The renewal of the European Institutions offers a critical opportunity to address fundamental challenges facing Europe’s economy and industries. As outlined in Mr. Mario Draghi’s recent report, Europe’s future—its prosperity, competitiveness, and capacity for innovation—depends on a renewed focus on strengthening industrial growth, ensuring economic security, and driving decarbonisation. These pillars are not just economic ambitions; they form the bedrock of the European project, underpinned by values of equity, freedom, peace, and democracy within a sustainable framework.
In an increasingly competitive global market, European industry must regain ground lost to international counterparts, particularly those in the United States and China. To prevent further erosion of our industrial competitiveness and social welfare, it is essential that the EU and Member States act swiftly on the Draghi Report’s three essential recommendations: closing the innovation gap, pursuing decarbonisation and competitiveness as parallel goals, and securing our supply chains.
Recognising the Role of Renewable and Low-Carbon Fuels in Decarbonisation
Europe has long been at the forefront of innovation in renewable and low-carbon fuels. Today, it holds 60% of the world’s high-value patents in renewable fuels, demonstrating a leadership position that can be expanded with the right regulatory framework. Mr. Draghi’s report highlights this strategic advantage and calls for a revision of the EU’s CO₂ fleet emissions regulation with a technology-neutral lens. This change is essential to ensure that the potential of carbon-neutral fuels is fully recognised and integrated into Europe’s decarbonisation strategy.A holistic EU strategy for transitioning liquid fuels, to decarbonise all transport sectors, and support decarbonisation of other crucial industrial sectors, is urgently needed. Without such a plan, Europe risks missing out on one of the most effective paths to net-zero. This is not just a matter of environmental stewardship; it is an industrial imperative that supports circular economy, strategic autonomy, and a competitive energy supply chain.
As Mario Draghi rightly emphasized, technology neutrality in transport is key to fostering innovation and ensuring that all viable solutions, including renewable fuels, contribute to the energy transition. With energy security and resilience becoming increasingly urgent, the fuel manufacturing sector remains a cornerstone of Europe’s industrial ecosystem, offering critical support to the circular economy and a competitive energy supply chain.
Safeguarding Energy-Intensive Industries
Europe’s Energy Intensive Industries (EIIs) play a pivotal role in the economy and contribute significantly to the EU’s GDP. Unlike global competitors, many of whom benefit from significant public subsidies without equivalent decarbonisation targets, EU-based EIIs are bearing disproportionate burdens in the shift toward a low-carbon economy.
Mr. Draghi’s report rightly underscores the need for public support to offset these challenges and prevent de-industrialisation. However, support must go beyond funding. It requires dismantling unnecessary regulatory hurdles, ensuring affordable energy prices, and addressing delays in permitting processes. We must also align with the Net Zero Industry Act to build critical infrastructure quickly and efficiently, making it possible for EIIs to innovate and thrive in a decarbonised future. A Clean Industrial Deal is imperative in Europe and the liquid fuels manufacturing sector should have a clear role in it.
FuelsEurope, with its strategic industrial manufacturing assets across Europe, and a clear vision and transition plan, has long advocated for regulatory coherence and simplified legislation. In line with the Antwerp Declaration, the Draghi Report recommends measures to streamline the complex regulatory landscape for EIIs, promoting a single market for energy and recycled materials and incentivising innovation through mechanisms like regulatory sandboxes and intellectual property protections, while avoiding unnecessary administrative burden which undermines European industries’ competitiveness.
Addressing the Impact of the Carbon Border Adjustment Mechanism
The Carbon Border Adjustment Mechanism (CBAM) is designed to create a fairer market for European industry by preventing carbon leakage and levelling the playing field with global competitors. However, its complex implementation, potential circumvention risks, and impacts on EU exporters need urgent attention. If CBAM is to be a truly effective tool, it must consider the reality of today’s competitive landscape, ensuring that goods produced in the EU are not disadvantaged in foreign markets.
FuelsEurope supports Mr. Draghi’s call for a thorough review of CBAM by the Commission, especially in assessing carbon leakage risks for EU-produced goods intended for export. A clear framework is essential for the effective implementation of CBAM, which is critical for both environmental progress and industrial competitiveness.
Alleviating the Regulatory Burden for European Businesses
Amidst recent geopolitical and economic pressures, European businesses are grappling with an increasingly heavy regulatory burden. As Mr. Draghi’s report underscores, this legislative complexity adds both direct costs and an administrative burden that diminishes Europe’s competitiveness. FuelsEurope fully supports the report’s recommendation for a 25% reduction in reporting obligations across sustainability and finance-related legislation. We also advocate for a competitiveness test to be applied to new regulatory proposals, along with a rigorous assessment of cumulative impacts.
A Collaborative Future for Europe’s Fuel Manufacturing Industry
The Draghi Report represents a pivotal moment for Europe’s fuel manufacturing industry to contribute actively to a decarbonised, competitive Europe. FuelsEurope is fully committed to working alongside the European Commission and Member States to bring these recommendations to life. In our “More than a Manifesto…an Offer for Europe,” published in May 2024, we outlined practical steps for building a resilient, sustainable, and competitive Europe. We believe that with the right policy focus, our sector can become a cornerstone of the EU’s decarbonisation journey, ensuring a balanced energy transition that supports the entire value chain.
Mr. Draghi’s report lays out a clear and compelling roadmap for the future of European industry and economy. Now, it is up to the EU’s leaders to turn these recommendations into actionable policies that drive sustainable growth. Let us seize this opportunity to re-affirm Europe’s leadership in the global economy and its commitment to a decarbonised future!
Liana Gouta is the Director General at FuelsEurope.
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Publish date : 2024-12-05 23:01:00
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The post Seizing Europe’s Industrial and Decarbonised Future first appeared on Love Europe.
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Publish date : 2024-12-17 22:16:10
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