Next EU Commission must focus on greening industry, clean tech competitiveness – think tank

Greening Europe’s industrial base, ensuring resilient clean-tech value chains and setting up a new EU climate fund should be among the priorities of the next European Commission, taking office following the 2024 EU elections in June, according to a new paper from think tank Agora Energiewende. The next Commission should draft an ‘EU Industrial Direct Electrification Action Plan,’ which would set fossil fuel phase-out dates for certain industrial processes. Agora Energiewende argues that direct electrification of industrial heat should become a major priority as it would result in rapid reduction of both fossil gas use and CO₂ emissions, making the industry more resilient and competitive. The paper argued that the EU has two larger climate policy tasks to undertake in the next five years: implementing the "Fit for 55" policy package to reach 2030 targets, which has been agreed in the current term; and building on this introducing new initiatives, such as a 2040 greenhouse gas reduction target.

The think tank's paper includes 20 proposals for initiatives across policy areas that the EU should introduce in the coming legislative period. Aside from industry decarbonisation, it focusses on garnering broader public support for the transition through making climate-friendly heating, cooling and mobility solutions affordable and accessible. It also calls for the development of a 'European Rural Deal' to enable farmers, forest owners, and rural communities to benefit from the transition. Agora Energiewende also proposes setting up a new EU climate fund to increase available funding for the transition in all member states, financed with a balanced mix of sources including carbon pricing revenues and EU debt. It should be in place to fill the gap when the Recovery and Resilience Facility (RRF) ends in 2026. The RRF, worth hundreds of billions of euros, was introduced to help the bloc out of the COVID-19 crisis in an environmentally sustainable way. The think tank also calls on the EU to establish a bloc-wide target for ending the use of fossil fuels and establishing an obligation to phase-out fossil fuel subsidies in national and EU spending.

Voters in the EU will head to the polls on 6-9 June 2024 to elect the next European Parliament and help shape the bloc’s climate policy for the next five years. The next European Commission will face the difficult task of designing the follow-up to the Green Deal – Europe’s strategy to become the first climate-neutral continent by 2050. Policymakers say the EU must focus on implementation, but also ensure its place in the world as a climate and technology leader, even as increasing worries of losing out in the transition causes pushback against ambitious climate policy. The political landscape is set to change as far-right parties are projected to make significant gains in many countries. The current Commission is set to make a first proposal regarding a 2040 climate target on 6 February, which would then be decided in the coming legislative period.