Industrial Strategy

In March 2020, the European Commission presented “A New Industrial Strategy for Europe”, setting out the key drivers of Europe’s industrial transformation and including measures to modernise and decarbonise energy-intensive industries, support sustainable and smart mobility industries, promotion of energy efficiency, strengthen current carbon leakage tools and secure a sufficient and constant supply of low-carbon energy at competitive prices.

The strategy is making clear the European Commission objective of making The European Green Deal Europe’s new growth strategy; the European fuel manufacturing industry, in supporting the twin digital and energy transition towards climate neutrality by 2050 highlight that the competitiveness aspect will be crucial in order to reach a sustainable transition which do not leave anyone behind. This is the reason why FuelsEurope believe that a competitive transformation is possible, and that the EU industry will need the right enabling framework conditions and clear, long-term signals to guide investors.

As part of the Industrial Strategy, the “Hydrogen strategy” and the “Smart sector integration communication” were published in 2021, providing a comprehensive framework addressing all carriers of energy powering a climate-neutral economy.

Then, in 2022 the “EU Inflation reduction act” was published, with the clear intention of providing incentives to the US industrial production. It has been focused on rate of progress, facilitating early and sustained investment, project-by-project. The incentives– mainly provided federal tax credits - would allow an easy and simple incremental value to be assigned to an investment for low or zero-carbon production of goods.

On the other hand, EU legislation has been focussing on targets, underpinned by exclusions or bans of some technologies and penalties, which gave signals as to the requirements, size and shape of future markets. Such a framework does not favour investment decisions and impedes clear financial evaluations of how low-carbon products would increase above the value of today’s incumbent products.

This is why the “Net Zero Industry Act” has been published by the European Commission, and FuelsEurope welcome it in its aim of promoting the ramp-up of critical technologies and their deployment to help EU decarbonization objectives; it also praises its emphasis on industrial investments and competitiveness. This legislative proposal shows a renewed attention towards energy security, providing a possible response to new global challenges. With this perspective, we aim at contributing to the debate related to this legislation by sharing our views on how promoting the deployment of renewable and low-carbon technologies would help the resilience of the EU industry which, unfortunately, is facing a growing and dangerous trend of de-industrialization.