Ref. Ares(2021)4424555 - 07/07/2021
KEY messages
• The Climate law and its “Fit for 55” package are at the heart of the
European Green Deal, the new growth strategy for Europe.
• With the Industrial Strategy Update, the Commission proposes
new measures to support the green and digital transitions.
• Energy intensive industries (EII), such as steel, will require a
particular focus on decarbonisation and technology upgrading.
• Al these efforts require important investments in means of
production, research and innovation, and new infrastructure.
• We want a modern and competitive European industry, acting as a
key enabler for a sustainable and inclusive economic growth.
Defensives / Q&A
How to make the EU electricity sector attractive for investors building
on well-functioning open energy markets?
• To attract investments in low-carbon sectors, there are several
possibilities in EU funding, including Horizon Europe, the
Innovation Fund, the Recovery and Resilience Facility, and a range
of EU state aid instruments, fal ing under environmental and
energy guidelines and projects of Common European Interests
(IPCEIs).
• In particular, a large number of EU member states are currently
preparing an IPCEI for clean hydrogen. Industrial al iances are
already giving results in the field of batteries and raw materials.
• Financial frameworks and concrete alliances are good
opportunities to co-create decarbonisation initiatives, in
partnership with industry, public authorities, social partners and
other stakeholders.
Important policy initiatives such as the revision of the EU Emissions
Trading System (EU ETS) and the creation of a CBAM (Carbon Border
Adjustment Mechanism) are under discussion within the Commission.
What will be their impact on supporting and decarbonising industrial
sectors?
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• The financial value of free alowances is a very important
consideration for energy intensive industries. Regarding steel,
the industry indicates that it amounted to around 3.66 bil ion
euros in 2019. On the other hand, the cost of purchasing
al owances that are auctioned has an impact on the margins of
the sectors concerned.
• Therefore, the transition to a stricter ETS wil have to al ow for
gradual adaptation. The implementation of other instruments
such as the CBAM wil have to be done in coordination with the
ETS. To decide on the different policy options, we wil need to
maintain the current level of protection against carbon leakage
in our industries without compromising the EU's environmental
objectives.
Background information
The Union of the Electricity Industry – Eurelectric is the sector association representing the
interests of the European electricity industry at pan-European level. They represent the
power sector in over 30 European countries, speaking for more than 3,500 companies in
power generation, distribution and supply.
By mid-July, the Commission will unveil the '
Fit 4 55' legislative package with the most
important laws to achieve our climate goal. The initiatives of the package are the following:
- Revision of the
EU Emissions Trading System (ETS)
-
Carbon Border Adjustment Mechanism (CBAM).
-
Effort Sharing Regulation (ESR).
- Amendment to the
Renewable Energy Directive (RED).
- Amendment to the
Energy Efficiency Directive (EED).
- Revision of the Regulation on the inclusion of greenhouse gas emissions and
removals from land use, land use change and
forestry (LULUCF).
- Reducing
methane emission in the energy sector.
- Revision of the
energy performance of Buildings Directive (EPBD).
- Revision of the
Third Energy Package for gas.
- Revision of the
Energy Tax Directive.
- Revision of the directive on
deployment of alternative fuels infrastructure.
- Revision of the regulation setting
CO2 emission performance standards for new
passenger cars and for new light commercial vehicles.
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