The European Commission will launch the Clean Industrial Deal in February in a bid to tackle permitting delays and red tape among hard-to-abate and new tech industries.
Speaking at Davos, Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth, European Commission, said a major challenge is bridging climate action with competitiveness.
“One of the key things we need to do is further enhance our competitiveness and make sure that decarbonisation is a growth strategy,” he said. “So that means focusing on two sectors. Firstly, heavy industry and difficult-to-abate, which is pivotal to the success of our continent, and as important, are the ‘new kids on the block’, the tech companies that have huge demand and are in dire need of shorter permitting periods and way less red tape, and making sure standardisation is being applied across member states.
“So what we will do, in the Clean Industrial Deal that will launch in a couple of weeks, is make sure we realise a step change for those two groups, and there is much more we will seek to announce. A second thing, and this is where Europe has a clear disadvantage currently compared with the US, is the ease with which capital is flowing, so if you’re an entrepreneur you’re in a completely different realm here – we need to make sure that we deliver on the promise that’s been there for years, which is the capital markets union [creating a single market for capital].
He said the second big area where Europe differs from the US is in the domain of tech, innovation and AI. “We’re simply not doing enough, and need to absolutely double down,” he said.
He added that the quest for renewables has a harsh geopolitical angle. “We learned the hard way in 2022 and 2023 what a dependency on Russia meant on practice, so moving into renewables, grid capacity and storage not only has a cost benefit but an independency benefit as well.”
In the ‘Making Climate Tech Coun’ panel, Catherine MacGregor, CEO Engie Group, said last year Europe produced 47% of its electricity from renewables, showing the trend is well underway. “But Europe has to continue to work on all of the grids of the system, to make sure what we are building is affordable for our customers – and equally as important, for industries. All are asking for visibility on price, so we need to work hard on permitting and market integration, we have to think as one European market.”
Electrification is a major lever for decarbonisation, but it won’t cover everything. “We need to work on the molecules, the gas, and here heavy industries are telling us they want access to affordable grid molecules. We have solutions in Europe which are ready to reap – a lot of countries are exploiting biomethane. It’s the same molecule as national gas but produced locally. In France we estimate its potential to be 20% of gas consumption by 2030.”
In a separate speech at Davos, European Commission President Ursula Von der Leyen said infrastructure will be central to the Clean Industrial Deal, investing in modernising electricity grids and storage infrastructure, and better connecting clean and low-carbon energy systems.
Reflecting on the new US Presidency, she struck a collaborative tone, without providing any indication of how Europe would react in the event of the US imposing tariffs.
“It’s in no-one’s interest to break the bonds of the global economy,” she said. “We have entire supply chains that stretch across both sides of the Atlantic. The US provides over 50% of our LNG. A lot is at stake for both sides.”
