European Green Deal: ‘The status quo is not an option’

Paula Pinho, EU policy chief for the clean energy transition, explains why decarbonization targets can’t be met without close collaboration with the private sector.

In July 2021, the European Commission proposed measures to transform the EU economy and society to meet climate ambitions presented in the “European Green Deal”. Key elements are digital innovation, stringent regulation, and collaboration between the private sector and public authorities, says Paula Pinho, head of the Directorate for Just Transition, Consumers, Energy Efficiency and Innovation in the Directorate-General for Energy. 

 

By Erika Claessens and Christian De Neef

For Director Paula Pinho, appointed on 17 March 2021 to lead the Directorate for Just Transition, Consumers, Energy Efficiency and Innovation in the EU Directorate-General for Energy (DG Energy), the European Green Deal is a personal matter. “I consider it a privilege to be given the responsibility to strive for climate neutrality by 2050. We have 30 years ahead. Action needs to be taken now, but the impact will be felt over time. Achieving a net reduction of greenhouse gas emissions by at least 55 percent by 2030, compared to 1990 levels, is crucial to Europe becoming the world’s first climate-neutral continent by 2050.”

Achieving a net reduction of GHG emissions by at least 55 percent by 2030, compared to 1990 levels, is crucial to Europe becoming the world’s first climate-neutral continent by 2050.
Paula Pinho | Directorate for Just Transition, Consumers, Energy Efficiency and Innovation | EU DG Energy

In July 2021, the European Commission (EC) presented the legislative tools to deliver on the targets agreed in the European Climate Law, intended to fundamentally shift behavior affecting the economy as a whole. The actions to be taken are clear, Director Pinho notes: “We need to change the way we produce and consume energy. We need to change the patterns of supply and demand. We need both current and future technologies to support us in this process. And of course, this will come at a cost, but the cost of inaction would be far higher.” The Green Deal, she points out, is not just about energy or climate, but a societal transformation that affects everyone at every level: industry, citizens and consumers, academics, and the public sector. 

All eyes on innovative technologies

“A recent report from the International Energy Agency (IEA) about pathways to ‘Net Zero’ concluded that a net zero result can only be achieved through immediate industrial innovation. Let’s not forget, for half of the emissions we need to reduce, we are not yet in possession of commercially available technologies”, explains Director Pinho. “Innovation and research are part of my responsibilities in the Directorate. This will be vital for contributing to immediate action by industry, at least if we want to deliver our green ambitions for 2030.”

 

The EU research financing program Horizon Europe will contribute an unprecedented €95.5 billion from 2021 to 2027 for investment in research and development of innovative technologies. With this public funding, the EU hopes to encourage private actors in various industrial sectors to collaborate at the European level.

Without the collaboration of private actors like Siemens, it would be difficult to tackle all the technologies needed to achieve our European Green Deal ambition.
Paula Pinho

Director Pinho is convinced that without industrial investment, Europe can’t deliver the green transition in time. “I address Siemens as an OEM in particular,” she says, “as Siemens has the know-how and experience to bring technologies from research and demonstration to commercial deployment. Without the collaboration of private actors like Siemens, it would be difficult to tackle all the technologies needed to achieve our European Green Deal ambition.”

 

The EC is promoting a number of partnerships and alliances with EU countries, industry, and the scientific community to meet those goals. One of these is the European Battery Alliance (EBA). Batteries are a strategic part of Europe’s clean and digital transition and a key enabling technology that is also essential to the automotive sector’s competitiveness.

Digitalization for an integrated approach

While there is no silver bullet in terms of technology, Paula Pinho confirms that energy efficiency and digitalization will be key for an integrated approach to the energy system. “Whether you’re talking about smart buildings, smart cities, or complex industrial features, digital technologies will make a difference in terms of capability and efficiency. Digital technologies interconnect and impact everyone, from the citizen to the public authority to the industry.”

 

Pinho points to the impact of digitalization on new ways of working during the pandemic. “It was a good example of how digitalization plays a critical role in driving behavioral shift. At all levels, digital technologies offered solutions for a new, global approach to remote work.”

Whether you’re talking about smart buildings, smart cities, or complex industrial features, digital technologies will make a difference in terms of capability and efficiency.
Paula Pinho

The other side of the coin is the risks we are exposed to, such as cyberattacks, and the potential violation of privacy rights, she continues: “Privacy matters. Citizens need to feel comfortable with this increasing digitalization and with the impact it has on their private data. Private data processing has to be safe and/or anonymized. The EU has always been a pioneer and expert in setting standards when it comes to data protection, compared to other parts of the world. Protecting privacy is one of our core values.”

Managing a decentralized and volatile resource

It is not only digitalization, but also the decentralization of energy production, down to the level of the individual citizen, that create challenges for the European energy system. Here, too, Director Pinho is convinced that the benefits will far outweigh the risks: “The interconnectedness of our energy system is a clear asset for the EU and something we’ve been working on for many years. And even the possible vulnerabilities that we are exposed to through digitalization will be better confronted if we are interconnected.”

 

She adds: “The intermittent nature of some renewable energy resources makes it particularly challenging for grid operators, who need to keep the balance in the system. We probably have the largest interconnected electricity grid worldwide, which is also an asset for the EU.” In this context, cooperation between local operators will be essential. This means important investments on their side, but probably also the capability to deliver new services that they were not able to deliver before. 

The momentum to embrace decarbonization

Decarbonization can only work if policies and governance on the one hand, and industrial innovation and research on the other hand work together. Paula Pinho’s call to industry is for a financial involvement, to bridge the technological gap together with the European public authorities: “We can’t deliver a societal transformation on energy without EU industry. But I am confident about the number of companies pledging to Net Zero. There is real momentum now.”

It’s very encouraging to see many sectors, including traditional oil and gas companies, committed to net zero.
Paula Pinho 

The conviction that industry is embracing decarbonization makes her hopeful. “It’s very encouraging to see many sectors, including traditional oil and gas companies, committed to net zero. Big emitters are putting forward their pledges for decarbonization, and in a way that would have been unimaginable only a few years ago.” For this senior manager in DG Energy, it is clear that Europe cannot do this on its own. “The EU is responsible for about 10 percent of the global greenhouse gas emissions, so there is another 90 percent out there to be solved.” 

Regulation paves the way to transformation

Regulation is an important instrument for initiating industrial transformation. The automotive sector, for example, has achieved significant breakthroughs in terms of energy efficiency and emissions over the past decade. The EC proposals of July 2021 include a combination of measures to tackle rising emissions in road transport to complement emissions trading.

We are heading to a green and fair future on a global level where everyone has a role to play, from citizen to industry to authorities.
Paula Pinho

Stronger CO2 emission standards for cars and vans will accelerate the transition to zero-emission mobility. Auto makers will be required to reduce the average emissions of new cars by 55 percent from 2030 and by 100 percent from 2035, compared to current levels. As a result, all new cars registered as of 2035 will be zero-emission. To ensure that drivers are able to charge or fuel their vehicles at a reliable network across Europe, the revised Alternative Fuels Infrastructure Regulation will require member states to expand charging capacity in line with zero-emission car sales, and to install charging and fueling points at regular intervals on major highways – every 60 kilometers for electric charging, and every 150 kilometers for hydrogen refueling. 

‘The status quo is not an option’

Paula Pinho is hopeful. “Squaring the circle between supply, demand, financial means, and the necessary innovative technologies, while making sure everyone can benefit from it, is a challenge. And regulation is one of the instruments to help bring it all together and allow supply and demand to match, and eventually achieve the result needed. We are heading to a green and fair future on a global level where everyone has a role to play, from citizen to industry to authorities.”

 

Digitalization will help the EU to achieve its goals by 2050. Director Pinho makes it very clear that the EU won’t leave anyone behind. “The status quo is not an option. The benefits will far outweigh the costs. It will be tough, I know, but it has to be a just transition of energy, affordable for every citizen. And the industry already understands that there is no way back. This is the real momentum.”

The European Green Deal

The European Green Deal, presented by the European Commission (EC) on 11 December 2019, aims to make Europe the first climate-neutral continent by 2050. The European Climate Law, which entered into force in July 2021, codifies the EU’s commitment to climate neutrality and the intermediate target of reducing net GHG emissions by at least 55 percent by 2030, compared to 1990 levels. This commitment was submitted to the UN Framework Convention on Climate Change (UNFCCC) in December 2020 as the EU’s contribution to the Paris Agreement’s goals.

As a result of existing EU climate and energy legislation, the EU’s GHG emissions have already fallen by 24 percent compared to 1990, while the EU economy has grown by around 60 percent in the same period, decoupling growth from emissions. This is why the Green Deal roadmap builds on the existing EU legal framework.

In preparing legislation for delivering on the Green Deal, the EC conducted extensive impact assessments to measure the opportunities and costs of the transition. In September 2020, these showed that the increased target is both achievable and beneficial. The EC’s legislative proposals, published on 14 July 2021, are supported by impact assessments taking into account other parts of the package.

The EU’s budget for the next seven years will support the green transition. Thirty percent of programs under the €2 trillion 2021-2027 Multiannual Financial Framework and NextGenerationEU are dedicated to supporting climate action. Moreover, 37 percent of the €723.8 billion Recovery and Resilience Facility, which will finance member states’ national recovery programs under NextGenerationEU, is allocated to climate action. 

September 14, 2021

 

Authors: Erika Claessens is an independent journalist and editor. She works from Antwerp, Belgium. 

Christian De Neef is a management consultant and a regular contributor to content ranging from change adoption and innovation to sustainability.
Picture credits: Justin Jin

 

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