The new energy and climate legislative framework of the European Union (EU), modified during the mandate of the current Commission to begin a new stage in achieving the goal of net zero emissions in 2050, is made up of different measures that require a vision of set that allows us to understand the impact they have on companies, to implement long-term decarbonization strategies, regardless of the sector in which they operate. This is one of the main conclusions of the report ”The Green Deal and its impact on the EU industry: measures taken and future challenges”, prepared by Christopher Jones, professor at the Florence School of Regulation, in which they have experts from the sector also participated and which was published by the Naturgy Foundation a few weeks ago.
The study reviews the most important laws and new energy and climate policies that have been implemented in the last four years since the entry into force of the European Climate Law in 2021, which establishes the objective of reducing greenhouse gas emissions. Greenhouse Gases (GHG) by 55% by 2030 and achieve climate neutrality in 2050. However, the European Commission has recently presented a recommendation to reduce these emissions even further, by 90% by 2040. In addition, it also analyzes its possible impact on the European industry over the next decade.
In this sense, the author of the report, Christopher Jones, highlights that “It is inevitable that these changes mean that there will be winners and losers. Anticipating these changes and putting in place a corporate strategy to avoid costs and seize opportunities will be as important for the corporate profitability of broad sectors of EU industry as, for example, labor costs,”
Decarbonization
In this context, the European Commission has identified a series of conditions that are fundamental to achieving the 2040 climate objective, highlighting the total decarbonization of the electricity sectors and the Emissions Trading Scheme (ETS) industries in 2040.
Another key lies in the full implementation of the current EU legislative framework; the development of a post-2030 policy framework with a focus on sustainable industry and competitiveness; and the deployment of carbon capture that would facilitate industrial absorptions
Jones goes into detail about the Emissions Trading Scheme, pointing to the “fundamental challenge” it poses for Europe since the EU is setting the price of carbon emissions for industry, while “companies in other countries are not.” “They are exposed to the same level of climate cost.”
Therefore, in his opinion, it is important to “close the gap between European companies that will inevitably have to face higher costs, and adopt increasingly higher standards in sustainability criteria, compared to other companies that do not belong to the European Union.”
In any case, the report also highlights the major industrial, political and economic challenges that the European Union will have to face to achieve the goal of net zero emissions in 2050.