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The EU is one of the most important economies in reducing GHG emissions and will reach its emission reduction target by 2020. However, much more needs to be done to harmonize with climate change. the objective of the Paris agreement which stipulates to limit global warming to well below 2° C…
“The EU is one of the most important economies in reducing GHG emissions and will reach its emission reduction target by 2020. However, much more needs to be done to harmonize with climate change. the objective of the Paris agreement which stipulates to limit global warming to well below 2° C, it will also require a lot of effort if only to exceed 1.5 ° C by the end of the century. Before the Paris Climate Conference in 2015, the European Union aimed to reduce its GHG emissions by 40% by 2030 compared to 1990 levels. Following the Paris Agreement, this objective should be revised upwards by the end of 2020, as well as its long-term objective for 2050. Moreover, the EU must fill all the gaps in its climate policy, in particular with regard to the increase in emissions from the aviation and maritime sectors, as well as GHG emissions other than CO2 (methane, etc.), responsible for more than 30% of current global warming.”
Dr Georgios AMANATIDIS, Research administrator, Policy Department for Economic, Scientific and Quality of Life Policies, European Parliament
The European Green Deal is, on the one hand, our vision for a climate-neutral continent in 2050, and on the other hand a very dedicated roadmap whose goal is 50 actions for 2050.
Our goal is to reconcile the economy with our planet, to reconcile the way we produce, the way we consume, with our planet and to make it work for our people. The European Green Deal is on the one hand about cutting emissions, but on the other hand about creating jobs and boosting innovation.
The old growth model based on fossil fuels and pollution is out of date and out of touch with our planet, the European Green Deal is our new growth strategy that gives more back than it takes away.
This is Europe’s man on the moon moment. The European Green Deal is very ambitious, but it will be very careful in assessing the impact of every single step we’re taking.
The deal, which aims to make Europe the first climate-neutral continent by 2050, is a roadmap for making the EU’s economy sustainable by turning climate and environmental challenges into opportunities across all policy areas and making the transition just and inclusive for all.
It covers all sectors of the economy, most notably transport, energy, agriculture, buildings, and industries such as steel, cement, ICT, textiles and chemicals.
Meeting the objectives of the European Green Deal will require significant investment and that achieving the current 2030 climate and energy targets will require an estimated €260bn of additional annual investment, representing about 1.5 percent of 2018 GDP.
At least 25 percent of the EU’s long-term budget should be dedicated to climate action, and that the European Investment Bank, Europe’s climate bank, will provide further support.
Our goal is to reconcile the economy with our planet, to reconcile the way we produce, the way we consume, with our planet and to make it work for our people.
In my view, I see the European Green Deal as the starting process of modernizing the European Industrial Sector by addressing a double challenge simultaneously: the green conversion and the digital transformation. The Green Deal will shape substantially EU’s new model of economic growth for the next decades, aiming to increase European industry’s competitiveness in an increasingly resource constrained world that almost collectively tries to overcome climate change. Industrial leadership will be a key factor in the geopolitical context, as those who set the production standards today are those who control the international markets tomorrow. It is estimated to take up to 25 years to transform European industry according to the Green Deal’s fundamentals, therefore, EU’s institutional’ decisions in current mandate are crucial to achieve a digital, circular and climate neutral industrial sector by 2050.
It will be of utmost importance to succeed in designing a new industrial strategy that will enable European industry to manage the great challenges of the transformation required to make Green Deal a successful story. During the transition process, it will be critical to ensure our industry’s ability to withstand its global competitors and continue to export on global markets, while our main competitors are not facing financial burdens of similar transformation processes. I consider that EU’s new industrial policy should be funded on a strong competition policy and significant transition funding for the industrial regions most impacted by the green transition through a Just Transition Mechanism opened to further financial consolidation. As the ENVI responsible of Horizon Europe Programme 2021-2027, I would stress first that the success of the Green Deal will be directly linked to the robustness and capacity to deliver of EU’s research program. Proper investment will be instrumental for boosting global competitiveness of Europe’s industries in areas such as robotics, artificial intelligence, supercomputing, 5G, cloud, batteries and clean hydrogen. In this context, I would like to highlight the important mission of the European Innovation Council to succeed in bridging European Union’s long-existing gap from excellent research results to market deployment and ensure that breakthrough industrial innovation reaches our production processes.
A key element of the digital transformation of EU’s industry will be represented by our ability to collect, storage and process industrial data by artificial intelligence’s algorithms, which will increase dramatically industrial efficiency and productivity and strengthen overall competitiveness of European industry. Europe can maximize industrial performance by combining EU’s technological and industrial capabilities in a coordinated manner and further develop and update the digital infrastructure across Member States by adequately funding indispensable EU instruments such as Connecting Europe Facility and Digital Europe. High volumes of data will require inevitable measures to ensure data-sovereignty and will enable European Union to become a major global hub for data, opening up important opportunities for Europe’s digitalized industry.
EU’s energy-intensive industries such as steel, chemicals and cement remain indispensable to Europe’s economy. Modernization and decarbonization of these industries will be crucial to achieve 2050’s climate-neutrality objectives and increase competitiveness. Feasible solutions have been already foreseen under the Green Deal planning and I highlight the necessity to broaden and revise the EU Emissions Trading System and particularly to strengthen the Innovation and Modernization Funds and further develop innovative low-carbon technologies and processes, such as Carbon capture and utilization (CCU), Construction and operation of carbon capture and storage (CCS) and energy storage.
A clean industrial sector will require adequate market access. I consider of outmost importance to address in due time market barriers to the deployment of clean products and ensure a level playing field for our industry, which often faces unfair competition from third countries-based industries.
I remind you, while European industry will be required to mobilise considerable investments in technological development and deployment of the new technologies, other parts of the world will not face such financial constraints. In this regard, I recall the concerns and the necessity of establishing in a timely manner Green Deal’s carbon border mechanism, in order to reduce the risk of carbon leakage, ensure that price of imports reflect their carbon footprint and avoid jeopardizing the global competitiveness of EU’s industries during the transition process.
The Green Deal also aims to deepen the switch of focus from extracted materials to waste and recycled materials, which currently represent just 12% of total material used. This strategy can generate a notable international advantage, reduce production costs, decrease Europe’s industry import dependence and cut green gas emissions. But the process will require strengthening our efforts in developing a homogenous market for climate-neutral and circular products. A comprehensive circular economy action plan with clear principles could become, as other EU policies, a worldwide model of developing sustainable products, where European Union will benefit from the first to act. Finally, a successful industrial transition towards climate-neutral will require a massive both public and private investment. In this regard, I firstly highlight the decisive role of the European Investment Bank in the years ahead and secondly, I underline that industrial competitiveness represents a major factor in determining private investment attractiveness.
European Union will face the unprecedented mission to increase in a balanced manner both private investment and sustainable and climate neutral productivity.
To conclude, I personally see the Green Deal as a new opportunity for our industrial sector. An accelerated process of an inevitable industrial evolution, where the European Union takes the leading role.
Private investment into sustainable rather than harmful economic activities is gaining traction. The European Commission was right to make proposals for the EU to lead the way in sustainable finance by proposing harmonized European definitions for investors to provide certainty about what can be considered sustainable investments. But for the EU to live up to the promise made in the Paris climate agreement to align financial flows with a 1.5-degree world, more ambition is needed. Whether the EU will live up to this promise depends on the ambition of the new Commission and the willingness of the Parliament and Member States to put words into action. At least four challenges are waiting for action from the incoming European Commission.
First, a framework that defines future policy action on a sustainable finance agenda should not limit itself to investors already interested in doing something positive for people and planet. Instead, EU action should contribute to making all finance more sustainable and shift the trillions of investments from unsustainable to sustainable economic activities. This is why we proposed to use the taxonomy not just for those financial market products with a specific environmental objective, but for a much wider range of financial products including ordinary shares and bonds sold to investors and also to bank accounts.
Second, we need to combat greenwashing more forcefully. Self-regulation and measures such as voluntary green bond standards are insufficient to ensure that green public and private finance really is sustainable. An EU definition of sustainable finance must make clear that there is no such thing is clean coal, sustainable nuclear energy, or green gas infrastructure. This is why it is important that Parliament explicitly excludes fossil fuels, fossil infrastructure and nuclear energy investments from being considered ‘sustainable investment’. Investors must also understand that environmentally sustainable investment requires respect of robust human rights standards. Only financial market participants who can proof their financial products are in line with the EU definitions should be allowed to sell products as “sustainable”, “green” or “ethical”.
Third, the EU should not only define what are sustainable investments, but also create clarity about the most environmentally harmful investments. This will send a strong signal to public and private investors and banks that investing in or lending to economic activities like coal, shale gas, factory farming is both risky and unsustainable. Also, it will provide transparency on the amounts of unsustainable investments out there, which in turn is instrumental for shareholder pressure to put pressure on companies to transform unsustainable activities into sustainable ones.
Measuring “brown” activities should not be limited to capital markets, but also include the banking sector which is still financing the bulk of the European economy. The Central Banks and Supervisors Network for greening the financial system has also called for a clear clarification between green, non-green, brown and non-brown assets in order to understand their risks. The European supervisors should be required to integrated climate change into their stress testing methodologies to deal in an orderly fashion with the financial risks related to stranded assets. Finally, measuring the sustainability of financial assets and loans will remain challenging without more detailed reporting by the corporate sector. An ambitious revision of the corporate reporting framework is long overdue. There are already good initiatives such as the Platform for Carbon Accounting Financials, to assess and disclose greenhouse gas emissions of loans and investments. There is no excuse to start measuring and estimating sustainability impact now, but the EU should help the financial sector in getting access to comparable information by corporates on key sustainability indicators by updating the reporting rules. So far there has been a lot of political support for EU action to promote sustainable investment. Both companies and politicians love measures that help them to look greener and can be presented as win-win for all stakeholders. But a sustainable finance agenda that really achieves its objective of speeding up the urgent green transformation of the realneconomy will also hurt certain vested interests.
If the Von Der Leyen Commission is serious about its sustainability ambitious, it should grasp the nettle of this more difficult part of the sustainable finance
The EU’s budget for 2020 should include more climate action funding and higher investment in sustainable technologies, according to Monika Hohlmeier, MEP’s Parliament’s budget negotiator.
The Parliament will vote on its position for next year’s budget on 23 October. German EPP member Monika Hohlmeier, chair of the budgetary control committee, talks about her budget proposals in our interview:
The overarching priority for the Parliament is that we wish to tackle the issue of climate change and in parallel combine it with possibilities to create new jobs and strengthen the competitiveness of our economy.
We wanted to give a clear statement that Parliament wants to significantly contribute to innovation, research and new, green technologies with next year’s budget.
We also want to support digitalisation because for research on climate, we need good digital tools. Digitalisation not only helps with the EU’s climate targets, but also enables us, for example, to improve research into severe illnesses or more efficient agriculture methods.
We want to give money to universities and research institutions that are conducting this type of research and collaborate successfully with industry.
The priority of climate and environmental protection continues in the area of the common agricultural policy and rural development with the successful LIFE+ programme. Another important area is development policy, where we want to continue to reduce poverty, but also address issues such as plastic-free oceans and waste removal.
With our budget instruments, we can help tackle climate-related problems, for example, by supporting the use of renewables in countries where they could help solve the issue of access to sustainable energy and tackle the energy problem.
No, we won’t reach the target because in 2014 we had a contribution of less than 14% of climate-related expenditure, which we were unable to make up in the following six years of the current multi-annual framework [the EU’s long-term budget].
Nevertheless, for 2020, my proposal is very clearly above the 20% target. We think that the young generation really has the right to tell us when it comes to climate “Please do something, do it quickly and don’t just discuss the issue of what we could do.”
We would also like to increase financial support for the successful Youth Employment Initiative. The unemployment rate for young people is decreasing and this programme is contributing to helping them find work. We would also like to increase funding for Erasmus+ to give more young people the opportunity to study abroad.
I think we definitely can get the Council on board. We have a special challenge because this is the last year of the current [long-term budget]. Some net paying countries want to cut the budget, while other member states would like to see more money in the area of cohesion or agriculture.
At the same time, Brexit is happening and we do not know what will happen after 31 October. I still hope that we will have a smooth Brexit. The cost of a hard Brexit for the EU would be €11 billion until the end of the current [long-term budget], something we should all want to avoid at any cost.
We are prepared. The UK cannot put us under pressure. If there is a hard Brexit, we would have to change the budget, but we already know that research teams in the UK are struggling to continue with their projects and cooperation with the EU.
I think the UK will end up contributing to many programmes, for example in the area of security and agriculture. There are lots of areas where they want to be part of the EU, so the money will come back into the EU’s budget the same way it does with Norway, Switzerland, Liechtenstein and other third countries.
Parliament wants to ensure that there is no cherry picking for the UK, because it can never be accepted that a country leaving the EU gets a better deal.
We take note of the announcement by the UK Presidency that the COP26 will be postponed amid efforts to contain the coronavirus pandemic, and that the Presidency will now consult on the most appropriate date to reschedule it.
On behalf of the European Commission, I want to assure the UK COP26 Presidency, the UNFCCC, Italy as the host of the pre-COP and all of our international partners and civil society, of our strong commitment to making a success of COP26 and to delivering the European Green Deal which we announced in December 2019 in the interest of the health of our economy and our people.
We acknowledge that global diplomatic activity is currently slowed down by the coronavirus crisis. And we understand that this decision is taken to avoid that COP26 would fail to meet expectations as a result of insufficient participation. This makes sense.
As for the European Commission, we will not slow down our work domestically or internationally to prepare for an ambitious COP26, when it takes place. At home, we have put in place the key EU laws to meet our existing 2030 climate and energy targets. In the long-term, we have committed to climate neutrality by 2050 and proposed a climate law that will make this objective legally binding. The legislative work on this proposal has started, even in these challenging circumstances.
The work that the Commission is doing to present by September 2020 an impact assessed plan to raise the EU’s 2030 ambitions and cut greenhouse gas emissions by 50-55% compared to 1990 levels is on track, and the Commission will stick to that. The same goes for the work necessary to submit an enhanced Nationally Determined Contribution to the UNFCCC in line with our commitment under the Paris Agreement.
We will also continue to work intensively through all available channels with our partners around the world to share our plans and to encourage them to raise ambition too, and to work together on other key elements of the global climate agenda, like sustainable finance and adaptation and resilience to the impacts of climate change.
Last year was the fourth warmest on record. Of the 18 hottest years in recorded history, 17 have occurred since the year 2000. In July, Belgium, Germany, Luxembourg and the Netherlands saw new national temperature records over 40° Celsius in an intense heatwave. In France, Paris recorded its hottest day on record. So: we either act now or face disastrous consequences, probably in our lifetime. The European Union is committed to achieving the Paris Climate Agreement goals, including targets for energy efficiency and renewable energy, and for reducing CO2 emissions. We have gone a step further.
The European Commission has proposed moving to a climate neutral economy by 2050, aiming for Europe to be the world’s first major economy to do so. Realistically, to start out on this path, we only have about 10 years to halve greenhouse gas emissions. It implies unprecedented modernization and transformation, on a massive scale. It will mean widespread restructuring and industrial change across all EU countries; it will affect every sector as we develop low and zero carbon alternatives to replace more traditional technologies. None of it will be quick, or cheap. For Europe to achieve its Paris Climate Agreement goals and climate neutrality, we will need between €175 and €290 billion in extra investment each year, to fund everything from small-scale energy efficiencies to large sustainable infrastructure projects. While at least 25% of EU spending in the next seven-year budget starting in 2021 will support climate action, there is no way that stretched public funds can meet all those needs. We need the financial sector to play its part to help attract private capital from across the board – in equity, loans, project finance – to help us reach our climate-neutral goal, by investing in economic activities that mitigate climate change. The European Union was an early mover in this area by recognizing the urgency of scaling up private capital to support the transition to a sustainable economy. Last year, we presented a comprehensive action plan on financing sustainable growth, to create more opportunities for green investment and make investors more aware of the risks of climate change.
Its center piece is a proposed law for a unified EU classification system – or taxonomy – to determine whether an economic activity is environmentally sustainable. This breaks new legal ground and is a vital step towards attracting more investment to green and sustainable projects. We need political agreement between EU countries by end-October. Two new EU laws aim to incentivize people to invest in green financial products. Stronger rules on disclosing sustainability factors to end-investors will make it easier for people to make informed choices when they invest in a financial product. Two new categories of EU climate benchmarks – voluntary labels – will give greater information on an investment portfolio’s carbon footprint: one for climate transition and another to allow building a portfolio aligned with the temperature goals of the Paris Agreement. We will also set up an EU green bond standard, raise transparency for companies on climate related reporting and expand the use of the EU Ecolabel to financial products. Many other countries are putting similar initiatives into effect and making substantial progress. It shows clear global momentum to align finance better with sustainable development needs. With environmental, social and governance issues now a major factor in investment decisions, it is time to make sustainable finance go global by working together with public and private initiatives, among institutions and between countries.
Since finance ministers know most clearly the economic consequences of climate change, I was pleased to see the Coalition of Finance Ministers for Climate Action launch last April. It is a great example of strong international action on climate change: more than 30 countries signing up to promote national climate action through fiscal policy and public financing. No country working alone can afford to tackle the socio-economic consequences of climate change. While national public budgets can only do so much, financial markets are global. And we are up against a global problem, particularly for sustainable finance to reach the scale that the world needs. The global reach of financial markets can help countries on their transition to carbon neutrality by linking their financing needs to international sources of funding. This is especially relevant for developing countries that face difficulties in accessing finance for their sustainable development. It is the thinking behind the International Platform on Sustainable Finance (IPSF), launched on October 18th, 2019 in Washington by the European Union together with relevant authorities from Argentina, Canada, Chili, China, India, Kenya and Morocco. The IPSF is open to all jurisdictions willing to exchange best practices and, where relevant, coordinate their approaches on environmentally sustainable finance. It aims to avoid market fragmentation and to achieve better coordination on initiatives and approaches to environmentally sustainable finance, while respecting national and regional contexts. It will focus, in particular, on the areas of taxonomies, disclosures, standards and labels, which are fundamental for investors to identify and seize green investment opportunities worldwide. Building coherent international strategies such as these, with like-minded partners, is the best way to stimulate investment at the scale required for the most important economic transition of our times.
Climate change affects the entire planet, wherever you are. The evidence is overwhelming. Our response to it should be global, coordinated – and fast.
Our state aid rules have to deal with the huge investments that we’ll need, to make Europe climate neutral by 2050.
Our Sustainable Europe Investment Plan will help make a trillion euros available for that investment. And with so much at stake, it’s easy to assume that we shouldn’t worry too much about exactly how that money is spent.
But the truth is just the opposite. Having the right conditions in our state aid rules can help us to do more with our money, not less.
Those rules can help us to get the best for the money we spend, by using competition to drive down costs. There’s been a remarkable fall in the cost of supporting renewable energy, since the state aid rules began to require competitive bidding to hand out that money. In Germany, the cost of supporting solar power has been cut in half. Some offshore wind projects in Europe now happen with no subsidy at all. And the money that Europe saves in that way can be invested elsewhere, to speed up the transition – without costing taxpayers a cent more.
The state aid rules can also help us get the most out of what the private sector can do. Because a fundamental principle of the rules is that taxpayers’ money shouldn’t crowd out private investment. It should add something extra, not just replace investments that businesses would have made anyway.
The state aid rules also make sure that this money is spent without harming competition. Because we need to tackle climate change – but we should do it in a way that preserves the competition we need, to keep our economy strong and competitive.
So the state aid rules are a vital part of the green transition. And it’s important that we keep them up to date, so they can support the investments we need. That’s why we’ve decided to speed up our review of the rules on state aid for energy and the environment, so the new rules can be in place by the end of next year.
We’re also about to complete our work on new rules for state aid to help energy-intensive industries cope with higher electricity costs from the EU’s emissions trading system. The new draft rules – which are open for comment until next week – are designed to make sure this aid doesn’t undermine our climate goals. So companies which get aid will also have to do their part to cut emissions, by becoming more energy efficient.
And our state aid rules can also help make it possible for governments across Europe to pool their resources, and fund innovation that benefits our whole Union.
Our rules on important projects of common European interest already help to make that happen. They open the way for governments from different EU countries to come together with business to support breakthrough innovation – and to share the results widely throughout Europe. Those rules have already made two large, EU-wide projects possible, developing things like low-power microchips, and more environmentally friendly batteries. But experience shows that there are conditions that could be clearer, and procedures that could work more smoothly. So, we’re also bringing forward our review of these rules, so we can have new rules in place before the end of 2021.
The green transition affects all of us. But some parts of Europe will have to make a bigger adjustment than others. There are regions of our continent whose economies still depend, to a large extent, on digging up fossil fuels, or on industries that produce a lot of greenhouse gases. And our Just Transition Mechanism will make 100 billion euros available, to support these regions as they convert their economies to clean industry.
This is a question of solidarity – and it should work with, not undermine, the solidarity Europe shows through the cohesion policies that help our poorest regions to catch up.
The European Commission lead by President Von der Leyen has made clear from the outset that the European Green Deal is the main priority for its five-year mandate. Our principal objective is to move to a climate-neutral economy by 2050, and the Green Deal coordinates our approach across all policy areas and all sectors. Energy is of course one of the domains that will play a crucial role in the transition. If we look at Europe’s economy, we see that energy generation, transmission and conversion is responsible for 75% of the EU’s emissions. A lot has already been done to make EU energy policy legislation fit for the new challenges. Finalized in 2019, the Clean energy for all Europeans package addressed the three main priorities of EU energy policy: security of supply, affordability, and sustainability.
The Green Deal aims to continue in this path across all sectors and complete the transformation of our energy system into one which is not only carbon-neutral, but also, more cost effective, energy efficient and secure. At the same time, some areas face a larger transformation than others, and so we must ensure that we do not leave any person or region behind.
The principle of ‘Energy efficiency first’ is at the heart of the Deal. The cheapest and cleanest energy is the one we do not use, so the more we can do to reduce energy consumption, the better. This approach is also good news for consumers – saving energy will not only cut emissions but shrink their energy bills. This efficiency principle will be applied at all levels of Commission policymaking. In particular, we will focus on further improving the energy efficiency of our buildings, through a “renovation wave”, aiming to triple the existing, insufficient rate of renovation in Europe.
A crucial aspect is the inclusion of social housing in the wave, to help address the challenge of energy poverty in the EU. Our latest figures indicate that up to 50 million people around the EU are not able to properly heat their homes. This is not acceptable! Energy efficiency is important, but so is the source of our energy.
We need to increase the share of renewable energy by making it easier to incorporate renewables into our energy system. For this to succeed, we must move towards smart sector integration, which will promote stronger integration of the electricity, heating and cooling, transport, gas, industry, and agricultural sectors.
We have already achieved impressive results in decarbonizing the electricity sector, where 31% of electricity is produced from renewable sources.
In order to further boost decarbonization, we will present a new strategy to boost offshore renewable energy, addressing all the opportunities and challenges, such as the impact on energy grids and markets, the management of maritime space and the industrial policy dimensions of offshore wind.
That said, the decarbonization of our energy system cannot happen overnight. Natural gas still constitutes almost one quarter of the EU’s energy mix and will therefore have a role to play in the medium term, as a substitute for more polluting sources like coal, lignite or oil shale. While the role of gas in the transition is up to each Member State to decide upon, much like their energy mix in general, the EU can and should contribute to the decarbonization of the gas sector – ultimately, the gas we use in the EU has to be clean. We are already working on creating an environmentwhere clean gases can have a significant presence in the EU gas sector.
The EU has managed to diversify our sources of energy supply in recent years – in terms of more varied forms of energy and different suppliers – but we remain dependent on imports. Security of energy supply continues to be crucial and, amongst other policies, we need a forward-looking, modern, secure and smart energy infrastructure to safeguard it.
To ensure consistency with Europe’s climate neutrality objective and the Green Deal, we will review the regulatory framework for energy infrastructure this year, through a proposal to modify the TEN-E regulation. As for technology and innovation, the Green Deal will trigger a major push towards digitalization in all sectors, facilitating the clean energy transition in all parts of the energy supply chain, from generation to transmission to distribution, and including smart meters at home.
As we increase the digitalization of energy, we will also need new rules on cybersecurity that are tailor-made for the energy sector. Given the variability of certain renewables such as solar and wind, we also need to improve our capability to store energy. Our forthcoming Strategic Action Plan on Batteries will address the urgent need for progress on batteries and other forms of storage.
Other new and innovative technologies that will be fostered by the Green Deal are Carbon Capture, Use & Storage, and an increase in the use of hydrogen, which has the potential to play a major role in our move towards climate neutrality. Making the Green Deal a reality will depend on funding the necessary investment – and the smartest combination of public and private finance. Just to meet our 2030 climate and energy targets, we need an estimated additional €260 billion in annual investments. Public money alone cannot foot this bill. In fact, we will have to rely primarily on the private sector. By setting clear long-term goals, we are already reducing the risks for investors. Public spending can also play an important role in leveraging private support and providing guarantees.
In this context, the Commission has already outlined a Green Deal Investment Plan, which, over the course of the decade, can generate as much as €1 trillion to fund sustainable projects.
In a similar vein, the Commission has also already published the Just Transition Mechanism – a series of elements to encourage the necessary public and private investment in regions that face the biggest challenges, such as those, which have been most dependent on coal and other fossil fuels. This includes € 7.5 billion of new funding in the EU budget from 2021-2027 for the Just Transition Fund – aimed at the most vulnerable people and regions.
Our ambition will be achieved, if Member States are not on board. Under existing rules, each Member State has been required to put together integrated National Energy & Climate Plans for 2021 to 2030, outlining how it intends to contribute to our 2030 targets. Commission experts are currently analyzing these plans – and assessing the cumulative impact. We are still missing some, so I urge the countries who are still behind schedule to move with haste. This assessment, due out in the summer of 2020, will provide a clearer picture of where we stand – and where we are likely to be in 2030. It will also tell us to what extent we can and should raise our ambition, individually or collectively.
We know that moving towards a climate neutral economy by mid-century will be a long journey and that the energy sector will need to make a major contribution. But we are not starting from scratch and we are more efficient and stronger by joining forces at EU level.
As the most important industrial continent in the world, Europe has great responsibilities in leading the way. We have set a clear ambition: to become the first climate neutral economy by 2050. President Von Der Leyen has made this the central pillar of this Commission’s political priorities, since an ambitious industrial policy is a prerequisite for the successful transition towards a climate-neutral economy.
Our vision is of a competitive and sustainable EU industry that contributes to the strategic autonomy of the EU. One that is firmly rooted in the European social model, and makes the most of its strengths while seizing new opportunities and tackling the “twin transitions” that are the Green Deal and digitalization. Industry will play a central role in leading this dual transformation.
As theCommissioner for Industry, one of my main tasks in this mandate is to support the green transformation of our industry, ensure it continues to prosper and deliver benefits for Europe and its citizens. To translate this ambition into concrete actions, my teams and I have been fully mobilized during the 100 days of the Von Der Leyen Commission to present a new European Industrial Strategy taking into account this twin transition, together with geostrategic challenges underlined by the outbreak of Coronavirus. This strategy puts the importance of sustainable transformation right at the very center, also because it can maintain Europe’s strategic autonomy in the context of global action. Of course, this is an incredible challenge. Transforming our industrial base on this scale requires a generation – 25 years – and consistent efforts by all industrial actors and different government levels. Together we will ensure that this base is globally integrated, sustainable and competitive.
We have little time to prepare this transition and set it on the right track – but we will make it together by starting now because this challenge is also an incredible opportunity.
We will seize it to ensure that our industries become world leaders in green technologies and reap the benefits of being the first movers and early adopters. Digitalization is a key enabler of circular economy and the shift towards climate neutrality. The good news today is that we are ahead of global competitors when it comes to patents, clean technology and the regulatory framework.
But while Europe leads in increased resource and material efficiency, at the same time China and India produce carbon-intensive products for consumption by Americans and Europeans. Global as well as internal market aspects impose upon us to get better at scale-up and investment in low carbon technology. Our European efforts must surpass so called “carbon leakage” which could lead to relocation of companies to places with lesser climate protection.
The pathways we choose to decarbonize our production and consumption patterns will be compatible with WTO commitments with international partners. As an example of the actions that the Commission is taking, a highly sensitive and strategic point is that European value chains are vastly dependent on foreign suppliers of critical raw materials, and manufacturing industries are facing strong competition from fast-growing economies on the global raw materials markets.
That means that we have to ensure strategic autonomy – access to sustainable raw materials – such as rare earths or cobalt that are crucial for the future of the EU industrial value chains, particularly e-mobility, batteries, renewable energies, aerospace, defense and other digital applications. Improving the diversification of raw materials’ sourcing and good circular economy practices that result in higher recycling rates could both help to reduce our dependencies.
This challenge is recognized in the EU Industrial Strategy, which in addition to horizontal measures to create favorable framework conditions, provides more targeted strategic actions along value chains.
In order to remain globally competitive in key technologies and strategic value chains, the EU will encourage more risk-taking and step up investment in research and innovation. By announcing a new alliance on clean hydrogen together with our new industrial strategy, we have set the pace, allowing Member States and companies of all sizes to partner. We have a strong existing industrial base, talents, and most crucially, sufficient political will to make it happen.
Europe has a potentially unique leadership role to play globally as a climate neutral market: low carbon technology that results in circular products and services are the way to get there.
The sense of urgency we need when talking about the transition towards a circular economy can be conveyed by a single equation: if we keep on with our growth model, by 2050 the world will be consuming as if there were three planets Earth. Global consumption of materials such as biomass, fossil fuels, metals and minerals are expected to double in the next forty years and annual waste generation is projected to increase by 70% by 2050.
The circular economy is about providing positive solutions to reversing these trends, reducing pressure on the environment and supporting sustainable jobs and growth at the same time,
while ensuring security of supply. The time to accelerate the transition to a circular economy has come. The commitment of European Green Deal to respond with decisive actions to the challenges of achieving carbon neutrality and decoupling economic growth from resource use, has been described as this generation’s defining task.
The next five years will likely put us on a path that will directly impact our well-being in 2050. Future generations will be affected by the decisions we make today in ways that probably have no comparisons in human history. The circular economy is a crucial pillar of the European Green Deal. It is about making the necessary changes in the way we produce and consume so that we can solve the many environmental and climate pressures that are directly linked to the current unsustainable “take-make-use-discard” growth model. The new Circular Economy Action Plan adopted in March this year will make a considerable difference. We have introduced actions to address inefficiencies along the entire life cycle of products.
The cornerstone of the Action Plan is a new Sustainable Product Policy Framework, which will ensure that green products become the norm. Products will have a longer lifetime, will be easier to repair and upgrade, and will have lower environmental impacts. This will unleash new business opportunities and provide high-quality products and cost-saving solutions to citizens.
The Action Plan will help protect consumers better: a new “right to repair” will be established, complementing the efforts to design sustainable products. Consumers will also have reliable information on the reparability and durability of products, as well as on them
environmental performance. Companies will have the confidence to invest in a fair market for green products, since we will tackle misleading green claims. Furthermore, in synergy with actions on products, we will work to prevent the generation of waste as a matter of priority. Where waste cannot be avoided, the focus should be on transforming it into valuable resources.
The Commission will review a number of legislative instruments to increase their contribution to a circular economy and continue supporting Member States in the implementation of the EU waste legislation. In parallel to horizontal measures, smart policymaking means also tackling priority sectors and value chains where there is considerable potential for more circularity. This is the case of “electronics and ICT”, “batteries and vehicles”, “packaging”, “plastics”, “textiles”, “construction and buildings”, “food, water and nutrients”.
The Action Plan announced comprehensive strategies or tailored actions for each of these key product value chains. These sectorial actions will bring significant benefits. Textiles, for example, are the fourth highest-pressure category for the use of primary raw materials and water, after food, housing and transport, and fifth for GHG emissions. It is estimated that less than 1% of all textiles worldwide are recycled into new textiles. We want to adopt a strategy that can trigger circular business opportunities, give consumers more information and reduce the environmental impacts of this sector. At the same time, we want to make sure the transition is fair and just for everyone. We will work on strengthening the social angle of circularity, for example by promoting the uptake of the right skills for Europe’s workforce of tomorrow. We will also support investments in infrastructure, innovation and digitalization that will enable the circular economy to become the mainstream in our lives. We are also aware that the circular economy in Europe will work only if we achieve progress at the international level.
The EU has an important role as a global frontrunner in the circular economy, and we can use this position of leadership to actively engage with partners at bilateral and multilateral level to scale-up the uptake of the circular economy worldwide. The new Circular Economy Action Plan offers an inclusive, future-oriented agenda for achieving a cleaner and more competitive Europe in co-creation with economic actors, consumers, citizens and civil society organizations. It has been well received by a broad range of stakeholders because it offers win-win solutions: to protect the environment, but also to create lead markets, to expand sustainable and job-intensive economic activities, and to ensure EU leadership on circular, climate-friendly and safe products and technologies globally. This Action Plan is a plan for all people in the EU and beyond. It is essential that it delivers on the ground for national and regional policymakers, for businesses, for all EU consumers and citizens. Therefore, its implementation will be successful only if informed by the same collaborative spirit we share today. I am confident this will be the case.
The Commission has proposed today to make 2021 the European Year of Rail, to support the delivery of its European Green Deal objectives in the transport field. A series of events, campaigns and initiatives in 2021 will promote rail as a sustainable, innovative and safe mode of transport. It will highlight its benefits for people, the economy and the climate and focus on the remaining challenges to create a true Single European Rail Area without borders.
There’s no doubt that railway transport means huge benefits in most areas: sustainability, safety, even speed, once it’s organized and engineered according to 21st century principles. But there’s also something more profound about railways: they connect the EU together not only in physical terms. Setting up a coherent and functional network across all Europe is an exercise in political cohesion. The European Year of Rail is not a random event. It comes at an appropriate time, when the EU needs this kind of collective undertaking.
As one of the most sustainable and safest modes of transport we have, rail will play a major role in Europe’s future mobility system. Rail is not only environmentally friendly and energy-efficient – it is also the only mode of transport to have almost continuously reduced its CO2 emissions since 1990, at the same time as it increased transport volumes.
Rail connects people, regions and businesses all across the EU. Moreover, it is proof of European engineering expertise and part of our European heritage and culture.
The European Year of Rail in 2021 will help to step up the pace of rail modernization, which is needed to make it a more popular alternative to less sustainable transport modes.
2021 will be the first full year in which the rules agreed under the Fourth Railway Package will be implemented throughout the EU. 2021 also marks several important anniversaries for rail: the 20th anniversary of the first Railway Package, the 175th anniversary of the first ever rail link between two EU capitals (Paris-Brussels), as well as 40 years of TGV and 30 years of ICE.
The international arts festival EUROPALIA has already chosen railways as their 2021 theme and will be an active contributor to the wide range of activities taking place throughout the European Year of Rail.
In its Communication of 11 December 2019, the European Commission set out a European Green Deal for the EU and its citizens, with the goal of achieving climate neutrality by 2050. As transport accounts for a quarter of the EU’s greenhouse gas emissions, the sector will play a crucial role in achieving this target and has been set the objective of reducing its emissions by 90% by 2050.
As part of the European Green Deal, the Commission is currently working on a strategy for sustainable and smart mobility that will address emissions from all transport modes. As a matter of priority, a substantial part of the 75% of inland freight carried today by road should shift onto rail and inland waterways.
The Commission’s proposal on declaring 2021 the European Year of Rail needs to be adopted by the European Parliament and the Council.
A new European Commission, the Executive Government of the European Union (EU), commenced its work on 1 December 2019, chaired by Ursula von der Leyen. For the duration of this five-year term, one of the political priorities is abundantly clear: that of the fight against climate change with an emphasis on the issues related to the energy transition.
To become the world’s first climate-neutral continent in 2050, Europe will have to further reduce its emissions without delay and responsibly by at least 50% or even 55% by 2030. To achieve these goals, the Commission just came forward with a package of comprehensive and coherent measures called the European Green Pact. Given that energy production and consumption account for 75% of EU emissions, it is clear that the European energy policy will have a central role to play in this Pact.
Furthermore, it is essential that Europeans have access to affordable, secure, reliable and clean energy. Regional interconnectivity, a more efficient energy market as well as research and innovation are important issues to be dealt with.
The new Commission will explore the consolidation of an integrated, interconnected and optimally functioning European energy market. This will help keep prices low for consumers, increase clean energy consumption and make the energy supply more reliable and secure. All the legislation that has been adopted during the last term will also have to be implemented, in particular on energy efficiency and renewable energies and on the internal electricity market. Close collaboration with the Member States is necessary, if only to properly define and implement their national energy-climate plans covering the various energy and climate sectors in a coherent manner for the next ten years.
Europe has also recognized the importance of the principle of “energy efficiency first” and is preparing the modalities for its implementation. Improving the energy performance of buildings and accelerating renovation rates is a priority in this context, given the significant potential that this represents in the fight against climate change, the revival of economic activity, the improvement of life quality and the reduction of energy poverty.
To meet the increasing electricity needs, the potential of renewable energies, especially offshore, will have to continue to be exploited. The idea is to promote a flexible and secure electricity system, largely based on these variable sources, and to accelerate the deployment of clean energy in the economy as a whole. This implies increased interconnectivity and improved energy storage, especially with respect to battery technology.
To deploy investments in clean energy, we will have to create the appropriate financial incentives, notably through a new investment plan for a sustainable Europe. It also means investing in the missing infrastructure of our energy system, to help the EU reach its electricity interconnection target and to develop more cross-border cooperation around renewable energy installations and networks.
All of these policies must always take into account and support people who are the most vulnerable and exposed to these transformations, while ensuring that no one is left behind. The Commission will implement a new Just Transition Fund, which will include targeted assistance to the regions that will be most affected by the energy transition, such as the mining regions and the European islands.
In all of our energy policies, the emphasis will be put on the need to place consumers at the heart of our energy system. The new provisions relating to self-consumption and citizen energy communities allow consumers to play a greater and direct role in the deployment of renewable energies and the energy transition in general.
Regarding energy poverty, we have to remember that more than 50 million European households cannot afford to heat their homes properly. A priority will be to help Member States identify the areas that need the most help, using the Energy Poverty Observatory.
The European energy policy will also need to address the issue of a new carbon tax, as well as the review of the Energy Taxation Directive to ensure it is in line with our climate commitments. As part of wider efforts to expand the international role of the euro, we will look at possible ways to significantly increase the use of the euro in the energy markets, given that the EU is the largest energy importer in the world but that approximately 85% of our imports are currently paid for in dollars.
Gas will continue to have a role to play as a transitional energy source towards a carbon neutral economy, while aiming at its progressive decarbonisation thanks to the deployment of renewable and low carbon intensity gases. As for nuclear energy, we will continue to focus on improving the standards of safety of nuclear power plants in Europe and continue nuclear decommissioning of existing installations.
In conclusion, it is clear that the Green Pact for Europe is an imperative for the health of our planet and our citizens, but also for our economy. This Pact is Europe’s new growth strategy, which will help reduce emissions while creating jobs. The European energy policy is undoubtedly at the heart of this new revolution.
As world leaders, negotiators and civil society congregated in Madrid for the annual United Nations climate change conference earlier this month, Secretary-General Antonio Guterres’ stark warning rang loud and clear: “The point of no return is no longer over the horizon. It is in sight and hurtling towards us.”
In this article, I would like to highlight Europe’s approach to addressing climate change, the greatest challenge and opportunity of our times. We are working simultaneously on adapting to the effects of climate change we are experiencing, while at the same time constructing a policy environment that will enable a societal shift towards a prosperous, modern, competitive and climate-neutral economy. The good news is that we possess both the technical knowledge and the physical means to prevent the worst effects of climate change. Humanity’s top priority is therefore to halt climate change in its tracks, keeping it within limits to which our species can adapt.
The European project was part, parcel and even motor of the continent’s reconstructive efforts post-WWII. The twin premises of economic progress and the absence of war were the foundation for the European Community and later the European Union. War was a close neighbour; most people had experienced it, and their children – my generation – still felt it as a real threat. However, other priorities arose: equality, social customs, feminism and gender, the sexual revolution, education, democracy “from the street”. We took economic welfare for granted and wanted it to extend to those still on the margins. We did not take peace for granted and wanted better guarantees that war would not return.
Why does all this matter? It matters in order to give us a bare minimum of perspective, to frame where we are today in Europe. It also allows us to make three important initial observations:
First, that economic stability remains fundamental to our society and that the European project remains the glue for this, whether or not everyone acknowledges it.
Second, European society has coalesced around fundamental values of democracy, equality, social fairness and environmental integrity. This remains true in spite of constant challenges to these values from within our society. Again, the European Union and its institutions are the essential anchor for these values.
Third, there is a new awareness throughout Europe that climate change is a threat that requires urgent action. This may not be universal, but is widespread and cuts across the political spectrum and most other philosophical, religious or social differences.
Action in and by Europe alone is of course inadequate to address this global challenge. Yet Europe ought to lead, especially by example, and persuade and help others to step up the fight against climate change. Young Europeans in particular are angry, as indeed they have a right to be. Yet this appears to be a constructive anger based on the premise of overthrowing “business as usual” in all aspects of life, to make our society and economy more efficient, resilient and ultimately sustainable.
We have the means to achieve this, as well as a little time left in which to take action. Yet this will be an enormous undertaking. In half a century, the world needs to reverse gears on a century and a half of economic development. Economically and technologically advanced countries ought to do this in thirty years or so.
Europe’s awareness of climate change and determination to act has a long history. In fact, Europe’s greenhouse gas emissions peaked in the late 1970s and have since decreased steadily. The European Union will likely exceed its 2020 target of a 20% reduction of emissions compared with 1990 levels, and is on track to meet its targets of a 20% increase in renewable energy share and of 20% improvement in energy efficiency.
In the meantime, policy has progressed further. In 2014, the European Council agreed to a target for the reduction of emissions: at least 40% by 2030, compared with 1990 levels. This was translated into the EU’s Nationally Determined Contribution, namely a voluntary commitment subject to reporting and transparency obligations and peer review under the Paris Agreement. By now the European Union has agreed a comprehensive package of binding legislation to achieve this overall target.
This includes the recent reform of the EU Emissions Trading System (EU ETS), a cap and trade system under which the power generation sector and virtually all industrial sectors are obliged to reduce – or pay for – their emissions. Overall, the emissions under the EU ETS need to reduce by 43% by 2030 compared to 2005. The revision of the EU ETS, including the introduction of a Market Stability Reserve to ensure there is no surplus of EU ETS allowances on the market, has already strengthened the EU carbon price signal – the price of a ton of carbon, which had gone as low as €5, now fluctuates around €25.
Under the Effort Sharing Regulation, Member States have a collective obligation to reduce emissions in sectors not covered by the ETS – namely transport, buildings, waste, and agriculture and forestry – by 30% by 2030 compared to 2005. This is split into national targets, based on the principles of fairness, cost-effectiveness and environmental integrity.
The Land Use, Land Use Change, and Forestry Regulation obliges Member States to ensure that accounted emissions from land use are entirely compensated by an equivalent removal of CO₂ from the atmosphere through action in the sector, known as the “no debit” rule.
The EU Energy Union Governance Regulation mandates Member States to establish National Energy and Climate Plans, subject to peer review and to recommendations for their improvement by the European Commission. The EU has also set standards for CO₂ emissions from cars and trucks. By 2030, CO₂ emissions from new cars will have to be 37% less than in 2020, plus a 30% reduction for trucks.
Finally, we have EU legislation that require require a 32% increase in the share of renewable energies in the energy mix by 2030 as well as a 32.5% improvement in energy efficiency by 2030.
Taken together, these measures should enable the EU to exceed its target of at least a 40% reduction in greenhouse gas emissions by 2030 compared with 1990, and in fact achieve a reduction of around 45%. It is very clear that present-day Europe is firmly on the path to decarbonisation and that it is possible to decouple emissions from economic growth. In other words, Europe has shown that it is possible to profit, in good economic climates and bad, from greenhouse gas emissions reduction.
Despite the transformative nature of Europe’s 2030 target, more needs to be done. Now is the time to transition from a logic of progressive emissions reductions to a goal of true climate neutrality.
On 1 December 2019, the new European Commission, led by Ursula von der Leyen, assumed office. One of the new Commission’s key priorities is to address the issue of climate change and within its first two weeks in office, it had already presented the European Green Deal. Steered by Executive Vice President Timmermans, it is poised to be a new growth strategy for Europe that will transform the EU into a fair, prosperous society with a modern, resource efficient and competitive economy, where there are no net emissions of greenhouse gases by 2050 and where economic growth is decoupled from resource use. This is the most ambitious package of measures to date that should enable European citizens and businesses to benefit from a sustainable green transition. It combines a set of transformative policies and measures to tackle climate change, biodiversity loss and pollution, and to reform the inefficient use of resources by moving to a more circular economy. It will not only provide cleaner air and water for citizens, but will strengthen the economy to the benefit of all. It will put Europe on track to a sustainable and prosperous future whilst leaving no citizen behind.
A key component of the European Green Deal is the objective of climate neutrality by 2050. In 2018 the Commission presented its vision for a climate neutral EU by 2050, based on seven building blocks (increased energy efficiency; increased use of renewables; a clean and connected mobility system; a competitive circular economy industry; connected high-standard infrastructures; a boost in the bio-economy and natural carbon sinks; and the use of carbon capture and storage). Following an extensive stakeholder debate, the objective is was endorsed by the European Council in December – with one Member State requiring more details for implementation. This will now allow the EU to submit its long term strategy under the Paris Agreement by 2020. Furthermore, as part of the European Green Deal, the 2050 objective will also be transposed into EU law within the first 100 days of President von der Leyen’s mandate.
Under the Green Deal, the EU will also look at ambitious climate action for 2030. By summer 2020, the Commission will present an impact-assessed plan to increase the EU’s greenhouse gas emission reductions target for 2030 to at least 50% and towards 55% compared with 1990 levels in a responsible way. Similar assessments will be undertaken on other key pieces of legislation that underpin our climate policy, including the EU Adaptation Strategy to adapt to the inevitable changes in the climate.
The Green Deal covers all aspects of the economy, from transport to energy, agriculture, buildings and industry. For instance, we we will work to transform our industry to address the twin challenge of a green and digital transformation. Together with a new industrial strategy, a new circular economy action plan will facilitate the transition to a more circular economy. We will take ambitious measures for a more environmentally friendly mobility and for greening agriculture as part of a sustainable food policy. We also propose to work with stakeholders on a buildings renovation wave across Europe. This is a condition of Europe’s ability to achieve our climate and energy efficiency objectives. We know that meeting the objectives of the European Green Deal will require significant additional investment. The Commission therefore will present a Sustainable Europe Investment Plan to help meet additional funding needs. It will combine dedicated financing to support sustainable investments, and proposals for an improved enabling framework that is conducive to green investment. Moreover, at least 30% of the InvestEU Fund will contribute to fighting climate change. Projects will be subject to sustainability proofing to screen the contribution that they make to climate, environmental and social objectives.
The EU budget will play a key role; indeed, the Commission has proposed a 25% target for climate mainstreaming across all EU programmes. As part of the revision of the EU Emission Trading System, the Commission will also review the role of the Innovation and Modernisation Funds, with the aim of strengthening their role and effectiveness in deploying innovative and climate-neutral solutions across the EU.
Fighting climate change and environmental degradation is our common endeavour but not all regions and Member States start from the same point. Yet this transition can only succeed if it is conducted in a fair and inclusive way. The Commission will therefore propose a Just Transition Mechanism, including a Just Transition Fund, focusing on the regions and sectors that are most affected by the transition because they depend on fossil fuels or carbon-intensive processes. It will draw on sources of funding from the EU budget as well as the EIB group to leverage the necessary private and public resources to ensure a socially fair transition that leaves no citizen behind.
Last but not least, civil society’s active engagement in the transition is paramount if businesses and all citizens are to endorse and support the necessary policies and measures. The Commission will launch a Climate Pact later in 2020 to give civil society a voice in designing new actions, sharing information and highlighting grass-roots activities to improve the environment.
The global challenges of climate change and environmental degradation require a global response. The Green Deal outlines the ambition of the EU to act a global leader of change though a number of initiatives to be pursued in multilateral and bilateral formats. If we do not show European leadership, nobody else will lead the way. We need to demonstrate our working model for a clean, prosperous and sustainable society that leaves no one behind. Then others will follow.
It is clear that we must concentrate our efforts into the next decade or so, putting the necessary policies and measures in place and deploying our investment correctly if we want results to unfold at a timely pace between now and 2050. In the EU, we have a plan to get there and busy agenda for the coming years to deliver on a prosperous and fair transformation towards a climate-neutral European Union.
For more information:
European Green Deal Communication:
The Directorate-General for Environment is the European Commission department responsible for EU policy on the environment. It aims to protect, preserve and improve the environment for present and future generations, proposing and implementing policies that ensure a high level of environmental protection and preserve the quality of life of EU citizens. It also makes sure that Member States apply EU environmental law correctly and represents the European Union in environmental matters in international negotiations.
Despite the significant progress of recent decades, and despite the ambitious policies on climate and circular economy, many trends are still going in the wrong direction. Problems like rapid biodiversity loss, the unsustainable use of resources, and accelerating climate change are more threatening than ever before.
We need to address the systemic drivers behind environmental pressures, such as resource-intensive production and consumption patterns, increasing demand for transport and continuing urbanisation, to achieve the scale of change needed. The main challenge will be to ‘mainstream’ environmental policy and integrate environmental considerations into those areas which affect it the most – for example, agriculture, fisheries, industrial policy, energy, transport, research, trade and so on.
The European Green Deal proposed by the Commission in December 2019 is Europe’s answer not just to the growing climate and environmental challenges, but to the social challenges they bring as well. It is a growth strategy with justice and equity at its heart, pulling together all sectors of the EU economy for people, for prosperity and for planet.
Leaving aside climate, three elements of the Green Deal are particularly important for DG Environment. We will propose in 2020 a new EU Biodiversity Strategy to protect, restore and mainstream biodiversity. We want to present global targets to protect biodiversity, as well as EU commitments to address the main causes of biodiversity loss in the EU, underpinned by measurable objectives.
The new Circular Economy Action Plan will follow in early March 2020, accompanying the EU Industrial Strategy. The Plan will bring circularity into the mainstream, with a particular focus this time on construction, textiles, electronics and plastics. The aim is to transform these resource-intensive sectors into truly circular systems. The new Action Plan will underline the importance of good design, sustainability and durability. It will also give consumers reliable and verifiable information on products and services.
The third major environmental element of the Green Deal is a zero pollution ambition for a toxic-free environment, which will provide a set of measures to prevent and remedy pollution from all sources, including emissions and chemicals.
The EU has the most comprehensive and advanced environmental legislation in the world. The regulatory framework is therefore in place. However, these laws need to be properly implemented and that is not always the case. One of my DG’s tasks is to ensure that Member States implement the laws to which they have agreed. In that context the Commission may launch we open infringement proceedings against Member States and even take them to Court to ensure the respect of EU law.
Existing policy instruments should lead to further reductions in industrial emissions, and decarbonisation of industry will be the main driver of reductions in industrial emissions. However, to be successful, environmental objectives must be integrated into other policy areas. Incorporating more efficient, clean technologies and processes within Europe’s industrial sectors is essential to ensure continued reductions in emissions of pollutants and improved environmental and climate performance.
The primary objectives and benefits of environmental taxes are to reduce pollution and resource use. They are also several secondary benefits: for example, such taxes contribute to a healthier society and hence lower health-related costs, they trigger eco-innovations that generate wealth and jobs, while the broad diffusion of environmentally friendly technologies support sustainable systems of production and consumption.
Taxing polluters has so far been mostly a national matter, but the Commission wants a fairer decision-making process and has proposed that environmental tax matters across the EU should be decided by a majority vote.
The Commission will propose the first European ‘Climate Law’ by March 2020 to enshrine the 2050 climate neutrality objective in legislation.
By Summer 2020, the Commission will present a plan to increase the EU’s greenhouse gas emission reductions target for 2030 to at least 50% and towards 55% compared with 1990 levels in a responsible way. To deliver these additional greenhouse gas emissions reductions, the Commission will, by June 2021, review and propose to revise where necessary, all relevant climate-related policy instruments. This will comprise the Emissions Trading System, including a possible extension of European emissions trading to new sectors, Member State targets to reduce emissions in sectors outside the Emissions Trading System, and the regulation on land use, land use change and forestry. The Commission will propose to amend the Climate Law to update it accordingly.
Sustainability must also be mainstreamed across all EU policies, as we must also pay attention to the coherence and synergies between our different actions. We need to see that all sectors, including energy, transport, agriculture, contribute to the climate neutrality objective.
My job as Director-General of DG Environment is to fully support Commissioner Sinkevičius in delivering on the European Green Deal by reducing emissions, protecting biodiversity, improving the health of our citizens and ensuring the sustainability of our economy. DG Environment will be doing the research, drafting proposals and negotiating with other Institutions and Member States. We will also be in close contact with Member States to make sure that legislation which is adopted is fully in line with what is required and is actually implemented on the ground.
Furthermore, it is my job to ensure that environmental concerns are taken into account in other policy areas such as climate, energy, agriculture, ocean, transport, research and trade. To this end, I am involved in policy proposals made by other services in the Commission.
The Paris Agreement requests from its signatory Parties to update by 2020 their nationally determined contributions (NDCs) by increasing their level of ambition, as well as to define their long-term greenhouse gas (GHG) emission reduction target for 2050. As part of this update, the European Parliament (EP) called in its resolution in October 2018 for an update of the European Union (EU) NDC to a target of 55 % domestic GHG emission reduction by 2030 compared with the 1990 levels and the adoption of a long-term strategy for net-zero emissions by 2050. The new Commission President von der Leyen announced the intention to increase the 2030 target to at least 50% emission reductions and even to 55%, if international negotiations lead to a higher ambition level from other major emitters by 2021.
In order to implement the Paris Agreement, the EU put in place during the last years numerous legislations in order to achieve its current GHG emission reduction target of 40% compared with the 1990 levels. GHG emissions from most sectors (not included in the EU emission trading system-ETS), such as transport, buildings, agriculture and waste are covered by the EU’s Effort Sharing Regulation which sets national targets to be achieved by 2030. Moreover, for the first time the Governance Regulation implements a transparent governance process to track progress towards the objectives of the EU Energy Union and Climate Action, including monitoring and reporting rules. EU Member States (MSs) are obliged to adopt integrated National Climate and Energy Plans (NECPs) for the 2021-2030 period.
After the submission of draft NECPs for the period 2021-2030 by the end of 2018, the Commission provided last June detailed assessments and recommendations to each MS, which must submit a revised NECP by the end of 2019 with improvements, addressing these recommendations. The Commission’s assessment of MSs NECPs states that, based on the planned measures or stated ambitions for national GHG reductions included in the draft NECPs, and based on conservative assumptions for the countries which have submitted neither of the two, the overall EU GHG reduction is expected to meet the target of reducing GHG emissions by 40% by 2030. However, the assessment also found that GHG emission reductions in the non-ETS sectors (mainly in transport, buildings and agriculture) would fall two points short of the 30% Effort Sharing reduction target compared to 2005 levels. A considerable number of MSs did not present plans that showed how they would meet the national target under this Effort Sharing Regulation.
The Commission’s assessment of NECPs also reveals that the goal of 32% of renewable energy could be even missed by 1.6 percentage points. In addition to this gap, the overall level to be achieved in 2030 remains highly dependent on the contribution of the ambitious MSs and on the gross final consumption of energy. The shortfall for achieving the goal of 32.5% improvement in energy efficiency by 2030 could be as high as 6.2 percentage points. Only a few MS submitted sufficient contributions to the energy efficiency target.
As transport sector is responsible for around a quarter of the GHG emissions and still increasing in the EU, it therefore needs to be at the centre of the NECPs. Electro-mobility, charging and alternative fuel infrastructure will be crucial for cars, vans and lorries’ emissions. Aviation and maritime sectors should be also part of national priorities for achieving emission reductions. It is worth noting that international aviation emissions have increased by 19% over the last five years. The EU and its MSs need to make their positions in the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) consistent with the Paris Agreement.
Moreover, the EU and its MSs need to abandon – among others- fossil fuels subsidies, which distort the energy market, create economic inefficiency and inhibit investment in the clean energy transition and innovation. The recent European Investment Bank’s (EIB) decision to ban funding for natural gas projects by the end of 2021 is in the right direction. By doing so, the EIB decided to no longer finance gas as a bridging technology in the phase out of coal from electricity generation.
In the 2020 State of the Energy Union and Climate Action report, the Commission will take stock of the final NECPs and confirm whether they are consistent with the Union’s 2030 targets or whether further efforts are needed. The governance process also provides an opportunity to update the plans in 2024 to reflect experience and to take advantage of new opportunities for the remainder of the decade.
In November 2018, the Commission presented its strategic long-term vision for a climate neutral economy by 2050, in which it has included eight different pathways, two of them reaching net-zero GHG emissions. The EP’s resolution in March 2019 related to this strategy welcomed the inclusion of two pathways aimed at reaching net-zero GHG emissions by 2050 and regretted the fact that no net-zero GHG pathways for before 2050 were considered in the strategy. It expressed concerns that the pathways suggested in the strategy rely on the use of carbon removal technologies, including carbon capture and storage (CCS) or carbon capture and utilisation (CCU) and direct air capture. The EP called upon the EU to enhance action towards achieving direct emission reductions and enhancing the EU’s natural sinks and reservoirs.
At the European Council in June 2019, MSs failed to adopt a 2050 carbon neutrality target for the EU (a footnote to the conclusions reads ‘For a large majority of Member States, climate neutrality must be achieved by 2050’). MSs that already adopted climate neutrality targets are Denmark (“climate neutral society” by 2050), Finland (by 2035, coalition agreement), France (by 2050, part of legislation), UK (by 2050, part of legislation, Scotland by 2045), Ireland (by 2050, policy position), Portugal (by 2050, policy position), Greece (by 2050, policy position), Sweden (by 2045, part of legislation). Norway has adopted the most ambitious climate neutrality target (by 2030 as part of its legislation). However, it has to be noted that some of these countries plan to rely on offsetting emissions in other countries to achieve climate neutrality. Poland, Hungary and the Czech Republic opposed the target of net-zero emissions. Finland, the current EU Presidency, is likely to renew efforts to adopt the 2050 carbon neutrality target in the Council. New Commission President von der Leyen pledged for a European Climate Law to enshrine the 2050 climate-neutrality target into legislation, which may imply additional interim targets for the period 2030-2050. She also put forward the idea of a new European Climate Pact between regions, local communities, civil society and schools to commit to a set of pledges to change behaviours.
It is redundant to argue that the adoption of an EU long-term climate-neutrality target, together with an ambitious GHG emission reduction target for 2030, is of paramount importance if the EU wants to lead by example in the combat against climate change.
Dr Georgios AMANATIDIS,
Research administrator, Policy Department for Economic, Scientific and Quality of Life Policies, European Parliament
Tel : +32 2 2834086, e-mail : email@example.com
* The opinions expressed in this document are the sole responsibility of the author and do not necessarily represent the official position of the European Parliament.
The new year has begun with good news: greenhouse gas emissions in Germany have plummeted, with the energy sector alone cutting around 50 million tons of CO2. The carbon price, which Germany has now extended to the heating and transport sectors, will speed up this process. Our target of reducing domestic emissions in 2020 by 40 per cent over 1990 is thus within reach. Meanwhile, renewable energy accounted for an encouraging 43 per cent of electricity consumption in 2019, and German power plants generated far less electricity from coal. All of this shows that our climate change mitigation policies are working.
However, when taking decisions on energy policy, we have to make sure costs will not spiral out of control and there is broad public acceptance. That is why, in the context of the German EU Council Presidency in the second half of the year, we will seek to secure political backing from the EU for the transformation processes taking place across the continent.
The opportunities offered by the energy transition have already been highlighted by the European Commission in its European Green Deal. The EU’s target of achieving climate neutrality by 2050 is certainly very ambitious. Business is facing a simultaneous rise in investment, production, transport and energy costs. This is why there are considerable risks with regard to carbon leakage and the loss of market shares in international competition. We must find answers to this problem before enshrining the climate target in law.
Energy-intensive industries will be particularly affected by the transformations entailed in the European Green Deal. I advocate far-reaching protection against carbon leakage, not only as regards direct emissions, but also indirect emissions that are due to electricity consumption. All energy-intensive industries facing international competition should continue to enjoy comprehensive protection after 2020.
The deliberations of the European Commission concerning the establishment of a “Carbon Border Adjustment Mechanism (CBA)” raise a lot of legal and administrative questions. It is also still unclear how the new mechanism would relate to existing carbon leakage instruments that have proven successful and should be continued.
One of our tasks for the coming years is to strengthen cooperation both within Europe and internationally. We are, after all, unable to achieve the decarbonization of our economy with German wind and solar power alone. On the one hand, there is a lack of eligible land for these types of electricity generation. On the other, the manufacturing, heating and transport sectors also require green and synthetic fuels. These can be more cheaply produced in areas outside Germany, such as in sunny North Africa or the windswept North Sea.
The way I see it, the Green Deal is a growth strategy for our economy that will allow us to access fast-growing markets and safeguard jobs with the help of innovations and new clean technologies. We need to reconcile economic growth with ecological considerations. Wherever possible, we ought to face increasing complexity by relying more on competition and the market. We ought to create an environment in which the best technologies and innovations can thrive. This will give us an edge in research and development while making the EU fit for the future. Possibly, other countries will follow suit and replicate our approach to the energy transition. This would deliver the greatest benefit in terms of global climate action.
The Croatian Presidency has defined four main priorities: A Europe that develops, A Europe that connects, A Europe that protects and An influential Europe.
Croatia shares the vision of the European Green Deal and is ready to lead relevant discussions in the Council on legislative and policy proposals announced by the Commission that include Climate Law, Just Transition Mechanism, Biodiversity strategy, Industrial strategy and Action plan for circular economy. We expect these proposals to reinforce transformational change in sectors that have major negative impacts on biodiversity, climate and human health.
The Presidency will continue the work on the implementation of the Paris Agreement. The Environment Council has just adopted on 5 of March submission for the Long-term strategy of the EU for climate-neutral economy (LTS), and it will be sent to the UNFCCC and the Paris Agreement Secretariat.
The Croatian Presidency will focus on the discussions in the Council in respect of Climate Law, aiming to do utmost on 22 June Environment Council. In this respect the Presidency could have the partial general approach/general approach.
The Presidency will pay close attention to the challenges of climate financing and will promote a global role of the European Union as the leader in low-carbon transition.
Regarding the energy aspects of the European Green Deal, the Croatian Presidency plans to evaluate the proposed objectives and measures, taking into account the different circumstances and starting points of Member States. Therefore, the Croatian Presidency intends to focus on discussions striving to fulfil this vision, having in mind the ambitious targets of recently adopted Clean Energy Package.
Deadline for submission of the final National Energy and Climate Plans by Member States expired on 31 December 2019. The European Commission is striving to prepare the assessment of these plans and present it on the Council of Energy Ministers by June 2020.
A special emphasis during the Croatian Presidency is on the energy transition of islands where we are focused on the development of the future Framework, Memorandum of Understanding, based on the Valletta Declaration of Clean Energy for EU Islands. The Declaration recognizes the important role that the EU islands have in the process towards decarbonisation and the role that they could play in accordance with the Paris Agreement. The Declaration was signed during the Maltese Presidency in 2017 and Croatia was one of the Member States that signed it. The signature of the Memorandum of Understanding is planned during the Informal Meeting of Energy Ministers in April 2020.
One of the important points in regards to environmental issues is protection of marine environment, which includes further discussions on additional ways to protect the marine environment from pollution. We will frame the debate in the context of the upcoming revision of Packaging and Packaging Waste Directive and future measures from the European Green Deal with the view of preventing waste and litter as well as enabling implementation of existing legislative framework, including Marine Strategy Framework Directive after 2020.
We agree with the Commission’s position that, as a global leader, the European Union must encourage other countries to follow its path in taking the responsibility for our planet and future generations. This implies a radical transformation of the EU economy, with a just and prosperous society, representing a completely new paradigm.
We see this new paradigm as an opportunity for the growth of the Croatian economy through advanced technologies and innovative policies. We especially welcome the path set by the Green Deal for mobilizing the EU industry towards achieving a fully circular and climate neutral economy. This presents an excellent opportunity for newer Member States to catch up with stronger economies.
Croatia is very rich in biodiversity; Natura 2000 network covers 36% of our land and 15% of territorial sea and internal waters. Natural forest ecosystems cover nearly half of the country`s territory. The conserved large forests in the karst area are habitat to all three European large carnivores- wolf, bear and lynx. Therefore, emphasize is on the importance of conservation and restoration of degraded ecosystems and their essential role in achieving climate goals. The key area of investments should be nature-based solutions as the latest scientific data estimates that, by applying such solutions, a reduction of 37% of CO2 emissions is possible by 2030.
A huge potential for further reduction of CO2 emissions lays in tackling emissions associated with production and use of food and products. Therefore, proper incentives and financial resources to stimulate full implementation of circular economy principles across the sectors are essential, as it can significantly contribute to meeting our climate targets.
Only by working together, we can achieve these important objectives, and I am confident that we can do it.
Ministry of Environment and Energy
Radnička cesta 80, 10000 Zagreb, Croatie
” EU can do more to fight dangerous climate change ”
says Wendel TRIO as part of the “Energy & Climate” Official Dossier
The climate crisis is one of the biggest challenges the European Union and the world are facing today. Despite progress made over the past few years, the EU’s response to the threat of climate change is still insufficient and undermines its self-proclaimed status as global climate leader. The current EU targets and policies when it comes to fighting climate change need an urgent upgrade if the bloc is to limit temperature rise to 1.5°C and thus stay in line with the Paris Agreement goals.
In order to reduce greenhouse gas emissions to the scale needed to comply with the Paris Agreement goals, EU leaders must quickly transition away from fossil fuels to renewables-based and energy efficient energy systems. But what has been achieved so far? What steps are urgently needed to achieve more climate ambition in the next decade, the crucial decade that will make our break our response to the climate crisis?
In October 2014, EU heads of state and government in the European Council agreed on the level of ambition of the EU’s climate and energy targets for 2030. A binding EU target of at least 40 percent domestic reduction in greenhouse gas emissions, compared to 1990 levels, was adopted. It is important to note that this climate target, which was adopted before the Paris Agreement in 2015, is still the same today. For renewable energy, a target of at least 27 percent was agreed. And they also agreed on an energy efficiency target of 27 percent, compared to projections of future energy consumption with the possibility to increase it to 30 percent after a review in 2020.
In November 2016, the European Commission proposed a package of legislation, called the ‘Clean Energy for All package’ which reviewed the existing renewable energy and energy efficiency legislation. The Commission proposal was rather conservative: it proposed to keep the same renewable energy target as the one agreed upon by the EU leaders in 2014, and to increase the energy efficiency target to 30 percent by 2030. The European Parliament, who was underwhelmed by the lack of ambition of the Commission, asked to increase both targets to at least 35 percent. After intensive negotiations between the European Commission, the European Parliament and the Council of the European Union, in June 2018 the compromise reached was to set an EU renewable energy of at least 32 percent and an EU energy efficiency target of at least 32.5 percent by 2030. The reviewed renewables and energy efficiency legislation was put in force in December 2018.
Hence the 2030 EU energy targets were to some extent increased, and according to the European Commission this would lead to greenhouse emission reductions of at least 45 percent compared to the set 40 percent reduction agreed by the EU leaders in 2014(1). Still, the current ambition levels are far from sufficient. Through the Paris Agreement in 2015, world leaders agreed to pursue efforts to limit temperature rise to 1.5°C. However, there is a serious gap between what countries, including the EU, promised under the Paris Agreement on the one hand and what they have so far committed to do on the other hand. Over the past year, hundreds of thousands of people, led by the school children, have been taking to the streets to demand immediate and effective action to face the climate emergency. In addition, a recent poll shows that 93 percent of Europeans believe that climate change is a ‘serious problem’, 79 percent see it as a ‘very serious problem’ and 92 percent demand for national governments to step up their own targets for energy efficiency and renewable energy(2).
Faced with the existential threat of devastating climate change impacts, the EU, its institutions and all Member States need to prioritise urgent action addressing the climate emergency with the aim of implementing the Paris Agreement’s ambition to limit temperature rise to 1.5°C. But governments are moving far too slowly to address the escalating crisis. It is estimated that current national commitments worldwide are projected to only limit warming at best to 3°C.
Therefore, the current EU climate target needs to be considerably increased, followed by a revision of the energy targets accordingly. European countries need to take responsibility for their historical emissions and acknowledge they have greater capacity to act, and therefore should do more than most other countries in the world. In order to contribute in an equitable way to the effort of meeting the Paris Agreement goals, the EU should achieve 65 percent greenhouse gas emission reduction by 2030. And with a more ambitious climate target, also the 2030 energy targets will need to be enhanced.
Support for a more ambitious 2030 EU climate target is growing. Last year the European Parliament and some Member States called for an increase from the current 40 percent to at least 55 percent. In July, President-elect of the European Commission Ursula von der Leyen also called for a substantial increase of the 2030 climate target. And more recently, the German chancellor also stated that she favours a 55 percent reduction in greenhouse gases in the EU by 2030, alongside other Member States and the European Parliament. The EU will need to increase its climate target well before the end of 2020 in order to meaningfully influence the discussions that are happening at the international level and within the process of the UN negotiations. The Paris Agreement requests all parties to revise their 2030 targets, called Nationally Determined Contributions, by the end of 2020 latest.
It is vital that the EU not only increases its climate target but upscales its 2030 energy targets. The renewable energy and energy efficiency legislation agreed in 2018 already offers a starting point for raising ambition. Based on this legislation, Member States are required to develop ten-year National Energy and Climate Plans (NECPs). These plans are an important basis for discussing and further elaborating on national climate and energy targets and concrete measures for 2030 and beyond. Member States should seize this opportunity to go beyond the bare minimum needed to reach the current 2030 targets and considerably increase the ambition of their plans, both in terms of targets and policies, in order to allow the EU to stick to its engagement under the Paris Agreement to limit temperature rise to 1.5°C. This will prepare the ground for a swifter implementation of the clean energy transition at the scale and the level of ambition needed.
The EU legislation states that the European Commission will submit a legislative proposal by 2023 to revise the energy targets should they fall short of the Union’s international commitments for decarbonisation. However, this proposal should come much faster given the climate urgency and the recent proposal by the new head of the Commission to increase the 2030 climate target.
The EU long-term budget for the period 2021-2027, currently under negotiation, should support Member States in achieving higher climate and energy ambition. To that end, Member States need to show the political will and take the decision to put EU funds where they can catalyse the clean energy transition, and not continue to invest in carbon-intensive infrastructure like gas pipelines for instance.
At the same time, Europe will need to act on its commitments to phase out fossil fuel subsidies. Member States will have to come up with plans on how they will implement this at the national level, while the Commission will have to make proposals for the reform of all fiscal policies to be aligned with the Paris Agreement goals. Currently the fossil fuel industry benefits from unfair tax breaks and other subsidies which are running counter to achieving climate objectives.
Finally, investing in new fossil fuel infrastructure risks creating carbon lock-in effects and stranded infrastructure assets. Also, investments into maintaining existing fossil fuel infrastructure bar the way to a system-switch towards energy savings and renewable energy sources. The EU’s energy infrastructure planning and financing must become Paris compatible, thereby ensuring that this sector adequately contributes to the overall ambition to have a 100 percent renewables-based energy system and achieve net-zero greenhouse gas emissions by 2040.
When unveiling the structure of the next European Commission, Ursula von der Leyen put climate policy upfront as a top priority. There is little time left for the EU to fulfil its commitments made in the Paris Agreement. So it is high time for the EU to act and to take the lead on climate change. Increasing climate ambition will be the first and most important step of the next European Commission.
Directeur de l’Action pour le Climat Europe
Climate Action Network Europe
Rue d’Edimbourg 26
1050 Brussels, Belgium
Email: firstname.lastname@example.org, Tel: +32 (0) 28944670
(2) Special Eurobarometer 490 on Climate Change (publication date September 2019) with Member State specific factsheets and Special Eurobarometer 492 on Energy (publication date September 2019) with Member State specific factsheets.
I usually say that the climate challenge is global. Part of the solution is European. An example must be set on a national level.
With the Energy-Climate Act, which entered into force on November 8th and on which I was a rapporteur, France declared a state of ecological and climatic emergency. It is one of the first countries in the world to do so.
I am pleased that the European Parliament has, for its part, followed the same path. The temporality of this vote is, in fact, extremely important. The new European Commission, chaired by Ursula von der Leyen, has just been approved, and Parliament sent a strong message: the fight against climate change must be a priority!
To get back to France, still regarding the Energy-Climate Act, we have set ourselves very ambitious objectives, namely to achieve carbon neutrality by 2050.
To succeed, we must act in all areas, on all fronts.
In the transport sector, which is the largest emitter of greenhouse gases in France (29%), we are taking action in particular through a transportation act (Loi d’Orientation des Mobilités) for a cleaner daily mobility with the development of ridesharing and soft mobility. In this law, as in the last finance bill, we favour the support of the French people, especially the least affluent. This will help create a new mobility with reforms to the bonus malus system and a financial incentive to promote cleaner vehicles. Transport also includes freight and cargo. We promote and facilitate intermodality such as piggyback transport, for example.
The other major sector that emits a lot of greenhouse gases is the construction sector. Residential and commercial buildings account for 25% of France’s greenhouse gas emissions. We have thus made energy renovation one of our priorities. Renovating your home is good for the planet, it’s good for our fellow citizens’ comfort and bills, and it’s also good for our energy system. We bring more simplicity and readability and give everyone the means to renovate through the Energy-Climate Act, which creates a triptych of action for the renovation of energy strainers – information, obligation of renovation and sanction –, and the draft finance bill for 2020, as well as through actions far from law or regulation. The way is still long but we are actively engaged on this subject!
With the commercial relations balance act in the agricultural and food sector and a healthy, sustainable and accessible to all food supply known as EGAlim, we are promoting agroecology. With a circular economy and the fight against waste, we want to set up a new way of consuming. Consuming has an impact on the climate and the environment and to consume better every day is a major first step!
The action plan will be conducted not only in the consumption phase but also in the production phase: industry, agriculture, energy…
We have also chosen to no longer explore and extract fossil hydrocarbons in France and to close our last four coal-fired power plants. When this shutdown was announced, some people argued that it was anecdotal, that the plants represented only 1.8% of the electricity production in France. 1.8%, yes, but they also represent 35% of the sector’s CO2 emissions.
Another advance through this law is that now the French Parliament will be fully involved in determining the course of major climate and energy trends in France. This will be done through a five-year law that precedes the adoption of future multiannual energy programs and low-carbon national strategies.
Our country’s energy and climate strategy can only be achieved with the support of our territories and taking due account of their specific features: whether in terms of energy production with territories that are sunny, oceanic, windy, agricultural or that have nuclear culture, or be it in terms of energy renovation and mobility… The energy transition will only be achieved in cooperation with the territories!
It is always difficult to sum up an act, especially when you have carried it inside you and made it grow – starting from an 8-article text and ending up with 69 articles.
But, if I had to extract a philosophy from it, it would be that of touching French women and men’s daily lives. As a rapporteur, I have always been concerned about making this highly technical law a law that will get across to all citizens.
The Energy-Climate Act means carbon neutrality by 2050 and the shutdown of the last four coal-fired power plants. This shutdown impacts hundreds of women and men who will lose their jobs and who must be supported. That is what we have outlined in this law!
We also set a target of reducing fossil fuel consumption by 40% in 2030 by, for example, reducing gas-powered cars and eliminating oil-fired boilers. We are further supporting the development of renewable energies, notably hydroelectricity, offshore wind, hydrogen and photovoltaics with more ambitious objectives and simplification and transparency measures.
The law also encourages citizens to produce their own electricity in energy communities while preserving our solidarity model of access for all to the electrical grid at the same price.
Like I said, we are working on energy renovation with the strengthened control on energy efficiency certificates (EEC) and the fight against fraud to protect our fellow citizens from bitter experiences. We take into account the carbon footprint of imported products and reduction objectives. We are creating the High Climate Council, an independent body of climate experts.
Finally, I think companies have a strong responsibility and a role to play in the ecological transition. I go so far as to call it the ecological acceleration… We are therefore instituting a more extensive “green reporting” including an assessment of companies’ greenhouse gas emissions with a transition plan to reduce these emissions. We are also putting in place an obligation for certain investment companies to present the impacts of their operations on the climate and biodiversity.
Besides the law and its obligations, I think that a business leader or a captain of industry is a woman or a man who dares, someone who knows how to take risks but who also has intuition. The intuition that the ecological and climatic urgency is real, that it is not only a line in the Energy-Climate Act, not only a whim of our youth, and not only a subject among experts or scientists. The intuition to anticipate the impact that this subject will have on our society, our economy and therefore on companies.
Some have already got it, some are currently transitioning and others are just continuing on their path. This last option is no longer possible. It is not enough to talk about ecological transition in seminars anymore, we must act!
As we have seen, France has earned a strong following by the European Parliament, which has also chosen to declare climatic and environmental emergency.
If we look at the Green Deal announced by President von der Leyen in her program, it involves ambitious measures. Some of these measures have already been taken by France, such as carbon neutrality by 2050 or the decarbonisation of the most polluting sectors. Some measures were even proposed by President von der Leyen as was the case for the Climate Bank.
On European as well as on international level, the President of the Republic, Emmanuel Macron, has always been able to help bring a realistic and ambitious voice on the fight against climate change back to the European Council, the One Planet Summit and, last September, the United Nations climate summit.
However, as I said, the climate challenge is global.
France could be exemplary, and even do more. Examples are driving forces. The line I chose to convey and defend in the finance bill for 2020 is to not finance abroad what France forbids on its own soil. This way, we limit or even prohibit state guarantees for exporting fossil fuels.
However, it is only a common desire of all States, and especially those that contribute most to greenhouse gas emissions, that will allow us to avoid the point of no return. In the words of United Nations Secretary-General Antonio Gutteres, let us not betray the “entire human family and all generations to come”.
National Assembly – 126, rue de l’Université – 75355 Paris 07 SP – Tél : 01.40.63.74.33
District – BP 63139 – 30205 Bagnols-sur-Cèze – Tél : 04.66.89.72.16
French Polynesia is an archipelago of 118 islands located in the Pacific Ocean. It is spread over an ocean surface as large as Europe. Its exclusive economic zone (EEZ) is a vast managed marine area of 5 million km². This makes France the second largest maritime power in the world, after the United States. Two thirds of the 276,000 inhabitants live on the island of Tahiti.
From an institutional point of view, French Polynesia enjoys great autonomy within the Republic. It has an executive, an elected president who appoints the members of his government and an assembly which passes laws and deliberations. The country’s areas of responsibilities are very broad. The State retains, for the most part, only the sovereign areas such as security, police, defense, currency, nationality, public liberties, foreign policy and immigration. For all the rest, Polynesia “governs itself freely and democratically” according to Article 1 of the Statute of Autonomy.
Ever since Brexit, French Polynesia, New Caledonia and Wallis and Futuna remain the only overseas communities in the Pacific linked to the European Union.
The two pillars of the Polynesian economy are founded upon tourism and the blue economy. French Polynesia welcomed 290,000 visitors in 2019. High-end tourism is one of the main drivers of this economy, without ruling out family hotels and pensions at local level.
Our tourism industry, which has gone through difficult times over the past ten years, is once again expanding, supported in particular by the arrival of two new airlines (United Airlines and French Bee). This tourism revival is also reflected in the opening of new hotel units, the takeover of closed institutions, the increase of Airbnb accommodation offers and the rise in the number of cruise ship passengers.
“The Tahitian Village” project lies within the scope of this approach. It is a large-scale tourist accommodation and associated services project (catering, recreation, shops, marina, etc.) on the island of Tahiti. After a call for expressions of interest, local investors have presented their projects. The lots must be allocated accordingly by the end of the first semester of 2020.
The production of cultured black pearls is the second of the country’s own resources, followed by fishing.
Polynesia has the particularity of having no fishing agreement with foreign countries. Fishing in the EEZ is prohibited for any maritime vessel not flying the Polynesian flag. All vessels crossing our EEZ are monitored in real time by satellite. In this way, we sustain our resource base. Our vessels undertake long-line fishing obtaining around 9,000 tons per year, which constitutes a quite bearable harvest.
Polynesians have a deep commitment to their maritime environment. Since 2002, Polynesia has become the largest sanctuary in the world for marine mammals (whales, dolphins, etc.), as well as other species such as sea turtles and sharks.
However, the maritime environment may prove to be a threat. French Polynesia, like the insular South Pacific States, is directly impacted by global warming (rising water levels, higher water temperatures, salinisation, etc.).
This is how our country has become the spokesperson in behalf of the Pacific Islands during COP 21 to contain global warming below 2°. This occurred after the member countries of the Polynesian Leaders Group (which groups Polynesian countries) signed in July 2015 the “Taputapuatea Declaration” (Polynesians against Climate Threats) which calls on the Nations to join forces for the protection of the ocean and the environment.
French Polynesia actively participates in regional work on the Pacific Islands Forum’s climate agenda, particularly with regard to the fight against global warming and the adaptation of our islands and societies to its adverse effects.
The Forum leaders consider that climate change is the first threat our countries have to confront. In this respect, the Boé Declaration, on the occasion of the 49th Forum summit in Nauru in 2018, constitutes an appeal to the international community.
The common themes for regional reflection are numerous. All Pacific island countries are concerned by rising ocean levels, ocean warming, the loss of territoriality, meteorological disturbances, droughts, cyclones, floods, climate migrations and the risk of losing exclusive economic zones if atolls were to disappear.
At a purely local level, French Polynesia adopted a Climate-Energy Plan in September 2015 which confirms the authorities’ willingness to develop renewable energies, reduce the production of greenhouse gases and promote an exemplary energy and climate approach.
In addition, as part of the Energy Transition Plan adopted in November 2015, Polynesia’s ambition is to generate 75% of renewable energy in 2030, compared to 37% today.
French Polynesia remains deeply rooted in its culture and in the promotion of its languages which are taught in school. It is, however, resolutely turned towards the future and openness to the world. Thanks to two submarine cables it is connected to the entire world. These cables are complemented by an internal network connecting the various archipelagoes which are the Leeward Islands, the Tuamotu and the Marquesas. The Astrals archipelagoes’ network is under evaluation.
Digital links prove to be essential for development once we realize that some islands are nearly 1,500 km away from the island of Tahiti.
This focus on French Polynesia will allow you, I hope, to better understand the challenges facing our community (nearly 12,000 km away from its mainland and the European continent) and the solutions we provide for a lasting and harmonious development.
Our islands are facing a major climatic challenge which is now clear for everyone to see. This major challenge, whose entirety and intensity is sometimes extremely difficult to measure, is an increasingly obvious reality for the 118 islands of our vast territory. There is an exponentiation of natural disasters as well as an increase in their intensity and recurrence.
Thus the question arises: In this era of major environmental changes that call for a transformation of our lifestyles, how can we guarantee optimal living conditions for the population of the islands of Polynesia? How can we prevent them from being isolated, without help and resources in the event of a major disaster? Also, how can we prevent this from impacting our economy, which is already sensitive to the upheavals of different geopolitical contexts?
I am confident that with the daily commitment of each community, we will to find coordinated responses to the constantly increasing threats.
Fortunately, community involvement is natural in French Polynesia. Our population is by nature, and historically, resilient. This trait has been passed down to us by our ancestors. After generations of sailing the vast Pacific Ocean, they reached the shore and discovered new lands to populate. Over the centuries, they developed a natural resilience due to the need to adapt to an environment with limited space and resources. Despite those challenges, they managed to develop a prosperous civilization which survived right up to today.
My experience as President of the Assembly of French Polynesia, Mayor of Bora Bora and the many functions that I have had the honor to occupy at country level for the last 30 years, has led me to believe that public action is clearly a key element in our support network.
The Assembly of French Polynesia is a major and essential player in the locally developed energy and climate change adaptation strategy.
The reason behind this is that the Assembly of French Polynesia is where the defining and approving of the country’s energy policy is made. Legislative committees play a fundamental role because they are a place of dialogue for the actors concerned. They are also a place of exchange with the government in terms of the energy strategy and the definition of all the necessary regulatory tools.
This requires both the preparation of a general framework and the implementation of fiscal measures. The general framework should aim at ambitious objectives with regard to the use of renewable energy in the near future and the fiscal measures must encourage development and innovation in the energy sector.
In this regard, French Polynesia is already an example to follow with more than 30% of its electricity produced via renewable sources. However, this means that a much more ambitious energy future should be sought. French Polynesia intends to develop a range of innovative solutions that meet the requirements of a future where energy will be found in multiple channels rather than depending on a single source of production. This applies even more in an island environment such as ours.
Climatically, it is exemplarity and instructional work that will set the country on a progressive and effective path, even more than the implementation of ambitious rules in terms of preserving ecosystems and preparing for future changes.
Indeed, it is behavioral changes regarding consumption and lifestyles that will be key elements for our communities in the future. Subsidies and other possible arrangements will not be sufficient if all the actors concerned do not mutually agree to change and improve their practices.
We are now at the stage where the adaptation of our societies becomes a priority ahead of the inexorable fight against climate change.
These behavioral changes must above all be adopted by the representatives of the people so as to lead the way, reduce fears and positively influence our fellow citizens. This is how the Assembly embarked on a policy of paperless processes of parliamentary documents in an attempt to minimize the number of printing papers. Similarly, in 2019 we launched a policy to reduce plastic waste by distributing alu-bottles to all elected officials.
Changes are often lengthy and laborious. But when changes are initiated by leaders, they are inspiring and more easily assimilated by the citizens who, in turn, are more likely to follow the movement.
Our institutions are facing a major challenge, but it is equally exciting for us, elected officials, as it positions us at the heart of possible solutions. We are heirs to a long tradition and ancestral culture of resilience and adaptation, and I am confident in the ability of Polynesian elected officials to meet this noble challenge.
Dr Groebel is also Head of the Department of International Relations/Postal Regulation at German regulator Bundesnetzagentur. CEER is the Council of European Energy Regulators, the non-profit association of Europe’s national energy regulatory authorities.
The energy transition essentially means moving to a future of greatly increasing electrification of economic activities and extensive decarbonisation of the energy and other sectors such as transport, leading to reductions in the use of unabated natural gas (and other fossil fuels). This can only be accomplished with large increases in variable renewables and enhanced digitalisation of the energy sector. At the same time, more and more energy generation will be distributed, not only consumption.
Hence, the essential point is thinking about changes to a regulatory system that was originally designed for a system where fossil fuels and single-direction energy flows to inactive consumers were the mainstays of the system. CEER considers these changes in the framework of its ‘3D’ strategy: digitalisation in the consumer interest; decarbonisation at least cost; and dynamic regulation: European solutions for adaptive regulation in a fast-changing world.
What this means concretely is European regulators coming together to find pathways that deliver the energy transition in a reliable, consumer-benefiting and least-cost way. Two prime examples of that are CEER’s “Conclusions Paper on Dynamic Regulation to Enable Digitalisation of the Energy System”, published 10 October 2019, and the ACER-CEER Joint Conclusions Paper “The Bridge beyond 2025” [on the gas sector in the context of decarbonisation] published on 19 November 2019.
In terms of digitalisation, there is the potential for an enormous value proposition for consumers, including cost savings (increased efficiency); convenience (e.g. smart homes); choice (e.g. different types of pricing models); participation (active as consumers and even prosumers); and quality and security of supply (e.g. digitalisation is necessary for reliability in the context of greater variable renewable penetration).
In terms of decarbonisation, gas has been a mainstay of millions of European consumers both in terms of electricity generation and heating, yet decarbonisation is imperative: regulators seek to square that circle by ensuring that the externalities of carbon emissions are paid by the polluter rather than foisted upon consumers in an unfair and inefficient manner. Regulators seek to create a level playing field so that the market delivers to consumers in the context of changes such as increased electrification, renewable/green gas, hydrogen, power-to-gas and other developments at least cost. This level playing field extends to gas vs. electricity storage and tariffs as well.
Regulators could have a more significant role in assessing Projects of Common Interest to ensure that grids are restructured to absorb an increased share of renewables and green gases such that they maximise benefit for consumers.
Among the consumer-friendly provisions that CEER has supported for years that we now see in the Clean Energy for All Europeans Package (CEP), we can cite faster and free supplier switching; comparison tools (for choosing supplier) available for all; clearer and simpler electricity bills; interoperability for customer data; economic smart meter roll-out; facilitating dynamic price contracts; and appropriate rules for energy communities.
CEER published three case-study reports this year that look more closely at how these provisions have been and can be put into effect. The CEER “Report on Implementing Consumer Rights of the Clean Energy for All Europeans Package”, published 7 August 2019, provides case studies to illustrate the relevant consumer protection rules, with respect to information requirements; on solutions for a standardised energy contract; illustrating billing-related issues; and finally, addressing how to make switching a supplier easier for customers.
A complementary CEER “Report on Implementing Technology that Benefits Consumers in the Clean Energy for All Europeans Package” of 22 July 2019 has case studies illustrating the lessons learnt regarding the implementation of a system for smart meter installations upon customer request; on dynamic price contract implementation; and finally illustrations of different types of data management approaches that are in line with the goals of the Clean Energy Package.
Finally, following the formal recognition of active consumers and the introduction of Citizen Energy Communities (CECs) and Renewable Energy Communities (RECs) in the CEP, CEER sought to analyse the regulatory implications of these new actors in its 25 June 2019 “Report on Regulatory Aspects of Self-Consumption and Energy Communities”. This report develops a regulatory approach to analyse these developments in the energy market, based on several case studies submitted by NRAs. The report is both an overview of ongoing developments in the respective Member States and also addresses regulatory challenges at an early stage, to enable innovation whilst ensuring that consumers benefit from these new practices. In general CEER wants to ensure well-functioning retail markets.
European energy regulators have a plan of action to work together to better understand the provisions of the CEP and to work closely with Member States and the Agency for the Cooperation of Energy Regulators (ACER) to contribute to a successful implementation of the legislation. For CEER, this is part of what we understand by our third ‘D’: dynamic regulation, i.e. adapting regulation to market changes but also legislative changes while remaining predictable. CEER has focused its efforts in particular on provisions affecting consumers and distribution systems. This work includes close cooperation with the European Commission on clarifying specific articles, as well as enhancing our own knowledge on topics such as flexibility and use of storage in electricity systems.
On the consumer side, on this topic, we are looking at demand-response and aggregation; on the network side, at network services and TSO-DSO cooperation. The role of DSOs is an important part of the CEP, just as the package was being completed in March 2019, CEER published a complementary “Paper on New Services and DSO Involvement”. New services examined include storage; direct services to the consumer (everything from efficiency advice to operating electric vehicle charging); data management; and telecommunications and services outside of the energy sector. CEER is of the view that a market-centric approach for the facilitation of services should be used wherever possible, with DSOs acting as neutral market facilitators.
One of those direct services to consumers is flexibility services. CEER believes that DSOs should be involved mainly by procuring flexibility resources in the distribution system. CEER has an upcoming report on procurement of flexibility that will give insights on how flexibility procurement procedures could be arranged to reach an efficient outcome and how regulatory incentives are applied to DSOs to use flexibility. This report will look at some best practices to highlight to help with CEP implementation.
Overall, CEER looks forward to working with the European Institutions particularly the European Commission to do the hard technical and legal work to deliver the benefits of a better, more future-oriented and customer-centric marked-based energy system for all Europeans.
Conseil des régulateurs européens de l’énergie (CEER)
Cours Saint-Michel 30a, Box F (5ème étage)
1040 Bruxelles, Belgique
A green deal that works for the people,
the economy and the planet:
thoughts from a local perspective
As President of a federation of regions and energy agencies, I followed the designation process and hearings of future Commissioners with both hope and concern. Hope that the new proposed commissioners will fully and truly embrace their President’s announced Climate & Energy Commitments; concern that these commitments could turn into empty promises, lacking in concrete proposals for implementation measures. Moreover, although it is too early to decide whether hope or concern should prevail, several positive conclusions can nevertheless be drawn.
The increase of ambition in the EU’s climate targets is the correct signal that we were all expecting. Ms Von der Leyen committed to raising the 2030 targets by at least 50% of greenhouse gas reduction compared to the 1990 levels (the current target agreed by EU Member States being 40%) and to enshrine the 2050 climate-neutrality target into legislation, with the aim of making Europe the world’s first climate-neutral continent. These new efforts to reduce Europe’s carbon footprint make me think the new President-elect did listen to the IPCC’s call for urgent climate action, as well as to the thousands of young people urging leaders to act for the Climate. In this last year, FEDARENE joined the young strikers in the streets of Europe’s cities and met with some of its local leaders to offer our support in any way possible.
For all the stakeholders across the EU who have been pushing for more energy efficiency and renewables for years in order to drive the energy transition, the announcement of a European Green Deal is music to the ears. Reaching this deal and actually respecting it will require an unprecedented cross-institutional effort, forcing dialogue between the various Directorate Generals, especially for the Agriculture, Climate, Cohesion, Energy and Environment policy fields. This should also allow for a joint and consistent approach to Climate issues.
These integrated approaches are strongly promoted by regions and energy agencies who are developing integrated planning tools and processes blending climate mitigation and adaptation measures. The Covenant of Mayors’ signatories have additionally commenced updating their sustainable energy action plans with the incorporation of “adaptation” measures. Prospects for utilising “integrated territorial investments” related to structural funds are also being explored in many regions in Europe for more integrated projects. The move of the clean energy transition coordination and support actions from Horizon to the LIFE programme is similarly a step towards having more holistic funding programmes that encompass environment, climate and energy together.
A cross-sector mobilisation is undoubtedly indispensable if we are to reach carbon neutrality by 2050. To quote Ms Von der Leyen, in her Mission Letter to Mr. Timmermans: “To make a real step change, we must look at everything from how we use and produce energy, unlock private investment and support new clean technologies, all the way through to the transport we use, the food we eat and the packaging we throw away.” Mr. Timmermans indeed promised to the Members of the European Parliament a transversal and comprehensive Green Deal that will make the societal transformation happen and leave nobody behind and nothing aside: the poor, the rich, the industry, the lands and farms, the air we breathe, the tax we pay… all policy dimensions will be examined and taken into account.
Implementing this deal will not happen without the engagement of local and regional authorities, which also implies their inclusion in the design of the Green Deal. Mr. Timmermans is aware of this fact as since in his opening statement, he highlights the role that regional and local authorities play in carrying out large renovation projects and renewable energy installations. He moves on to announcing the setting up of a European Climate Pact that according to his mission letter aims at “bringing together regions, local communities, civil society, industry and schools” in order to trigger a change in behaviour across our society.
This pact sounds very similar to the “Multilevel Climate and Energy Dialogue” that Member States are required to establish in accordance to the Energy Union and Climate Action Governance Regulation. This dialogue has been gravely ignored in the development of the current National Integrated Energy and Climate Plans. We hope this pact will bring some vitality to this provision and actually lead to more co-designed energy policies and programmes that truly take into account the contributions and greater ambitions of cities and regions. Regions and cities see today how the energy transition brings vitality to their communities. Their local/regional energy agencies are critical enablers to stimulate local economic development, foster employment, create demand and supply for energy efficiency services and products, implement and upscale renewable energy projects, develop adaptation strategies, alleviate energy poverty, improve air quality and truly inform and empower citizens and community initiatives.
2020-2030 will be a decade of crucial importance if the EU is to reach net-zero greenhouse gas emissions by 2050. Achieving it will require considerable additional investments in the EU’s energy system and related infrastructure compared to today’s baseline, in the range of EUR 175 to 290 billion a year . To cover the financial costs of the new Climate agenda, two main proposals were put forward. Firstly, a Sustainable Europe Investment Plan (SEIP) that should unlock €1 trillion of climate-related investments over the next decade. Secondly, to help realize the SEIP, the European Investment Bank (EIB) would be turned into a Climate Bank and increase its share of climate investments from 25 to 50%. From initial comments received, we have learnt that the SEIP will consist of a blend of public and private money and from many different income streams: existing EU funds, new investments mobilised via the EIB and InvestEU, other contributions from the EU budget, from Member States and National Promotional Banks…
This Sustainable Europe Investment Plan holds the promise of bringing “fresh” money for sustainable projects in Europe. Such a promise can trigger enthusiasm as well as questions for local and regional energy agencies. One of their main occupations is the design and implementation of energy efficiency and sustainable energy projects, which are often heavily financed by EU funded programmes. Small structures like local and regional energy agencies are thus heavily dependent on European funds, and this new plan could open new perspectives for their future. Whether local and regional authorities and energy agencies will be able to benefit from the plan remains to be seen.
The Sustainable Europe Investment plan might yet succeed where the European Fund for Strategic Investment (EFSI, also known as the “Juncker Plan”) has failed, particularly when it comes to convincing of its capacity to mobilise investment in the decarbonisation of the energy sector. This new plan must refuse any and all investments in fossil fuel infrastructure projects. Market uptake of clean energy solutions should be the main focus here. Europeans may already reap the benefits of clean energy research if proper support is provided to local and regional market facilitators. Support programmes must enable the up-scaling, aggregation and replication of existing successful energy efficiency and renewable projects across Europe.
FEDARENE will keep striving for recognition of the work led by local and regional actors for Energy Transition. Since 1990, we have been showcasing the achievements of regions and municipalities and their energy agencies in renewables, energy efficiency, environment, the circular economy, sustainable finance, capacity-building activities for public authorities, awareness-raising… Now that the new EU Commission leaders seem convinced about the need to massively invest in the green economy, we have to show them that cities, regions and energy agencies have been front-runners in taking action, and that they are already leading the transition on the ground. We will show them that energy agencies are some of their strongest allies when looking to achieve their objectives. The Commissioner-designate for Energy Ms. Kadri Simson promised a large impact assessment analysis to determine how best to achieve the new targets. Logic suggests that in the first days of designing the Green Deal, consultation with key partners and stakeholders will take place and we must ensure that local and regional actors are very much included.
Notwithstanding the concerns expressed and with pragmatic hope, Europe’s regions, local authorities, islands and energy agencies look forward to cooperating with Ms Von der Leyen and her team to address the ambitious Climate & Energy challenges that lie ahead.
1- European Parliament resolution of 14 March 2019 on climate change – a European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy in accordance with the Paris Agreement
M. Jean François CARENCO
“I want Europe to become the first climate neutral continent by 2050”,
thus began Ursula von der Leyen’s inaugural speech before the European Parliament in July 2019.
“I want Europe to become the first climate neutral continent by 2050”,
thus began Ursula von der Leyen’s inaugural speech before the European Parliament in July 2019.
The ambition is therefore given at the European Union level, which has acquired over the decades a structuring power in environmental matters. This ambition is also supported by a large majority of European public opinion. The energy sector will therefore be at the heart of the transformations needed for this transition towards a carbon-neutral economy.
In this process, the European Union has already set a course by renewing its energy & climate goals by 2030 in the recent “Clean Energy Package”. It is now up to the Member States to implement it by adopting their national strategies and plans, as France does with the Multiannual Energy Program and the National Low Carbon Strategy.
The national energy regulator plays a central role in this unprecedented human and industrial adventure. At the heart of the energy system, it was meant to accompany the transition of the sector. Its independence allows it to analyse sector issues with regard to industrial difficulties and economic transformations. Its ambition is to make an impartial contribution to the democratic debate on these subjects in the interest of the public good and taking into account the economic efficiency as it is a prerequisite for the achievement of these objectives.
Since my arrival at the head of the CRE, I wished that we exercise our missions while being guided by the absolute necessity of the energy transition and the protection of the planet. But this objective must be accompanied by three imperatives to guarantee the social acceptability of this transformation: control of public finances, national solidarity and consumer protection.
This triptych is at the heart of energy transition issues. According to the European Commission, to achieve carbon neutrality, Europe must make investment efforts in its energy system of about 175 to 290 billion euros per year. The regulator must ensure that these huge sums are invested effectively.
As such, it is appropriate to ask the right questions and not give in to the current climate or lobbies, whether they are industrial, ecological or nuclear. It is also important to take into account the particular context of France in order to avoid the unique solutions that some would like to impose.
For that, we must, on all sides, avoid inaccuracies and factual errors. Thanks to our very low carbon electricity system due to an energy mix mainly composed of nuclear and renewable energies, France benefits from low CO² emissions and controlled electricity prices.
However, this does not mean that France must continue to rely solely on nuclear power, or that we must not invest in renewable energies (RES). Renewable energies are now competitive and the power cells that alleviate their intermittency cost less and less. In parallel, new nuclear is still very expensive, if we rely on the Flamanville and Hinkley Point projects. The problem of nuclear waste has still not been solved. It is therefore rational to develop renewable energies today and aim for a smaller share of nuclear power by 2035.
Above all, the energy transition will only be possible with innovation. This innovation must be collective. That’s why when I arrived at the CRE, I set up a Futurology Committee, a real exchange place where all the actors involved in the energy sector can reflect together on future trends. This Committee has already worked on the greening of gas and its uses, new local dynamics of the energy system, clean mobility, energy storage and consumer data. In particular, innovation must take place within the networks: in gas networks, with the integration of green gas production which represents as much a source of energy as a source of agricultural income and a means of eliminating garbage; in electricity networks, which faces the challenge of decentralization and the transformation of the generating assets. At the CRE’s initiative, the Energy-Climate Act provides for a “regulatory sandbox” system which allows derogating from the regulation to test new innovations in the conditions of network access, such as the integration of electric vehicles, whose number could reach 15 million in 2035.
Finally, the use of flexibility solutions will also limit investments in electricity networks and thus facilitate social acceptance of environmental requirements. This flexibility can cover several forms: interruptibility and erasure for industrialists, self-consumption – provided it does not generate a new energy communitarianism – the levelling off of renewable energies, storage, European interconnections but also, energy savings and demand management.
Thus, the CRE is fully committed to the energy transition, at both national and European level. So that everyone becomes aware of the urgency, but also the opportunities of this revolution. Seneca wrote “You need a change of soul rather than a change of climate.” The CRE works to convince doubters that this transition can be fair and effective.
Mr. Jean-François CARENCO has been appointed President of the Energy Regu-lation Commission by decree of the President of the Republic on February 16, 2017.
Jean-François CARENCO is a graduate of HEC and later joined the National Ad-ministrative College (promotion Michel de l’Hospital). Much of his career took place in prefects. In 2015, he was appointed Prefect of the Ile-de-France re-gion, Prefect of Paris and also President of the Association of the Prefectural Corps and Senior Officials of the Ministry of Interior.
Former chief of staff to Jean-Louis BORLOO, Minister of State for Ecology, Energy, Sustainable Development and the Sea, Jean-François CARENCO was one of the main architects of the law of the electricity market’s new organization. He also made a major contribution to the Grenelle Environment Forum, which set the objectives for the development of electricity production from renewable energy sources.
After graduating from the NAC in 1979 (promotion “Michel de l’Hospital”), he was appointed Advisor to the Administrative Court assigned to Marseille. He was then appointed as Director General of the district of Montpellier between 1985 and 1988, before being Under-Secretary-General for Economic Affairs (1988-1990), then Secretary General of New Caledonia (1990-1991).
He was appointed District Commissioner in 1991 and Secretary General of the prefecture of Yvelines (1991-1996). Appointed Prefect of Saint Pierre and Miquelon in 1996, he successively served as Prefect of Tarn-et-Garonne (1997-1999), then Prefect of the Guadeloupe region (1999-2002), and Prefect of the Haute Savoie (2002-2004). He then headed the cabinet of Mr. Jean-Louis BORLOO at the Ministry of Employment, Labour, Social Cohesion and Housing (June 2005 to July 2006), before being appointed Prefect of the Haute-Normandie region, Prefect of Seine-Maritime, from July 2006 to May 2007 then Prefect of the Midi-Pyrenees region, Prefect of Haute-Garonne (2007-2008).
As from 2008, Jean-François CARENCO headed the cabinet of Mr. Jean-Louis BORLOO, Minister of State for Ecology, Energy, Sustainable Development and Regional Planning until 2009. Always Chief of Staff to the Minister of State for Ecology, Energy, Sustainable Development and the Sea until 2010, Jean-François CARENCO was responsible, inter alia, of the Climate Negotiations.
On December 1st, 2010, he was appointed Prefect of the Rhône-Alpes region, prefect of the Rhône. In parallel, in October 2013, he was in charge of the “Second Chance Pack” mission to fight against delinquency by the Deputy Minister of the City. Then in March 2015, he was appointed Prefect of the Ile-de-France region, Prefect of Paris.
The IOGP is the international industry association representing the upstream sector (Exploration & Production) of the oil and gas chain. Our Members – just over 80 companies today – account for more than 40% of oil and gas production worldwide and about 90% in Europe. Our goal is to make these operations ever more secure, responsible and sustainable. We do this by working to continuously improve HSSE, operational, and energy efficiency performances, as well as by publishing a collection of good practices in these fields. It goes without saying that to achieve this goal, we collaborate with national, regional and international bodies and regulators, such as the European Union and the United Nations Environment Agency.
Traditionally, the IOGP’s role has focused on the rather technical and operational aspects, but faced with the questions posed by the future role of our industry in the energy transition, we are also the spokesperson of our field in Brussels. Faced with a speech that is often too simplistic because of a lack of awareness – “we must break free from fossil fuels today” – we explain the continued evolution of oil and gas uses, the important role they will continue to play, even within the Paris Agreement, and the technologies we are developing to reduce our own emissions, those of our customers and those of other sectors.
There are three.
The first is the adaptation of our offer. The business portfolios of our Members are changing. The balance of oil and gas reserves of many majors leans more in favour of gas. Twenty years ago, drilling a well and finding gas was almost a failure – it was oil that the world economy needed most. Today, we are actively looking for gas because global demand for this flexible and less carbonaceous energy is exploding, as it is the perfect substitute for coal and the ideal complement to intermittent and eminently variable renewables in their electricity generation. We do not see much of it, but our industry also invests significant amounts in renewables, batteries, and the electrical sector in general. Their offer is expanding, and some are renamed “energy companies”, and no longer “oil & gas companies”, to mark the occasion.
Europe and our industry have now truly entered the era of “beyond petroleum” as Lord Browne had stated too early, but not in the era of “without oil & gas” as we all too often understand it: the energy transition opens opportunities, and we are also here to seize them.
The second project is the deployment of widespread low-carbon technologies other than renewables: I am mainly talking about hydrogen and carbon storage and capture (CSC). We capitalize on two advantages: natural gas is today the main “raw material” used to produce hydrogen for large-scale industrial needs. We can decarbonise gas by separating and storing the CO2 it contains and injecting hydrogen into the energy system. I now come to the second advantage – not only do we have the technology for capturing and storing CO2, but we also have hundreds of depleted and often offshore reservoirs that have proven their watertightness for millions of years and can therefore be used to store huge volumes of CO2 hundreds or even thousands of meters deep and over hundreds of years.
The third project is that of reducing our own environmental impact – right from the oil and gas production stage.
Today, for example, nearly three-quarters of platform emissions in the UK North Sea come from diesel or natural gas-powered electric generators. The idea is to replace them with electricity, and green when possible. This involves projects under consideration such as large offshore wind investments in the North Sea or even the wiring of platforms from the mainland.
But our industry is also working on what has been called in recent years the “leakage of methane”. We are well aware of this – if gas is to play a role in the transition, especially as a replacement for coal, it is crucial to minimize its own environmental impact. The industry has recently launched numerous initiatives to detect, measure, and reduce methane leaks. From infrared cameras to satellites, to drones, the means devoted to them by our industry are important. Within the IOGP, we are actively involved in this work – we look at what is working and what is less effective, and we draw up good practice recommendations for our Members.
This requires recognition of the problem and flawless discipline. In the past, we have tackled the safety of our operations. Accidents were more frequent and more serious, as were their consequences – from an operational point of view, but especially from a human point of view. We have made it the number one priority: it has even become one of the company’s “values”. We have rethought our approach to safety as a whole and have devoted the necessary resources to it. Today, accidents have become extremely rare and we aim for the zero figure.
We do the same for methane. Through the “Methane Guiding Principles” initiative, for example, we start with awareness campaigns for our most senior field staff and decision-makers among our members. Then, in partnership with NGOs, academicians and specialists in the reduction of methane leaks, we actively train them to implement the means and adopt the necessary reflexes to solve the problem. We have started, we must now continue – our credibility depends on it.
It is considerable, and relatively unknown! Each year, our products – crude or refined – represent a net contribution of around € 420 billion to EU member states + Norway, of which € 37 billion comes from E&P. To give you an idea, € 420 billion is the equivalent of almost 3% of the European Union’s GDP, or that of a country like Belgium or Austria!
We often hear NGOs talking about subsidies to our sector, but it’s absurd given what it taxes! In Europe, public intervention usually consists of less taxation for a category of customers in a precarious situation, or less on one product rather than the other – for example, diesel and gasoline until recently – or investment incentives, which ultimately earns enormously more than the supposed “cost” of the measure. The figures show that our sector has benefited from € 3.3 billion of public aid in Europe in one year – € 1 invested represents € 130 recovered!
But yes, there are indeed subsidies in less developed countries and regions, where without them, the population could not stay warm, have electric lighting or even move around. Do you think those who denounce these aids care?
It is certain that a carbon-neutral Europe is not likely to be a growth market for oil and gas. But we can choose to see things simply in terms of volumes, or added value.
In terms of volumes, for oil, we will consume less in road transport, and more in air transport and petrochemicals. Vehicle electrification is under way, but it is mostly the efficiency of combustion engines that impacts the consumption of oil for vehicles. As for the aviation sector and petrochemicals, they are both booming and it is hard to see what would stop them. As for gas, we will be seeing a lot more of it in the marine sector, due to the emission standards of the International Maritime Organization from January 2020, and probably less in heating, industry and electricity, where electrification and energy efficiency will gain market shares over gas.
Personally, I like to think that we will make the “best” possible use of oil and gas – that is for more advanced uses, to make products with higher added value. Lightweight electric cars require increasingly lighter and more resistant plastics. There is the use of high quality lubricants for offshore wind turbines.
Petrochemical building materials will make homes less energy intensive, and so on. Solving the problem of pollution caused by shipping would be a fantastic step forward for the quality of the air breathed by the populations of port areas around the world… and for liquefied natural gas!
I think this is our position for Europe, and to achieve carbon neutrality in general – in terms of added value for society.
It is more than an asset, it’s a necessity. Today, the IPCC, the International Energy Agency and the European Commission all agree that it will be impossible to achieve ambitious climate goals without capturing and storing CO2. “Finally”, is what we would want to say! Now the message must be passed to the political level, and then to the public: it will take much more than wind and sun to solve the problem, and the solution would require a complex mix of technologies and changes in practices.
CSC has long been presented by NGOs as a way for the fossil fuel industry to stay alive in a carbon neutral future. In fact, storing carbon is becoming a necessity for many other sectors, in particular the cement industry, the iron industry, and the chemical industry that emit CO2 in their industrial processes. It will also be a necessity to cancel certain emissions that cannot be avoided – for example methane emitted by the agricultural sector, carbon emitted by aviation, etc. That’s why we’re calling for a broad cross-sectoral coalition to promote CSC in Europe – we need to overcome our communication gap, and our sector is ready to act.
As for hydrogen, it has become the word of the day in energy and climate talks. Everyone is talking about “green hydrogen” produced from renewable electricity. The problem is that we do not have enough renewables, that it is extremely expensive to produce, and that the volumes are and will remain microscopic for a long time. The reverse is mere fantasy.
If we want to promote the emergence of a hydrogen market in Europe, we must capitalize on current production, based on natural gas. The concern is that currently the CO2 produced by this process is now released into the atmosphere. By decarbonising natural gas, that is, by separating and storing the carbon it contains and keeping only hydrogen, we can provide large-scale low carbon “blue hydrogen”. This would open up a European market, create an ecosystem and a hydrogen value chain and facilitate the integration of “green hydrogen”, the production of which will remain more local and intermittent.
It just so happens that we have done a long analysis of the first drafts of the National Energy & Climate Plans to figure that out, and it turns out that the whole thing is currently pretty much in sync with the idea we have.
We were pleased to see that half of the Member States (14) have a positive view of Oil & Gas Exploration & Production, mainly for reasons of security of supply and as an alternative to coal. Only France mentions the ban on E&P…! This will only accentuate our trade deficit but also our emissions, since the gas produced in the country emits on average 25% less CO2 than the one that is imported. This dogmatic and unilateral measure is therefore meaningless, especially for the climate, for which it is even counterproductive!
As far as gas is concerned, its role in the heating, electricity generation, transport and, to a lesser extent, industry sectors seems clear until 2030.
Member States are also almost unanimous on the need to deploy CSC and hydrogen in Europe, with the notable exception (and here also totally dogmatic and groundless) of Luxembourg for CSC. Many see this as a solution to the problem of industrial CO2 emissions. Only five Member States, however, see the link between natural gas and hydrogen – we still have a lot of work to do on this subject!
With regard to oil, we were perhaps a bit surprised at the extent to which Member States share our point of view on its future role in Europe: The improvement of thermal engines, the role in petrochemical production, the progressive replacement of fuel oil in the heating sector – this is a fairly pragmatic picture of national plans.
Pragmatic yet ambitious and progressive – that’s how I would describe these plans. It will be necessary to take the helm and not fall into outrageous oversimplification, into anti-science, into emotionalism and ideology. It will be necessary to respect each other, to listen to each other, to explain things, and above all to take thoughtful, rational and consensual decisions. Our industry understands, adapts and accompanies the changes our societies are going through – I invite those who do not see it yet to take a closer look.
International Association of Oil & Gas Producers
Av de Tervuren 188A,
B-1150 Brussels, Belgium
We must now look outward to ensure that Europe becomes more competitive on the world stage in order to create the prosperity that businesses and citizens aspire to.
The business world obviously plays a central role. All industrial and entrepreneurial actors are mobilized, whether they are energy producers or energy-consuming companies, or even those developing new technologies or services for example to reduce energy consumption. In general, companies are increasingly aware of their own responsibilities to produce and consume energy more efficiently, especially to address the global challenge of climate change. And even though the current challenges Europe is facing are numerous, the issue of the energy and climate transition comes up very regularly in my meetings with business leaders from all over Europe.
It is indeed a delicate equation which is the subject of many discussions at a European level and it is not easy to solve. While an ambitious European energy and climate policy is needed, it also creates significant costs and constraints, especially for businesses. If third-country companies such as the United States, China or Russia are not subject to the same standards, this weakens the competitiveness of European companies engaged in an increasingly competitive global market. This can be seen, for example, in the price of electricity, which increased on average by 18% in the European Union between 2008 and 2015. It is now higher than in the United States, Russia and South Korea. This situation impacts the competitiveness of energy-consuming European companies. Solving the equation is not easy, but solutions do exist. For example, there is a need for more coherence in certain European policies to avoid the additional costs associated with “legislative millefeuilles”. We must also convince third countries to align their climate ambitions with those of Europe because the answer must be global. Finally, we need an ambitious “ultra” policy on research and innovation. With a global low-carbon technology market expected to reach between 1,000 and 2,000 billion euros by 2030, innovative European companies are in pole position.
First of all, the Paris agreement is a worthy agreement. BusinessEurope, which has been following the international climate negotiations for many years, has strongly mobilized upstream to express the support of the European industry for an ambitious agreement. And we welcomed the agreement as of December 12, 2015. Unfortunately, there has been mixed progress on its implementation. First of all, there is the withdrawal of the United States from the Paris agreement. It is a decision that we deeply regret because the agreement of 2015 finally made it possible to define a framework so that all the countries could move in the same direction. The withdrawal of the United States obviously raises the question of our collective ability to reach the target of 1.5-2° C. It is nevertheless essential that all (other) countries remain mobilized. The other worrying point revolves around the difficulties in reaching agreement on the rulebook. This document should define common playing rules between all signatory countries to implement the agreement. The negotiations have been going on for about two years now and we can see that there are still points of tension, for example, on transparency rules for CO2 emissions and how they should be accounted for. These common playing rules are important for creating trust between countries, but also for companies because several provisions concern them directly such as the establishment of a carbon market. It is essential that the negotiations come to a conclusion at the COP24 in Poland by the end of the year at the latest.
GD4S is an association comprising six European gas distributors (France, Italy, Spain, Portugal, Romania, Ireland). It accounts for a total of 27.4 million consumers, the equivalent of 20% of the European market. GD4S members are agreed on a decentralised, digitalized and carbon-free vision of tomorrow’s energy landscape and in this, believe that gas distributors have an important role to play.
GD4S enthusiastically welcomes the Green Deal and the association supports the aims of climate neutrality and resource efficiency. The Green Deal is a chance to boost the development of renewable gas for an efficient energy and climate transition.
European climate ambitions: how can GD4S support these ambitions?
To achieve the very ambitious goal of climate neutrality by 2050, the European Union will gain significantly from involving gas distributors as catalysts for the energy sector transformation. In fact, more than 90% of renewable gas production units are decentralised and connected to the distribution networks. GD4S proposes that a European renewable gas consumption target be adopted to accelerate the gas sector’s contribution to decarbonisation. By 2050, the gas we use may become fully renewable, thanks to the development of European potential and the reduction in consumption.
Clean, safe and affordable energy: how can gas be a useful channel to reach this objective and what are your expectations in terms of regulations?Gas can become renewable and low-carbon thanks to biomethane, synthetic methane and green hydrogen. Biomethane, produced from the fermentation of organic matter, is already a reality today. Gas will continue to play an essential role in meeting the seasonal and daily patterns of energy needs, thanks to theimmense storage capacity of gas networks. In addition, natural or renewable gas is, of course, the preferred channel for the phasing out of coal.
The Commission rightly includes a “smart integration strategy across sectors” as part of the Green Deal. This is an opportunity to implement the complementary strengths of the gas and electricity networks. In the upstream part, that of “power-to-gas”, there is the possibility of producing and storing excess renewable electricity in gaseous form. In the downstream part, with close proximity to consumers, hybrid heating equipment combines the advantages of gas and electricity.
The intended revision of the TEN-E regulation (on European energy networks) would improve its relevance by redirecting funds reserved to support cross-border projects, towards more local renewable gas and network integration initiatives.
Developping a circular economy through an industrial strategy: how can the gas sector contribute to this objective?
Biomethane fits into a circular economy through the use of organic waste and the production of digestate (an organic fertilizer). Agriculture, agro-food industries and municipalities would gain much from treating their organic waste through anaerobic digestion and should be legally motivated to do so.
The same reasoning could be extended to the forestry sector and its related industries (papermills, wood) through pyro-gasification. Pyro-gasification is a technology that produces biomethane from dry matter.
An intelligent and sustainable mobility: what are the particular strengths of gas and what challenges impose constraints on its development?
Given its strengths, BioNGV has a valid position in a carbon-free energy mix. This eco-friendly fuel responds to the complex challenges of pollution and air quality, and contributes effectively to thedecarbonisation of the transport sector. The calculation of a vehicle’s greenhouse gas emissions must be based on a Life Cycle Analysis (LCA). It is a method that takes into account the manufacture of the vehicle, its use and its recycling. An IFPEN study* shows that in LCA and in many segments, vehicles supplied with BioNGV have a better carbon footprint than electrical vehicles.
Future legislative proposals must take into account the potential of renewable gases and eliminate the barriers impeding their development.Decentralised, renewable and storable energy is a major asset for achieving carbon neutrality. Thus, the implementation of a specific renewable gas target in Europe would give visibility to investors and clear direction to member states and local communities. Greater and more innovative funding is also essential to achieve change that addresses the challenges posed across Europe.
* IFP Energies nouvelles, “LCA study of vehicles running on NGV and BioNGV”, September 2019.
Vermilion is the French subsidiary of the Canadian Vermilion Energy oil group, and is based in Europe, North America and Australia. It is a company which is specialized in the redevelopment of mature fields. Since its creation in 1997, Vermilion is committed and recognized in France to exploit French underground resources with respect for the people, the environment and the territories where it is established, while seeking to contribute to the quality of life in communities.
Vermilion is the leading oil producer in France and accounts for 75% of production and 0.5% of French consumption. We are convinced that we can maintain our activity in a sustainable and innovative way thanks to the expertise and continuous commitment of our teams. 600 people work daily on our sites and consider it an immense privilege as well as a great responsibility to produce energy so as to meet the daily needs of French people.
Vermilion is one of the successful and well-managed companies that make sustainable development a central element of their strategy!
Our business model leads us to favour the human aspect and the environment over profits. We work to protect the health and safety of our teams and communities, to treat our partners with respect and fairness, and to ensure environmental stewardship.
Beyond our current activities, we also create strong and mutually beneficial partnerships for the territories. As part of its strategy for the valorisation of secondary energies from its oil production process (hot water, gas), Vermilion has provided free calorific energy over the past ten years – derived from hot water extracted with its oil – to heat 15 hectares of greenhouses in the Landes, 550 housing units in an eco-district in the Bay of Arcachon and soon 900 social housing and public buildings in Essonne, and soon an agricultural operation in the Pyrénées-Atlantiques. Thanks to these circular economy projects, 250 jobs have been created and 11,000 tons of CO2 emissions are thereby avoided every year. Numerous projects to develop the extraction of heat from water or gas are being initiated and studied.
Vermilion wishes to retain its most valuable assets and attract the best talent among its workforce. In a process of continuous improvement, we are doing everything we can to ensure a stimulating and fulfilling work environment designed to adequately answer to their needs, and in which the values of respect, fairness, pride and team spirit are paramount.
Finally, we are very involved in the communities in which we live and work. This is a core and mainstream part of the way we work. Thanks to our peer-based program, to which we devote about 1% of our profits, we support non-profit organizations and local charities in three different ways: by “giving back” (sponsorship and patronage), by “giving time” (supporting associations in which our employees are involved outside working hours) and by “giving together” (voluntary work by our employees during working hours).
All the laws passed since 2017 aim to put an end to “made in France” activities, the value providers for our territories!
The French Government wishes to “leave hydrocarbons in the ground” via the Hydrocarbons Law of 2017. This sets new conditions for the exercise of our activity: no new hydrocarbon exploration permit are granted and no license will be renewed (therefore no production) beyond 2040.
With this law, France chooses to import more hydrocarbons and generate 3 times more CO2 emissions! France chooses to deprive itself of the economic advantages of these activities (corporate taxes, taxes on production)! France chooses to put a lot of people out of work! France chooses to end partnerships with high added value for the regions!
Our production, which corresponds to the consumption of the French army, represents an asset for the country’s security of supply, but also a potential source to finance the energy transition. The French hydrocarbon industry, by developing local resources and making the best use of secondary energies linked to their production, has a full part to play in the development of the circular economy.
At Vermilion, we undertook a strategic orientation process in 2019 to enable us to build a future for our company and its employees by 2040 (date chosen by the current Government for the end of oil exploitation in France). We are rethinking our business model in order to significantly contribute to the energy transition, to ensure our sustainability, and to guarantee a motivating job for our employees.
Climate change and the reasoned energy transition force us to build upon our responsible management of natural resources. It is with regard to all these constraints and the balance sheet of each form of energy from its source to its use (as well as associated costs) that we should consider the future energy mix.
Vermilion is convinced that “Made in France” oil production is absolutely complementary to France’s objectives. We have a role to play in the energy mix for the coming decades, a role with a strong positive impact on the environment and human development, as well as a favourable territorial impact, in particular through activities associated with the production of hydrocarbons.
We want decision-makers to stop placing energy forms in competition, because they all have their usefulness, and to stop condemning French industry. It is not logical to say that our activity has no future when we are in phase with the main axes of the 2018 EPP: improvement of energy efficiency, development of renewable energies, security of supply, preparing a more flexible and decarbonized energy system by developing our infrastructures, taking into account the economic and social challenges of the energy transition and acting in coordination with the territories.
VERMILION – Headquarters, France: Route de Pontenx – 40160 Parentis-en-Born
Contact: Christelle Dupouy: 05 58 82 96 35 – email@example.com
Since the signing of the Paris Agreement in 2015, there has been considerable momentum across the globe for a cleaner and more sustainable future. And yet our climate and our environment are still in crisis.
The recent demonstrations and the “green wave” that marked the European elections clearly show that citizens are demanding more ambition.
The transformation of our energy systems does not only concern our environment, but also the citizens: up to 80 million Europeans suffer from energy poverty. The transition to a carbon-free economy will create many much-needed jobs, making the Union more competitive and reducing our energy dependency.
So it’s not a question of whether we need to decarbonise our economy, but rather how to do it. What is clear is that all of us – all levels of government, industries, civil society and citizens – need to come together, take action and produce results at the local level.
The fight against climate change and the transformation we need begins within our regions and cities and also with them.
The Union must provide adequate objectives and a framework for action: the only way to meet our international commitments in this area is to respond to the European Commission’s recent call for a carbon-free Union by 2050, which our Committee has been requesting since 2015.
The Romanian Presidency recently concluded the negotiations on the clean energy package: we need better energy performance in buildings, more renewable energy, better energy efficiency, better design of European electricity markets, and the development of National Energy and Climate Plans (“PNEC”).
Member States must finalize their plans for the period 2021-2030 in collaboration with local and regional actors. If local and regional authorities are not involved, this will reduce the impact and slow down Europe.
We must continue to invest heavily in research and innovation in an effort to unleash the potential of green technologies. Regions and cities must create an environment conducive to accelerating regional innovation. Nevertheless, we cannot expect innovation to solve all problems. Cities and regions are the answer to the climate and energy challenge. They not only implement decisions, they also lead by example.
Today, more than 9,000 cities have joined the EU Mayors Convention, voluntarily committing to exceed the European Union’s climate and energy goals. This allows them to locally appropriate the objectives of the EU and the Member States. It is one of the most powerful instruments for stimulating action on climate and energy at the local level. Nevertheless, this transition goes beyond the simple issue of energy efficiency and renewable energy: it must be a fair and well-managed transition.
The EU’s transition assistance project for regions highly dependent on coal provides tailor-made assistance to at least 13 pilot regions in seven Member States. The islands can ask the EU for help to promote the development of individual projects in renewable energy and energy efficiency in their local communities.
We need to decentralize, democratize and revolutionize our energy systems, empowering local communities to take control and produce their own renewable energy.
By 2050, half of EU citizens will potentially satisfy 45% of the Union’s energy demand. This will require political will, systematic coordination at all levels, as well as sufficient investment.
However, if we want an ecological Europe, we need the Member States to give us (the local and regional leaders) the financial means. Our Committee rejects cohesion policy cuts in the EU budget after 2020, as this will undermine not only the EU’s territorial cohesion objective, but also the efforts of local and regional authorities to improve our transportation systems, to build energy efficient homes and to green our economy.
We need a budget that lives up to our ambitions. We therefore ask, together with the European Parliament, for the budget to be increased from 1.1% to 1.3% of EU-27’s GNI. We need to better coordinate our local, regional, national and European budgets so that all communities can access other financial flows such as the European Fund for Strategic Investments.
Nobody can achieve the ecological transition alone. In the aftermath of the European elections, we must join forces to give regions and cities greater means of action so that they can move urgently towards a carbon-free Europe.
We must show that the EU can ensure a sustainable future that leaves no country, region, city or village aside.
Local Public Enterprises (LPEs) have been active for over a hundred years in the production and distribution of energy in France. The appearance of environmental issues within societal concerns has led LPEs to strengthen their role and become leading players in the implementation of the energy transition. They offer innovative and diversified solutions to all parties involved.
The LPE movement quickly seized the opportunity to provide local elected officials with a complete range of solutions so as to meet the very diverse needs of their territories. The “LPE range” first comprised Semi-Public Companies (SPCs), and gradually expanded with the creation of Local Public Conservation Authorities (LPCAs) in 2006. It extended to other areas of activity in 2010, and then the creation of the Single-Operation Semi-Public Companies (SPCOp) took place in 2014.
Local public policy actors now have a number of energy transition solutions for their territories and have seized their full potential. Today there are 221 LPEs contributing within the areas of waste, water, sanitation and energy. 146 exist in the form of SPCs, 36 have taken the form of LPCAs and 13 SPCOps have been created. Different forms of partnership are therefore developed by local authorities – public-private within the framework of SPCs or SPCOps and public-public by associating local authorities of the same level or different levels in SPCs or LPCAs. Local authorities are also carrying out a large number of projects related to the energy transition.
LPEs are well-functioning companies with an emphasis on the partnership approach. They carry out numerous actions on behalf of local authorities in all areas of energy, energy transition and the environment. They are actively involved in the collection, sorting and treatment of waste as well as in the production and distribution of water and sanitation. They act in the production and distribution of energy, whether mechanical, thermal, chemical, radiant or electric. With a turnover of nearly 3 billion euros, SPCs, LPCAs and SPCOps of the environment and network sector actively contribute to the implementation of the energy transition in France and are playing an increasing role in this direction. They provide innovative solutions for local authorities by allowing them to work, in a wide range of configurations and in a concerted manner, in perfect cooperation with environmentalists and civil society.
These collaborations lead to concrete achievements. To take a concrete example, there is SPC Vendée Energie, created to develop, build and operate facilities for the production of renewable energy. In 2018, it operated 46 wind turbines, had developed 62 power plants on buildings and on the ground and had diversified its activity in the production and distribution of bioNGV green hydrogen. We can also address the case of the SPC Soregies in Vienna. Apart from its “traditional” activities, it was involved in the West Grid Synergy project which aimed to maximize the production of renewable natural gases in the territories by facilitating their integration into gas networks. Finally, we can focus on one of the endeavors of the SPC Energies Renouvelables Citoyennes in the Jura region. Its know-how enabled the creation of a wind farm in Chamole in 2017 with a very strong public involvement.
Beyond the general and intrinsic partnership nature of LPEs, SPCs, LPCAs and SPCOps operating in the fields of environment and energy, they are distinguished by their ability to enable numerous actors to work together and to provide a link between local authorities and civil society. The public shareholding of LPEs in the energy sector is dominated by metropolitan areas at 16% (these include municipalities of various sizes) and by joint associations and other cooperation structures at 24% (in which different legal persons under public law participate). Large groups such as Engie and EDF have also invested in these companies, as have many local companies. Citizen involvement is less direct but just as decisive. While some have committed funds to the creation of LPEs, others are involved by funding projects, often carried out by LPE subsidiaries, either by taking shares in these subsidiaries, or by proceeding to crowdfunding.
LPEs intervening in the environment and energy fields have also developed synergies in the territories, considering how they were encouraged by law number 2015-992 of August 17, 2015 relating to the energy transition for green growth. They are part of numerous networks which stimulate, animate, develop and finance citizen projects for the production of renewable energy. They do this alongside other LPEs, but also public, para-public and private institutions, including through participation in project companies. They thus initiated what we call cross-shareholdings. They have bought shares in companies of the same type and allow for energy transition projects to materialize. More than 4% of the shareholders of Energy SPCs are now held by SPCs, for an invested amount of almost 25 million euros. Finally, most of them have negotiated the winding route to sustainable development by integrating a social and environmental manager as part of their processes. 92% of executives have implemented at least one CSR action in their company, placing them at the high end of an LPE movement and allowing them to be at the forefront compared to other companies.
Through these very diverse illustrations, we can clearly see how LPEs are innovative tools that enable local authorities to implement the energy transition in a cooperative manner across all territories.
Fédération des Epl
95, rue d’Amsterdam
Tél : 01 53 32 22 00
Fax: 01 53 32 22 22
Mettre en place un « Fonds pour une transition juste ». Frans Timmermans, Vice-Président exécutif en charge du Green Deal Européen, a répété à plusieurs reprises ces mots comme un mantra, cherchant à rassurer les eurodéputés sur la prise en charge des coûts induits par la transition énergétique pour les régions charbonnières, lors de son audition au Parlement européen, le 8 octobre dernier(1).
Et pour cause : la mort du charbon semble inéluctable, la nouvelle Présidente de la Commission européenne, Ursula Von der Leyen, déclarant vouloir faire de l’Union européenne le « premier continent neutre en carbone d’ici à 2050 ». Le charbon est en effet responsable de plus d’un quart des émissions européennes de gaz à effet de serre(2). La technologie qui permettrait son utilisation accompagnée de captage et stockage du CO2 émis n’est pas envisagée à grande échelle.
Si l’on ne peut que saluer une telle ambition – le GIEC table désormais sur un réchauffement planétaire s’élevant jusqu’à 7°C de plus d’ici à 2100(3) -, les dommages économiques et sociaux collatéraux pour les régions minières au sein de l’UE pourraient s’avérer sévères. Le Président de la COP 24, Michal Kurtyka, secrétaire d’État auprès du Ministre de l’environnement polonais, ne s’y est pas trompé en soulignant les difficultés de surmonter la dépendance aux énergies fossiles, dans la Déclaration de Silésie sur la solidarité et la transition juste(4), signée par 48 Chefs d’Etat. En effet, mettre fin à l’industrie du charbon signifie supprimer près de 450 000 emplois directs dans toute l’Europe(5). La facture sera également salée : en Pologne par exemple, où le charbon représente encore 84% du mix énergétique national, le coût de la transition est estimé à 80 milliards d’euros d’ici à 2030, voire de 115 à 160 milliards d’euros(6) d’ici à 2050 pour « dé-carboner » tout le système énergétique et le secteur de l’industrie.
Anticiper et prendre en compte toutes les conséquences d’un tel changement est un enjeu crucial pour l’Union européenne. L’acceptabilité sociale et la reconversion économique des régions minières en dépendent. Quelle stratégie européenne adopter pour rendre juste cette transition énergétique, afin qu’elle ne soit pas « juste » une transition ?
41 régions situées dans 12 États membres(8) possèdent encore des mines de charbon en activité. La Pologne est l’Etat membre qui compte le plus grand nombre de mines de charbon (35), suivi par l’Espagne (26), l’Allemagne et la Bulgarie (12 chacun)(9). En termes d’emplois directs, la Pologne compte 99 000 travailleurs, l’Allemagne 25 000, la République Tchèque 18 000, la Roumanie 15 000 et la Bulgarie 12 000(10). Sortir du charbon est donc un défi paneuropéen.
En outre, la grande majorité des régions charbonnières rencontrent d’ores et déjà des difficultés économiques. En effet, le taux de chômage y est beaucoup plus élevé qu’ailleurs. Dans la région de la Silésie, en Pologne, le taux de chômage des jeunes s’élève à 39%(13). En Grèce, dans la région de Macédoine occidentale qui dépend en majeure partie de l’activité minière, le taux de chômage global est de 29%(14). La faible diversification des activités économiques au sein des régions minières et l’âge moyen élevé des travailleurs du secteur du charbon compliquent la reconversion économique de ces territoires. De plus, la réticence à fermer les mines de charbon de la part de certains Etats et autorités régionales s’explique également par leur implication directe dans ce secteur. Si elles représentent de fait une source de revenus pour les régions, le gouvernement polonais est quant à lui propriétaire majoritaire de la plus grande entreprise charbonnière et actionnaire de la deuxième entreprise du pays(15).
Afin d’étudier les voies permettant d’éviter une sortie du charbon trop brutale, la Commission européenne a mis en place fin 2017 la Plateforme pour les régions charbonnières en transition(16). Pilotée par la DG ENER(17), en collaboration avec la DG REGIO(18) et la DG RTD(19) ainsi qu’avec des groupes opérationnels sur les territoires, la plateforme accompagne notamment 13 régions pilotes situées dans sept États membres :
Elle vise à garantir une gouvernance multi-niveaux entre les différents acteurs impliqués dans la transition énergétique (autorités européennes, nationales, régionales, syndicats, industriels, ONG, etc.). L’objectif est de faciliter le développement de projets et de stratégies à long terme dans les régions charbonnières en mettant l’accent sur l’équité sociale, les diversifications énergétique et économique ainsi que la requalification. La plateforme offre aux régions charbonnières une expertise sur l’utilisation des fonds européens et la façon d’attirer davantage d’investissements privés. Il n’est ainsi pas question ici de se limiter à des mesures compensatoires pour les salariés une fois la mine fermée. Si la transition énergétique au sein des régions charbonnières pourrait créer environ 900 000 emplois d’ici à 2030(20) selon la Commission européenne, il est sans doute encore trop tôt pour évaluer l’efficacité de la plateforme et sa capacité à infléchir les décideurs politiques.
La plateforme ne suffit toutefois pas à convaincre les trois derniers Etats membres réticents à s’engager en faveur de la neutralité carbone en 2050, à savoir la Pologne, la Hongrie et la République Tchèque. Leur accord est pourtant nécessaire pour adopter le Climate Pact souhaité par la nouvelle Commission dans les 100 premiers jours de sa mandature, afin d’entériner cet objectif au niveau européen. La création d’un nouveau fonds européen pour accompagner les régions charbonnières dans leur transition changera peut-être la donne(21), mais ses contours sont encore flous à l’heure actuelle. Günther Oettinger, le Commissaire européen sortant au Budget, a indiqué un montant allant de 8 à 12 milliards d’euros sur sept ans(22).
Le Ministre polonais de l’Énergie, Krzysztof Tchórzewski, a déclaré que la transition énergétique de la Pologne nécessiterait plus de 900 milliards d’euros, notamment pour arrêter ses centrales à charbon tout en augmentant sa capacité de production d’énergie renouvelable(23). Ces 900 milliards d’euros estimés ne viendront toutefois pas nécessairement de fonds publics : un cadre réglementaire attractif permettrait de drainer l’essentiel de cette somme sous forme d’investissements privés. A titre d’illustration, la mer Baltique détient un important potentiel de production éolienne offshore qui entraînerait la création de milliers d’emplois(24) (chaînes de montage, infrastructures portuaires, vaisseaux spécialisés, etc.). Afin d’attirer les investisseurs privés en Pologne, la DG COMP(25) pourrait assouplir les exigences sur les appels d’offres dans les pays dépendants du charbon, tandis que la Banque Européenne d’Investissement abonderait certains emprunts. Parallèlement, le gouvernement polonais devrait réussir à garantir un cadre réglementaire stable et une justice impartiale pour avoir la capacité de régler les litiges sans interférence politique. Un tel partage des tâches, qui ne concerne pas que la Pologne, gagnerait à se négocier dans un climat apaisé entre les gouvernements concernés et les institutions européennes. L’équilibre à trouver entre solidarité européenne et juste prix sera, sans aucun doute, un exercice délicat pour le nouvel exécutif européen.
Une seule chose est aujourd’hui certaine : autrefois symbole de la coopération européenne il y a plus de cinquante ans, le charbon met désormais à l’épreuve l’unité des 28 Etats membres pour réussir ce qui sera peut-être le défi mondial du 21ème siècle : limiter le réchauffement planétaire en deçà de 2 degrés.
chargée de mission Energie avec la collaboration de Michel Cruciani,
pilote du groupe Energie
Accompagner les territoires c’est, en quelque sorte, l’ADN de CNR. En tant que concessionnaire de l’Etat pour l’aménagement du fleuve Rhône, nous exerçons 3 missions solidaires : produire de l’hydroélectricité, développer la navigation et irriguer les terres agricoles. Ce modèle a, dès l’origine, été pensé pour permettre au bien commun qu’est le fleuve, de contribuer au développement des territoires qu’il traverse. C’est aussi cette identité d’aménageur qui motive notre investissement pour la préservation de la biodiversité, le déploiement de la mobilité douce, du tourisme ou le dynamisme économique en vallée du Rhône. L’ensemble de nos actions sont pensées pour et en collaboration avec les territoires.
Cette co-construction est présente dès notre actionnariat où intérêts et expertises industriels, représentés par le groupe Engie, côtoient intérêt général et connaissance des territoires incarnés par le groupe Caisse des Dépôts et 183 collectivités publiques. Elle se manifeste également au travers de nos développements d’actifs éoliens et photovoltaïques, initiés au début des années 2000 et qui font aujourd’hui de CNR le premier producteur français d’énergie 100% renouvelable.
Dans un contexte de transition écologique, économique et énergétique, cet actionnariat et la proximité permanente avec les territoires sont la base d’un processus d’innovation continue qui nous permet d’anticiper les besoins et de faire évoluer notre modèle industriel en fonction des enjeux nationaux et territoriaux.
Le Port de Lyon – port fluvial, interland du Grand Port Maritime de Marseille que nous avons construit en 1938 et que nous exploitons – est un bel exemple de cette adaptabilité. Espace industriel autrefois en périphérie, le port côtoie aujourd’hui les frontières de la ville qui s’est étendue et oeuvre pour son intégration au milieu urbain.
Ceci passe non seulement par un travail paysager mais aussi et surtout par le développement de services innovants répondant aux besoins d’une ville qui cherche à concilier croissance, développement et transition écologique. En lien avec la Métropole de Lyon et les services de l’Etat, CNR œuvre pour faire du Port de Lyon, le port de toutes les énergies, accompagnateur d’une logistique urbaine douce. Le futur hôtel de logistique urbaine, dont la première pierre a été posée le 9 juillet dernier, en est le parfait exemple.
Plus aucun scientifique ne le conteste : le réchauffement climatique est une réalité. Ce dont il nous faut maintenant prendre conscience, c’est que ses conséquences sont visibles, non pas seulement en Afrique ou en Antarctique mais également ici, en Europe, en France et sur le Rhône. L’eau devient une ressource rare et inégalement répartie. En 2017, nous avons connu une diminution du volume du Rhône de près de 30% par rapport à 2016. Les experts s’accordent pour dire que les fréquences des phénomènes extrêmes (crues et des étiages) vont s’accentuer dans les années à venir.
La ressource en eau disponible est – avec le prix de vente de l’électricité – l’élément essentiel constitutif du chiffre d’affaires de CNR. Dans ce contexte, nous cherchons donc naturellement à agir rapidement pour lutter et nous adapter à ces nouvelles réalités. Je voudrais insister en particulier sur trois leviers d’action pour la mise en œuvre de la transition écologique :
• Considérer la transition écologique non pas seulement comme une nécessité mais également comme une opportunité, notamment économique. Ce sont de nouveaux métiers et de nouvelles opportunités business qui se créent et qui génèrent un véritable dynamisme. Le soutien aux nouvelles filières est déterminant, c’est pourquoi CNR accompagne notamment celle de l’hydrogène renouvelable dont les débouchés concernent à la fois le secteur de la mobilité et celui de l’industrie. Nous travaillons également à démontrer la rentabilité et l’attractivité des énergies renouvelables, qui sont créatrices d’emplois locaux. Les activités de CNR représentent ainsi 15 000 emplois directs, indirects et induits dont 85% en vallée du Rhône.
• Parler de transition écologique plutôt qu’uniquement de transition énergétique, car la solution est forcément systémique : Elle doit inclure la protection de la biodiversité et la prise en compte du temps long. Un parc photovoltaïque au sol développé sur une surface agricole par exemple n’a pas de sens, de même qu’un fleuve bien géré est un fleuve qui, avant même de produire son premier mégawatt d’électricité renouvelable, a pris soin d’assurer la navigation, d’irriguer les terres agricoles, de refroidir les centrales nucléaires ou de garantir la vie des espèces animales et végétales environnantes. La conciliation des usages est la clef de voûte du modèle CNR, et s’avère particulièrement nécessaire en période de réchauffement climatique, quand l’eau vient à manquer.
• Enfin, sensibilisation et pédagogie sont des instruments indispensables pour la mise en œuvre de la transition écologique. En tant qu’industriel et producteur d’énergie 100% renouvelable, notre rôle en la matière est de démontrer et de faire savoir la pertinence économique de la transition écologique. C’est pourquoi je rappelle aussi souvent que possible la capacité de CNR à remédier au caractère intermittent des énergies renouvelables. Le foisonnement entre nos différentes sources de production d’électricité, couplé à des moyens de stockage appropriés et au pilotage intelligent de la ressource, sont des solutions qui nous permettent d’assurer la rentabilité des énergies renouvelables et la qualité du mix énergétique.
L’ancrage local est important pour CNR, car la transition écologique se fera sur et avec les territoires. Nous sommes un partenaire de référence pour de nombreux acteurs locaux et usagers du Rhône ainsi que pour de nombreuses collectivités dans le développement d’actifs éoliens ou photovoltaïques.
Mais la transition écologique est avant tout une question de volonté politique qui s’exprime aussi à d’autres échelles : nationale, européenne et mondiale. C’est pourquoi nous nous efforçons de faire porter nos messages et de communiquer sur notre modèle. Nos relations avec l’Union européenne se sont intensifiées depuis quelques années et j’ai souhaité il y a deux ans, la création d’une cellule Europe CNR qui facilite notre participation à des projets européens et permet de porter notre message auprès des institutions.
Les équipes de CNR se mobilisent également en Asie, en Afrique et en Amérique du sud grâce à nos missions d’ingénierie. C’est un moyen de mettre notre expérience sur le Rhône au service d’autres gestionnaires de fleuves, pour garantir une prise en compte des enjeux écologiques.
Enfin, nous avons créé l’Initiative pour l’Avenir des Grands Fleuves (IAGF), aujourd’hui association d’intérêt général, qui représente la voix des fleuves à l’international. Elle favorise les échanges et une co-construction des stratégies de résilience face au changement climatique, qui touche l’ensemble des cours d’eau. Un exemple de gouvernance innovante pour la transition énergétique.
Currently, national customers are equipped with either mechanical meters or electronic meters for the distribution of electricity. These meters only measure consumption and require manual intervention to recover data for billing, repowering or in the event of a power failure.
With the Smart Grid, the computerized system manages the complete production-consumption cycle. This means: saving energy and money, real-time remote meter reading, reading consumption automatically and remotely, revenue management practices, integration of renewable energies, storage, active participation of consumers and a significant reduction in CO2. The VERTPOM solution offered by CIAC INTERNATIONAL TECHNOLOGIES is distinguished by its innovative aspects compared to existing solutions on the market: A single network, a cyber-secure system (IBox) to manage all the production and consumption of fluids on each reporting point:
• Production metering: Renewable energies and Co/ Sorting/Micro-generation
• Consumption management: Electricity, water, gas, others…
All data flows pass only through the IBox counter to be processed by the central computer system managing the entire design.
VERTPOM® is a modular multi-fluid or mono-fluid solution based on a network in line with the objectives and the context of use. It has financial advantages on several aspects:
How? With the Technical-Financial Simulator: Decision-making tool providing, for different VERTPOM modules, a precise Cost-Savings / Benefits – ROI assessment:
The advantages of the Innovation Partnership Contract:
Below are the technical references of CIAC IT:
These references allow us today to open up the energy transition market – zero net energy territory -, especially with local authorities and managers of European and global networks. After our implementation in Hauts de France, several French regions and municipalities have shown their interest in VERTPOM®: the cities of Amiens, Lille, the regions of Nouvelle Aquitaine and Occitania. We also presented our offer in Switzerland and Belgium as well as in MENA countries (Middle East and North Africa).
Internet Data energy management system: The management tool (IDems ®).
We have implemented dynamic training with particularly innovative and fun educational tools. We provide part of our training thanks to virtual reality! This method makes it possible to create engagement, develop performance and facilitate the integration of these new solutions.
The information can be presented in the form of a question. More complex use cases have also been planned, such as increasing electrical power in anticipation of higher consumption or even switching to prepayment. A user-friendly menu allows you to go from the scale of apartments, individual houses to the scale of the entire city. A message describes the different options.
The efficient energy management of a territory is the result of the optimization of the purchase / storage / consumption cycle of the different energies present in the territory. For these reasons and with a view to efficient energy management, any manager of national and foreign distribution networks (DSOs) needs:
To do this, VERTPOM® developed and deployed a VERTPOM-BANK® decision support tool called energy bank.
It is the technical and financial energy management tool of the VERTPOM® offer.
VERTPOM-BANK® will maintain an optimized balance between the energy available from production (conventional and renewable energy) with regard to uses (consumption and losses), in conjunction with energy storage means. Consisting of a set of algorithms for predicting and simulating the levels of energy production, consumption and losses on the various distribution systems, it operates a common database (Big Data). The use of artificial intelligence is preferred (machine learning, deep learning). The energy bank will simulate all possible scenarios allowing a positive production/use balance, while identifying the renewable energies specific to the territory.
VERTPOM-BANK® contributes to these objectives by offering different functionalities:
Our key issues and challenges for France and abroad:
The International Energy Agency – IEA predicts that the share of electricity in the global energy market will increase from 24% in 1970 to 40% in 2020. Faced with growing environmental concerns, the European Union has adopted ambitious objectives, called “3×20”.
– increase the share of renewable energies in the European energy mix to 20%
– reduce EU countries’ CO2 emissions by 20% compared to 1990
– increase energy efficiency by 20%.
Environmental innovations can be held back for regulatory or administrative reasons. Fortunately, the procedure for innovation partnerships with communities has been considerably lightened, but those efforts are not very strong. On the other hand, environmental policies should be based on the idea that environmental innovation and competitiveness are not necessarily dissociated or opposed. Finally, environmental policies should be made even more stimulating to make the incentives to invest in technology stronger. Today, there is a real emergency for the ecological transition and French banks are at the service of a low-carbon, environmental and inclusive economy (Press info – Publication of a “Climate Manifesto” by French banks-November 25, 2019).
Our offer responds to the environmental policies determined and set out in cop 21, hoping that funding will accompany VERTPOM® environmental solutions allowing the creation of positive energy territories.
The International Chamber of Commerce (ICC) is the world’s largest business organisation, representing more than 45 million companies in over 100 countries; its core mission is to make business work for everyone, every day, everywhere. Through a unique mix of advocacy, solutions, and standard setting, ICC promotes international trade, responsible business conduct, and a global approach to regulation, in addition to providing market-leading dispute resolution services. ICC’s membership includes many of the world’s leading companies, small and medium sized enterprises (SMEs), business associations, and local chambers of commerce.
The ICC is also the only business organisation with Observer Status at the United Nations (UN) General Assembly. For this special and formal relationship with the UN, the ICC has established permanent representation offices in New York as well as in Geneva. In addition to the UN, the ICC represents business interests at the highest levels of intergovernmental decision-making, whether at the World Trade Organization (WTO) or the G20, ensuring the voice of business is heard. It is this capacity to bridge the public and private sectors that sets the ICC apart as a unique organisation, responding to the needs of any player involved in international commerce.
In September 2019 the ICC announced the appointment of Dr. Tom Voege as Head of EU Affairs, growing its Brussels presence to strengthen the engagement with the European Union (EU) – thus adding to the policy outreach activities and the already established ICC roles in New York and in Geneva respectively vis-à-vis the UN. As the largest single trading bloc in the world, the EU creates and influences rules and standards that have implications for business everywhere. ICC has been supporting the bloc’s commitment to free trade, and to security and peace since the founding of the European Economic Community (EEC) in 1957.
The responsibility of the newly established office of the International Chamber of Commerce European Union (ICC EU) is to formally represent the ICC and its global business memberships towards the EU institutions, including the European Commission (EC), the European Parliament (EP), and the European Economic and Social Committee (EESC). Very important here is the global aspect, i.e. not just representing EU businesses, which sets ICC EU apart from the many other business associations operating in Brussels already. Thus bringing the voice of the global business community to EU decision makers on a wide variety of policy issues – being part of the debate!
With the new Commission now confirmed and work having started in earnest on the 1st of December, on the very day of the 10th anniversary of the Lisbon Treaty, Commission President Ursula von der Leyen’s message for her policy focus for the next 5 years could not be clearer, with the need for multilaterism and sustainability being front and centre! This commitment mirrors the values and convictions of the ICC – and the Brussels representative office ICC EU is ready to convene businesses, civil society, and decision makers on these and other key policy areas, such as climate action, trade facilitation, digital technologies, and social justice.
In terms of climate action, the ICC has been engaging with the UN Framework Convention on Climate Change (UNFCCC) for 25 years and has a key role in that process as the official UNFCCC Focal Point for Business and Industry. Furthermore, the ICC is taking a leading role in mainstreaming climate action across its network of institutional members through the campaign to Make Climate Action Everyone’s Business and the Chamber for Climate initiative. As for commercial and industrial policy, ICC EU is advocating for a level playing field globally, with free trade and minimum regulatory barriers to international trade, particularly in view of SMEs.
The new EU institutional cycle is only a few months old, and sustainable finance is already the talk of the town. The reasons for this sudden craze are easily identifiable: popular and corporate will to act for the planet through investment, political availability and economic flexibility. Numbers are evocative of the extent of the interest for green finance, as at least $30.7 trillion of funds is held in sustainable or green investments, up 34% from 2016. This represents a third of the tracked assets under management.
However, what exactly accounts as “sustainable” or “green” investment? Does investing in solar panels, electric scooters, nuclear power plants or R&D for “greener” mining qualify all the same? We would tend to answer negatively, and this calls for precise legal definitions, which is the intent of the taxonomy regulation, on which the Parliament looks forward to entering as soon as possible into negotiations with the Council and the Commission. Besides, understanding the drivers of the trend is necessary to embrace its features. It is indeed unusual that investors turn to riskier and often less profitable financial products. In this regard some might cynically point out corporate greenwashing intentions, but the deeper reason for a transformation of investors’ behavior lies above all in economic sustainability and thus, in a longer-term investment’s approach. William Nordhaus, economic sciences Nobel Prize in 2018, established in this respect that unbridled continuation of growth would make everybody worse-off because of the impact of climate change on the economy. All in all, the theme of long-term investment can no longer be apprehended without its ecologic appendix.
The importance of green finance established; our reflection should focus on the role of public powers in its development. Shutting down proven greenwashing attempts seems to be the first step, as the whole trend’s credibility is at stake. Such a goal can be achieved by public powers through regulation and privately through labelling. The trickier part lies in the incentive role the legislator may play. Fiscal solutions are available at the national level, as well as State aid or public procurement. To achieve the EU’s 2030 targets agreed in Paris, including a 40% cut in greenhouse gas emissions, we have to fill an investment gap estimated at 180 billion EUR per year. The bulk of this gap is to be filled by the private sector but the spark of this dynamic should be public. The Juncker plan is a good example of how to conceptualize the role of public funding in this regard. This necessary initiative- that we supported from the beginning- was created at a time where the Eurozone was just starting to recover from the crisis, and the criteria to benefit from it were essentially of growth linked nature. InvestEU, its successor, will resolutely be greener, by dedicating a well-defined share of resources to sustainable investments and by conditioning the attribution of funds to the evaluation of sustainability aspects of projects.
In parallel with these operational actions, a strategic framework has to be set at the European level, so the transition is not costly in terms of jobs. The ecologic transition is indeed, first and foremost, an economic transition. For it not to be a burden but an opportunity, the EU must be bold in its legislation to push the financing of sustainable projects while ensuring legal predictability for businesses. It has to be reminded that the sustainability of an investment goes beyond its environmental impact and has to be evaluated against the three ESG factors, thus including social and governance.
As often, our efforts to build an effective European framework for sustainable finance need to take into account the global perspective and functioning of financial markets. Non-governmental initiatives, as the Intergroup on long-term and sustainable investment, already focusing on bringing together lawmakers, businesses, civil society and financial market actors, constitute an indispensable lever to develop the multidimensional approach needed to move forward on this path. Stay tuned: sustainable finance will, without a doubt, be one of the major items of the new institutional cycle.
As the EU sets out to define criteria for what constitutes sustainable economic activity, it must be capable of covering all sectors.
This year, the US Business Roundtable redefined their ‘Purpose Statement of a Corporation’ for companies as serving not only the financial interest of shareholders, but stakeholders as a whole.
For decades, the overriding principle has been shareholder primacy. This update, signed by 181 CEOs, highlights a shift to modern standards of corporate governance where sustainability is core.
It represents a notable step in a jurisdiction where the change is led by business and society rather than political leadership.
In Europe, the principle of considering sustainability impact and risks when investing is being enshrined in law. The Regulation on sustainability-related disclosures in the financial services sector, for the first time explicitly takes the principle of considering society and the environment as part of the fiduciary duty of investment intermediaries.
With these new rules, large financial institutions will be responsible for assessing possible adverse environmental and societal impacts before investing as part of their corporate governance and due diligence. They also need to inform any end investors buying a financial product. Considering sustainability indicators is essential for companies’ long-term value creation.
According to the Sustainable Accounting Standards Board (SASB), as much as 80 percent of market capitalisation in many industries comes from intangible assets including brand value, customer relationships, human capital and – increasingly – environmental and social factors.
It is about time that company boards and the highest levels of management realise they need to take environmental, social and corporate governance (ESG) indicators as an integral part of all operations, risk management and strategic planning.
Sustainability is both a risk and an opportunity. The forthcoming EU taxonomy will set criteria for determining the sustainability of an economic activity and hence of a financial product.
Together with the Disclosure Regulation, these should be viewed as essential company governance tools for making informed decisions on the operating environment and risks.
Full information requires full taxonomy; when establishing criteria and thresholds for what is sustainable, harmonised indicators are normally taken as the foundation for new standards to ensure objective, science-based metrics covering the lifecycle of a financial product.
Rather than a binary distinction between green or non-green activities, a more useful approach is a taxonomy capable of fully capturing the environmental impact.
Green products cover a fraction of financial markets; rather than a green-only taxonomy, a more useful toolkit for investors would cover all economic activities.
Importantly for companies, a scaled taxonomy could recognise transitional, incremental steps towards sustainability. For investors, it would allow them to monitor the progress of investee companies.
If the actions we need to take seem difficult today, tomorrow they will be harder still.
Just as sustainability affects all sectors, the EU taxonomy needs to be developed for all market participants. While sustainability relates to different financial products and asset classes to varying degrees, the tools for what is measured, and how, cannot differ between asset management and banking sectors.
Another challenge is environmental and financial languages. A key task for the new Commission will be establishing harmonised sustainability indicators both readily usable by the investment community and readily reportable by corporates.
To use sustainability data, investors need accounting models that can help them calculate return on
investment, sustainability-weighted risks, discount models, profitability, etc.
In other words, integrated accounting. Sustainability information is not separate from financial; integrated reporting and accounting will be part of company boards’ and investors’ daily decision- making.
The long-overdue revision of the Accounting Directive is the right place to address this. The EU is responsible for leading the development of sustainable accounting standards, industry-specific benchmarks and corporate reporting.
Furthermore, effective standards should be global. The future update of the Sustainable Finance Action Plan should advocate sustainability standards within the framework of the IFRS and the IASB, paving the way for global standards.
In fact, our approach to accounting itself must renovate, moving from linear forecasting to backcasting – defining where we want to be and then identifying the policies and actions that take us there.
The approach has to be fit for purpose. An exponentially-deteriorating climate and biodiversity emergencies require new ways of planning and forecasting.
Instead of linear approaches or planting a few more trees to capture carbon, our actions need to be equally exponential to match the challenge.
This applies to companies, investors and legislators alike; sustainable finance goes beyond the Capital Markets Union, cutting across all financial services and industries.
Rather than merely talking about how we improve sustainability impact or reduce our negative footprint today, we need to assess whether the trajectory is on a sustainable path.
What matters is the decisions we have to make now, tomorrow it will be too late!
With climate risk materializing, populism gaining traction in many jurisdictions and youth marching for climate action, the involvement of all stakeholders is crucial to shift our economies towards a more sustainable path. We might well be the last generation which has the opportunity to act before the consequences of human activity on our planet become irreversible. And lawmakers do not have the power to change the course of events alone: the role of civil society and corporates will be key to make this shift happen. The matter is urgent. The economic implication of global warming become obvious. The latest IPCC (The Intergovernmental Panel on Climate Change) report estimates the rise of sea level in the southern hemisphere alone will create 280 million refugees. Severe droughts can trigger a sovereign debt crisis in some fragile countries like Zimbabwe. Extreme weather events like floods are more likely to happen, making businesses endure severe losses. Climate is becoming a matter of financial stability. Awareness about those issues in the corporate world has become more acute in the past few years.
The PACTE law adopted last April in France redefined the role of companies for society, encompassing social and environmental issues and allowing them to adopt a specific purpose broader than profit. This is the beginning of a global trend: a few weeks ago, the Business Roundtable, which gathers CEOs of some of the biggest US companies, acknowledged that corporates should put social responsibility above profit in a firstof-its-kind common statement. Sustainable growth has also been at the heart of the G7 summit’s discussions in Biarritz at the end of August. The Business for inclusive Growth. initiative spearheaded by Emmanuel Faber – CEO of Danone – in partnership with the OECD has already gathered 34 companies with 3.5 million employees worldwide. The financial system needs to sustain this global shift and ESG (Environmental, Social and Governance) factors into account in investment decisions. Yet non-financial information has long been seen as an unnecessary burden. We need a substantial improvement in the quality and relevance of non-financial data for at least two reasons.
First, ESG is becoming increasingly material and could become as relevant as financial data in the short term. Governance and social issues have long been considered as drivers of growth and stability for companies, but their importance is increasing due to reputational risks that are easily reflected on financial markets. Environmental risk was long overlooked, partly because of the so-called “Tragedy of the horizon” as defined by the current governor of the Bank of England, Mark Carney. Yet climate change and the increase in the frequency of extreme weather events make climate physical risk a reality for companies, with already important implications today.
Second, pressure from investors, shareholders and asset owners pushing for more relevant disclosure has been mounting over the past few years. Structures such as the Unbacked Principles for Responsible Investments or the One Planet Sovereign Wealth Funds Coalition and One Planet Asset Managers Working Group are emerging, gathering investors of all sizes and types. Those investors want to efficiently integrate ESG factors in their investment strategies. This can only be achieved through relevant and comparable non-financial disclosure by corporates. Non-financial data lacks coherence and relevance to final users’ needs. There is no harmonized set of relevant ESG indicators at the European level, leaving companies to write hundreds of pages of reports that are difficult to use for investors. A lot of ESG data are provided by non-financial reporting agencies and data providers. But the lack of standardized metrics between companies makes it nearly impossible to compare indicators such as greenhouse gas emissions – as the scope of emissions is not precisely defined – or even the headcount within companies. To be effective, ESG strategies must be closely integrated into corporate governance patterns. Non-financial reporting should be incorporated in management reports be formally discussed regularly by relevant governance bodies. Initiatives of all kinds have been flourishing over the last few years, but I firmly believe the time has come for further standardization and clarity in order to mainstream the use of nonfinancial information in corporate governance – and as a result in financial decision making.
France will push for evolutions in this sense at the European level and support the creation of statutory ESG disclosure standards for companies, following the conclusions of a thorough report released in July 2019 by Patrick de Cambourg, President of the French Accounting Standards Authority. By defining which ESG factors are relevant and by fostering efficient disclosure of those factors, we can shift the economy towards a more sustainable path. Europe should be at the forefront of this ambition and create a new form of corporate governance that is more responsible and in line with our long-term commitments, such as the objectives of the Paris Agreement and the UN Sustainable Development Goals. It will pave the way for the capitalism of the 21rst century – a capitalism based on the common values of our continent.
We owe it to future generations urging us to achieve this urgent transition.
One of the great challenges that humanity has to urgently address is how we respond to the climate emergency. It is a global challenge, which concerns to all of us, at both the individual and community level, and that no longer admits any kind of hesitation. That is why it is essential that all countries make headway with their environmental commitments and achieve as soon as possible a common strategy that allows us to build a more environmentally friendly, sustainable and inclusive world.
When it comes to modifying harmful practices for the environment and, especially, to correcting negative externalities generated by certain goods, services and activities, there are numerous studies that support the role and usefulness of the so-called green taxation. There are also numerous debates on the redistributive capacity of environmental taxes or on their real impact on the economy and public accounts. It is true that there is still room for improvement of the collection from environmental taxes, but it should be remembered that these kinds of taxes do not pursue revenues, but try to provide sufficient incentives for consumers and producers to modify their practices towards a more efficient and respectful use of natural resources.
However, the urgency of addressing the climate crisis is not only a matter of public ethics. Correctly targeted, it is also an opportunity for research and innovation to become the basis upon which to implement structural changes in the economic, productive and energy models, in order to transform our growth model and to guarantee a more prosperous future. We have already abundant normative provisions and objectives assumed at European or international level in this matter, but now we have to go one step further and to adapt our old fiscal policies to this new scenario of shared responsibilities. We have to ensure that taxation contributes to the necessary decarbonization of the economy, acting as a lever for change in the ecological transition, discouraging harmful practices in homes and factories and ensuring greater social and intergenerational justice.
If we want this process of change to evolve towards a climate-neutral development model, it needs as well to be socially beneficial and inclusive. The Government of Spain has a firm commitment in the fight against climate change. In fact, we have turned this problem into a state policy, and in recent months, we have worked on an ambitious package of measures for a fair ecological transition. An opportunity that can help us to mobilize 236 billion Euros in public investment and to generate between 250,000 and 364,000 new quality jobs between 2021 and 2030. Taxation is also part of this strategy, with different proposals aimed at decarbonizing the economy and promoting sustainable mobility. Among them, the equalization of the taxation on hydrocarbons, starting with a gradual equalization of the taxation on diesel and gasoline fuels, while maintaining the tax benefits for “professional diesel” and that consumed in agriculture and livestock activities.
We believe that environmental taxation can be a good domain for the European Union to set aside the unanimity rule in taxation and to apply the ordinary legislative procedure based on co-decision and on the qualified majority of the Council. Regarding the existing debate on the taxation of imported products based on their CO2 emissions, the “Border Carbon Tax” (BCAs) proposal is a Spanish contribution to the 2019-2024 Strategic Agenda, in order to protect the competitiveness of the European industry from unfair environmental practices.
In short, it would be a carbon tax applied on the border on imported products, depending on the CO2 emissions released in their production, all within the framework of a tax scheme in line with the requirements set by the WTO. It is worth remembering that in order for Member States to meet their commitments to reduce greenhouse gas emissions, assumed pursuant to the ratification of the Kyoto Protocol, it was approved the Directive establishing a system for greenhouse gas emission allowance trading within the EU. This regime draws on one of the market instruments provided for in the Kyoto Protocol, the emissions trading, which, together with those based on clean technology investment projects in third countries, constitute the so-called “flexibility mechanisms”.
The “Border Carbon Tax” could be considered a European Union own resource. It would be easy to manage by the customs authorities since the products would be classified according to their code in the Combined Nomenclature and the amount of the tax could be calculated taking as a reference the tax paid by the industries established within the European Union according to the product concerned.
With this measure, in addition to providing financial resources to the European Union budget, the negative externalities derived from CO2 emissions in the manufacture of these products would be internalized and the competitiveness of European industries would be protected, which would lead to a lower risk of relocation. In short, we would be updating the tax framework to the new realities of the 21st century and thereby building a stronger economy for a more prosperous future.
Moving to a greener and more sustainable society is a must as the challenges of global warming, environmental degradation and resource depletion become increasingly pressing. Sustainability is in the DNA of the European
Investment Bank. It shapes our activities and investments. We appraise and monitor all projects we finance based on sustainability. We review environmental, social and governance aspects of each investment. For many years, the EU Bank has been a leader in finding solutions to the world’s climate and environmental challenges. We are one of the largest multilateral financiers for climate action. Since 2012, we have provided €150 billion for the climate and environment, supporting €550 billion of investments. To support the European Union’s leadership in the fight against climate change, our work is increasing. In 2015, in support of the Paris agreement, we committed to investing $100 billion in climate projects over 5 years, and we are on track to meet this goal.
A big transformation Helping the world transition to a sustainable, carbon-neutral society is a complex job that requires a big transformation for our economies and lifestyles. We need to make massive investments over the next 10 to 15 years. Achieving carbon neutrality and meeting the Paris agreement will require the European Union to invest an additional €175 billion to €290 billion each year. To meet this challenge, more public and private financing must be directed to sustainable projects. The financial system and sustainability will need to be closely connected.
The EU is moving quickly in this direction with its Action Plan on Financing Sustainable Growth.
A key ingredient of this plan is the EU’s sustainability classifications. Classifying sustainable economic activities will provide a common understanding of sustainable investments. The EIB helped develop this sustainability taxonomy. A first draft of these classifications on climate mitigation and adaptation was presented in June and is now under consultation.
Capital markets are the key
To raise the amount of sustainable financing needed to protect the climate, we need to take advantage of the capital markets. The market for green, social and sustainability bonds is growing fast, but it is still a small part of the whole bond market. The EIB pioneered the green bond market, so we understand the potential of this unique investment tool. The Bank launched the world’s first green bond in 2007 and has now issued close to €26 billion in green bonds. This makes us the largest multinational green bond issuer. In 2018, we issued our first sustainability bond to support projects that go beyond the climate. We also have contributed to transparency by helping design the proposed EU Green Bond Standard. Better transparency and guidelines are important steps towards a more robust green bond market in Europe. Sustainability challenges are important to the whole world and require collective action. As with the wider climate goals, progress on sustainable finance in Europe should be linked with other jurisdictions, and various initiatives should be better coordinated. In this sense, the EU’s International Platform on Sustainable Finance will be a major step to encourage more dialogue beyond European borders. The EIB will participate in this initiative that is expected to be launched at the World Bank Group/IMF Annual Meetings in October. The Bank is also participating in other international initiatives aimed at sharing principles and knowledge that will help the world transition to a sustainable economy, such as the Central Banks and Supervisors Network on Greening the Financial System (NGFS) or the Coalition of Finance Ministers for Climate Action.
Innovative finance to save the planet
As a public bank whose investments are designed to attract more private investment, we are showing the world how to mobilize other financiers to invest in sustainability. In the last 10 years, the EU Bank has also pioneered the development of blended finance instruments that help the market increase the level of private finance for sustainable activities. Some of these instruments blend public money from the European Commission and individual EU countries with financing from capital markets investors and other international finance institutions. We have also set up multiple financial instruments and innovative funds that focus on climate and the environment, such as our Global Energy Efficiency and Renewable Energy Fund and our Natural Capital Financing Facility. As climate dangers rise, it is clear we are failing to do enough work to slow global warming. Pressure from the public to take more action is growing and we need to respond to this demand. In Europe, sustainability and climate change are top issues on political agendas, as shown by statements from Ursula von der Leyen, the President-elect of the European Commission. The EIB can play an instrumental role in assisting von der Leyen’s vision for a European Green Deal and the Sustainable Europe Investment Plan.
3 new goals from the EU Bank
The EU Bank is ready to embark on a new journey. We accepted the European Council’s call in June to step up our activities on climate action. We now have three new proposals that solidify our role as the EU’s Climate Bank.
At least 50% of EIB lending are to support climate and environmental sustainability by 2025.
We will significantly help grow sustainable finance from billions of euros in investment to trillions. The EIB Group aims to unlock €1 trillion in investments from the public and private sectors for climate and environmental sustainability by 2030.
We aim to align all EIB Group activities with the principles and goals of the Paris agreement by 2020. Any financing that is not green will be made sustainable, according to the requirements of the Paris deal.
A good example of this transition is our new Energy Lending Policy under consideration by our Board of Directors. In the new Policy, we propose to phase out energy projects that rely solely on fossil fuels by the end of 2020. This change ensures that we are aligned with the Paris agreement and enhances our contribution to the creation of a carbon-neutral European economy.
It’s not easy to move towards a more sustainable, low-carbon economy. This is a huge challenge. It will have to be managed well so that it doesn’t hurt society and that nobody is left behind. We will need new mechanisms that ensure a fair transition, especially for vulnerable groups. The EU Bank has always supported economic and social cohesion, so it is clear that we will support a fair transition for society.
We have no choice but to create a greener future and make our climate sustainable, but this transition also can help Europe in many ways. This is a huge opportunity to modernize our cities, reduce Europe’s energy dependency, grow the economy and create jobs.
Launched as a transformative contribution to the global fight against climate change, the Land Degradation Neutrality Fund seeks to support the sustainable management of 500 000 hectares of land, to reduce CO. emissions by 35 million tons, and to create jobs or improve livelihoods for over 100,000 people through its investments, with a focus on Africa, Asia and Latin America. It aims to reach USD 300 million investment in sustainable land management and land restoration projects worldwide to achieve the Sustainable Development Goals’ land degradation neutrality by 2030.
The EIB is a founding investor in this fund, which is managed by Mirova and set up in partnership with the United Nations Convention to Combat Desertification.
The Urapi initiative helps mid-size cooperatives restore degraded land and set up programmes that protect the land and forests while making it more productive. Cafe Selva Norte is a good example of a project implemented by Urapi. Cafe Selva Norte is a $12 million project in Peru that aims to protect over 20,000 hectares of land. This project is recovering degraded land and implementing productive programmes that mix timber species and coffee plants. This project involves mid-size coffee cooperatives that are growing organic and fair trade beans and have been working with Ecotierra, a developer of agroforestry projects.
The publication of the action plan for sustainable finance is a landmark in EU policy regarding ESG issues, climate change mitigation and adaptation. The action plan was accompanied by several legislative proposals with the goal of ensuring that financial products are used to promote sustainable activities and be the engine which drives the EU’s transition to a greener economy. The most important legislative proposal to look at is the proposal for a regulation on the establishment of a framework to facilitate sustainable investment (or, taxonomy proposal). The taxonomy proposal provides the foundation for sustainable investments in the EU and determines the parameters for which activities are eligible to receive “green” investments. EuropeanIssuers believes that the challenge for the taxonomy is not to make finance greener but to bring about a greener economy. Therefore, it should be designed to be used as a tool to help companies grow and create jobs whilst facilitating the transition to a sustainable economy.
In order to shape the taxonomy into an effective tool, the regulation needs to address several key issues. The first is a clarification of the term “environmentally sustainable activities”. It is of the utmost importance that the definition for this term does not exclude economic activities per se but allows for an analysis of best practices in terms of environmental performance for each activity. This assessment should go further than the activity level and measure real performance indicators and benchmarks at the company or even installation level, as was done in the EU Emissions Trading Scheme Directive (ETS Directive). It is also important that the level of granularity in the technical screening criteria is better defined so that a company using environmentally sustainable technologies does not get penalized for being engaged in an activity that is not considered to be sustainable. This give companies room to find innovative solutions and integrate new technologies to improve the sustainability of certain activities. Another issue is the integration of a forward-looking approach to activities. The major objective of sustainable finance is to enhance a transformation from “brown” to “green” activities in a continuous way. While using finance to further enhance “green” activities is an interesting concept, we believe that it is more effective to target less sustainable.
If companies develop plans to turn so-called “brown” activities into “green” ones, then these activities should be eligible to raise capital through sustainable finance. When EuropeanIssuers thinks about what transitioning to a green economy looks like, this is what we mean. It is imperative that the focus be on making the unsustainable sustainable. It is critical for the green transition to involve non-financial companies in the dialogue with other stakeholders. This should be done by strengthening the participation of these companies on the sustainable finance platform. By including non-financial companies on the platform, it ensures for a balanced stakeholder group. Furthermore, it means that environmentally sustainable solutions can be conceived and/or handled by companies in order to create a positive dynamic for the European economy. Alongside these key issues, there are other aspects that need to be taken into consideration when making the taxonomy effective. The taxonomy should help companies grow and transition in a sustainable manner, but this should not come at the cost of large administrative burdens. The taxonomy could be quite expensive for companies if too many obligations are included. Currently, the EU is in a race against the clock to meet the 2050 goal of net-zero emissions. EuropeanIssuers firmly believes that this goal can be achieved if the EU acts decisively and focusses on environmental factors. Due to the urgency of the matter, the taxonomy should not seek to tackle the social impact of investments. While EuropeanIssuers supports minimum social safeguards, it would be premature to include social criteria immediately in the taxonomy; this will require an in-depth analysis and the identification of appropriate indicators which will need time to be properly addressed. Other aspects of the taxonomy which would create unnecessary administrative burdens for companies include the requirement for third party verification of compliance with the regulation. Also, including the provisions regarding companies’ due diligence along the supply chain would be a step too far as well. There are best practices when it comes to reporting on these matters, and the nonbinding guidelines on climate-related report already provide guidance for companies to follow. Obliging companies to comply by including these provisions in the regulation would create an obstacle that companies would have to spend time overcoming rather than directing resources to sustainable activities and growth.
By making sure that these aspects of the taxonomy have been addressed, we will begin to see significant progress in the transition to a more sustainable economy while still promoting a healthy level of growth for companies across the EU. It is important to remember that the taxonomy is aimed primarily at financing this transition, therefore the scope of the regulation should only be applied to financial products labelled or marketed as sustainable and to financial market participants offering these products. Going beyond this scope could be counterproductive and not foster implementation of transition strategies. EuropeanIssuers sees the potential benefits the taxonomy would give to issuers, and we believe that it will be a critical tool in the construction of a robust, sustainable EU economy.
EuropeanIssuers is a pan-European organisation representing the interests of publicly quoted companies across Europe to the EU Institutions. Our members include both national associations and companies from all sectors in 15 European countries, covering markets worth € 7.6 trillion market capitalisation with approximately 8000 companies.
We aim to ensure that EU policy creates an environment in which companies can raise capital through the public markets and can deliver growth over the longerterm. We seek capital markets that serve the interests of their end users, including issuers.
For more information, please visit www.europeanissuers.eu
Olivier has been Accountancy Europe’s CEO since 2006. He benefits from a diverse professional experience, having been a public prosecutor in France, a director with PricewaterhouseCoopers, a board member of the European Policy Centre, a director of XBRL international and a business and policy consultant. He regularly speaks on issues related to European affairs and the impact of technology on accountancy. A lawyer and economist by training, Olivier started his professional career in equestrian sports (jumping).
Olivier has been Accountancy Europe’s CEO since 2006. He benefits from a diverse professional experience, having been a public prosecutor in France, a director with PricewaterhouseCoopers, a board member of the European Policy Centre, a director of XBRL international and a business and policy consultant. He regularly speaks on issues related to European affairs and the impact of technology on accountancy. A lawyer and economist by training, Olivier started his professional career in equestrian sports (jumping).
From climate deterioration and ecosystem failure to societal strife and geopolitical tensions, people from business, politics and civil society see that radical change is becoming critical. Indisputable scientific evidence shows that continuing endless economic growth is suicide. This means we must all act now.
Measuring environmental and social impacts is the first step to correct market failures that are destroying our planet. Reporting on these impacts and on business’ governance and strategy helps to better identify long-term risks and make sustainable business decisions. The information needs to be reliable as well. Professional accountants and auditors are experienced in non-financial information (NFI) reporting and assurance for companies and public sector organisations. The latter often represent around half of EU Member States’ economies. Accountants play an instrumental role to support the necessary shift to a circular economy.
There is much potential for effective NFI reporting to bring greater transparency. This would allow decision-makers to adopt sustainable strategies, investors to make informed investment decisions and government leaders to develop appropriate public policies.
However, there are now hundreds of initiatives on what, and how, NFI should be reported. which leads to confusion and feeds the potential for greenwashing. Organisations can ‘framework shop’ and use (parts of) any NFI framework that might allow it to disclose only the positive side of the story. For an effective response to these global issues and stakeholder demands, we need to improve NFI reporting globally.
The European Commission (EC) has recently announced its plans to develop European non-financial reporting standards. The intention is to build on the existing reporting initiatives, using the elements that work best.
As part of the Green Deal, the EC has opened a consultation to revise the Non-Financial Reporting Directive (2014/95/EU). Accountancy Europe has recommended five steps to strengthen non-financial reporting requirements in this Directive. Specifically. we see the need to:
We urge the EU to take a clearer direction to encourage the development of NFI reporting in Member States.
In the world
Shareholders and stakeholders are realising that non-financial reporting reveals more insights than financial reporting alone and that only integrating the two makes sense. As part of its series of thought-leadership discussion papers that aims to stimulate policy debates (Cogito), Accountancy Europe published Interconnected standard setting for corporate reporting. This Cogito paper envisions a solution that would:
With growing interest in NFI, more and more investors and other stakeholders call for independent assurance on NFI. However, NFI reporting is not yet subject to the same level of assurance as financial information. As NFI reporting evolves, it is important to ensure that the information is verifiable or can be verified in the future. We have offered advice on how to approach NFI assurance. As the demand for assurance on NFI has been growing steadily, we have shown that the practice still varies across Member States.
Accounting and auditing serve better corporate governance. Transitioning to a carbon free and sustainable economy, requires that corporate governance centres on sustainability. Boards have the power to start this change and make sustainability the cornerstone of business decisions. Policymakers and regulators also must play a role in shaping how business is done. Another one of our Cogito papers suggests ten ideas to help boards, policymakers and regulators undertake the necessary changes to become sustainable.
Good business decisions start with reliable information. The accountancy profession can help companies make the right changes to reduce their environmental footprint – and costs. As businesses change their benchmarks for success, accountants contribute by measuring impacts, disclosing information, and adding credibility to what is reported.
We aim to achieve better non-financial reporting and support integrated reporting. We are pleased to see that the EU’s corporate reporting agenda is following the same lines.
Our economy brings increasing development and wealth but also causes natural resource depletion, pollution, overconsumption and social unrest to a level that is not sustainable anymore. An unprecedented scientific consensus shows that the clock is dangerously ticking. The only way forward is changing how the economy operates.
The Committee on Transport and Tourism, which I chair, must respond to the concerns of European citizens. The expectations are high and we must act to make our mobility more sustainable, more inclusive, safer and more connected. Transport accounts for a quarter of European greenhouse gas emissions and is also responsible for the chronic problem of air pollution.
Transport should now be one of the main priorities of the European Green Deal. The Transport Committee will therefore try to regulate sea and air transport emissions. Rail freight will have to be relaunched, a rail renovation plan will have to be initiated, and legislation on passenger rights should be consolidated for carrying bicycles on trains.
We need to look at sustainable urban and rural mobility in order to create alternatives to private car use. We should also augment public transport, bike paths, waterway transport, walking, and car sharing.
We must also anticipate a new transformation policy in the automotive industry. It is necessary to contribute to the professionalization of employees on a new energy mix and the leaving behind of thermal engines.
In order to carry out these projects, it is our responsibility to implement fair investments and trigger the dynamics of new levers of action, such as fees for heavy goods or a tax on kerosene.
Finally, the ecological transition can only be effective in transport and accepted in society if it is accompanied by social justice measures, with a close attention to the right to mobility for all citizens, depending on their finances and territory.
To meet the requirements of the future, we must also address the challenge of digitizing the sector.
The aviation sector has so far escaped numerous regulations, but its exponential growth means that its growing impact on the climate can no longer be ignored.
The aviation sector is growing rapidly; in 2000, 1.6 billion tickets were sold, compared to 4.3 billion in 2018. This symbolizes a multiplication by more than 2.5 in less than 20 years. The IATA (International Air Transport Association) again plans to double the number of tickets sold between 2017 and 2037, to reach 8.2 billion per year by that date.
It is estimated that aviation, through its CO2 and other emissions, is responsible for 5% of global warming. When you know that every tenth of a degree counts, it becomes a crucial subject. These emissions have doubled since 1990, and, given the growth of the sector, if we do not act, they risk doubling again.
Flying is the mode of transportation that has the greatest impact on the climate per kilometre travelled.
It is absolutely necessary for aviation to contribute to the fight against climate change and therefore cease to benefit from a special regime. It is today in a position of unfair competition with cleaner means of transport. Concretely, we must implement our strategy in several ways:
Application of the polluter-pays principle: taxation of kerosene and extension of the ETS to the aviation sector (in particular the abolition of free quotas). This can get us 27 billion euros per year at European level by taxing kerosene at 33 cents per litre;
Cease subsidies to airports;
Apply VAT to airline tickets.
It is simply a matter of bringing aviation into normal competition with other means of transport, it is far from revolutionary!
However, alternatives do exist and are just waiting to be developed. The first should be the development of the night train. This is extremely useful for distances of 750 to 1,500 kilometres, which represent around 50% of flights to and from France. Our European neighbours are relaunching railways and so should we!
The automotive industry is extremely significant in Europe, with 12 million employees. These jobs are concentrated in a few territories, in the North and East regarding France for example. Today, this industry is faced with regulations that are absolutely necessary to improve air quality and limit our carbon footprint, which will force it to reinvent itself.
To be honest, at this stage, manufacturers are not facing their responsibilities: they have known for years that diesel will have to disappear, that electric is a solution for the future and instead of working to support the employees and sites concerned, they produce SUVs. I’m afraid of a social and territorial breakdown in the years to come, due to manufacturers’ unpreparedness. I will launch an initiative to reflect on this issue. The ecological transition must be fair and, in the automotive sector in particular, it is first and foremost the manufacturers’ responsibility to ensure it.
The field of transport, and in particular the automotive field, is a major topic on several levels. Faced with the scarcity of resources, the automotive industry has no other choice than to implement a new life cycle for vehicles, the different stages of which will be those of the circular economy: recycling, remanufacturing, reuse. To reduce dependence on natural resources, replacing or reducing the use of materials is not enough. Manufacturers must also use recycled materials.
The answer is in two figures: zero emissions – zero road fatalities!
The biggest challenge is to transition to a sustainable and smart mobility system over the next 30 years. By 2050, we must be able to master a new, more efficient and integrated transport system based on renewable energies, while facilitating multimodality and taking into account all technological offers and different economic models.
During this transition period, it is essential to ensure that access to mobility remains affordable for all European citizens. In addition, the transport sector must remain a dynamic part of the European economy. For all these reasons, we are currently working on the development of a “Green Deal”.
We are faced with a double imperative: to ensure the necessary connectivity for the development of the European Economic Area and at the same time to decarbonise transport. This is why the European investment promotion policy on the trans-European transport network has always given priority to the most environmentally friendly modes of transport, such as rail transport, public transport and the waterway. Nevertheless, this is still insufficient to reduce the growth of CO2 emissions from transport; European action represents only a fraction of investments. In support of national public funding, we must of course continue to use all available European resources (the Horizon 2020 fund for research, regional funds, the Connecting Europe Facility, InvestEU and the EIB) by giving them an even more pronounced orientation in favor of sustainable mobility. But we must also more effectively mobilize private capital for infrastructure, either through “user-pay” systems, still poorly developed, or through “green finance”. In this respect, a proposal on the “taxonomy” of investments for a European classification of climate-friendly investments has been tabled and is currently being considered by the legislator.
The Connecting Europe Facility (CEF) is a European investment program for transport, energy and digital infrastructure. For the period 2014-2020, the program has invested € 23.7 billion in the transport sector through grants spread over more than 750 projects. These are major projects such as the Alpine Tunnels in Brenner and Lyon-Turin – or the Seine-Scheldt Canal, but also a large number of targeted projects aiming to improve cross-border connections, overcome bottlenecks, promote intermodality (for example through a better connection of ports) and deploy harmonized systems at European level for traffic management in the various transportation modes (such as SESAR for aviation and ERTMS for the railway sector). The CEF also supports a large number of alternative fuel projects (i.e. electric charging or hydrogen charging infrastructure). For the next budget period 2021-2027, the European Parliament and the Council have already reached an agreement on the CEF’s priorities, namely by emphasizing the importance of decarbonisation. In particular, 60% of the CEF budget will have to contribute to climate objectives, in conjunction with the commitments made by the EU under the Paris Agreement, which means a target ranging from 70 to 80% for its transport component. The challenge today is to define the budget that will be allocated to it as part of the discussions on the Union’s multiannual financial framework (the Union Budget).
We have introduced new CO2 performance standards for private cars, new light commercial vehicles and new heavy vehicles, for the very first time. These standards have given a real boost in terms of innovation, thus facilitating the entry of zero emission vehicles on the market. Significant investments have already been made by alternative fuel suppliers, thereby influencing new electric motors.
The Directive on the promotion of clean and energy efficient road transport vehicles has also been revised: it sets minimum targets for public procurement at Member State level on the basis of a new definition of clean road transport vehicles. In addition, we have significantly increased our financial support for investments in alternative fuel infrastructure. Finally, we have also proposed new regulations on the fee for the use of certain infrastructures in the context of the revision of the “Eurovignette” Directive. It is still being negotiated with the Council and the Parliament.
Rail is the safest and most sustainable mode of land transport, yet it still suffers from an image problem. A strong and efficient internal market is therefore essential to support the
European railway industry’s position. The four railway packages implemented since the 1990s have created a truly unique European railway area accompanied by harmonization of rules at European level. Today, more than 90% of the rules applicable to railway vehicles, which numbered 14,000 for the EU as a whole a few years ago, have been eliminated. A single European railway area combined with European harmonization stimulates both the demand for rail services and productivity for the benefit of the industry.
From a technological point of view, rail needs to be modernized more rapidly. Innovation and digitization are essential factors in the rail industry’s competitiveness.
Deployment of the European Rail Traffic Management System “ERTMS” is a priority. This system developed in Europe is today a world reference. ERTMS works in many countries and regions such as the Middle East, North Africa and Australia. Its deployment in Europe is strongly supported by the Mechanism for Interconnection in Europe financing program.
In terms of innovation, the committee has also set up a joint venture called “Shift2Rail”, with a budget of € 920 million, within the framework of Horizon 2020, to develop innovative solutions in the rail sector. For example, Shift2Rail participates in the development of the new generation of ERTMS for 2022. As part of Horizon Europe, the Commission wants to continue to support rail innovation and focus in particular on decarbonisation and digitization.
Finally, with third countries, the Commission intends to continue to strive for fair competition within and outside the EU.
In the framework of the Directive promoting the deployment of Intelligent Transport Systems in Europe, new European rules have been put in place to facilitate the emergence of new multimodal information and planning services. These rules, together with financial support for their implementation, will provide better multimodal solutions to meet the mobility needs of travellers. This will also lead to efficiency gains in transport operations and generally on the transportation system as a whole.
With this in mind, the next step is to think about the tools to be put in place to facilitate e-ticketing services at European level: whether it is through financial support to facilitate the digitization of payment services and transport tickets and/or through new rules for the exchange of essential data for digital ticketing services.
In order for connected and automated mobility to be a real success, it is essential to look beyond vehicles and involve all stakeholders: car manufacturers, cities, road operators, user groups, service providers, just to name a few. It is only in this way that we will be able to overcome the current barriers to introducing innovative solutions and ensure that they contribute to making transport safer, more sustainable and more accessible for all users, including those with reduced mobility.
Working collaboratively and systematically on innovations is a European force, which we also apply to the field of connected and automated mobility. We have therefore brought together all key players in a single European platform to define a common research and innovation agenda. We are also planning the creation of a European public-private partnership for research and innovation for the next budget period 2021-2027.
Digitization has been a reality for several years in the logistics transport sector. One of the key objectives is to improve the sharing of information to enable process optimization and to make cargo and capacity information accessible to all. Similarly, by sending digital data via the internet protocol, it is possible to ensure optimum freight distribution (in terms of cost, duration and environmental impact) by using the resources available at each step of the delivery.
This should make the system as a whole more efficient, in particular by avoiding the underfilling of transportation means as much as possible, while reducing the impact on the climate.
To support this process, we have set up a European Digital Transport & Logistics Forum (DTLF). Its purpose is to facilitate the sharing of data between stakeholders through data exchange platforms established along Trans-European Transport Network (TEN-T) corridors. This initiative will optimize the loading and shipping of goods, thus minimizing emissions and congestion (including in cities), and contributing to the carbon reduction of logistical transport. Finally, this data exchange also contributes to the automation of logistical processes and a more efficient use of resources.
The Commission is committed to facilitating the establishment of a reliable, fast and transparent multimodal transport environment in order to facilitate the mobility of citizens, paying particular attention to people with reduced mobility. This should be done in a pragmatic way, taking into account citizens’ needs and market evolution.
In recent years, online platforms (including MaaS platforms) have become important players. These digital platforms can offer significant benefits to consumers by providing multimodal mobility solutions tailored to their needs, while supporting our transportation policy goals, namely: efficiency of the transportation system as a whole and its sustainability. However, we are aware that the development of these platforms is an issue for traditional transport operators. We are therefore thinking about the need for additional rules on the relationship between platforms and transport operators in a multimodal perspective.
European drone policy is based on four main priorities: security, safety, data protection and decarbonisation. A new European regulatory framework(1) allows the Commission to adopt specific rules on drones’ technical standards, as well as their operating conditions(2). The European Union wants to encourage the development of new technologies, such as electrification, automation, digitization and artificial intelligence. All of these innovative technologies will contribute to more sustainable mobility by reducing the transport sector’s environmental footprint and supporting the competitiveness of an emerging and promising industry in terms of creating economic activity and skilled jobs.
By transporting three quarters of our foreign trade and one-third of intra-Community trade, the maritime sector is an essential link in the European economy. In addition, maritime transport has an undeniable advantage in terms of energy efficiency (CO2 emissions per ton of freight transported). This makes it an interesting alternative to road haulage.
Current models predict strong growth in the maritime sector; the flow of goods passing through EU ports could increase by 50% by 2030. These growth expectations also translate into higher CO2 emissions.
In 2018, the International Maritime Organization (IMO), the international body that regulates shipping, adopted a strategy for reducing greenhouse gas emissions involving decreasing the total annual GHG emissions by at least 50% by 2050, as compared to 2008.
It is now essential that this strategy be translated into concrete actions. Firstly, the European Union and its Member States will continue to contribute actively to international discussions. In addition, the elected President of the European Commission, Ursula von der Leyen, has already indicated in her political guidelines the need for all sectors, including maritime transport, to contribute to the Union’s ambitious climate policy.
Reducing the environmental footprint of the transport sector, including air transport, is a priority challenge for President-elect Ursula von der Leyen and the new Commission. Currently, air transport is globally responsible for more than 2% of greenhouse gas emissions. This figure does not appear to be very high when compared to other sectors, but it is growing steadily despite the efforts undertaken by this sector. Indeed, in Europe, fuel consumption per passenger has decreased by 24% between 2005 and 2017, yet this improvement has not been sufficient in terms of overall emissions given the strong growth of the sector. Today, many citizens expect air transport to be cleaner and more sustainable and this trend will not weaken. We will therefore need better technologies, sustainable fuels and operational reforms.
The Commission’s Directorate-General for Mobility and Transport (DG MOVE) is responsible for the implementation of the Community transport policy, as well as for the trans-European transport network policy, in close cooperation with its executive agency INEA and three regulatory agencies for air transport (EASA), maritime (EMSA) and rail (ERA). To this end, it also manages the budgets dedicated to funding programs which are the Mechanism for the Interconnection of Europe (MIE) and the Research for Transport (H2020).
Air transport plays an essential role in economic development and land use planning. It responds to a real societal demand: more than 60% of French people have previously travelled by air and 30% travel by air at least once a year. But the future growth will come mainly from the Asia-Pacific region. In fact, 50% of new passengers will come from India or China.
Given this situation, the solution lies in the revolution towards sustainable air transport on a global scale. The ultimate solution to this huge challenge is technological innovation. A typical new generation Single Aisle aircraft coming off the production line today (e.g. A350 or A320neo) emits around 50 grams of CO2 per seat kilometre, equivalent to 2 litres fuel burn per passenger for 100km. Air transport accounts for 2% of humanity’s CO2 emissions. It is considerably lower than the Internet, but we need to go further. Europe is at the forefront of this transformation and at Airbus, we see this as an opportunity. There have seldom been times in the history of aeronautics that required such profound industrial and technological changes.
In the European Green Deal, the European Commission aims for a carbon neutral Europe by 2050. In order to contribute to the achievement of this goal, Airbus and the entire industry have already set themselves clear targets: the stabilisation of global carbon emissions as of this year and reducing CO2 emissions by half by 2050 (compared to 2005 levels).
Everyone is aiming for a “zero emission” scenario. Today, our industry is beginning to see the possible technological paths to get there. This remains very difficult and requires colossal investments over time, but there are several ways to achieve this goal.
To develop a low-emission aircraft, Airbus engineers must work on several levers at the same time, in a coherent and simultaneous manner: new aircraft design, lighter materials, new propulsion systems, new fuels (biofuels, synthetic fuels, even hydrogen), a greater autonomy and electrification. The final solution will be a combination of the different elements, accelerated by digital processes.
It is in this spirit that Airbus has already flown a number of “zero emission” aircraft. The prototype for the electric aircraft, the E-Fan 1.0, was the first important demonstrator. Since then, Airbus has flown Vahana 1-seat demonstrator, which has now accumulated more than 90 flights. The City Airbus 4-seat demonstrator had its first flight on 3rd May, 2019 and has now started a rigorous flight test campaign. Airbus recently opened an “E-Aircraft Systems Test Facility” where electric and hybrid propulsion systems are developed. To further develop and take these technologies to commercial aviation, Airbus has also launched the E-FAN X demonstrator, which will make its first flight in 2021.
Airbus’ main ambition is to develop the very first low-emission aircraft, intended to be ready to fly by 2035. The Clean Sky Joint Undertaking, grouping European Union projects, can significantly contribute to this end.
Distinguishing time periods is very important to guarantee a progressive decarbonisation of our industry on a global scale. The reality is that the sector’s environmental transition has already been initiated: CO2 emissions per passenger have been divided by 5 in 60 years and have decreased on average by 2% each year since 2000. Every new generation of Airbus aircraft emits between 15% and 25% less CO2 than its predecessor. The latest generations only emit around 2 liters per 100km per passenger, equivalent to 50 grams of CO2 per seat-kilometer. Accordingly, the first part of the journey (next 10-15 years) will be to improve the fuel-efficiency of today’s aircraft through lightweight materials and new engine technology.
Alternative or sustainable fuels also have a potential to reduce substantially the carbon intensity of commercial aviation and can start to bring results in the short term. They are already certified and can deliver impressive emission reductions – between 60% and 80%. However, the right incentive policies and funding are still needed to scale them up in sufficient quantities at reasonable cost.
Consequently, solutions include fleet renewal, the use of sustainable alternative fuels (including the use of hydrogen), an improvement of infrastructures and the effective implementation of an international programme to reduce emissions.
Improving air traffic management in Europe is another short-term solution to reduce CO2 emissions.
Several industrial partners – including Airbus – have cooperated in the SESAR (Single European Sky ATM Research) research programme to develop innovative solutions aiming at optimizing operational concepts in air traffic. One of the flagship projects is the promotion of optimized trajectories for aircrafts, making it possible to better manage future growth in air traffic while minimizing the environmental impact.
The realisation of a Single European Sky would complement these innovations since it would revolutionise the European Union’s airspace by eliminating ineffective air routes. The European Aviation Safety Agency (EASA) estimates that a 6% reduction in CO2 emissions can be achieved in this way.
The Green Deal is accentuating the momentum to finally move forward on this file and we support the European Commission’s political approach. A breakthrough would indeed allow a more rapid market uptake of key operational concepts and technologies. This would, in turn, improve the overall performance of air traffic.
Airbus considers CORSIA to be the first important step towards a global sustainable aviation. It can be improved, but it is the only worldwide solution to offset aviation emissions. It is absolutely necessary to strengthen it and make it work. We understand that regional adaptations may be required to achieve EU targets, while also avoiding market distortion and observing aviation’s international nature.
In order for Europe to be at the forefront of the environmental transition in air transport, public authorities must support the movement launched by the sector. To this end, it is essential to support the significant investments necessary for aeronautics research, in particular through the European public-private partnerships “Clean Sky” and “SESAR”. The solution can only be found in technological innovation.
In addition to supporting the CORSIA global scheme, it is necessary to guarantee the consistency of the carbon tax system implemented in Europe to ensure that it participates to the financing of the sector’s environmental transition.
We are calling for infrastructure investments in order to make new energies available for airlines. Encouraging the use of new sustainable fuels is also important in order to create a real sustainable aviation fuel market in Europe. In the future, there will be a need to prepare the development of the hydrogen sector and other carbon-free electricity production sources. This is a major challenge: all modes of transport will need a primary source of low-carbon energy. It is up to the institutions to create this ecosystem.
All of these elements will make it possible in the future to reconcile traffic growth and a reduction in emissions.
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• Why is smart urban delivery the way forward?
Being a last-mile delivery player, there are three main challenges to tackle :
To meet these challenges, DPDgroup has developed a range of innovative, user-focused delivery solutions. DPDgroup’ urban logistics initiatives aim at improving everyday urban life by giving customers greater delivery choices, while reducing our impact on the environment.
At DPDgroup, we believe that it is key to be a valuable stakeholder, which is why we engage with local authorities to anticipate and react quickly to new requirements and legislation.
We set up urban depots close to high-density areas and invest on an alternative, low-emission delivery fleet that relies on natural gas, electric vehicles, and cargobikes.
We continuously strive to minimise the environmental footprint of our fleet on exhaust emissions and pollutants, by using the latest Euro Standard and deploying the latest technology vehicles. On top of that, we compensate all remaining carbon emissions through our certified offsetting programmes on clean energy production. We therefore make every parcel we deliver carbon neutral at no extra cost for our customers.
Throughout Europe, DPDgroup has rolled out more than 40 smart urban delivery solutions. The strength of DPDgroup lays in its ability to have a global approach whilst adapting perfectly to local specifics.
In London, the Westminster urban depot is an all-electric last mile delivery site. This depot is also home to the first DPD UK owned Pickup shop, with a dedicated access point for consumers collecting parcels from the site.
In Warsaw, 9 urban depots offer an on-site dressing room, allowing consumers to try on their purchases and return if need be.
Thanks to a comprehensive digitalisation, last mile delivery in 10 to 20 years will be fully flexible and personalized. By using digital interfaces, consignees will have access to various delivery options – the doorstep being one of many possibilities, while alternative delivery options will be far more numerous and frequent than today. The number of parcels delivered in cities should increase drastically; new delivery solutions should be designed to allow citizen to receive their parcel in smart cities environments. Future delivery fleet will consist of a vast range of alternative vehicles: trucks, vans, cargo bikes, e-scooters, completed with rolling and flying autonomous vehicles.
We mentioned earlier how we want to engage with the city authorities. The air quality is a real concern for them and for citizens, which is why we are implementing a project that aims at measuring the air quality through sensors on vans and urban locations such as depots or Pickup points. Once collected, the data is used through an online platform to create different maps enabling to show the “hotspots” of PM 2.5 (* PM2.5 refers to atmospheric particulate matter (PM) that have a diameter of less than 2.5 micrometers) at different level of precision (from dot view to city view). The map can be seen by day, week, month or season.
This project was tested in three European cities and aims at being rolled out throughout Europe. This will bring benefits both to cities that will have the opportunity to efficiently tackle the air quality issues by making data based decisions on mitigation initiatives and new traffic regulations. And to end-consumers who will have access to an air quality diagnosis at their doorstep.
Logistics is the backbone of the economy largely sustained by international trade. At the same time, regulations are becoming stricter and consumers are more and more sensitive to the environmental topics.
Logistics companies have a responsibility to act in a sustainable mannern,measure and reduce continually their impact on the environment, by adapting their processes and innovate.. Climate change makes this topic even more accurate and position sustainability as a key priority for all economic players.
DPDgroup is Europe’s second largest parcel delivery network.
DPDgroup combines innovative technology and local knowledge to provide a flexible and user-friendly service for both shippers and shoppers. With its industry-leading Predict service, DPDgroup is setting a new standard for convenience by keeping customers closely in touch with their delivery.
With more than 75,000 delivery experts and a network of more than 42,000 Pickup points, DPDgroup delivers 5.2 million parcels each day through the brands DPD, Chronopost, SEUR and BRT.
DPDgroup is the parcel delivery network of GeoPost, which posted sales of €7.3 billion in 2018. GeoPost is a holding company owned by Le Groupe La Poste.
DPDgroup is Europe’s second largest parcel delivery network.
DPDgroup combines innovative technology and local knowledge to provide a flexible and user-friendly service for both shippers and shoppers. With its industry-leading Predict service, DPDgroup is setting a new standard for convenience by keeping customers closely in touch with their delivery.
With more than 75,000 delivery experts and a network of more than 42,000 Pickup points, DPDgroup delivers 5.2 million parcels each day through the brands DPD, Chronopost, SEUR and BRT.
DPDgroup is the parcel delivery network of GeoPost, which posted sales of €7.3 billion in 2018. GeoPost is a holding company owned by Le Groupe La Poste.
HAROPA is an alliance between the sea ports of Le Havre, Rouen and the river port of Paris. It was created in 2012 to form a port system throughout Europe.
It is the first French port system with 90 million tons of maritime traffic and more than 25 million tons of river traffic. It is the only port system to have a permanent representation to the European Union. This allows it to interact with the European Institutions on a day-to-day basis.
Furthermore, in November 2018, the government decided to proceed with the integration of the ports of Le Havre, Rouen and Paris in a single public port establishment on the Seine. The foreshadowing of this plan was entrusted to me by the Prime Minister. The objective of this second phase is to improve HAROPA’s integration into maritime transport flows and to make it a key component in maritime logistical chains. This will allow it to gain competitiveness by adopting a “single window” approach for our customers and it will also help develop the region’s economic appeal. This large-scale collective project mobilizes all of the stakeholders in our port ecosystem: customers, partners, port communities, users and local elected officials. The new port facility on the Seine waterway will see the light of day on January 1, 2021.
We are currently in the process of finalizing our strategic project for the period 2020-2025; it will be the perfect example of this new paradigm. There are dramatic changes taking place in our ports at the moment. They consist in strengthening our client likability and to reason on another scale. This implies both going beyond the borders of the port territory to initiate projects and offer end-to-end solutions to our customers, as well as mobilizing our institutional partners to ensure that the common standards and legislation become more flexible and adaptable. This will be even more pronounced when the new public port establishment on the Seine waterway is operational. HAROPA will be a front-line and effective logistics tool and a major player in the development of the Seine waterway alongside its customers, partners and regions.
The energy transition has started, and ports are one of the main emphases of this strategy. This is particularly true via the modal shift which makes it possible to limit greenhouse gas emissions in freight operations. HAROPA is picking up the pace to reduce its greenhouse gas emissions by promoting the production of renewable energies on its territory (off-shore wind energy, solar farms, etc.). HAROPA is also, and above all, a port complex that supports its customers and economic players in their own transition.
Faced with the challenge of the energy transition, HAROPA ports are called upon to modify their environmental footprint and support the efforts of their customers in their own transformation towards sustainability. For this purpose, HAROPA must renew their service offer and encourage innovation and development within “clean” sectors so as to result in the sustainability of industrial activity within their region. The greening of fleets, the electrification of wharves and the preservation of biodiversity are not only at the heart of our mission but are already on-the-ground realities.
“Smart” is a concept that is in HAROPA’s DNA. It was therefore normal for us to start our digital revolution: the “smart corridor”. It is what makes the ports of Le Havre, Rouen and Paris connected, innovative, sustainable and collaborative.
HAROPA is both a “SMART” and a “GREEN” corridor. It is the brand of a developer port which has a vision for its territory, its customers and its partners. Within this ecosystem, HAROPA interconnects all the players so that each stakeholder can receive and share relevant information in an effective manner.
The Smart Corridor also aims to become a “territorial hub”. The ambition is to renew and develop the historical links that we have with the city and its inhabitants so that everyone can take full advantage of the benefits that port development affords.
We have enthusiastically welcomed the European Commission’s Green Deal. For HAROPA, the ecological and energy transition is, of course, self-evident. The ports within the Seine waterway have a great role to play, and I believe that strongly. I have been involved in this issue for quite a number of years, working to green the operation of these ports and to encourage the development of low-carbon activities.
The ports that will matter in the future in Europe and in the world will be those that will have implemented ambitious strategies to minimize their impact and that will offer their customers and partners greening solutions (development of alternative fuels, last-mile urban logistics, zero carbon, CO2 capture and storage, production of carbon-free energy, etc.).
To make this transition successful, it also involves reviewing the existing legislation and having adequate funding programs to support and accelerate this transition. HAROPA is certainly ready to engage in this most important challenge. However, in order to achieve the objectives set by the European Union, national and European public authorities must support us along the way.
HAROPA is a wonderful testing ground matched by few others in the European Union: it comprises of an industrial, logistical and port ecosystem all in one from Le Havre to Paris via Rouen. It has both the appropriate critical mass to develop and test innovative large-scale solutions, and has already obtained sufficient experience in growth-generating projects.
The idea of creating a bookable and monetisable terminal was developed at the end of 2016. Marc Lepage and David Leguide envisioned WattPark as the first collaborative charging terminal that can be booked using a mobile application.
It is based on Airbnb’s principle (as described by the magazine USINE NOUVELLE). The company was founded in January 2017 in the south of Essonne, in Saclas. In terms of operation, the terminal and parking space user can decide to use them for his/her own use, but he also has the possibility to display them on the WattPark application by defining the availability and the occupancy price with or without charge.
A sharp rise in the market is being felt and we are seeing more and more electric vehicles on our roads. This trend is backed up by a new study by the Boston Consulting Group (BCG), which now estimates that the market share of electric and hybrid cars in total car sales will reach 33% by 2025 and 51% by 2030 (including 39% in France), compared with 25% and 50% respectively in their previous 2017 study. As a mechanical consequence, the diesel share will increase from 12% to 4% and that of petrol from 78% to 44% over the next ten years. The market for electric vehicles is constantly growing.
The main constraint today is the number of charging terminals available throughout the territory. In light of the above-mentioned estimate for the sale of electric vehicles, a network must be created, thus allowing each user not to worry about charging anymore. With WATTPARK, a complete, bookable and monetisable network is possible. The cost is relatively low and above all, the locations can be fully adapted: the terminal can be connected anywhere, in town or in the countryside, in both private and professional premises.
Wattpark is an intelligent charging terminal linked to a mobile application enabling users to remotely book, park and charge wherever they need it (at home, at the office, in cities, car parks, shops, etc.). Our terminal is easy to install (all you need is a 16-amp electrical line), and is also suitable for individuals who wish to propose their own parking space. It integrates data and includes a mobile reservation and monetisation system. Our solution works everywhere, even in white zones. WattPark is versatile and targets different audiences according to their needs. Local authorities can invest sustainably in terminals at a deliberately low price (500 € before tax) to allow for a rapid return on investment with an “à la carte” pricing system. The WattPark terminal can also be used as a parking meter and can manage a car park for either an electric or thermal vehicle. Finally, private individuals can also install our terminals, which are more powerful and better adapted to their electric car than a domestic socket. These private terminals can be made public and connect to the network of access points on our application. WattPark will become the “Airbnb” of the charging system, thus cutting back on public investment. We are accelerating the transition from fossil fuels to electricity while addressing Smart Grid issues. Our customers benefit from our algorithms and our data, which will increase as the charging point network grows. We know their cars, their consumption and the network status thus enabling us to anticipate needs, consumption peaks, propose an efficient and more ecological charging solution and avoid damaging their batteries.
It is easy to install, can be used anywhere, can be booked and monetised, and above all, is collaborative. In other words, the charging terminal can be of interest to an individual, a company or a community. It also serves as a parking meter and flow counter.
On the one hand, the terminal and parking space holder can either decide to use them for their own personal use or, on the other hand, the holder can register the space on the dedicated platform. Afterwards, the fee is deducted by WattPark, which pays 90% of the amount collected to the holder of the parking space.
In the context of the energy transition, cities are practically obliged to provide charging stations throughout their territories. Instead of investing tens of thousands of euros (a supercharger alone costs 15,000 to 35,000 euros), we offer to help individuals equip themselves for optimum coverage. One could imagine a public-private energy transition model based on public superchargers and privately owned parking spaces, all without state intervention.
The first climate-neutral continent. That is what the new Von der Leyen Commission envisions Europe to be by 2050. Decarbonising the economy, especially energy production and use, is of crucial importance for this central priority. This was also underlined by the Director-General for energy, mrs. Ditte Juul Jørgensen, in her recent article for this journal. Hydrogen, the lightest element on earth, is increasingly being recognized as a potential contributor to this heavy task. What challenges of decarbonisation could hydrogen respond to? What benefits could it bring? What does this depend on? And, what is happening at the European and international level?
To a very large extent, decarbonizing energy production means replacing fossil fuels with renewable sources. Today, the highest share of renewable penetration is in electricity generation. As such, it is hardly surprising that electricity is projected to be the dominant energy carrier by 2050 in the Commission’s long-term decarbonisation strategy. On the other end, using renewable electricity to replace fossil fuel demand is often far from easy. Firstly, the intermittent nature of renewable energy sources implies that their availability does not necessarily overlap with patterns of demand. Increased shares of renewables thus amplify the need for flexibility and storage solutions. Secondly, several large demand sectors such as heavy-duty transport and carbon-intensive industry have proven to be challenging to electrify.
Hydrogen, if produced through electrolysis of water using renewable energy, can provide flexibility as a storage medium while reaching hard to abate sectors as an energy carrier or feedstock. Its merits as a storage solution are most pronounced in large scale and long-term applications, it can become the most economic option already at discharge durations longer than 20-45 hours, depending on the cost of stored electricity (IEA, 2019). As an end fuel, it is especially promising in sectors where the importance of power-to-weight ratios obstruct the uptake of battery-powered solutions, such as in heavy transport. Simultaneously, low-carbon hydrogen could contribute to greening the gas grid. As a feedstock, it can decarbonise industrial processes that currently depend on fossil feedstock, such as steel making, refinery and fertiliser industries. As such, hydrogen has the potential to connect the electricity to the gas, as well as transport, industry and heating sectors, thus enabling sector integration. In a transition phase, potentially also hydrogen produced from steam methane reforming coupled with Carbon Capture and Storage (CCS) could contribute to decarbonisation objectives and facilitate scale-up of technologies and infrastructure.
Hydrogen is relatively unique in its multi-functionality as a storage and flexibility solution, energy carrier, fuel and feedstock. This implies that, unlike for most other components of the energy system, the relevant regulatory framework could entail any of these topics, depending on the application. The EU’s last main energy policy achievement, the “Clean Energy for All Europeans” package, includes several provisions relevant for hydrogen. In the Electricity Directive, the definition of storage is extended beyond power-to-power, to power-to-gas and power-to-heat, thereby including other energy carriers as a means of storing electricity. Furthermore, renewable fuels of non-biological origin (RFNBO) are explicitly recognised in the renewables directive of the package. The current Commission recently presented “the European Green Deal”, the flagship package of measures that should deliver climate-neutrality by reducing emissions, while creating jobs. Both cost-effective decarbonisation and European leadership in green technologies will be pivotal in this context. As part of the Green Deal, the European Commission, under the guidance of Commissioner Kadri Simson, is currently analysing how to facilitate the smart integration of sectors, and hydrogen is considered a key enabler in this process.
At the European Union level, national developments and experiences, including the extent to which hydrogen has been considered in the recently submitted National Energy and Climate Plans (NECPs), are shared in an informal network of national policy experts called the Hydrogen Energy Network (HyENet). This expert group was set up by the Commission (DG ENER) in order to gradually make hydrogen properly considered as an energy carrier in the policies and plans of energy authorities, and enabling them to exchange information, share good practices and collaborate on specific issues. The group follows up on the wide support that member states gave to the hydrogen initiative under the Austrian presidency, which promoted the role of renewable hydrogen in decarbonising the various sectors of the economy. This initiative was also followed by a declaration that emphasised the potential role of hydrogen in decarbonising the gas infrastructure, in Bucharest.
For successful value chains, hydrogen need not only be clean and energy-efficient, but also competitive. These challenging objectives, as well as recognition of the importance of demonstration, are well integrated into the work program of the Fuel Cell and Hydrogen Joint Undertaking (FCH-JU), a partnership between the industry organization Hydrogen Europe, the research organization Hydrogen Europe Research and the European Commission. This also represents one of the successful examples of cooperation and synergy between various departments of the Commission, notably energy, transport and research. Research and innovation are essential to bringing new promising technologies to the market and creating a competitive and industrial advantage for the EU in this field. The FCH-JU funds research and innovation on hydrogen with an EU budget contribution of 646 million euros for the period 2014-2020. The Commission proposes to continue this partnership beyond 2020, under Horizon Europe. Next to fundamental research, also the development of technologies with higher readiness levels is supported by the FCH-JU, for example in large-scale regional demos called “Hydrogen Valleys”. The Commission furthermore encourages EU wide demonstration projects under the so-called Important Projects of Common European Interest (IPCEIs), that way promoting an opportunity for the European industry (e.g. of PEM electrolysers) to further strengthen their leadership position.
For hydrogen to play a role in the decarbonisation of the economy, harmonised definitions of “clean”, “renewable” and “low-carbon” hydrogen are indispensable. A promising initiative in this context is the FCH-JU funded project called “CertifHy”, which provides analytic work that could support the development of a scheme to issue and trade guarantees of origin, mapping the impact on greenhouse gas emissions of different production pathways. Agreeing on definitions is also considered a priority in the context of international cooperation initiatives, such as the Clean Energy Ministerial (CEM) and the International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE), in which the EC is actively participating.
In conclusion, we expect a growing role for hydrogen in several sectors of the energy system towards 2050. Self-evidently, hydrogen will be an integral part of the initiative on sectoral integration. From a policy perspective, this work will predominantly aim to clarify the possible roles of hydrogen in the energy system and their respective merits, as well as to identify the right instruments that will enable sustainable business models to be developed. To succeed in the energy transition, we need to make use of all options at hand and we cannot afford to favour or rule out any technological solution at the moment. The aim of the Commission is to put together the elements that will allow hydrogen, together with other solutions, to contribute to the cost-effective decarbonisation of our continent, while strengthening global leadership for the EU in the technologies that get us there.
Energy storage is one of the most promising enabling technologies for a renewables-dominated system. Energy storage allows us to store excess energy and discharge it when there is too little generation or too much demand. There are many different types of technologies in development and on the market today: batteries, pumped hydro storage, thermal storage, flywheels, ultracapacitors, liquid air, compressed air, power-to-gas, and the list goes on.
What all storage technologies have in common is that they provide flexibility at different time-scales – seconds/minutes, hours, weeks, and someday, months – which will be essential to achieve a high share of renewables. Storage can help consumers increase their self-consumption of solar PV, or to generate value by providing flexibility to the system. Storage can help defer costly investments in transmission and distribution infrastructure, extending the lifetime of existing assets and helping grids function more efficiently.
Industrial consumers can install storage to reduce consumption peaks, which can entail costly charges, and to provide back-up power if there is a black-out. In addition, storage at any level can offer system and ancillary services, safeguarding the secure and efficient operation of the electricity system.
The transport, heating, and cooling sectors today depend on fossil fuels, but through electrification these sectors could run on clean energy with the help of energy storage. For instance, storage deployment could help support the roll-out of very fast charging infrastructure for EVs, particularly in areas with weak grids.
EASE fully supports the European Commission’s ambitious proposal for a European Green Deal. We believe this policy is a huge step forward for Europe, and we are eager to support its success. EASE supports the target of net-zero greenhouse gas emissions in 2050, as well as an upwards revision of the 2030 targets.
Achieving these targets undoubtedly requires increased deployment of energy storage solutions, which can support a cost-effective transition by facilitating integration of high shares of variable renewables (vRES). Investing in energy storage research, demonstration, and deployment is essential to support the EU’s global leadership in clean energy technologies.
Energy storage will support the energy transition across the entire EU and in particular, has the potential to facilitate the transition of industrial, coal, and energy intensive regions (since existing infrastructure can be upgraded or complemented with energy storage solutions), and islands (where energy storage allows reducing the use of costly imported fossil fuels).
This is why we believe energy storage should be a central element of the different actions that will be taken in the next two years to deliver on the European Green Deal, from the Just Transition Mechanism proposal to the smart sector integration strategy. We hope that European policymakers will take a technology neutral approach, considering the contribution of all different energy storage technologies rather than choosing winners and losers.
EASE worked very hard with the support of its members to advocate for the role of storage before the first draft of the Clean Energy Package (CEP) was presented by the Commission. We are happy with the result: the CEP – the biggest ever package of EU legislative and non-legislative measures in the energy sector – is undoubtedly positive for the storage sector.
By establishing a binding renewables target of 32% by 2030 – along with targets for renewables in transport, heating, and cooling – the package sets a high level of ambition that can only be achieved with the widespread deployment of flexibility and sector coupling solutions such as storage.
Within the CEP, the recast Electricity Directive and Regulation tackle some of the most pressing challenges for storage technologies. They establish a definition for energy storage that covers all of the different technologies: pumped hydro storage, power-to-gas, power-to-heat, liquid air, batteries, supercapacitors, flywheels, and others. This technology neutral definition ensures that both current technologies and those that may be developed in the future are covered by the legislative framework.
Second, the Package clarifies the important issue of regulated entities owning and operating storage facilities. As a general rule, TSOs and DSOs should not own and operate storage, unless they are considered ‘fully integrated network components’. However, in situations where there is no market party willing to build a storage device, the National Regulatory Authority (NRA) may introduce a derogation. Prior to the CEP, the lack of clarity on ownership of storage held back the development of storage devices; addressing this point therefore represents an important step forward.
The CEP also focuses on the evolving role of TSOs and DSOs: they must consider energy storage in their network planning and are encouraged to develop market-based tendering of flexibility services as an alternative to grid expansion. This will allow energy storage to access more revenue streams, building a more robust business case and creating a level playing field between the different flexibility options. The Netherlands has seen some promising developments in this area already, for instance with the launch of the GOPACS platform, a collaboration between TSOs and DSOs to create a market for congestion management.
In addition, the CEP emphasises the changing role of consumers in the energy system. Instead of being passive players in the energy system, consumers can choose to play an active role, deploying renewables and storage and participating in different electricity markets. The Package formally recognises the right of ‘active customers’ and ‘citizens energy communities’ to own and operate energy storage devices. These customers and communities should be able to offer the flexibility of their storage devices to the grid, including via aggregators.
Although the CEP is a significant step forward for the industry, there are some areas that require further work. The lack of long-term contracts for energy storage services is one concern; this can significantly hold back investments in the sector due to the lack of certainty regarding revenues. Another key issue is that grid fees, taxes, and tariffs applied to energy storage may be higher than on other devices, as storage is sometimes taxed when ‘consuming’ electricity and then again when ‘generating’ electricity. This point is not adequately addressed in the CEP, since taxation remains an EU Member State competence. In the Netherlands, the government has recently promised to address this question, which we see as very positive.
What is needed now is for all Member States to rapidly implement the CEP. More work needs to be done by Member States to incorporate storage in all of their policy measures surrounding decarbonisation – including in National Energy and Climate Plans.
Now that the general market design for storage has been set, we need to go much more into detail, at EU level but especially at Member State level, to clarify some of the tricky barriers that still block storage deployment. For instance, guarantees of origin for renewable energy that has been stored or transformed via power-to-gas is an important issue that would need to be addressed.
The Clean Energy Package (CEP) was an important focus for EASE over the past several years, and we succeeded in having energy storage recognised for the first time in EU legislation as a key element of the energy system. Although the CEP is a significant step forward for the industry, it does not address all of the issues that are holding back storage deployment. For instance, energy storage will require at least some investment certainty in the form of long-term contracts for storage services. Yet the CEP limits the duration of balancing services, which could reduce investment certainty. This means that there are ever fewer longer-term revenue streams on which storage operators – and investors – can rely.
National governments must now lead the way in implementing the CEP, while EU policymakers can play an important role in sharing best practices and ensuring energy storage is duly recognised in other legislative files, e.g. energy efficiency, alternative fuels infrastructure, and the gas package.
The European Confederation of Recycling Industries (EuRIC) is the trade association for recycling industries at the European level. Our Members consist of the National Recycling Federations present in the majority of the Member States of the European Union (EU) and the European Economic Area (EEA), as well as companies when there is no national union for certain sectors. EuRIC was created in 2014 at the initiative of pre-existing European Federations representing the recycling and trade of ferrous metals (EFR), non-ferrous metals (EUROMETREC) and hard-bound paper (ERPA), which decided to unite their strength to create a structure to increase the representation of recycling activities in the EU institutions. EuRIC is therefore a relatively young confederation having just celebrated its five years on the occasion of the European Recycling Conference which took place, for its third edition, in Paris, and which continues to grow. This growth is mainly due to two factors. Firstly, the urgent need for the recycling industry to structure its representation in order to influence the decisions taken at European level that directly impact its activities. Second, the growing interest of the European institutions in recycling for both its industrial dimension and its environmental benefits. If the European waste management policy is more than forty years old, with the publication of the first waste directive in 1975(1), the publication of the Circular Economy Package in December 2015(2) by the Juncker Commission has clearly changed the situation as far as the measures are concerned. The programmatic measures they announced did not only concern EU waste policy, but the entire life cycle of a product, from its conception to its valuation when it reaches the end of its life.
This evolution, if not revolution, has had a profound impact on the development and nature of EuRIC’s activities. Thus, while EuRIC’s primary mission is the representation of recycling benefits in the European institutions, this mission is multi-dimensional and requires multiple skills to be adequately fulfilled.
Firstly, it focuses on the political, regulatory and technical analysis of waste legislation that has been revised and continues to be revised in order to increase recycling targets, to harmonize certain elements such as calculation of these objectives or at least the mode of operation of Extended Producer Responsibility (REP) systems across Member States. This legislation is relatively complex to the extent that it sets not only the recycling targets but also the rules related to the classification of waste, the emission limits for recycling facilities falling within the scope of the Directive on industrial emissions(3) and their cross-border transfer, and by extension to international trade.
It then focuses on legislative, economic and/or voluntary instruments to better take into account the recyclability of products at the design stage and the incorporation of recycled materials into new products in order to create the necessary conditions for a real circular economy.
Finally, EuRIC organizes one to two conferences a year to promote recycling and foster information exchange between European decision-makers and recycling professionals.
The EuRIC Secretariat is composed of employees with legal and technical, particularly in terms of waste chemistry and economy skills, that are necessarily complementary, given the topics covered. Last but not least, the Board of Directors, like the Confederation, brings together directors from national federations and companies from all over Europe. The first president of EuRIC was French in the person of Dominique MAGUIN (FEDEREC), the second German, Michael SCHUY (BDSV) and the third Italian, Cinzia VEZZOSI (ASSOFERMET).
There are several of them. The first is clearly to better transpose existing legislation. Despite the directives on waste that have been constantly revised over the past 40 years, the performance of the Member States in this area is largely disparate.
Take, for example, EUROSTAT statistics on the rate of recovery of municipal waste. If some European countries such as Germany, Austria, Belgium, the Netherlands or the Scandinavian countries send practically no more household waste to landfills and have already reached or are about to reach a recycling rate of 50% based on the current method of calculation, others are still a fair way from doing so and send the majority of the waste collected to landfills. There are notable differences in many other areas that directly impact recyclers in Europe. For example, cross-border transfer procedures, in addition to being unsuitable for a circular economy, are not uniformly interpreted from one country to another, which poses substantial legal and administrative problems for recycling operators. France, by setting up the National Center for Transboundary Waste Transfers (PNTDD), which is a centralized competent authority in this field, is setting the example in contrast to Member States where various authorities, particularly regional authorities, retain competence. This poses problems of uniformity of interpretation within the same state.
The biggest project to accelerate the transition to a circular economy is the creation of a genuine internal recycling market open to the world. While the Circular Economy Package conceptually allowed for a paradigm shift, with waste being considered as a resource and not a waste, the road ahead is still long.
In concrete terms, the priorities are diverse, including:
• Firstly, the adaptation of the regulation on cross-border waste transfers to the circular economy objectives by simplifying and significantly harmonizing the administrative procedures applicable to both non-hazardous waste (Annex VII procedure) and hazardous waste (notification procedures). The aim is to reduce differences in interpretations between Member States, to speed up the flow of materials for and from recycling between industrial facilities equipped to process or use them, and to allow the relevant authorities to release more resources to fight against illegal transfers.
• Secondly, it is important to put in place a legislative framework that provides more legal certainty for recycling professionals. One of the priorities must be to establish at national and European level waste status exit criteria for flows such as paper or tires. Given that the European legislative framework is binary in this area – a substance is either a waste or a product – it is fundamental that the quality treatment of waste recovered from recycled materials, meeting industrial or standardized specifications, makes it possible to exit the waste status. Another priority is to improve the interface between the applicable legislation on chemical substances and that applicable to waste in order to adapt it to the constraints of circular value chains.
• Thirdly, it is equally important to correct market failures that do not internalize the environmental benefits of recycling in terms of saving energy and emissions. Thus, while waste recycling saves up to 90% of CO2, by comparison with sectors that use raw materials from natural resources, these environmental benefits are in no way reflected in the price signal, which depends solely on supply and demand in international markets. It is therefore urgent to put incentive mechanisms in place that value these environmental benefits and reward value chains using recycled materials. The study conducted by the French Environment and Energy Management Agency (ADEME) and the Professional Federation of Recycling Enterprises (FEDEREC)(4) provides a solid basis for progress at European level towards such mechanisms that are fundamental to bridge the transition to a circular economy and the fight against climate change. It was cited by the European Commission’s European Plastics Strategy, published in January 2018, to highlight the substantial savings in CO2 generated by plastic recycling.
• Fourthly, we need to make rapid progress on eco-design. The design phase determines 80% of the environmental impacts of a product(5). Given the increasing complexity of the products placed on the market and their abundance related to our consumer companies, it is impossible to succeed in turning towards a circular economy without integrating circularity requirements right from the product design stage. Several instruments exist, be they eco-design regulations for energy-related products, or standards under development to measure the recyclability and recycled content of these same products, or even essential requirements for packaging products under revision. It is fundamental to include in each of them the criteria and requirements that will improve the re-use, recyclability and recycled content of products falling within their scope of application when they reach the end of their life.
That’s the key and it requires effort on both sides. Currently, it is the consumers’ desire in terms of price, design and features that dictate the design and production of products on the market. Their recycling when they reach the end of their life is almost never taken into account. It will be necessary to make this exception the rule and in order to make that happen it is necessary to activate different levers.
Firstly, we need to institutionalize the necessary exchange between producers and recyclers so that everyone can understand the constraints of each other and create the necessary bridges between design and recycling phases. This work is beginning to be carried out as part of the revision of eco-design regulations incorporating criteria to improve the recyclability of energy-related products, the standards covering the same product categories or more broadly European projects. It is important to multiply this type of institutionalized exchanges to produce criteria, rules or best practices enabling a better design of products.
Secondly, the carrot and stick approach has its full place in eco-design. EuRIC supported, under the Waste Framework Directive(6), the principle of eco-modulating financial contributions paid by producers to EPRs “particularly in view of durability, repairability, re-use and recyclability opportunities and the presence of hazardous substances”. Concretely, it allows to get out of a system of contributions solely based on the weight or the quantity of products put on the market to better take into account their
circularity. For example, an electronic product that is easier to dismantle, an important component in terms of both repairability and recyclability, that does not contain brominated flame retardants and that contains, for example, recycled plastics, should be concerned by a significantly lower contribution than a similar product that is not.
Thirdly, it is important to enable consumers to become players in a circular economy, hence the need to move forward on a clear, harmonized and verifiable labeling of “circular” products, either because they are made from recycled materials and/or that they are more easily recyclable.
As for the obstacles to the use of recycled materials, they are numerous but are all surmountable. The recycling industry did not wait for the circular economy to become a priority to turn waste into recycled materials substituting primary raw materials for various production processes. This being said, particularly for recycled materials exposed to competition from these primary materials, instruments stimulating the demand for recycled materials are required to give recyclers the necessary visibility for major and long-term investments.
Over the last forty years, European waste policy has focused solely on supply policy, setting and then increasing the collection and recycling objectives of the different flows without worrying about their demand. The adoption of the Single Use Plastics Directive(7) is in itself a Copernican revolution since for the first time it also includes recycled content objectives for plastic packaging by 2025 (25% recycled plastic for PET bottles) and 2030 (30% recycled plastic for all plastic packaging). These recycled content objectives are already having a beneficial effect on the demand for recycled PET and investments of the industries committed to achieve this goal by 2025. EuRIC has naturally worked for the inclusion of recycled content objectives in this directive. If such objectives are not duplicable for all materials, similar objectives should be provided in other European instruments under revision to stimulate demand for recycled materials.
Public authorities also have a major role when they systematically use the lever of public procurement. These represent no less than 14% of the EU’s annual GDP. The inclusion of reparability, recyclability and recycled content criteria in public procurement procedures would directly enhance the value of tendering companies offering more circular products.
Finally, the development of previously mentioned incentive mechanisms, aimed at internalizing in the price the environmental benefits of recycling, has an essential role to play. The introduction of certificates for the incorporation of recycled raw materials, modeled on energy savings certificates, or a reduced VAT on products incorporating recycled content is an essential link to reward value chains betting on the circular economy.
European Confederation of Recycling Industries (EuRIC)
FEDEREC, created in 1945, is the French federation representative of recycling companies. It represents a sector of 1,000 companies, that is to say 2,000 recycling sites in France that have a system of sorting and treating waste as well as the marketing of raw materials from recycling. Our federation brings together all 12 recycling sectors: metals, plastic, wood, cardboard, textile… and is made up of 8 regional unions. In France, our sector is responsible for 28,800 direct non-relocatable jobs and has a turnover of 9 billion euros. Our companies have in their DNA a very strong capacity of adaptation and investment since each year around 500 million euros are invested in the modernization of our industrial tools, ie 6% of our turnover. FEDEREC’s mission is to represent its members to political bodies, the press and social partners.
The incorporation of raw material derived from recycling is the cornerstone of recycling. Without industrial demand for this material, there can be no viable business model and therefore no recycling. However, the demand for recycled raw materials is closely linked to the fluctuation of the prices of fossil or primary raw materials. For example, when oil prices fall, the demand for recycled plastic slows or even stops. If we want to build a perennial circular economy, we must break with this dependence, it is the whole issue of public policies. To do this, we must internalize the positive externalities of recycling in the price of recycled material. Thanks to a study conducted by FEDEREC in partnership with ADEME, we now know how to measure CO2 and energy gains through recycling. For all materials, recycling saves 22.5 million tons of CO2 and 124 TWH of energy. These environmental benefits must be integrated into the price. To achieve this, FEDEREC proposes to set up a market mechanism following the example of energy efficiency certificates and phytosanitary products efficiency certificates. In terms of resource savings permitted by recycling, these certificates would allow economic actors to incorporate raw materials from recycling and to monetize their certificate of incorporation in a dedicated market. From a business point of view, this mechanism would provide support to a regulatory constraint of incorporation without reducing the State’s budget.
The European Directive has harmonized the practices concerning the EPR sectors and has also created some such as the EPR on industrial and commercial packaging waste. France is already very advanced on this issue since we have created 14, and others are proposed as part of the ongoing discussions of the Circular Economy Bill. EPR creations are relevant when a particular economic model for waste management is not found or if the sector is not yet structured. Today, some of the EPR sectors that the European or French public authorities want concern sectors that have existed for many years in a contractual framework between the waste holder and the waste management operator with very good recycling rates. In this context, an EPR may not be necessary and above all, the creation of an eco-organism that would interfere in this contractual relationship with the risk of a single service provider could be counterproductive. As we see on a daily basis, eco-organizations are gaining more and more power, creating an imbalanced relationship between them and waste management operators. For these sectors, FEDEREC proposes to change the regulatory framework by allowing economic actors to organize the EPR sector without a producer responsibility organization (PRO) while guaranteeing data traceability and improving the performance of re-employment, re-use, recycling and eco-design.
A deposit-refund system for recycling is a way for marketers to meet the requirements of an EPR system. In this model, the PRO role is the management of the stratagem from a financial and logistic point of view by the establishment of deposit returning machines on the territory. If a deposit-refund system for recycling can be relevant and effective in some European countries, it is not the case in France because our country has chosen a completely different model for 25 years: that of the development of a public service of household waste management. Indeed, no European country having implemented the directive had adopted such a public operation based on recycling instructions by means of differentiated waste collection. The deposit-refund system for recycling privatizes the waste management of the deposits concerned. The risks of the deposit-refund system in France are numerous. First, it cuts back the budget of communities by privatizing the deposits that yield and leave them only with the deposits whose management is now expensive (eg jars of yogurts or ham trays). Then, it gives a deadly blow to the French portfolio because of undiscounted deposits, cash advance and the increase in local taxation. Finally, local shops may see their customers orient themselves even more towards supermarkets, the only ones capable of accommodating this type of system. Added to this is the fact that these risks would be taken even though the environmental benefit of the deposit-refund system for recycling has not been proven. In France, we can achieve collection and recycling objectives with the existing levers, such as the extension of recycling instructions or incentive taxes, as well as by deploying an ambitious plan for selective waste collection that is non-domestic. We must provide a solution to all packaging and not just the plastic bottles and cans that are the most recyclable household waste and represent only 6% of the packaging consumed.
Our sector welcomes a real awareness of the European and national institutions regarding the development of a circular economy and thus the preservation of our resources. This is an excellent dynamic that needs to be intensified in responding to the challenges of climate change. On the other hand, we must be vigilant about the pragmatic nature of adapted legislation. Behind the circular economy, there are economic players who need a certain regulatory visibility in order to survive as well as a real coherence of public policies. The example of the regulatory decline in landfill illustrates this point. In France, reducing landfills by 50% by 2025 means finding markets for 8 million tons that are diverted from landfills. Public policies enabling the development of new material or energy markets via solid fuel should be taken at the same time to avoid creating blockages. Economic, administrative and political times must be aligned. The circular economy must also mean the construction of a real consumer industry of these materials if the European Union wishes to preserve economic value in its territory.
Our contact information:
FEDEREC, La fédération des Entreprises du recyclage
101, rue de Prony – 75017 Paris
01 40 54 01 94
www.federec.com – firstname.lastname@example.org
Chemical Recycling Europe (ChemRecEurope) was created early 2019 by key European companies involved in the development of chemical recycling technologies, including Plastic Energy, ReNew ELP, Gr3n, Ioniqa Technologies and IGE Amsterdam with the vision of establishing an industry platform for developing and promoting innovative chemical recycling technologies for polymer waste across Europe. The new platform will enable its members to act more united.
While ChemRecEurope’s mission is to represent the interest of its members to political bodies and the public, it also aims to deepen collaboration with the EU Institutions and develop positive industry-wide relationships throughout the whole chemical recycling value chain in Europe in order to boost polymer recycling.
ChemRecEurope is a young association which continues to grow as from 2020 we have two new members: Clariter and Arcus Greencycling. Carlos Monreal, CEO of Plastic Energy, has appointed by Executive Committee as the first President of ChemRecEurope. Last but not least, for the first time, we organised the first European Chemical Recycling Conference last year, focusing mainly on presenting the different types of solutions, the regulatory challenges as well as how chemical recycling can contribute to creating a circular economy for plastics. The second edition has been scheduled for 26-27 May 2020 in Brussels.
Plastic has many valuable uses; however, we are all concerned about the impact of plastic waste with its severe environmental consequences. Reducing single-use plastic is one way of tackling the issue but while plastics and in particular plastic packaging play a vital role in protecting and preserving the safety and quality of food for consumers and contributing to a healthier future, they should be used responsibly. This way plastic materials become a resource to be recovered rather than merely a waste in the environment. We need to stop the use of landfill, and heavily reduce incineration to dispose of plastic waste and find innovative ways to introduce a circular economy.
Chemical recycling is a complementary solution for recycling end-of-life plastics and an important additional solution for the circularity of plastics. It also helps us to overcome the current challenges of mechanical processes, by taking a broader range of plastic waste, avoiding downcycling, and increasing overall recycling rates. The fact is that the quality of the recycled content from mechanical recycling is in many cases not sufficient to replace the virgin quality material necessary for making food-grade packaging.
Furthermore, as part of its Circular Economy Package, the Commission illustrates its ‘vision for Europe’s new plastics strategy’ by defining goals to limit plastic waste, increase resource efficiency, and create value and job growth in Europe. However, it mainly focuses on mechanical recycling, thus it falls short of presenting a comprehensive approach. Concrete steps towards increasing plastic waste recyclability and reducing landfilling and incineration involve supporting innovative recycling solutions such as Chemical Recycling. We believe that the ambitious targets set up in the EU Plastics Strategy will not be achievable without implementing chemical recycling as it allows the use of wider feedstock and create high-quality recycled content.
Therefore, chemical recycling represents one of the obvious solutions to tackle plastic pollution, to conserve natural resources and protect the environment. It targets heterogeneous and contaminated plastic waste material, when separation is neither economical nor technically feasible, reduces the amount of fossil oil needed to produce commodity plastics, and reduces landfilling or incineration of plastic waste. Chemical recycling enables us to produce infinitely high-quality output, leading to the creation of virgin quality recycled plastics and/or other valuable chemical products.
What are the main challenges with regard to the development of chemical recycling industry?
Chemical recycling is becoming an increasingly prominent complementary route for plastics waste in order to close the loop. To make the circular economy a reality, we call for regulations and policies supporting the development of these new technologies. The right policies and regulations can promote high rates of recycling happening in Europe and prevent plastic waste in the environment. Today, the speed of technology growth and deployment is outpacing the regulation and policy around it. Lack of structured and harmonized approach to waste collection and recycling causes constraints on companies that can create new value-added products from this waste. The current waste management system makes it very difficult for companies offering better solutions to get access to waste plastic landfilled, incinerated, or exported. Efficient harmonized collection and segregation systems across European countries would secure the required feedstock for chemical recycling plants.
In addition, an unequal playing field may become a barrier to eventual implementation of chemical recycling. Establishing of the same EPR systems for mechanical and chemical recycling and recognition of chemical recycling as recycling across Europe and counting in the recycling targets is necessary for further industrialization of chemical recycling technologies. The Netherlands has already taken some steps towards this recognition and support of the industry.
Chemical recycling is also a more sustainable and environmentally friendly alternative to incineration and landfilling, this is demonstrated by life-cycle analysis.
It is worth mentioning here that ChemRecEurope is committed to provide, as soon as the development of the industry enables us, an LCA to ensure that the chemical recycling process creates a value for the environment in terms of saving energy and emissions.
And your final message?
There are still open questions and challenges ahead with regards to the technologies and the regulations. A strong collaboration with the value-chain is essential to develop this industry and tackle some of the challenges, as well as the work with policymakers to close the gap between innovations and regulations.
There is now a growing movement recognising chemical recycling as part of the solution to reduce plastic pollution, decrease CO2 footprint and contribute to the creation of a circular plastics economy.
We are confident that recycling rates will improve, once the environmental and economic benefits of chemical recycling are fully understood and sufficient investment is made to establish the infrastructure needed to enable the deployment of chemical recycling in Europe.
Dr Mohammad Hayatifar
Tél. : +32 (0) 2669 18 76
Avenue de Cortenbergh 71,
The EU’s ambition is to lead by example and be a world leader in reducing greenhouse gas emissions, and European climate policy has a long-term and intensive influence on European and Czech industry. Industry perceives that the topic of climate change and the fight against it has become a political, social and media phenomenon.
Because manufacturing is partly involved in greenhouse gas emissions, and we perceive the consequences and dangers of climate change, we want to reduce our carbon footprint and continue to take a responsible approach to environmental protection. However, we want to prevent the EU’s growing ambitions from phasing out a number of industries that have long and successfully invested in environmental measures.
A number of instruments and measures that depend on the EU objectives contribute to reducing carbon concentration in the atmosphere, including those for increasing the share of renewable sources in electricity generation, energy savings or the circular economy. Since 2005, the main instrument for reducing greenhouse gas emissions in industry and energy has been the European Emissions Trading Scheme (EU ETS), which covers less than half of European emissions. It aims to reduce emissions by 43% by 2030 compared to 2005. The EU’s overall target is to achieve a 40% reduction in greenhouse gas emissions by 2030 and 80-90% by 2050 compared to 1990 levels.
Achieving carbon neutrality in 2050 assumes an incredibly fast application often untested practices and technologies that must be tested and deployed across the board no later than 2030, perhaps sooner. However, carbon-free technologies do not yet exist in many sectors. Estimating the operational and investment costs of major innovations is almost impossible – but we expect them to be so enormous that industry, with various types of subsidies, will not be able to bear them alone, while maintaining global competitiveness.
If the costs associated with the decarbonisation of industry added to the additional costs that must be European and Czech industries apart from the competition from third countries already carry, it means a serious threat to the competitiveness. Demand for the products of Czech and European companies in Europe and the world will not cease – production will only move elsewhere (along with quality jobs, tax revenues, science and research, etc.). And it will be more energy-intensive and often more environmentally harmful. Paradoxically, the demand and purchase of products produced outside Europe by European consumers and businesses will lead to an increase in global emissions, not a decline. Of course, this process is long overdue, see, for example, the disappearance of British industry and the growing volume of imports from Asia, i.e. externalizing greenhouse gas emissions outside the EU.
If not prevent carbon leakage, ie. move industrial production due to European action outside the EU may have finally EU efforts on a global scale in terms of climate change mitigation almost no effect.
Specific effort within circular economy should be paid to the chemical recycling which aims to convert polymer’s waste back into chemicals. It is a process where the chemical structure of the polymer is changed and converted into chemical substances that are then used again as a raw material in chemical processes. It includes processes such as gasification, pyrolysis, solvolysis and depolymerization, which break down plastic waste into chemical substances including monomers for the production of plastics and other materials.
Chemical recycling allows to handle mixed plastics waste which are not mechanically recycled and enables polymer revitalization in case of waste plastic quality standards concerns as an essential and complementing step in the complete solution for the circularity. Chemical recycling is an important tool for avoiding downcycling, e.g. mechanical recycling with poor technical and economical result, at fulfilling high EU recycling targets.
The European Commission Plastics Strategy published in January 2018 provides a relative high focus on mechanical recycling and alternative feedstock. Chemical Recycling of plastics waste, although conceptually understood, is currently under-deployed for plastics circularity.
The Association of Chemical Industry of the Czech Republic cooperates with Cefic and Plastics Europe at highlighting the potential of chemical recycling of plastic waste and calling for enabling conditions, where innovation, scale-up to demonstration, support through policies, and establishing recycling-chains are needed to establish clear pathways for full-scale implementation of chemical recycling to valorize post-use plastics currently shipped, incinerated (energy recovery), or landfilled and wasted.
When we talk about climate change, it is clear what is at stake: The task of making sure that our children will still grow old on a livable planet, ensuring that the Earth stays within a temperature range that allows survival of a rich biodiversity and continued availability of clean drinking water as well as doing our utmost so we can stay safe from natural disasters and diseases linked to global warming. A rapidly growing sense of awareness has led to a situation in which we see millions marching in the streets, and where school kids all across the world boldly demand that decision makers act.
The climate action we urgently need to take is closely linked to natural gas, or fossil gas, which Europeans use in their daily life, which fuels industry processes, heats homes and generates electricity. The main message EU decision-makers support and which has been cemented in various legislative texts produced in the past years is that gas is a transition fuel, that gas is cleaner, that it emits less CO2 than other fossil fuels and that we will still need gas for the next decade or so.
So why is a rapidly growing number of nongovernmental organizations, grassroots movements and other civil society groups mobilizing against natural gas, or “fossil gas”? Independent scientists dealing with the impact of fossil fuels had a deeper look at gas and its climate impact and found that this fossil fuel does not deserve its reputation at all. Gas is a disaster for our climate – even though a tunnel vision of only looking at CO2 emissions, and not at all greenhouse gas emissions, might give a distorted image. This is because natural gas is basically methane, which is a significant contributor to radiative forcing and thus a warming climate. Methane from fossil gas can leak all along the gas life cycle. Methane has a global warming potential 87 times higher than that of CO2 during the next 20 years, and escapes during extraction of gas, at pipelines, compressor stations, during liquefaction, shipping, regasification, distribution and consumption. When the gas is burned it also emits CO2 (less compared to other fossil fuels but still considerable amounts). That means that Europe is today dependent on a fossil fuel which leaks a very potent greenhouse gas – methane – into the atmosphere and does not plan for an urgent phase out of this dangerous fuel.
A methane strategy that the EU Commission plans to present in 2020 will try to look at this problem. However, data on methane emissions in Europe is very poor, and studies from the U.S show that methane emissions have been largely underestimated and occur in large part during extraction, particularly if hydraulic fracturing is applied. Commonly known as fracking, this is a method to force oil and gas out of rock formations by pumping huge amounts of water, sand and a mix of chemicals into the ground, which then risk ending up in aquifers.
Fracking can lead to methane leakage of up to 12%, making the carbon footprint of natural gas much worse than that of coal. A methane strategy will thus need to look at emissions in supply countries and consider a more appropriate timeframe when looking at the global warming potential (GWP) of methane. Currently, the time period considered for comparing the GWP of greenhouse gases is 100 years, however, when considering the next decade or two, the extremely harmful climate impact of gas compared to CO2 becomes visible. This time window is particularly important as it is getting clearer and clearer that Europe is running out of time to tackle the climate crisis, as the 2018 IPCC report or the 2019 UNEP Production Gap Report make crystal clear. All indicators point towards the urgent need for a swift phase out of this dirty fossil fuel as soon as possible.
Nevertheless, it seems like the EU Commission hasn’t heard the warning calls from scientists, NGOs or from the kids taking to the streets. The mission letter to the new Commissioner for Energy clearly underlined the role the Commission wishes gas to play for the coming years, and asks to make “full use of the potential” of liquefied natural gas, LNG, which can come from countries with repressive regimes, riddled with corruption with barely existent environmental protection standards etc. Despite the promise of a European Green Deal, campaigners fear that the Commission president is just giving its policy a green coating and risks continuing with gas business as usual.
Despite commitments to work towards a “carbon-neutral” EU economy by 2050, there is little sign of the EU Commission rolling up their sleeves and getting rid of legislation completely unfit for a post-Paris Agreement world and which still allows EU taxpayers’ money to flow into natural gas projects. In the Union List of Project of Common Interest, the so-called “PCI list”, the Commission, together with Member States, biannually selects a set of priority energy projects in the field of gas and electricity which can receive EU subsidies. The latest such list, published by the EU Commission in October 2019, contains dozens of new fossil gas projects, which, if not rejected by the EU Parliament by February 2020, will enjoy highest EU priority, a streamlined environmental impact assessment and fast-tracked permit granting. They are also eligible for funding under the Connecting Europe Facility (CEF), despite the undeniable need to fund projects that enable a transition away from fossil fuels, not infrastructure that locks us into fossil gas dependence for decades.
The 4th PCI list is also at the crossroads of another important financing instrument of the EU: The European Investment Bank. Despite the EIB decision in November 2019 to stop funding fossil fuels, the EU Bank decided to still channel money towards gas projects if they are PCIs on the 4th list and receive European funding. This is an undeniable fossil gas loophole which won’t be closed until the end of 2021. Also, the pretext of possible compatibility of fossil gas infrastructure with “renewable” gases risks leading to continued EIB and CEF support for fossil gas in the years to come.
With regard to the PCIs, an important next step will be to ensure that support for fossil gas will cease immediately. In order to ensure this, the Commission will have to commit to a swift revision of the Trans-European Networks for Energy (TEN-E) regulation. It represents the rulebook for the process of how PCIs are being selected, a process that to date allows big fossil gas transmission projects to become EU priority and that is currently heavily influenced by the gas transport industry.
In the case of the EIB it will be crucial to ensure another review of the bank’s energy lending policy soon and a proper exclusion of projects that are not exclusively supporting very low or zero-greenhouse gas alternative gases, in order to close the backdoor for indirect support for fossil gas.
For future EU gas legislation, a genuine, transparent discussion about so-called “renewable”, “green”, “decarbonized” or “clean” gases will be crucial to ensure that the important upcoming pieces of EU legislation around gas will help the bloc to get rid of its dependence on fossil fuels. The way the discussion around these alternative gases is taking place on EU level now bears the big risk of directly and indirectly benefiting fossil fuel corporate interests and severely harming a transition towards truly renewable energy. While in very limited cases fossil gas infrastructure could be used to transport alternative gases, these non-fossil gases have completely different requirements regarding capacity, physical grid properties and transport routes than traditional natural gas networks. Also, alternative gases such as hydrogen are today still almost entirely produced with fossil fuels, mostly natural gas. Moreover, options like “decarbonized gas” rely on capturing and storing or utilizing CO2 (CCU/CCS), technologies that haven’t shown any large-scale impact and have seen a high number of cancelled projects despite overly optimistic promises made a decade ago.
Decision makers will need to cast a very critical, very close look at these gases and require a definition of alternative gases that only allows for truly sustainable options with zero or very low greenhouse gas emissions. We cannot afford to continue allowing dangerous CO2 and methane emissions to pollute our atmosphere while trusting that highly uncertain technologies such as CCS/CCU etc. will become a viable solution at some point in the future.
Civil Society, science and NGOs, increasingly knowledgeable about and sensitive to the issues around fossil gas, will certainly keep a close eye on every step the EU decision makers plan around gas. We will work relentlessly to push EU legislation to deliver a (truly) fossil free pathway in line with the Paris Agreement and that really deserves being called a “European Green Deal”.
Food & Water Europe is the European programme of Food & Water Watch. Food & Water Watch mobilizes regular people to build political power to move bold & uncompromised solutions to the most pressing food, water, and climate problems of our time. We work to protect people’s health, communities, and democracy from the growing destructive power of the most powerful economic interests.
Mr. Eduardo Santander Executive Director, ETC
Multilingual executive. Educated in Spain, USA and Austria Mr. Santander holds a PhD and a MBA degree. He has broad experience in tourism marketing, advocacy and public affairs gained in diverse private companies and public institutions from the tourism and hospitality sector. He is also guest lecturer on tourism marketing at international business seminars in a number of US and European Universities. He’s a frequent speaker in Tourism, Hospitality Industry and Destination Marketing forums and a passionate panellist.
Multilingual executive. Educated in Spain, USA and Austria Mr. Santander holds a PhD and a MBA degree. He has broad experience in tourism marketing, advocacy and public affairs gained in diverse private companies and public institutions from the tourism and hospitality sector. He is also guest lecturer on tourism marketing at international business seminars in a number of US and European Universities. He’s a frequent speaker in Tourism, Hospitality Industry and Destination Marketing forums and a passionate panellist.
It is widely recognized that Europe is the world’s number 1 tourist destination. Last year painted a promising future considering that Europe reached another record of international tourist arrival, resulting in a positive increase on previous year’s performance.
Factors that contributed to this positive development include the recovery of major source markets, marketing efforts in promoting travel outside the main season as well as themed promotional activities.
Furthermore, the future of the tourism sector appears prosperous as international tourist arrivals to Europe are believed to accumulate to 745 million by 2030. However, the European tourism industry is facing increasing global competition from emerging destinations that are attracting a significant number of tourists.
The World Tourism Organization (UNWTO) forecasts that especially destinations in Asia and the Pacific will benefit from the expansion of intra-regional travel and will gain most of the new arrivals in 2030. Consequently, North-East Asia will replace Southern and Mediterranean Europe as the most visited sub-region in 2030.
In order to remain the world’s first tourist destination, Europe must respond to the shifting patterns in global tourism and capitalize on the potential of tomorrow’s outbound travel markets. Their expanding middle classes are a growing market for European destinations, whose stakeholders need to ensure the development of a sustainable tourism sector.
Since the emergence of the term in the 1980s, sustainable tourism development is understood to encompass not only the region’s lasting economic benefits but also stakeholders’ responsibilities linked to the socio-cultural and natural environment which both form the basis of Europe’s unique tourism offer.
Sustainability in tourism should be considered in three different but interconnected dimensions:
1) Economic impact
Tourism in Europe is often discussed in terms of its beneficial economic impact. Tourism has proofed to be one of the few resilient sectors in the fragile economies of Europe during years of economic downturn.
The tourism industry generates (directly and indirectly) 10.2% of total EU-28 GDP, a figure which is forecasted to rise to 11.2% of GDP by 2027.
To be more specific: the sector’s total contribution to GDP is greater than the impact of Europe’s mining, chemical manufacturing, higher education, and automotive manufacturing sectors and represents one of the leading employers in the region.
Tourism is an important driver of economic and social development. The sector stimulates economic growth by generating income, employment and investment in Europe, and through its exports to origin markets worldwide. It helps to sustain our cultural and natural heritage, provides revenue to fund facilities and infrastructure enjoyed by visitors and residents, and promotes an awareness of a common European identity and citizenship distinguished by its diversity.
Apart from the direct contribution to the regions’ economy through the influx of revenues from tourism services, tourism produces a spill-over effect that benefits the recognition of Europe’s unique cultural and natural heritage. Tourism can assist local communities in developing a cultural and/or natural tourism product that opens new sources of revenue and employment. Furthermore, the public attention that follows in its wake may result in increased public and private investment as well as in the development of a shared responsibility to preserve assets for the benefit of the local community and future generations.
2) Socio-cultural impact
While fostering and harvesting the benefits of tourism’s economic impact, European tourism also needs to be a socially responsible industry that is accessible to all people regardless of their background. In this context, I would like to specifically mention three groups:
In tandem with making European tourism more welcoming to specific visitor segments, the social dimension of sustainable tourism also advocates for safeguarding the socio-cultural authenticity of the host community, which by no means should be neglected in product and service development.
3) Environment impact
Safeguarding Europe’s position as the world’s number 1 tourist destination also means preserving the region’s authentic natural character and acting responsibly towards its population.
There is no doubt that tourism, in particular mass tourism, places a strain on the region’s natural resources, creates pollution and impacts the physical environment through construction activities and tourist trampling. The development of alternative forms to mass tourism is therefore essential, demanding investment in and promotion of ecologically respectful products and practices.
However, the sustainable development of tourism in Europe is inhibited by three major factors:
Taking these facts into consideration, the UN World Tourism Organization (UNWTO) specifies that essentially, the sustainable development of tourism shall incorporate four essential goals:
What is the contribution of the European Travel Commission (ETC) to sustain European tourism’s competitiveness?
At the core of ETC’s strategy are the stimulation of competitiveness and the promotion of sustainable growth of the European tourism sector by raising awareness for ‘Destination Europe’ in long-haul markets.
Europe must take advantage of its tourism offerings and enforce its market shares in both emerging and established markets.
This means that in all efforts, Europe must align its market mix and identify underserved segments (e.g. senior tourism, LGBTQ, etc.) and further expand its understanding of pan-European product development. Through the promotion of transnational experiences, the European Travel Commission particularly seeks to raise visibility for the plethora of products available while creating awareness for the region’s diversity. An essential pillar to achieve the sustainable growth of European tourism are public-private partnerships (PPPs) following a focused approach with common and achievable goals.
ETC’s long-term strategy focuses on developing PPPs for European tourism promotion and raising awareness for pan-European, transnational thematic tourism products and experiences (such as cultural routes, heritage) that shall inspire and be tailored to different markets, passions groups and traveller segments.
To summarize what it has been outlined before, ETC firmly believes that four of the most important things to support the sustainable growth of the European tourism sector are:
European Travel Commission
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