New Recommendations by the EU’s High Level Group on Energy-Intensive Industries
The expert group gathered representatives from eleven industries, which make up more than half of the EU industry‘s energy consumption, such as aluminium, steel, cement – and chemicals. These industries also have a strong record in reducing greenhouse gas emissions, decreasing theirs by 36% between 1990 and 2015. Given the long investment cycles for these industries, the European Commission believes that meeting the 2050 target requires fast action to meet the objectives that were put forward in its “A Clean Planet for All“ strategy in November 2018.
Saving the Climate while
The Commission published the expert groups new recommendations at the end of November. The experts have developed a policy framework aiming to strike the right balance between Europe‘s climate ambitions and the need for the industries to remain competitive. Their input is to feed into the EU Industrial Strategy and the European Green Deal, announced by the designated President of the European Commission Ursula von der Leyen, that aims to make Europe become the first climate-neutral continent.
The experts’ recommendations include actions that are intended to provide the right market signals to attract new investments and help companies implement cost-effective solutions towards climate-neutrality. They also focus on the need to ensure a socially just transition, underlining the importance of equipping workers with the right skills for the future and of helping communities that depend on these industries to manage the transition.
New Markets for Circular Products
In particular, the recommendations highlight key success factors under three main priorities: First, creating markets for climate-neutral and circular products, for example by making a more strategic use of public procurement to select sustainable products and services. This is provided for in the 2014 revision of the rules, giving public authorities the power to use public procurement to achieve environmental, societal or innovative objectives when buying goods and services.
The experts urge the EU to develop an enabling framework to support the cost competitiveness of climate neutral, circular economy products. Furthermore, the experts underline the need to help consumers make more informed choices. They also ask the companies to share best practices and guidance among fellow industry participants, e.g. through professional bodies and associations, and to support other actors in identifying circular and low-carbon techniques with low other environmental impacts.
Need for Large-scale Pilot Projects
Secondly, the experts underline the need to develop large-scale pilot projects to showcase clean technologies by 2025–2030, with the aim of bringing them to market. They should be supported with EU funds and by easier access to private financing. This also requires eligibility criteria between different funds, both on an EU level and national level, as well as interoperability of funding mechanisms. But the industrial actors are needed, too: The experts plead for a bottom-up approach in which industry indicates areas where, and what level, financial needs are to be expected.
Thirdly, the experts urge all actors to switch to alternative climate-neutral energy and feedstock sources. This would require, for example, the EU and national legislators to secure access to and availability of such sources at globally competitive prices, mapping energy infrastructure and supply. On the other hand, the energy-intensive industries, for example, would need to provide demand response flexibilities. Moreover, the experts demand greater transparency in raw material supply chains and ask companies to improve tracking of secondary raw materials and chemicals. According to the experts’ recommendations, industries should also promote the ‘energy efficiency first’ principle across all operations. Furthermore, they should make their plants ready for waste heat recovery and waste heat delivery.
Opportunities for “Innovation, Economic Growth and Job Creation”
The experts group also recommends setting up an industrial transition observatory to monitor industry’s progress towards climate-neutrality and to provide guidance. “EU industries are our partners in achieving climate and circularity objectives”, said Commissioner Elżbieta Bieńkowska, responsible for Internal Market, Industry, Entrepreneurship and Small and Medium-sized Enterprises (SME). “A climate-neutral economy is not only a must for future generations. It also represents immense opportunities in terms of innovation, economic growth and job creation.”
At the beginning of next year, the Commission plans to present the recommendations to the Member States, in the EU Competitiveness Council, and to the European Parliament. It remains to be seen whether the many interests and ambitious goals – environmental, economic and social – can be reconciled at the same time. And time indeed is short.