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It was one of the key talking points Monday’s election debate – how decarbonisation can drive Europe’s future prosperity. 

Almost five years after the Green Deal was announced, this concept remains firmly embedded in Europe’s political consciousness. 

Heavy hitters from across the political spectrum, including Emmanuel Macron, Teresa Ribera and Margrethe Vestager, all recently laid out visions for how the energy transition is the basis of Europe’s economy. The Letta Report echoed these points, and the forthcoming Draghi Report is expected to do the same.

It’s election time, so these interventions are largely political slogans. But even after five years, it’s not clear that Europe has managed to translate political slogans into a coherent policy framework. 

A key element, the Net Zero Industry Act, which was passed by Parliament last week, is considered by many to be toothless. 

At the time of the Act’s conception, an accompanying ‘Sovereignty Fund’ was also planned, to back up the new rules with serious cash. 

However Europe’s subsequent fumbling on funding shows the existential challenge that industrial policy poses to the EU.

No fresh money materialised, thanks to deep scepticism from several national governments. 

In the meantime the Commission relaxed State Aid rules. This move allowed individual countries to channel more cash to their green industries, in the face of Chinese and US competition. 

France and Germany have jumped at the opportunity, accounted for over 70% of approved State Aid in the first 18 months after the rules were loosened.

This concentration of support to industry in just two countries is not consistent with the EU’s single-market, which promises free and fair competition between countries. To preserve the Single Market – the EU’s crown jewel –  any industrial strategy funding would need to be decided in Brussels. 

But this implies a bigger EU budget, more transfers between countries and – probably – common EU debt as a structural solution. Delivering this would mean crossing one of Europe’s deepest faultlines. It would represent a fundamental evolution of the EU.

Europe’s green industrial strategy is far more developed and coherent when it sits within ‘classic’ EU competencies – a deeper Energy Union, more muscular trade policy and circularity of goods and raw materials, for example.

But to be more than a talking point, the Green Industrial Strategy needs serious funding. Either Europe can deliver this or it cannot. Either outcome will be a critical moment in the EU’s journey.

Top stories

Ribera: Spain has 'enormous difficulties with France‘ on cross-border energy links

The Spanish energy minister, Teresa Ribera, says the French have been blocking projects to better connect the Iberian Peninsula to the European grid for years, calling it a disgrace. 

Macron at Sorbonne: Energy key to French president's 'new European paradigm'

French President Emmanuel Macron set out his vision for the future of Europe, placing energy, including nuclear, at the core of his approach, in a speech at Sorbonne University on Thursday (April 25).

German Green's minister Robert Habeck under fire over 2022 nuclear shutdown

The Berlin economy and environment ministries, both held by the Greens, have been accused of mishandling the shutdown of the country’s last three nuclear power plants during the 2022 energy crisis.

Must reads

• Austria’s farming, economy ministers urge von der Leyen to delay EU anti-deforestation law – by Sofia Sanchez Manzanaro
• Nuclear: €300 million state aid for French small modular reactors – By Paul Messad
• EU report: 91% of cities look to nature-based solutions in face of climate change – By Nikolaus J. Kurmayer
• EU lawmakers debate the future of the Green Deal ahead of elections – By Nikolaus J. Kurmayer 
• Energy taxation directive: No progress expected before EU elections – By Paul Messad
• Researchers urge Europe to ’embrace’ deindustrialisation – By Nikolaus J. Kurmayer
• EU Parliament approves new rules to reduce, reuse and recycle packaging – By Nathan Canas
• Madrid endorses Ribera to become Spanish Commissioner – By Nikolaus J. Kurmayer
• EU Parliament approves new ‘ecodesign’ rules to make products more sustainable – By Nathan Canas
• Macron’s billion trees target leaves scientists and NGOs sceptical – By Nathan Canas

News from the capitals

SOFIA. Bulgaria risks losing billions in EU funds over coal miner spat. Bulgaria risks losing €4.4 billion in EU funding under its Energy Recovery and Sustainability Plan as its parliament delays key legislative decisions due to a backlash from coal miners, which is likely to result in the European Commission withholding money from Bulgaria’s Recovery and Resilience Fund. Read more.

Opinions

• Putting people first: why healthy buildings matter – By Oliver Rapf

• A smart industrial policy to fast-charge Europe’s electric vehicles revolution – By Julia Poliscanova and Simone Tagliapietra

• The case for a European Green Industrial Deal – By Bas Eickhout, Michael Bloss and Sara Matthieu
• Tripling renewables: European G7 leaders need to turn words into action – By Katye Altieri

On our radar

• 30 MAY. Energy Council 
• SPRING 2024. First European Climate Risk Assessment
• 6-9 JUNE: European elections
• 17 JUNE. Environment Council (Luxembourg)
• 27-28 JUNE. European Council

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[Edited by Chris Powers]

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