Morten Petersen MEP: EU industry and the path to net zero

The Fit for 55 package set out much of the legislative backbone that will drive Europe toward net zero. A key challenge that could break the green deal’s success is achieving effective integration of energy systems in transport, industry and power production across the 27-member bloc. Billions of investments are at stake and European operators and investors are likely to have to deal with a very different regulatory framework over the coming years.

Highlights from the discussion:

• System integration is a precondition to achieve climate targets and the vision set by the European Commission in the Fit for 55 package is right. But it will be extremely challenging for the European Parliament and the council to negotiate a mix of measures that will collectively enable Europe to reduce carbon emissions by 55% in 2030. This is also because of the national elections occurring between now and 2023. Two years might not be enough to reach an agreement on the package.
   
• The social dimension of the green transition seems to have been underestimated and the growing concerns regarding the unfolding energy price crisis underscore different sensitivities across member states. The impact on consumers and business of high energy prices is being used by stakeholders to question the ambition of the Green Deal as such, which further complicates the outlook for achieving agreements on the Fit for 55 package.
   
• Renewable energies deployment is key to power any sector with clean electricity but permitting is one of the biggest barriers. Co-legislators will discuss what the EU can do to ease and speed permitting procedures in the context of the revision of the Renewable Energy Directive. The astonishing fall in renewable energy cost is making the review of the EU guidelines for state aid less of an issue for developers, though support schemes will be paramount to scale other cleantech such as hydrogen.
   
• The forthcoming negotiations on the package will need to make sense of the commission’s progressive departure from technology neutrality and move towards taking a hard stance on specific technologies. This is the case for natural gas, which is being progressively excluded by EU funding via the EU taxonomy and TEN-E regulations. But it is also the case for biomass, which the review of the renewable energy directive excludes from support mechanisms across Europe on environmental grounds.