Top EU officials pledged to offer more pro-active support for renewables and clean hydrogen as part of a more aggressive approach to industrial strategy, as the wind and solar sectors called for concrete measures to turn words into action.
“We will need a more strategic approach to renewable energy industries, such as offshore energy, and the supply chain underpinning them,” the European Commission said in its New Industrial Strategy for Europe, a wide-ranging attempt to exert more influence on the development of key sectors across the board and help the EU match the massive heft of China and the US.
“This should be supported by efforts to better connect Europe's electricity systems to increase security of electricity supply and integrate more renewables.”
In parallel to a more strategic approach to renewables, Brussels also plans to soon launch a ‘Clean Hydrogen Alliance’ to accelerate the decarbonisation of industry and “maintain industrial leadership”.
The Commission didn’t say when it plans to officially present the hydrogen initiative, but EU news website Euractiv cites an EU official saying it will be launched in the summer as it enjoys the broad backing of EU member states.
Germany later this month is already expected to launch its own national hydrogen strategy, calling for a rapid ramp-up of domestic renewables-based hydrogen (‘green hydrogen’) that may include special tenders for offshore wind projects linked to hydrogen production.
Europe’s main wind and solar lobbying groups reckon the substantial increase in the amount of power required for Europe’s planned ‘twin transitions’ (to a carbon neutral and a more digital industry) will be a great chance for the renewables sector.
“It is good the Commission has acknowledged the strategic role of renewables for the EU economy,” WindEurope chief executive Giles Dickson said.
“If the European Green Deal is to deliver climate neutrality by 2050, the EU needs to accelerate the deployment of wind energy. The Commission sees wind being half of Europe’s electricity by 2050. And it’ll be big part of the renewable hydrogen the EU wants more of.”
Aurélie Beauvais, policy director of SolarPower Europe, said: “After intensive engagement on industrial strategy, which included the backing of 25 major European renewables associations, and research and national solar associations, it is positive that the Commission recognises the need for a more strategic approach to renewable energy industries.”
But behind the words of encouragement, the associations also stress the need for the warm words in the Commission’s proposal for an industrial strategy to be followed by action.
The strategy provides a “promising starting point,” SolarPower Europe chief executive Walburga Hemetsberger said, but European institutions together with the renewables industry must now develop a “concrete ‘Industrial Toolbox’ for the solar sector.”
In a similar fashion, WindEurope’s Dickson demanded: “Now is the time to take concrete measures.”
The strategy launched Tuesday indeed doesn’t contain many such firm commitments, and the EU has a history of endless summits, white papers and strategy guidelines producing millions of toothless recommendations.
More aggressive approach
But Brussels this time does to be serious about becoming more active in defending Europe’s industries more aggressively in relation to other parts of the world.
In its communication on the industrial strategy, the Commission made clear it plans to use the European Green Deal first presented in December as a means to create new markets for climate neutral products in many industrial areas such as steel, cement and basic chemicals. Either these products themselves, or the technology to produce them, should then be exported to other parts of the world.
“The Commission will support clean steel breakthrough technologies leading to a zero-carbon steel making process,” the strategy says, for example.
Swedish utility Vattenfall is already piloting a pilot plant for fossil-free steel.
As pioneering in carbon-neutral production processes will cost billions of euros, the Commission said it will propose a “Carbon Border Adjustment Mechanism in 2021 to reduce the risk of carbon leakage, in full compatibility with WTO rules. This should be supported by strengthening our current tools to tackle carbon leakage.”
In plain language, Brussels plans to introduce the world’s first carbon border tax to penalize carbon-intensive imports and protect European businesses subjected to EU carbon pricing and producing at higher costs due to novel zero-carbon production processes.
Such a measure has the potential to trigger another wave of trade wars, if countries like the US were to conclude that it represents an illegal non-tariff trade barrier and that they are being treated unfairly.
Dickson also said a to-be-established new Industrial Forum bringing together stakeholders, EU member states and EU institutions must include the onshore and offshore wind industry. It should actively get involved if European exporters don’t encounter a level playing field, he stressed.
“This includes developing a European export strategy for renewables that looks not only at third country market access but also at how national export credit agencies can support the European industry in the face of State-financed Chinese competition.”