EU Energy Transition: Made in Europe

Our transition to emission-free energy generation is an opportunity to make Europe a global economic leader, but only if we take bold action now, writes Michael Bloss.
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By Michael Bloss

Michael Bloss (DE, Greens/EFA) is shadow rapporteur for Parliament’s Framework for Achieving Climate Neutrality report.

16 Jun 2021

In Germany, we Greens pressed the start button on the energy transition when we entered Government for the first time, and we have since laid a path to 100 percent renewable energy. To date, this successful model is spreading rapidly around the world.

It is no coincidence that we are one of the market leaders in wind and solar technologies, creating hundreds of thousands of jobs. Germany, an industrialised country, now sources over 50 percent of its electricity from renewables - while other countries like Denmark and Portugal source even more.

We now need the same courage to bring this transition to industry throughout Europe. Industry is the backbone of Europe’s economy. While it provides a bulwark against financial crises, in order to keep it, it has to change. We need to take bold steps now. We Greens want to restart the transition again and begin the race for climate neutrality by 2040. Climate protection and the economy have not always gone hand-in-hand; however, they belong together and complement each other. We simply have to find the right fit and start running.

“The race for the economy of the future has already started; China and the US are not waiting for us, rather they are investing and regulating their markets”

The European Union has all the tools to do this and has access to the funds to match. And the reform of the emissions trading system will be our biggest climate leverage. With this, we can achieve the phase-out of coal in the EU by 2030, put in place the measures to decarbonise industry and trigger a boom in renewable energies throughout Europe. The fact that this creates jobs was recently demonstrated by the new solar factory in Saxony, which is creating thousands of secure jobs and supplying us with solar modules that are ‘Made in Europe’.

Emissions trading must now therefore become a core instrument for our industry; however, to date, too little has been done. CO2-free steel or green hydrogen must be made fit for the market. We can do this with the right architecture, which incentivises decarbonisation and penalises CO2 emissions.

Industry has not yet decarbonised because of the free allocation of CO2 emission permits, meaning there is no incentive to change. But we can protect industry by introducing a Carbon Border Protection Mechanism and at the same time incentivise the shift by removing the free allowances.

Further supportive measures, such as quotas for CO2-free products and carbon contracts for difference must support the rapid transition and give companies confidence that their investment in the decarbonisation of huge plants will be pay off.

We must not be afraid of change; a CO2 price of €150 in the year 2030 seems likely and positive. It leads the way to phase out coal and gives industry the framework to steer investment. However, without a proper framework, Commission President Ursula von der Leyen’s European Green Deal will remain an empty shell.

With a CO2 price and the above-mentioned tools, we can renew the steel mills, offer climate technologies for other industries and make them marketable for the future. Sustainability must be part of every business model in the future.

“Germany, an industrialised country, now sources over 50 percent of its electricity from renewables - while other countries like Denmark and Portugal source even more”

But we must not kid ourselves. The race for the economy of the future has already started; China and the US are not waiting for us, rather they are investing and regulating their markets. At the same time, the EU is the largest domestic market in the world.

We must use this as leverage and exploit possibilities within the frameworks of our trade agreements. A CO2-limit compensation mechanism protects our industry from products with high emission levels and would initiate a global race for climate technologies. It would be a win-win situation for both our economy and the planet.

In summary, the green transformation is a guarantee of prosperity for our economy and society. The job of the future has climate at its centre; however to achieve this, all investments must become climate investments.

The European Union can deliver all of this. We are committed to restarting the energy transition that began more than 20 years ago in the energy sector and establishing ‘Made in Europe’ as a green industry location. If we want to keep what we have, we have to change.

Read the most recent articles written by Michael Bloss - Climate change: time to put the fire out

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