Keen not to pit the European Union’s climate and industrial ambitions against each other - as it had already done at the last meeting of European environment ministers (see EUROPE 13712/3) - France brought the issue of reconciling the 2040 climate target with European industrial competitiveness to the ‘Competitiveness’ Council on Monday 29 September.
A ‘miscellaneous’ point that was justified by the desire to pursue “strengthening competitiveness and European reindustrialisation” on the one hand, and European climate policy on the other.
However, “the figures do not add up in terms of industry”, stated French Minister for Industry and Energy Marc Ferracci, referring to the European Commission’s proposal, presented on 2 July, for an interim climate target of a 90% reduction in net greenhouse gas emissions by 2040, accompanied by flexibilities (see EUROPE 13672/2). And with good reason: the industrial agenda of the ‘Clean Industrial Deal’- which is nonetheless welcomed - is “not yet on a par with an ambitious 2040 target”.
Fearing that the green transition would constitute “a new stage in de-industrialisation”, France has formulated a set of eight enabling conditions, headed by “an ambitious review of the CBAM before the end of the year”, to support strategic sectors such as steel and avoid exacerbating European industry’s loss of competitiveness in the face of international competition.
A majority of Member States supported this approach. For Poland, the 2040 climate target needs to be combined “with favourable enabling conditions” such as access to finance, protection against carbon leakage, simplification of standards and respect for fair trade.
Hungary, Slovakia, Belgium and Italy have also welcomed the French initiative.
Sweden declared that “the climate transition and competitiveness go hand in hand”, calling for greater regulatory clarity in order to safeguard the investments already made by its industry. The same holds true for Luxembourg and the Netherlands, who have reiterated their commitment to the Commission’s proposal, while calling for an “ appropriate framework” in pursuit of the climate goals.
According to Finland, there needs to be support for the industrial efforts that have already been made and encourage circular innovation, while Estonia pointed out that in order to achieve carbon neutrality, it was necessary to consider the advantages that the transition would represent for businesses, including the smallest ones. Portugal, which has voiced its support for the 2040 target, called for a flexible application of the objectives, which would nevertheless be accompanied by a degree of legal certainty for businesses.
Spain, for its part, referred in particular to the report on the EU’s competitiveness (see EUROPE 13478/1), presented in September 2024 by Mario Draghi, to affirm that decarbonisation is also a driver of growth and employment, and urged rapid confirmation of the climate target in order to give a clear signal to investors and avoid capital flight to other regions. (Original version in French by Nithya Paquiry)