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New European Commission’s Agenda

Right to Energy Forum 2024

03/12/2024

Kim Claes

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Political Moments

Strategic agenda 2024-2029

a free and democratic Europe
a strong and secure Europe
a prosperous and competitive Europe

Making a success of the green and digital transitions

There is no reference to Europe’s flagship Green Deal

Political Guidelines for the next European Commission 2024-2029 (vdL)

we have to reconcile climate protection with a prosperous economy
competitiveness checks
a new Clean Industrial Deal in the first 100 days
will also help to bring down energy bills. We all know that structurally high energy prices hamper our competitiveness
a new European Competitiveness Fund

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Political moments (2)

Commissioner Hearings

an EC Vice-President for Implementation, Simplification, and Interinstitutional Relations
all commissioners are tasked with ‘stress-testing the acquis’: ie reviewing all existing EU legislation to simplify and reduce burdens on industry
all commissioners are asked to reduce corporate reporting obligations by 25 percent for all businesses

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Commission & Energy/Climate

Von der Leyen confirmed that the Commission aims to introduce a proposal for the 90% emission-reduction target for 2040 to be enshrined in the European Climate Law in line with its own communication from February 2024.
Hoekstra: reiterated his support for a 2040 climate target of 90 percent - mentioned the green transition needs to be socially fair - but he didn’t spell out how to achieve the 2040 target
Jørgensen as Commissioner-designate for Energy and Housing marks a crucial opportunity to tackle the European housing crisis and ensure that the drive for affordable, sustainable homes and investing in people become central to the future of Europe.
Jørgensen’s task: bringing down energy prices in the EU, which is essential to the bloc’s plans to remain competitive with the United States and China.
tackle simultaneously the climate and housing crisis in a systemic approach

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Political moments (3)

General political climate

Due to the failure of the existing energy policies of the EU and its Member States, which have not managed to make the benefits of the energy transition available to the wider population.
Climate policy is a prime target of emerging populist forces that construct a simplistic connection between high energy prices and the energy transition.
This opens up an area of conflict: energy transition needs to be accelerated. At the same time, due to the shift to the right => a challenge to continue at the pace of the European Green Deal

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From Green Deal to Clean Industrial Deal

Weakening of important parts for the EGD
It's part of the broader competitiveness agenda being pushed by the EU, which is also made up of efforts to strengthen the Single Market (the Letta Report) and enhance competitiveness (the Draghi report).

April – Letta Report “Much more than a market”
September – Draghi Report “The future of European competitiveness”

=> aim to establish the competitiveness of the EU economy as the main priority of the new European Commission priority and create the conditions for a stronger business case in Europe
=> call for Clean industrial Deal

The underlying premise is the necessity of utilizing public funds to de-risk private sector investments.
actions to eliminate regulatory incoherence (regulatory burden), conflicting objectives, unnecessary complexity in legislation and over reporting.

Letta - In this report, Letta reimagines the European Single Market, arguing that the decline in competitiveness is primarily due to a lack of integration in the financial, energy, and electronic communications sectors within the EU. “There is an urgent need to catch up and strengthen the Single Market dimension for financial services, energy, and electronic communications. This entails establishing an integrated framework between the European and the national level”, he says.

��Draghi - The report outlines strategies to strengthen Europe’s competitiveness in the face of an economic slowdown and growing reliance on external resources, particularly energy, a situation worsened by recent geopolitical tensions. His assessment? Europe is falling behind in competitiveness, especially compared to regions like the United States and China. This is most striking in the tech sector, where 36 of the world’s top 50 companies are American.

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Clean Industrial Deal

Not only de-regulation, it is also a major call for public funding for the industry

As a reaction on subsidy schemes in the U.S. and trading practices from China
Industries are calling out for subsidies, funds, state aid, other support to compete and improve competitiveness... to survive, and keep jobs. And they have a listening ear with Von der Leyen (Letta, Draghi…)
Call for cheap energy

<-> Austerity policy

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Austerity

At the same moment of massive public funds in energy-intensive industry ...
... we have the return of austerity policies
Belgium, France, Hungary, Italy, Malta, Poland, and Slovakia in the so-called excessive deficit procedure
This adds further constraints to member state economic policies in the years to come
It adds pressure on welfare and livelihoods, which under the current circumstances
It could fuel further support for the far-right

Austerity

In fact, to the challenges above should be added at least one not mentioned in the guidelines: the return of austerity policies. Ursula von der Leyen went through almost a whole term with the rules on member states’ deficit and debt suspended due to the pandemic, and hence with no intervention by the Commission to impose anti-social reforms. That era was put definitively to an end this summer when the Commission had a proposal approved by the Council to put Belgium, France, Hungary, Italy, Malta, Poland, and Slovakia in the so-called excessive deficit procedure. This adds further constraints to member state economic policies in the years to come, and it adds pressure on welfare and livelihoods, which under the current circumstances could fuel further support for the far right�

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Competitiveness

Competitiveness through simplification
Risk that this agenda may translate into deregulation of essential EU social, environmental, democracy and human rights protections
The challenges facing certain industries are mainly not due to excessive regulation but rather the failure of governments and corporations to invest and adapt to necessary transitions.
E.g. the crisis in the German car industry

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Competitiveness

Narrow focus : A narrow industry competitiveness, decarbonisation & deregulation/simplification agenda - missing on integration, ignoring benefits of regulation etc
Narrow focus on cheap energy for the industry
Seems to prioritise corporate interests over public welfare
If we want to achieve the phase-out of fossil fuels, real zero greenhouse gas emissions, we also need strong laws to protect people and the planet.

Risk of false solutions - e.g. wrong energy solutions that miss cost-effective solutions that, in turn, lead to prolonged fossil fuel dependency.

public funds being invested into false solutions

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From Green Deal to Clean Industrial Deal

This doesn’t come out of nowhere.
Big business groups have been campaigning since June 2022 to put ‘competitiveness’ first, pressuring governments and the Commission to put deregulation and ‘completing’ the Single Market at the heart of political affairs.
The commission is already (planning to) rolling back previous commitments on phasing out toxic chemicals, and from combustion engine phaseouts to deforestation prevention, many other social and environmental laws are in danger.

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Corporate influence - Antwerp Declaration

Belgian PM De Croo asked CEFIC at the beginning of the year to organise the Antwerp Summit & vdL attending
Declaration calls to:

1) Put the Industrial Deal at the core of the new European Strategic Agenda for 2024-2029.
2) Include a strong public funding chapter with a Clean Tech Deployment Fund
9) A new spirit of law-making.

9) Legislation should create incentives for businesses to invest in clean technologies. Avoid that the Green Deal policy targets are followed by prescriptive and detailed implementing regulations. Prevent over reporting, ensure coherence, stay tuned with industrial reality and integrate legislative proposals through a stronger Secretariat General and Regulatory Scrutiny Board which systematically pplies a Competitiveness Check and a European Innovation Stress Test against which each new legislation and policy initiative should be evaluated. Use robust data and scientific evidence for effective policymaking. Assess the cumulative impact of legislation.

Calls for an Industrial Deal in the Antwerp Declaration and demands for social rights made by the La Hulpe Declaration are yet the latest indicators that relevant EU actors envisage the need for a new deal. Meanwhile, Heads of State prepare the Strategic Agenda that will guide the EU’s priorities for the next five years. Yet, these high-level debates fail to acknowledge the environmental dimension – and that long-term sustainability needs to underpin our social and economic policy

�To meet climate neutrality by 2050 and the recently communicated 2040 target, Europe’s electricity production will need to multiply, and industry investments will need to be a factor six higher than the previous decade. This enormous challenge comes just as both large companies and SMEs face the most severe economic downturn in a decade, demand is falling, production costs increase and investments move to other regions.�

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Corporate influence

The Antwerp Declaration is largely energy-intensive industries’ (eg chemicals, steel, paper, and cement) & fossil fuel industry demands.
This agenda is not a direct outcome of the shift to the right following recent European elections.
On most points, the guidelines are the result of existing exchanges between the Commission, the Council, and business lobby groups over the past two years. This level of decision-making follows a different path and logic than parliamentary debates or elections.
through bilateral meetings, conferences, advisory groups with business groups set up by the Commission, and interactions on reports.
The predominance of corporate influence in the drafting of both report (Draghi’s and Letta’s) raises significant concerns about the undue impact of corporate power over the next EU legislature.
But... a strengthened far right, and EPP will stand ready to help.

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Corporate influence (2)

There have been nearly 900 meetings between Von der Leyen’s Commission and fossil fuel lobbyists during its term of office. Nearly once every working day for four and a half years.
Energy Commissioner Simson’s cabinet had the most meetings (116 + 78)
There was a 50% increase in meetings between Simson’s cabinet and fossil fuel lobbyists since Russia’s invasion of Ukraine
=> impact

= increasingly grey EGD, boom in new gas infrastructure & financing of false solutions

= weakened climate action & blocking of windfall taxes

= massive amount of fossil fuel subsidies

= an Industrial Deal & increased public funding for false solutions such as hydrogen and CCUS

Away from FF and lobbying

There have been nearly 900 meetings between von der Leyen’s Commission and fossil fuel lobbyists during its term of office. Nearly once every working day for four and a half years.

The impact of these near daily meetings – and the many other avenues of corporate capture afforded to the fossil fuel industry (see Box 1) – is once again all too clear: a boom in new gas infrastructure since the Ukraine invasion; a hollowed-out and increasingly grey Green Deal that is being remade into an ‘industrial deal’ designed to keep the fossil fuels flowing; and yet more public money and policy support to back dangerous distractions like carbon capture and hydrogen.

This open-door policy of the European Commission for big oil, gas and coal interests is in stark contrast with the increasingly frightening picture painted by climate science. It is clear that the interests of the fossil fuel industry are in direct contrast with the urgent need for climate protection. For decades, fossil fuel companies have lobbied against effective climate action at the national, EU and international levels, blocking policies to cut emissions and leave fossil fuels in the ground.The industry's successful lobbying and direct opposition to policy measures that tackle global warming have hindered the EU governments' efforts in implementing policies after the Paris Agreement that meet climate targets and keep warming below 1.5C.

Despite everything that the European Commission's RePowerEU package has achieved for the accelerated expansion of renewable energies, fossil fuel subsidies have risen to an all-time high and a slew of new gas infrastructure projects have been launched. This is also due to the strong lobbying influence of the fossil fuel industry on the EU institutions. Fossil-fuel stakeholders are involved in drafting legislative proposals through expert groups and committees. They even play a decisive role in the planning of natural gas and hydrogen networks. This has created a bias in the democratic decision-making process and thus in input legitimacy, which further erodes support for the energy transition.

Put the common good above fossil fuel interests: The fossil fuel industry's preferential access to political institutions must be restricted. Central planning processes in the hands of fossil interest groups, such as grid planning, must be brought under independent and democratically legitimised control with a view to the common good and preservation of the livelihoods of future generations. Public funds must be spent in the interests of the common good and future generations

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Energy & Climate targets

Severe impacts CC -> the answer must be an accelerated switch from fossil fuels to renewable energy sources
2040 target - but the EU shows lack of vision on phasing out of fossil fuels.

=> risk for false solutions

At the same time, the consequences of climate change are becoming ever more glaring. As a signatory to the Paris Climate Agreement, the EU has a responsibility. There is consensus in the scientific community that the answer must be an accelerated switch from fossil fuels to renewable energy sources. But the EU shows lack of vision on phasing our of Fossil Fuels.

This opens up an area of conflict: In order to meet the targets of the Paris Climate Agree-

ment, the energy transition needs to be accelerated. At the same time, due to the shift to

the right in the European elections, it will even be a challenge to continue at the pace of the

European Green Deal. In order to master the energy transition even under these difficult

conditions, the continued support and democratic legitimisation of this critical project must

be a central political goal.

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Concluding

CID to implement the EGD ??
We expect that the CID will be launched at the same time as the commissions plans on 2040 target. But we have to see how the CID effectively supports the 2040 targets.
The European Commission must ensure EU regulations prioritise public welfare over corporate interests.
Additional support to industry via EU funds (e.g. the recently proposed “Competitiveness Fund”) should not divert existing funds earmarked for climate, environment and social investment.

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Concluding (2)

Best way to clean & affordable energy =

scaling up renewable energy production to meet 100% of the EU’s energy demand by 2040
massive programme on targeted renovation of housing
energy sufficiency & efficiency

Thank you!

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Friends of the Earth Europe gratefully acknowledges financial assistance from the European Commission’s LIFE Programme. The contents of this presentation are the sole responsibility of the author and cannot be regarded as reflecting the position of the funder mentioned above.