Executive Summary
On 4 April, 2024 Eurelectric signed the Antwerp declaration showing the power sector’s clear support for keeping a strong, competitive and decarbonised industrial base in Europe. It is our view that the success of Europe’s energy and decarbonisation objectives hinges on a competitive green industry. In this paper – which outlines Eurelectric’s recommendations for the European Union’s upcoming Clean Industrial Deal – we share our thoughts on how this can be achieved.
5 Key considerations
The document highlights key considerations that we encourage policymakers to deliberate in their approach. These include:
- The need to channel investments in decarbonised, net-zero technologies and infrastructure. Regulatory certainty, accelerating permitting, simplification of administrative procedures and long-term visibility along with a conducive investment framework are paramount for the cost-efficient deployment of a technologies that will help the power sector reach net-zero around 2040.
- Measures to ramp up electrification, enabling energy efficiency gains and active involvement of consumers in the energy transition. Electrification rates have stagnated at 33% for industrial sectors, but promising solutions exist, leading to a technical potential of 92% direct electrification of industrial heat processes. Cost and regulatory barriers prevent this from happening at the scale needed.
- Making the EU value chains a boon for innovation and digitalisation to champion the decarbonisation and reindustrialisation agenda. Expanding the EU’s clean tech base will be crucial for the bloc’s climate and industrial leadership, while also speeding up the EU’s push for energy independence. For that, European companies need to see a reversal of their disadvantage vis-à-vis international competitors which benefit from unfairly, heavily subsidised markets and are subject to weaker compliance on environment, sustainability and governance (ESG) standards.
- Addressing a distorting taxation policy. While wholesale electricity prices are decreasing, on the retail end, unfair taxes and levies are exacerbating the competitiveness gap with international competitors. At present, electricity is taxed 1.4 times more than gas, a distortion given their respective environmental impacts. The revision of the European Taxation Directive should be an opportunity to address this issue.
- The need to further develop long-term contracting for industrials. This will transfer the benefits of renewables faster to European industries and making energy prices less volatile.