S.12. Clean Energy for All Europeans

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The European Green Deal – The Start of a Cross-Sectoral Revolution?

Friday, December 13, 2019


On 11 December, European Commission President Ursula von der Leyen started her presentation of the European Green Deal (EGD) as “Europe’s man on the moon moment”. The problems it aims to address are urgent and affect all layers of society, industry and the very fibre of the system we live in.

Given the climate urgency declared by the European Parliament and echoed by a plethora of international organisations, the EGD is ambitious and seemingly all-encompassing, yet only time will tell if this flagship policy will prove to be a success story with its proposals successfully landing at the EP and in each European capital.

The EGD is conceived as a roadmap to help make the EU’s economy sustainable, through turning climate and environmental challenges into opportunities and, above all, making the transition inclusive and just for all Europeans. The roadmap, through concrete actions, also intends to boost the efficient use of resources by moving to a clean circular economy, mitigating the effects of climate change, reversing biodiversity loss and cutting pollution. It also outlines needed investments and financing tools both available and that need to be created.

Ms von der Leyen stated that the “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 with our people”. Said goal is supported by the tightly packed and ambitious action and policy proposal timeline outlined in the Annex to the EGD, with some of the proposals expected as early as January 2020.

The nearly 50 specific measures of the EGD cover virtually all sectors of the economy, notably transport, energy, agriculture, finance, biodiversity, buildings, and industries such as steel, cement, ICT, textiles, chemicals and others. This means that the upcoming proposals will need to be delivered in a manner requiring more coordination than ever before among the various Directorate Generals and Commissioners responsible for the different portfolios, orchestrated by the Executive Vice-President for the European Green Deal, Mr Frans Timmermans, while at the same time being heavily scrutinised by numerous observers and external actors.

The roadmap foresees the first-ever pan-European climate law, which has the potential to set the direction for the development of the whole EU economy for the future. This should not only bring certainty to investors, it should also create opportunities for growth. This in fact was one of the main points for the 12 December European Council, where heads of state agreed to “endorse the objective of achieving a climate-neutral EU by 2050, in line with the objectives of the Paris Agreement”, albeit with one important caveat that Poland, “at this stage, cannot commit to implement this objective as far as it is concerned, and the European Council will come back to this in June 2020”.

Previously, on 05 December the Council of the EU in its Energy configuration adopted conclusions on the EU energy taxation framework, which aim is to contribute to the policy objectives and measures to achieve the environmental, energy and climate targets for 2030. These two Council Conclusions give the green light to the EC to work on and propose the EGD’s pan-European Climate Law and to reform the Energy Taxation Directive.

The EGD also points towards another important item that should be tackled simultaneously to transforming the European economy and way of life, namely bridging the energy poverty gap and making the transition transversal by ensuring that everyone benefits from it. This will require the creation of new EU instruments for project financing, such as the anticipated proposal for a Just Transition Mechanism.

Additionally, restructuring of existing mechanisms, including those managed by the European Central Bank, and gearing them towards the EGD goals will be required. Although the redesign and realignment of the EU instruments was started under the Juncker Commission, a lot ow rok is still required to effectively reshape these mechanisms to redirect finance and capital towards new “green” parts of the economy and to fully support the climate neutrality goal.

The main action proposals of the EGD include:

  1. Climate ambition. Considered to be one of the flagship policy proposals of the EGD and expected to be heavily debated. The EU will aim to reach net-zero greenhouse gas emissions by 2050, with the ‘Climate Law’ to be presented in March 2020. It also includes redrafting a big part of the recently adopted “Clean Energy for All Europeans” Package.
  2. Clean affordable and secure energy. This includes new strategies for smart sector integration and for offshore wind, as well as an evaluation and revision of the TEN-E Regulation – all scheduled for 2020. It also includes a “renovation wave” initiative for the building sector, which aims to “at least double or even triple” the renovation rate of buildings from the current approximately 1%).
  3. Industrial strategy for a clean and circular economy. A new circular economy action plan as well as a new EU industrial strategy will be tabled in March 2020. Additionally, a proposal for legislation on batteries is planned for October 2020. The latter is to complement the recently created European Battery Alliance, which Member States agreed to receive €3,2 billion. This initiative, combined with the new Industrial Strategy proposal, aims to make the EU the world leader in innovation, digitisation and decarbonisation.
  4. Sustainable and smart mobility. This includes a strategy for sustainable and smart mobility for 2020, as well as a review of the Alternative Fuels Infrastructure Directive and of the Trans European Network – Transport Regulation scheduled for 2021.
  5. A fair, healthy and environmentally friendly food system. This includes the so-called “greening of the Common Agricultural Policy” under a new “Farm to Fork” strategy to be proposed in spring 2020.
  6. Preserving and protecting biodiversity. This includes proposals in March 2020 for a new EU Biodiversity Strategy for 2030 and a new EU Forest Strategy to be proposed in 2020.
  7. Towards a zero-pollution ambition for a toxic free environment. This includes a strategy on chemicals for the summer of 2020, a zero pollution action plan for water, air and soil and additional measures to address pollution from large industrial installations all to be proposed in 2021.
  8. Mainstreaming sustainability in all EU policies. Another flagship proposal of the EGD is the Just Transition Mechanism that will be proposed in January 2020 and which includes a Just Transition Fund and a Sustainable Europe Investment Plan. Additionally, a renewed sustainable finance strategy is foreseen for autumn 2020 as is a review of the State aid guidelines, including the environment and energy State aid guidelines in 2021.
  9. The EU as a global leader. A number of actions and proposals will be put forth starting in 2020 to strengthen the EU climate leadership by example.
  10. Working together – a European Climate Pact (ECP). The ECP is expected to launched in March 2020 alongside a proposal for an 8th Environmental Action Programme later in 2020.