Energy and climate transition: How to strengthen the EU's competitiveness
The energy policy and industrial landscape in Europe is at a critical juncture. The recent energy crisis exposed significant vulnerabilities in the European energy supply and led to a sharp increase in energy costs for European businesses.
BusinessEurope commissioned Compass Lexecon to assess how Europe can achieve its climate and energy targets in a cost-effective way, while being internationally competitive. One message is clear from the report’s findings: a strategic review of EU energy and climate policies is needed to achieve this outcome.
The report, published alongside this position paper, finds that a massive scale-up of renewable and low-carbon capacity is needed to reduce the energy price gap between the EU and third countries and reach climate neutrality.
It also projects that energy prices could remain substantially higher in Europe compared to our international competitors. Therefore, additional policy measures will be needed to secure the competitiveness of European industry, supported by a conducive regulatory framework and a scale-up of private and public investments.
While there are major challenges ahead, this analysis demonstrates that a competitive energy and climate transition is still possible if the right policy decisions are made in time. Building
on the report’s conclusions, we call on EU policymakers to urgently take the following seven actions during the next political cycle.
- Massively increase the deployment and integration of all renewable and low-carbon energy sources, and the necessary infrastructure
- Close the investment gap
- Secure the hydrogen value chain
- Continue speeding-up and streamlining permitting procedures
- Tackle the carbon cost differential and ensure effective implementation of CBAM
- Introduce measures to close the energy competitiveness gap
- Foster industrial decarbonisation through effective demand-side measures
More detailed info is available here.