Clean Transition – European Commission summarises Clean Transition dialogues with industry and EU social partners

The European Commission adopted a Communication summarising a series of Clean Transition Dialogues on transforming Europe into a clean, resource-efficient, fair and competitive economy. In his 2023 State of the Union Address, Commission President Ursula von der Leyen announced the launch of dialogues to discuss with European industry and social partners how to strengthen and support the implementation of the European Green Deal, contributing to the creation of a reinforced industrial approach. The dialogues were chaired by Executive Vice-President Maroš Šefčovič. The summary will be used at the upcoming European Council to inform EU leaders’ discussion on the next steps towards a clean transformation for Europe.

To date, nine Clean Transformation Dialogues have been held. Industry representatives and social partners have reaffirmed their strong commitment to shaping and implementing the European Green Deal. The social partners stressed the importance of ensuring a fair social transition in order to create quality jobs, as well as the need for a strengthened structured social dialogue. The dialogues covered: hydrogen, energy-intensive industries, clean technologies, energy infrastructure, critical raw materials, forest-based bioeconomy, cities, clean mobility and the steel sector.

The Reinforced Industrial Approach: Basic Assumptions and Key Elements

The Communication highlights a number of key elements identified during the dialogues that could support a strengthened industrial approach to deliver the European Green Deal: an effective and simplified regulatory framework to enable businesses to transform; action on energy prices; modern infrastructure; easier access to finance; and a strengthened single market in a globally competitive environment. The Commission will continue to engage with industry and social partners in the dialogues on the clean transition and stands ready to engage in an in-depth debate with the Council and Parliament on the key factors to be addressed.

• Achievement through effective implementation and simplification

The EU has developed a policy and regulatory framework to achieve the 2030 goals. and keep Europe on track towards its goal of achieving climate neutrality and a sustainable economy by 2050. This clear regulatory framework ensures stability and predictability for all stakeholders. As the focus now shifts to implementation, the Commission will develop further guidance to support industry and Member States in applying EU rules and will continue to focus on burden reduction. The Commission will also publish on a dedicated platform a set of key indicators to monitor and measure progress in the green transition, the competitiveness of the EU economy and the societal transformation. The Commission will continue to support industry in providing training to workers to equip them with the skills needed for the transformation and will continue to work with cities, regional and local authorities.

• Abundant resources of clean energy at an affordable price

Member States should make full use of the updated legislative framework, in particular the Renewable Energy Directive, to ensure that industry and citizens benefit from the transition to a clean economy. The participants of the dialogues stressed that securing abundant resources of carbon-free and low-carbon energy at affordable prices is a key condition for accelerating the decarbonisation of the EU economy and maintaining the competitiveness of European industry, in particular energy-intensive sectors. Some industry and transport sectors have asked for additional innovative transitional measures that would secure energy at lower prices while providing certainty to energy producers through long-term offtake agreements. The industry also called for the creation of industrial clusters that connect major manufacturing plants and hubs with zero- and low-emission manufacturing facilities, hydrogen, renewable and low-emission fuel plants, or infrastructure for carbon capture, storage, transport and utilisation. Dialogue participants called on Member States to reconsider the level of taxes and levies on energy, including electricity. The Commission recalls that Member States must take measures to eliminate subsidies for fossil fuels, in line with the recent conclusions of the Conference of the Parties and the Commission proposal to revise the Energy Taxation Directive.

• Unlocking Funding for Transformation

Private sector investment has not yet been sufficiently mobilised, but the private sector will continue to play a leading role in implementing investments in the clean transition. Dialogue participants also stressed the need to reduce the costs of raising capital, diversify financing options for enterprises, develop further innovative financial tools and facilitate cross-border investments. A strong EU budget is needed to ensure higher quality investments and in this context the Commission calls for rapid progress both on innovative ways of using public funds to leverage private investment and on the proposed ETS own resources. Overall, there is an urgent need for greater coordination of funding at EU level, creating economies of scale, increasing the efficient allocation of resources and exploiting the opportunities of the single market. The European institutions should strengthen their engagement with institutional actors to mobilise private finance; the Commission should strengthen political engagement and dialogue with the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), international financial institutions and private banks. Leveraging additional revenues from the EU Emissions Trading System, the Strategic Technology Platform for Europe and auction-as-a-service systems such as the European Hydrogen Bank are examples of promising financing tools being put in place to support the transition. Dialogue participants drew attention to the serious discrepancy between the significant initial investment costs in infrastructure development and the funds available.

• Strengthening the Single Market in a Globally Competitive Environment

The single market is the EU’s greatest asset because it provides scale and promotes high standards also outside Europe. Building on the positive outcome of the joint purchasing of gas, the Commission will consider the possibility of developing demand aggregation and joint purchasing for other strategic goods and organising a pilot project on hydrogen and joint purchasing of critical raw materials. The Commission and the Member States should make full use of policy instruments against unfair global competition to ensure a level playing field in the internal and global markets. It is also important to implement a CO₂ border adjustment mechanism and introduce a more global system for pricing greenhouse gas emissions through intensified diplomatic efforts.

Context

To transform Europe into a clean, resource-efficient and competitive economy, in 2019 The Commission presented the European Green Deal. As a result, a number of concrete initiatives were taken, most of which are now embedded in EU law. The focus now is on implementation and delivery to make the Green Deal a success on the ground.

European industry and social partners should play a key role in the transformation of the European economy. At the same time, the industry is under pressure due to the deteriorating security, geopolitical and economic contexts, as well as the lack of a level playing field.

In the 2023 State of the Union Address President Ursula von der Leyen announced the launch of Clean Transition Dialogues as a new way for the Commission to engage with industry and social partners, understand their current challenges and strengthen and support the implementation of the European Green Deal.

Read more