Climate Law

FuelsEurope supports the Green Deal’s ambition for climate neutrality in 2050 and will work with the EU institutions, Member States, and stakeholders, to help create the essential enabling policy framework.

The European refining industry recognises that there is no business as usual and is ready to play a full role by developing alternative fuels with low or zero climate impact (1), as well as other products, services, and processes needed to achieve the climate neutrality objective. Low-carbon liquids, in particular, have an unrivalled energy density and are easy to handle, making them an ideal means to carry and store energy, whilst driving the decarbonisation of the transport sector.

With the EU Climate Law setting the overall EU ambition level, it is paramount that the associated legislative framework enables the development and deployment at scale of innovative technologies for the mitigation of greenhouse gas (GHG) emissions in all sectors of the economy. To this end, the EU Climate Law takes important steps in the right direction, and we welcome in particular:
• its stated aim to provide “predictability and confidence” for investors and other economic operators;
• the inclusion of competitiveness of the economy, cost-effectiveness and technology neutrality amongst the guiding principles of the regulatory activity;
• the pledge that all revised and new regulations are to be based on comprehensive impact assessments.

The Green Deal states that “a new pact is needed […]” with “[…] industry working closely with the EU’s institutions […].” Seeing its future in the transformation of its manufacturing processes, products, and services that would create European leadership in low-carbon technologies, FuelsEurope’s members are uniquely positioned to share their expertise and embrace the opportunity to provide input to the Commission for evaluations, impact assessments, and legislative proposals. Naturally, these impact assessments should follow the better regulation guidelines, and be sufficiently inclusive to allow all relevant stakeholders to participate in the policy dialogue, just as they should consider all available technology pathways, so as to allow the most cost-efficient solution to succeed.

Regulatory stability is an important pre-condition for mobilising investment and minimising the risk profile of low-carbon projects. Hence, we welcome the regulatory predictability that the Climate Law provides. Similarly, we fully recognise the need for the regulatory framework to be inclusive of the latest available science, while also emphasising the importance of carefully impact assessing any change made to the Union’s decarbonisation trajectory, so as to maintain the regulatory predictability of the climate law, which is crucial for mobilising investments at scale.
In addition to individual impact assessments, evaluating the cumulative cost and benefit impacts of the Green Deal and ensuring consistency of the legislative framework, will be key.

Furthermore, whilst fully supportive of the target of climate neutrality by 2050 as such, we also point towards the discrepancies between national ambition levels. In the absence of globally coherent climate policy, sufficient carbon leakage protection, commensurate with the respective level of climate ambition, will be absolutely vital to ensure the success of the climate law. Similarly, regulatory discrepancies between member states, be that in energy markets or transport, should be avoided to improve market functioning and facilitate the decarbonisation of the EU economy coherently.

(1): these are sustainable liquid fuels able to reduce CO2 emissions during their production and use compared to conventional fossil-based fuels.