EU confirms five-year approach to decarbonisation
The European Commission has laid out its strategy for helping to decarbonise the region’s economy over the next five years.
In its Competitiveness Compass, published today, policymakers said energy intensive sectors like steel, metals and chemicals were “among the most vulnerable in this phase of the transition”.
“These industries are the backbone of the European manufacturing system, as they produce certain inputs vital for whole value chains,” the document added.
To support them, the Commission will create “tailor-made action plans” on the back of the Clean Industrial Deal, which will be developed in collaboration with stakeholders.
A Steel and Metals Action Plan is slated for the Spring, proposing measures to help stimulate investment and access to materials, for example.
A similar package for the chemicals sector is due by the end of the year.
The Commission promised to address widespread backlash over current decarbonisation targets for the automotive industry, which require significant emissions reductions by the end of 2025 and carbon neutrality by 2035.
It said it was already in dialogue with carmakers, and would “identify immediate solutions” to safeguard them, “by looking at possible flexibilities” around the targets. It will amend the rules to permit the use of e-fuels, and will work on “ambitious supply- and demand-side initiatives, such as a proposal on greening corporate fleets”.
Trade association Fuels Europe published a statement in response to the announcement, criticising the Commission’s decision to only add e-fuels to the rules while “neglecting sustainable biofuels and other low-carbon and renewable solutions”.
The Compass commits to invest in Europe’s grids, to support the growth of renewable energy capacity, and promised to “reward early movers” in the shift towards clean energy production and circularity.
It will explore the introduction of benchmarks, labels and mandates, and will offer greener companies financial incentives and preferential treatment in public procurement decisions.
“In the Clean Industrial Deal, the Commission will set out how well-targeted, simplified aid can further encourage investment for decarbonisation, while avoiding market distortions,” it said.
Other sustainability initiatives promised in the Competitiveness Compass include a new strategy for Europe’s ports and maritime industry, a Sustainable Transport Investment Plan focused on derisking investments into electric charging points and green fuels, and a “vision” for EU agriculture and food production.
A review of the Carbon Border Adjustment Mechanism will explore the potential to extend its scope to more sectors and products, and to look at measures to address its impact on exported goods.
The Commission also pledged to “build a business case for permanent carbon removals to compensate for residual emissions from hard to abate sectors” under the compliance carbon markets.
Finally, it said, a Circular Economy Act proposal would focus on improving recycling and reducing waste levels and the amount of virgin materials used by European companies.
“This will be accompanied by the rollout of Eco-design requirements on important product groups,” the Commission pointed out.