Industry waits in anticipation of a Green Deal for Europe

Amid high hopes for the European Commission presidency that is about to start, attendees at a recent event in Berlin tempered optimism by renewing calls for an industrial policy for the bloc.

Things are looking up, in terms of European climate change policy, according to Pieter de Pous, a policy advisor at London-based climate change thinktank E3G.

“The new European Commission has set a new priority [on climate and the environment], something we didn’t see six months ago,” said De Pous recently at a Community Days event held by the EU-funded Innoenergy group of European industry, research and higher education organizations.

The positivity felt at the event stemmed from a pledge by new commission president Ursula von der Leyen to place the efforts of the EU to combat climate change at the center of her administration. Von der Leyen is due to take office on December 1 and media outlets are predicting she will announce a Green Deal for Europe within her first 100 days in the job, enshrining the bloc’s 2050 zero carbon ambition in law.

Vast infrastructure investment is needed

Haitze Siemers, of the EU’s Directorate of Energy, told the Innoenergy event in Berlin the bloc is close to achieving its 2020 energy goals and is confident it will hit its 2030 targets.

Achieving carbon neutrality by 2050, however, would require the investment of an estimated €180-250 billion extra per year into energy systems and infrastructure from 2030 onwards, said Siemers. The energy spokesman said there was no silver bullet technology to beat climate change and renewable energy generation capacity must be rolled out rapidly.

Siemers added, the European Commission is keen to understand how the various climate change-focused technologies can interact to mitigate global heating, and eager to explain that message to the public.

Asia leads battery cell production

Matthias Machnig, a German politician responsible for Innoenergy’s industrial strategy, painted a more challenging picture of the EU energy sector and said the bloc had surrendered global leadership in clean energy development to China.

He cited the example of battery cell manufacturing, pointing out the planned, 32 GWh capacity Northvolt factory in Sweden and the 16 GWh Volkswagen fab being planned in Salzgitter, in Germany’s Lower Saxony, will provide only 12% of the estimated 400 GWh of cells required by Europe’s automotive industry when they are up and running in 2025.

Where will the 88% shortfall be made up? In China and South Korea, said Machnig, unless EU funding is cranked up.

What role for Europe’s industrial policy?

Battery manufacturing is the latest industry ceded to China, said the politician, after the emigration of solar manufacturing – a point reinforced by the final collapse of German thin-film producer Solibro this week.

In Europe, said Machnig, we need to ask: “Where we are, where we want to go and how we can scale up what we already have, so that we can build up and transform our industry. We need a clear industrial strategy which we don’t have now.”

The EU can do more to expand carbon pricing under its Emissions Trading Scheme, which currently does not apply to the transport sector, said Machnig, and must work harder to foster innovation, with the Northvolt project illustrating how successful such an approach can be. Although the factory was backed by the European Investment Bank, its business plan only materialized with the help of Volkswagen.

The SPD party politician told pv magazine the hotly-anticipated Green Deal for Europe will offer an opportunity for the bloc’s renewable energy industry to carve out a cross-sectoral plan of action, similar to Beijing’s China 2025 policy to rapidly expand its high-tech sector and develop advanced manufacturing.

An EU industrial policy, together with a Green Deal for Europe must also address other issues associated with the energy transition, added Machnig, such as developing the nascent internal energy market and dealing with the social impact and changing employment picture of the switch to clean energy.

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