Commission takes stock of the Clean Transition Dialogues with EU industry and social partners

This article is brought to you in association with the European Commission.

Today, the Commission adopted a Communication  taking stock of a series of Clean Transition Dialogues on transforming Europe into a clean, resource-efficient, fair and competitive economy. Commission President von der Leyen announced the launch of the dialogues in her 2023 State of the Union speech, to discuss with European industry and social partners how to strengthen and support the implementation of the European Green Deal, contributing to a reinforced industrial approach. The Dialogues have been chaired by Executive Vice-President Maroš Šefčovič. Today’s stocktake will feed into the discussion of EU leaders at the upcoming European Council on the next steps in Europe’s clean transition.

Commission President Ursula von der Leyen said, “The European Green Deal is, and always has been, Europe’s growth strategy. Clean growth brings real benefits to our industry, and they have embraced it. Because in the European economy of the future, competitiveness and sustainability will go hand in hand. Now that a predictable regulatory framework is in place, the Clean Transition Dialogues are an important way to work together with industry and social partners to implement it in the most effective way. The Dialogues showed that our partners are committed to getting the job done and delivering on our ambitious and essential targets. Based on their insights, Europe will continue to support industry in building a business model fit for a decarbonised economy.”

Nine Clean Transition Dialogues have taken place so far. Industry and social partners confirmed their strong commitment to shape and implement the European Green Deal. Social partners highlighted the importance of ensuring the social fairness of the transition, to create good quality jobs as well as the need for reinforced structured social dialogue. The Dialogues have focused on hydrogen, energy-intensives industries, clean tech, energy infrastructure, critical raw materials, forest-based bioeconomy, cities, clean mobility, and steel.

A reinforced industrial approach: Building blocks and main elements

Today’s Communication highlights a number of key building blocks that have been identified through the Dialogues which could support a reinforced industrial approach to deliver on the European Green Deal: an effective and simplified regulatory framework for businesses to deliver on the transition; action on energy prices; modern infrastructure; easier access to finance; and a stronger Single Market in a globally competitive environment. The Commission will continue its engagement with industry and social partners through the Clean Transition Dialogues and it stands ready to engage in a thorough debate with Council and Parliament on the key factors that need to be addressed.

• Delivery through effective implementation and simplification

The EU has delivered the policy and regulatory framework to achieve the 2030 targets and to keep Europe on track towards climate neutrality and a sustainable economy by 2050. This clear regulatory framework creates stability and predictability for all stakeholders. As the focus now switches to implementation, the Commission will provide further guidance to support industry and Member States in applying EU legislation and will strengthen the focus on burden reduction. The Commission will also publish on a dedicated platform a set of key indicators to monitor and measure progress of the green transition, competitiveness of the EU economy and the social transition. The Commission will further support industry in equipping the employees with the necessary skills for the transition, and will continue working with cities, regional and local authorities.

• Abundant and affordable clean energy

Member States should make full use of the updated legal framework, notably the Renewable Energy Directive, to ensure the benefits of the clean transition flow to industry and citizens. Participants in the Dialogues stressed that securing the supply of abundant and affordable zero and low-carbon energy is a key condition to accelerate the decarbonisation of the EU economy and preserve the competitiveness of the European industry, and in particular energy intensive industries. Some industrial and transport sectors have called for additional innovative, transitory measures thatsecure energy at lower prices, while providing certainty to energy producers through long-term off-take. Industry also called for the creation of industrial clusters, thatconnect the largest manufacturing facilities and hubs with zero and low carbon generation plants, hydrogen and renewable- and low-carbon fuels producing facilities, or carbon capture, storage, transport and utilisation infrastructure. Participants in the Dialogues called on Member States to reconsider the level of taxes and levies on energy, including electricity. The Commission recalls that Member States need to take measures to eliminate fossil fuel subsidies, in line with recent COP conclusions and the Commission’s proposal to review the Energy Taxation Directive.

• Modern infrastructure as backbone for industry

Closer coordination is needed between the Commission, Member States, local and regional authorities, network operators, industrial actors, regulators and financial institutions on the development of infrastructure for the clean energy transition. The Commission will adjust the existing formats to provide a platform for a regular and direct engagement with all key actors, with a focus on concrete infrastructure projects. Resilience requirements applicable to procurement and auctions will help create demand for EU-made equipment and components that meet high standards set for use in infrastructure development. The Commission will consider supporting industry in developing demand standardisation for cables, pipelines and technologies necessary for the development of the energy grid.

• Unlocking finance for the transition

Private investment has not yet been sufficiently mobilised, but the private sector will continue to play a leading role in deploying investment in the clean transition. Participants in the Dialogues also stressed the need to reduce the cost of raising capital, diversify funding options for businesses, propose new innovative financial tools, and facilitate cross-border investing. A strong EU budget is needed to deliver higher quality investments and in this context the Commission urges swift progress on both the issue of innovative ways to use public funds to crowd in private investment, as well as the proposed ETS own resource. Overall, there is an urgent need to coordinate funding more at EU level, to create economies of scale, to enhance the efficient allocation of resources and make use of the single market. European institutions should strengthen their engagement with the institutional actors to mobilise private funding; the Commission should strengthen the political engagement and dialogue with the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), international financial institutions and private banks. Use of additional revenues from the EU Emissions Trading System, the Strategic Technologies for Europe Platform and auctions-as-a-service schemes like under the European Hydrogen Bank, are examples of promising funding tools put in place for the transition. Dialogue participants raised the important mismatch between the significant upfront investment costs of infrastructure development, and available funds.

• Leveraging the clean Single Market in a globally competitive environment

The Single Market is the EU’s greatest strength, as it provides scale and promotes a high level of standards also outside Europe. Based on the positive result of the joint purchase of gas, the Commission will consider developing demand aggregation and joint purchasing for other strategic commodities and organising a pilot for hydrogen and the joint purchasing of critical raw materials. The Commission and Member States should make full use of policy instruments against unfair global competition, to ensure a level playing field on the internal and global markets. Implementing the Carbon Border Adjustment Mechanism and deploying more global carbon pricing through enhanced diplomacy are also important.

Background

To transform Europe into a clean, resource-efficient, and competitive economy, the Commission presented in 2019 the European Green Deal. This has been followed by a number of concrete initiatives; the majority of which are now embedded in EU law. The focus now shifts to implementation and delivery to make the Green Deal a success on the ground.

Europe’s industry and social partners should lead the transition of Europe’s economy. At the same time, industry is coming under pressure because of the worsening security, geopolitical, and economic context, as well as the lack of a level playing field.

The Clean Transition Dialogues were launched by President von der Leyen in the 2023 State of the Union speech as a new way for  the Commission to engage with industry and social partners, to understand their current challenges, and to strengthen and support the implementation of the European Green Deal.  

For more information

Communication

Factsheet

European Green Deal webpage

Quote(s)

The European Green Deal is, and always has been, Europe’s growth strategy. Clean growth brings real benefits to our industry, and they have embraced it. Because in the European economy of the future, competitiveness and sustainability will go hand in hand. Now that a predictable regulatory framework is in place, the Clean Transition Dialogues are an important way to work together with industry and social partners to implement it in the most effective way. The Dialogues showed that our partners are committed to getting the job done and delivering on our ambitious and essential targets. Based on their insights, Europe will continue to support industry in building a business model fit for a decarbonised economy.

Ursula von der Leyen, President of the European Commission

Our decarbonisation goals, green growth and European competitiveness go hand in hand. Today’s stocktake of the Clean Transition Dialogues underlines the need to deliver and invest in the clean transition now. This requires a reinforced industrial approach that ensures predictability for investors, strengthens a business case for investments to keep the Single Market attractive for industrial actors, innovates and makes the most of opportunities for industry that come with the European Green Deal. Abundant and affordable clean energy as well as a global level playing field are indispensable for European industry to prosper. A collaborative approach is paramount and the Commission will continue this engagement with industry and social partners through the Clean Transition Dialogues.

Maroš Šefčovič, Executive Vice-President for European Green Deal, Interinstitutional Relations and Foresight