Enabling European industry to invest into a climate-neutral future before 2030

  • Impulse

At the European Council meeting of 10-11 December 2020, EU leaders took to the crucial step of setting a new EU target of reducing EU greenhouse gas emissions by 55% by 2030, up from the current -40% target. Recognising a need for reinforced efforts on industry, it also explicitly tasked the Commission to “propose measures that enable energy intensive industries to develop and deploy new climate neutral technologies while maintaining their industrial competitiveness”.

However, doing this requires an integrated package of policies to decarbonise heavy industry. Unfortunately, at the present stage, a coherent and integrated policy package is not what currently appears to be emerging from the EU Green Deal and the Fit-for-55 Package. On the contrary, there is a risk of a fragmented and altogether uncoordinated approach to industry decarbonisation which overlooks key parts of the problem.

Against this backdrop, this short publication proposes that the European Commission should present an updated EU industrial strategy by April 2021 that addresses these weaknesses of the previous industrial strategy head on. It should present a compelling narrative, set concrete and ambitious 2030 milestones, and includes a roadmap with specific instruments for delivering the above-mentioned milestones. This legislative “roadmap” could then enable the EU legislator to better coordinate the robust and consistent European framework needed.

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Core results

  1. 1

    Europe’s energy intensive industry must make a significant contribution to achieving the EU’s new target to reduce greenhouse gas emissions by 55% by 2030.

    The CO2 abatement potential of key low-carbon technologies in the steel, chemicals and cement sectors amounts to 145 Mt of CO2 by 2030. The European Council of 10-11 December 2020 thus explicitly tasked the Commission to “propose measures that enable energy intensive industries to develop and deploy new climate neutral technologies while maintaining their industrial competi-tiveness”.

  2. 2

    The Commission’s 2021 Work Programme currently does not foresee developing a coherent and integrated policy package for climate neutral industry.

    While the Commission has addressed some aspects (e.g. hydrogen strategy, ETS and carbon leak-age reform), key elements are still missing, such as policies to create lead markets for low carbon basic materials or incentives for material-efficient and circular construction and manufacturing.

  3. 3

    Enabling the necessary investments at scale requires a robust and consistent framework at the European and national level well before 2030.

    To this end, key elements of the “Fit for 55 package” must be connected to crucial initiatives for industrial decarbonization such as the Circular Economy Action Plan, Sustainable Products Initia-tives, mandatory use of the LEVEL(s) framework or Green Public Procurement opportunities.

  4. 4

    By latest April 2021, the European Commission should present an update of its industrial strategy.

    The updated strategy should: a) present a compelling and concrete narrative for how energy-intensive industry can transform by 2030 and 2050; b) set concrete and ambitious 2030 mile-stones for that industrial transformation; and c) include a legislative roadmap with specific instru-ments for delivering the milestones to kickstart the transition.

Bibliographical Data

  • Authors

    Oliver Sartor, Matthias Buck, Frank Peter

  • Publication number

    201/01-I-2021/EN

  • Version number

    1.0

  • Release date

    01/2021

  • Number of pages

    13

  • Citation

    Agora Energiewende (2021): Enabling European industry to invest into a climate-neutral future before 2030

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