The fact that the 2030 Energy and Climate package includes an analysis of energy costs and was published together with the European Industrial Renaissance Communication is a landmark shift in EU policy. The Confederation of European Paper Industries (CEPI) interprets this as a signal showing the European Commission is starting to take industrial competitiveness seriously. However, there are still important steps to be taken.
In practice, this new package will not change the competitiveness of industry in the short run. The high pile of documents released by the Commission analyses and promises, but at the end it only proposes one legal act – the change of the EU ETS. In this regard, CEPI welcomes the Commission proposal to keep EU ETS unchanged up to 2020 to give the necessary stability for investments in EU industry. But is this enough?
The Commission finally acknowledged energy prices in Europe are uncompetitive, as electricity costs for industry are twice that of US competitors. It also rightfully recognised the way the EU supported renewable energy was unsustainable. It is now up to EU member states to change this. But more is needed. The gas market needs to be reformed. Energy interconnections between EU member states need to increase urgently.
The impact on European competitiveness of a 40% CO2 reduction target by 2030 for the entire EU economy cannot be underestimated either. The suggested changes by the Commission for industrial sectors will require emission reductions of 43% in 2030, 65% in 2040 and 87% in 2050. The European Council in March needs to assess the feasibility of this package in detail and develop tools that support the deployment of innovative low-carbon solutions in industry. This is especially needed, if no further global action is taken and the EU Economy does not improve.
Additionally, the cost of decarbonising the current power sector - a key challenge - is not addressed. This will most likely increase electricity bills, which the European Commission accepted as being too high already. The EU will have to explore new models of decarbonising the power sector, other than via the carbon price alone.
Specifically related to the European pulp and paper industry, CEPI applauds the long awaited recognition of the negative impact of subsidised bioenergy on EU wood markets. And CEPI welcomes the announcement in the 2030 Energy and Climate package to further explore funding tools for breakthrough technologies.
But the bottom line is: policy needs to be put into practice. “We appreciate the refocus on industrial policy. It is a good sign that the Commission recognises again our role in creating jobs and growth for Europe. However, the proposed measures for an effective industrial policy need to be translated into concrete actions as soon as possible”, said Teresa Presas, CEPI Director General.
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Note to the Editor
2030 Energy and Climate Package from the European Commission:
Industrial renaissance Communication:
Download here