Most EU ministers responsible for industrial policy expressed concern about the impact of the ‘Fit for 55’ package on the competitiveness of European industry and businesses, and ultimately on the wallets of European consumers at a time of soaring energy prices, during a first public exchange on the subject at the ‘Competitiveness’ Council on Wednesday 29 September.
All ministers supported the targets set out in the ‘Fit for 55’ package, but its implementation did raise questions and warnings. Starting with the issue of energy, which has been on many lips.
Many Member States, such as Austria, Portugal, Cyprus and Poland, have expressed concern about the impact of the ‘Fit for 55’ package on the energy costs of economic operators, particularly energy-intensive industries and SMEs.
The impact of energy prices was also mentioned in terms of the purchasing power of vulnerable groups, who can no longer afford the rising price of gas, as Hungary pointed out. This could increase public discontent with the climate cause, the Bulgarian minister warned.
The place of nuclear power in the arsenal for achieving climate neutrality was strongly questioned from the outset by Austria, which called for differentiated treatment for Member States that achieve climate neutrality targets without nuclear power and those that do. Luxembourg hammered home the same message at the end of the round.
On the contrary, a group of Member States (mainly from Eastern Europe, such as Hungary, the Czech Republic and Slovakia) lined up behind France in support of nuclear energy. For the latter Member State, no low-carbon energy solution, including nuclear energy, should be denied. Germany, for its part, has remained silent on this point.
It is worth noting that the Spanish proposal to set up an emergency system in case of a sudden sharp rise in energy prices (see EUROPE 12796/9) received Polish support. Spain has asked the European Commission to present its toolkit as soon as possible.
The extension of the ETS to the construction and transport sectors has been repeatedly criticised, as has Poland, which fears that the scheme will accentuate the differences in development between Member States. Several ministers called for the national situation of each Member State to be taken into account and for a detailed analysis to be carried out on a case-by-case basis, also sector by sector.
Natural gas. Natural gas has also been mentioned as a transitional solution to achieve climate neutrality, notably by Hungary, the Czech Republic and Poland. Green hydrogen has been mentioned many times. Germany has insisted here that European support should only go towards sustainable hydrogen.
Carbon leakage. The risk of carbon leakage was also cited by many ministers, starting with the French minister. All supported the Commission’s proposed Carbon Border Adjustment Mechanism (CBAM), although some, like Denmark, stressed the need to respect World Trade Organization (WTO) rules. Many have argued for the continuation of free emission allowances until 2030 for the ETS.
IPCEI. The usefulness of Important Projects of Common European Interest (IPCEI) has been highlighted by many Member States, including Germany, France and Greece. However, some Member States have insisted that this tool should be used appropriately, taking into account the risks of distortion of competition, such as Finland, Estonia or Denmark. The latter recalled a joint document signed by 11 Member States which insisted on the need to act only in the case of market failure. The Netherlands insisted on the need for full transparency on their implementation.
Mobility package. Several Member States have stressed the absolute necessity of coherent European legislative action to achieve these climate neutral objectives. In this context, the mobility package has been strongly criticised by Lithuania, Latvia and Poland as going against the objective of climate neutrality.
A Competitiveness Council at the heart of the Pact. The Slovenian EU Presidency’s proposal to give the Competitiveness Council an advisory, but important, role in monitoring the negotiations and implementation of the’Fit for 55’ package was unanimously welcomed. Italy suggested that a competitiveness review be carried out as part of ‘Fit for 55’ along the lines of the competitiveness review.
Interviewed by EUROPE during a press briefing, French Secretary of State Agnès Pannier-Runacher confirmed the key role that the Competitiveness Council will play on this file, in that it will work hand in hand with the other Council formations, in particular the Environment Council, notably under the French Presidency of the Council. (Original version in French by Pascal Hansens)