomy to develop between, on the one hand, the aspirational objectives of public authorities and, on the other, the objectives that industry can meet,” Hauet added.

“Industry first”

According to EdEn, the next EU term should focus on the industry, the backbone of European decarbonisation.

This will involve setting up pilot projects and “establishing a framework and a clear strategy with targets in terms of autonomy for setting up a sector,” Coulet explained. To achieve this, “we need to know about resource availability and, as with sustainable aviation fuels, we need to anticipate demand,” Hauet added.

On Tuesday, EU legislators – the European Parliament, Council and Commission – reached an agreement on the Net Zero Industry Act (NZIA), designed to facilitate the deployment of a cleaner industry in Europe.

“A good thing, but only a first step after years during which the possibility of a common industrial strategy was swept under the carpet by EU institutions,” Coulet commented.

As Hauet points out, funds still need to be allocated specifically to a European industrial strategy, which is not the case with the NZIA, or even with the remaining money available from the EU’s pandemic recovery plan.

Electrification

Like other sectors, industry will need more electricity because the electrification of the energy mix is a prerequisite for decarbonisation, Eden said.

More and more applications and sectors will be electrified, such as construction and the deployment of heat pumps, which EdEn urgently calls for.

The introduction of deployment targets, like the ban on new petrol vehicles as of 2035, “could set an example,” according to Hauet, so that ultimately member states can move away from fossil fuels in the building sector by 2040.

Hauet calls for caution when it comes to building renovation. Moving straight away towards comprehensive renovation “is not realistic” while a review of how energy performance diagnostics are calculated would be more than necessary, he said.

Electric roads for heavy goods vehicles

In the transport sector, the challenge is to ensure that a reliable and robust system for recharging electric vehicles is put in place, and to launch a policy for the electrification of heavy goods vehicles.

“Solutions other than electrification for heavy goods vehicles will not be enough in the long term,” Hauet said. Hydrogen, for example, remains too expensive to launch a massive decarbonisation of the sector.

The think tank also suggests that electrification would pave the way for the introduction of “electric roads” for long-distance journeys.

“This is not science fiction. In terms of technology, there are no fundamental obstacles, but there are practical ones,” Hauet, who is an engineer, said.

The think tank warns that implementation of all these aspects will have to be efficient, because the transition is likely to cost a whopping €1,000 billion a year.

It will also be vital to ensure a fair redistribution of the social funds associated with climate policies, such as the carbon market, the group concludes.

Cover photo: EU Commission President Ursula von der Leyen (R), Prime Minister of state Hesse, Boris Rhein (L) and the chairwoman of the Merck Executive Board, Belen Garijo (C) tour a laboratory for the development of chemicals for the production of electro chips during a visit to the pharmaceutical company Merck in Darmstadt, Germany, 15 September 2023. [EPA-EFE/RONALD WITTEK]