European business views on a competitive energy & climate strategy

Executive summary

BusinessEurope stands behind the EU ambition of net-zero greenhouse gas emissions (climate neutrality) to reach the objectives of the Paris Agreement. This ambition needs to be closely connected to Europe’s agenda on competitiveness and security of supply, in order to reinforce each pillar in this “triangle”.

Reaching climate neutrality by around mid-century, as the IPCC Special Report and the European Commission’s 2050 climate strategy consider is necessary to limit average global temperature increases to 1.5°C, will fully depend on meeting a set of crucial framework conditions and related actions on both European and global level.

These are:

• Condition 1: Recognition of different conditions and starting points for EU member states.
  ACTION: Boost European coordination for cost-effective policy implementation.
• Condition 2: Development and deployment of innovative technologies to support the decarbonisation of value chains in Europe in a cost-effective way.
  ACTION: Unleash investments through a comprehensive industrial strategy.
• Condition 3: Large-scale availability of affordable, low-carbon energy.
  ACTION: Design an integrated value chain approach for energy supply.
• Condition 4: Adaptation of consumer behaviour and public acceptance for the low-carbon energy transition.
  ACTION: Engage actively with citizens to gain societal acceptance.
• Condition 5: Convergence of global climate ambitions, with G20 countries in particular working together on updating their Nationally Determined Contributions (NDCs) and developing common carbon market mechanisms to reach the Paris Agreement goals.
  ACTION: Consider additional safeguards depending on international actions to keep industrial production in Europe by preventing carbon and investment leakage.

Achieving collectively all these framework conditions and actions, without cherry picking, is absolutely essential. European businesses are committed to help reach these conditions, but it is clear that the key to success lies with societal-wide actions. Therefore, policymakers during the next EU political cycle should collaborate with business and other stakeholders to discuss the aforementioned framework conditions and related actions. This should be done in the context of the EU’s inputs on its long-term GHG emissions reduction strategy to the UNFCCC secretariat by 2020, the UNFCCC global stocktake exercise in 2023, and the EU’s energy and climate legislation reviews.