In a new report published on Thursday 4 July, BusinessEurope, the association that represents Europe’s major companies, sets out seven recommendations for urgent action by Europe’s leaders for a successful transition to carbon neutrality by 2050 and to ensure the EU’s competitiveness.
It models: - a first ‘managed’ transition scenario showing how policies to support the deployment of critical infrastructure and decarbonised technologies can reconcile the objectives of security and affordability with the achievement of climate objectives; - another scenario, labelled ‘frustrated’, which analyses the impact of policies that delay the necessary investment in these technologies.
The report highlights, firstly, that a massive scale-up in renewable and low-carbon energy production capacity is needed to reduce the energy price gap between the EU and third countries and to achieve climate neutrality.
It also points out that energy prices are likely to remain significantly higher in Europe. Additional policy measures are therefore deemed necessary to ensure the EU’s competitiveness.
With regard to the massive development of renewable energy, the report states that, if they are developed in the least costly locations and all obstacles are removed, including interconnections, electricity prices on the wholesale market could fall by almost 40%.
In addition, BusinessEurope is calling on the EU to mobilise more private investment in necessary production capacity and essential infrastructure to meet carbon neutrality targets.
The association goes on to call for investment certainty and the safeguarding of industrial demand for green hydrogen, “as it remains the vital hydrogen source for achieving a decarbonised economy by 2050”. It also recognises the role of low-carbon hydrogen.
BusinessEurope then recommends continuing to speed up and harmonise permit allocation procedures, ensuring effective application of the Carbon Border Adjustment Mechanism (CBAM) - in particular to prevent carbon leakage - introducing measures to reduce energy costs for industry and implementing effective demand-side measures, in particular by establishing sustainability criteria for public procurement in all Member States.
To see the report: https://aeur.eu/f/cxm (Original version in French by Pauline Denys)