What’s von der Leyen’s Deal? From Green Deal to Industrial Deal

On Monday, incumbent President of the European Commission , Ursula von der Leyen , announced she would stand for another mandate at the top of the European Executive in lieu of elections this summer. With no other candidate having put their name in the ring before the European People's Party (EPP) deadline, it is all but guaranteed that she will become the lead candidate – the so-called Spitzenkandidatin – for the EPP which is expected to win the most seats in the election. This makes Ms von der Leyen the immediate frontrunner for the job.

Can we expect more of the same from her if she is to take her seat in the Berlaymont once again? Ms von der Leyen’s Commission is the one that brought us the European Green Deal, including the Fit for 55 package, REPowerEU, the EU Biodiversity Strategy, the Green Deal Industrial Plan and most recently, the Communication on the 2040 Climate Target. These initiatives underscored a Commission that has been committed to climate action – building a greener Europe for the future. But climate action is not what will be winning votes this time around.

The Green Wave that brought the current round of more eco-conscious policymakers to Brussels in 2019 has since given way to concerns about the cost of living and the economy. Times have changed. Industry in Europe is worried about competitiveness and the risk of deindustrialisation. Polls suggest that the right will make major gains in upcoming elections at the expense of the Greens and centrist parties. The next round of policymakers could therefore very well average to the right side of the political spectrum.

These developments mean that Ms von der Leyen’s bid to keep her job may fall in the hands of the right-wing European Conservatives and Reformists (ECR) party, and potentially, the far-right Identity and Democracy (ID) party, rather than her party’s current coalition of more left leaning partners in the Socialists and Democrats (S&D) and Renew parties. Getting them on board for another five years would entail a rhetorical shift. What impact that will have on a second mandate has already reared its head.

From Green Deal to Industrial Deal

Over the past five years, von der Leyen’s Commission has been bringing its Green Deal brainchild to life, laying out a framework for a greener Europe in 2030. But as the current mandate winds down, the focus is shifting, not only in time, but also in scope. Looking ahead, “green” will morph into “industrial”, mainly due to key events punctuating this mandate.

The European Green Deal

Back in December 2019, Ursula von der Leyen launched the European Green Deal, a bold plan to have “no net emissions of greenhouse gases by 2050, economic growth decoupled from resource use” while leaving “no person and no place” behind. This was on the back of a momentous win in European Parliament elections for the Greens and broad societal support for action on climate change.

The Fit for 55 package, followed as the legislative package to reach a binding target of 55% emissions reductions below 1990 levels by 2030 under the European Climate Law. Since then, the 15 proposals in the package have all been either adopted or have provisional agreements awaiting formal adoption in the Parliament and the Council of the European Union . Meanwhile, the EU Biodiversity Strategy, including the politically fraught Nature Restoration Law proposal, set an ambitious and long-term plan to protect nature and reverse the degradation of ecosystems.

Follow on a year later and the geopolitical reality in Europe changed over night. Two years less one day ago, Russia invaded Ukraine and commenced a campaign of blackmail, via the weaponisation of energy, to discourage EU support for Ukraine. Europe, however, did not waver, Its response was REPowerEU, doubling down on Fit for 55 with increased ambition for renewable capacity in Europe to end dependence on imported Russian oil and gas. This response championed decarbonisation as the way to tackle climate change, and now face rising threats to energy security on the Continent.

In the same year in America, President Joe Biden launched the misleadingly named Inflation Reduction Act in August of 2022 which actually set out to provide massive subsidies for American clean technologies. In response, von der Leyen announced the Green Deal Industrial Plan at the World Economic Forum in early 2023. The plan included the Net-Zero Industry Act, a piece of legislation with a provisional agreement to support clean tech industry in Europe, and the Critical Raw Materials Act, which aimed to shore up the EU’s access to key material inputs for green industry. This is when competitiveness firmly entered the Green Deal discussion.

In the final act of this mandate, having laid out all the aforementioned frameworks as part of the Green Deal to reach the 2030 target, the Commission published its Communication on the 2040 Climate Target. The European Climate Law dictates that the EU set an interim emissions reduction target for 2040 on the way to net-zero by 2050. The Communication from 6 February 2024 shows that this Commission recommends a 90% target. However, responsibility for the official proposal is not expected until 2025 when the new Commission is already seated. What it will entail will depend on whether Ms von der Leyen is granted another term, and, if so, on who her political allies are.

The European Industrial Deal

Von der Leyen’s legacy from this mandate will clearly be the Green Deal. But what comes next? Should she be re-elected in June, it is unlikely that “green” will be the leitmotif driving her renewed mandate. On Tuesday, she joined a group of over 70 executives in Antwerp, alongside Belgian Prime Minister, Alexander De Croo, whose government currently holds the rotating Presidency of the Council of the EU, for a European Industry Summit. On the docket was a new deal for the upcoming Commission to sink their teeth into – the European Industrial Deal.

The Antwerp Declaration that came out of the Summit, signed now by 108 organisations from 18 sectors, stresses “an urgent need for clarity, predictability, and confidence in Europe and its industrial policy.” The declaration then goes into a ten-step process to deliver said clarity, predictability and confidence. These include:

1. Putting the Industrial Deal at the core of the new European Strategic Agenda for 2024-2029
2. Including a strong public funding chapter with a Clean Tech Deployment Fund
3. Making Europe a globally competitive provider of energy
4. Focusing on the infrastructure Europe needs
5. Increasing the EU’s raw materials security
6. Boosting demand for net zero, low carbon and circular products
7. Leveraging, enforcing, reviving and improving the Single Market
8. Making the innovation framework smarter
9. A new spirit of law-making
10. Ensuring the structure allows to achieve results

While quite broad, some points of interest for our readers include a call for “a comprehensive action plan to elevate competitiveness as strategic priority”, lowering the cost of energy with renewables, nuclear, hydrogen and developing the necessary infrastructure to deliver them in abundance, and most intriguingly, the installation of “a First Vice-President responsible for the delivery of the European Industrial Deal”.

This final point shows that the business community signing on to the declaration would like to see a remake of this Commission. Maro? ?ef?ovi?, the Executive Vice-President in charge of the Green Deal following Frans Timmermans’ departure, would see his position refocus to delivering industrial competitiveness. And for the most part, it seems like von der Leyen is on board.

In her speech announcing her re-election bid, Ms von der Leyen backed her legacy Green Deal, but used the key words “competitiveness” as well as “defense” signalling that perhaps industry is the new green. This is unsurprising. As the President has navigated the challenges of the energy crisis, increasing competition with China and the United States and wars popping up not far from EU borders, the name of the game has changed as the world has changed.

A changed world

The past five years have not been lacking in headline content. From COVID-19 to war in Ukraine, to global energy crisis and supply chain bottlenecks, flaring tensions in the Middle East and Africa, a potential second Trump presidency and rising western tensions with China. Europe has changed over these five years as the world has changed, and it comes as no surprise that political talking points have too. Should we see von der Leyen return to the Commission in June or not, the direction of travel for the next Commission is falling in line with the competitiveness leitmotif. The deal Europeans get should therefore be expected to morph from green to industrial.

This week's edition written by:

Nicholas A. Steinwand, Policy Communications Advisor - Eurelectric

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