Today, European citizens and entrepreneurs predict their future as green, climate-neutral and socially just. But how can we succeed and achieve this? Will we have the strength and might to put our continent and the rest of world on a path where automakers, steel manufacturers, airlines, electricity producers, cement makers and all our energy consuming industries as well as citizens and households will be able to reduce their carbon footprint drastically?

Our European political leaders now work on Europe’s “Fit for 55” legislation which in concrete terms means that EU countries still have to cut more than 30% of their current CO2 emissions over the coming eight years – as the aim is to cut the EU’s greenhouse gas emissions from 1990 to 2030 by minus 55%.

Compare this with Europe’s 12 % fall in CO2 emissions due to the massive economic slowdown in 2020 due to the Covid pandemic and you see the herculean task facing us all: creating quality growth and a climate-neutral future simultaneously.

It means for our businesses providing Europe’s largest flagship and low-cost airlines with enough sustainable aviation fuels while still operating flights profitably. It means a massive expansion of green mobility based on lithium batteries, hydrogen and renewable fuels, while rapidly reducing emissions of petrol and diesel cars at affordable costs for households and without destabilising governments all over Europe. It means a massive renovation wave of buildings, transformation of infrastructures and electrification of industrial processes that could more than double global power demand until 2050.

It means strengthening carbon emission pricing via the EU’s Emission Trading System without killing millions of jobs in the steel, aluminium, cement or chemical industries, which are at risk of being transferred outside of the EU where lower climate ambition allows cheaper, but not necessarily more sustainable production.

This all might sound like mission impossible, but politicians and businesses can square this circle, if the conditions are set right. First, we need to increase public support and speed up permitting and installation timelines for clean energy production and distribution. Take EU wind power: to meet the EU’s “Fit for 55” requirements we need Europe’s wind power capacity to grow from 220 gigawatts to more than 450 gigawatts by 2030.

Faster permitting will allow us to do so, and to gradually phase out fossil fuels in the power sector. And we’ll need to use all resources – wind turbines, solar power, better grids, nuclear, hydrogen, renewable fuels, gas, energy savings, product innovations – for our energy transition to net zero emissions.

But we must also look at the global situation. Europe emits 8 per cent of the worlds CO2 emissions and reduces its climate footprint much faster than other large economies while climate action can only be successful at a global scale. It means, Europe’s Emission Trading System needs to keep sufficient free carbon emission allowances available for companies, to avoid harm to our best-in-class EU industries as long as large emitters like the USA or China lack climate ambition. This is critical, because European firms must have the capacity to invest in their own transformation and to ultimately produce carbon-free steel, chemicals or aluminium. It additionally means a carbon border adjustment mechanism, CBAM, must be tested successfully to help Europe counter carbon leakage and avoid heavy industry re-location to higher-polluting regions.

Without the right instruments, any government in Europe will face job losses and public opposition, especially as many “unknowns” will accompany us to 2030. Will renewable electricity capacity really increase globally by over 60% by 2026 as predicted, the equivalent to the current global power capacity of fossil fuels and nuclear? And will such renewable energy increase be sustained with raw material prices up globally? Prices for photovoltaic grade polysilicon have more than quadrupled since 2020 and we’ve seen marked price increases for steel (up 50%), aluminium (up 80%) and copper (up 60%). Will gas prices further increase, or will the current inflation-rise just be transitory?

To ensure the success of the ecological transition in Europe, two complementary conditions must be met. First, we need a strong industrial base in Europe, with competitive companies. The vast majority of practical solutions to ensure the green transition coming directly from the industry, any measure degrading the competitiveness of European companies would therefore have a negative impact on the ecological transition. Secondly, simplifying the new rules of the « Fit for 55 » package must be a priority. Regulatory complexity is indeed the enemy of innovation, and innovation is what we need to provide future solutions to the climate challenge.

Pierre Gattaz
Présidente de la FEDIL