For a #CleanTechEU, More Climate Ambition is Needed

Debate in the European Union around climate policy has been front and center the past few weeks, but climate innovation and ambition have been lacking. The article below covers the highlights from recent votes in the EU, and is written on behalf of a group of leading institutions in the innovation space, which regularly share information under the tag, #CleanTechEU.

In an open letter published earlier this month, NGOs urged support for a strong reform of the EU Emissions Trading System (ETS). The combination of a strong ETS revision with a well-designed Carbon Border Adjustment Mechanism has the potential to slash emissions, create a level-playing field for low-carbon manufacturers, and stimulate demand for clean industrial products. The open letter urged MEPs not to delay the phasing out of free allowances allocated to industrial sectors like steel and cement. It called for:

1. Higher climate ambition
2. CBAM as an alternative to carbon leakage measures
3. Better allocation of free allowances

Initially, the European Parliament failed to find agreement on the revision of the ETS after amendments were adopted to weaken key aspects. However, a compromise was reached the following week, with the Greens, Renew, EPP, and S&D finding common cause.?

The ETS revision was just one innovation relevant part of the Fit for 55 package in the spotlight.?

More climate ambition is also needed in the Alternative Fuels Infrastructure Regulation (AFIR) and FuelEU Maritime proposals. The EU Council’s proposed position on the legislation will not lead to the necessary emissions reductions in the maritime sector. Current shipping fleets are heavily reliant on fossil fuels such as fuel oil and LNG. And in total, the heavy transport sector makes up almost a quarter of Europe’s total emissions. Decarbonising the maritime sector has been repeatedly delayed as a result of policymakers deflecting from the radical shifts needed to transition away from fossil fuels. Companies will not switch away from fossil fuels until there are adequate incentives to do so – including the refuelling and bunkering infrastructure for zero-carbon fuels like hydrogen and ammonia.

The Transport Committee in the European Parliament is currently working on compromise amendments ahead of a vote in early July – all eyes are on them to re-inject climate ambition into these files.

At an industrial decarbonisation event in early June, Bellona, Agora Energiewende, Natuur & Milieu, Future Cleantech Architects, and others discussed the innovative policies needed to accelerate commercialisation of low-carbon technologies, like the innovation fund included in the ETS. Plus, Future Cleantech Architects’ ARC Festival this month explores the drivers behind clean tech innovation. Climate ministers from ten EU countries have called on their fellow countries and the European Parliament not to lower the ambition of new climate legislation and to ensure that the overall package aims at reducing net emissions by at least 55% by 2030.

Innovation in climate policy is essential to decarbonisation. It’s up to the EU to push for policies that are more reflective of the massive decarbonisation challenge we’re facing.