Tackling climate change and environmental risks with technological innovations

Recommendations for the European legislative period 2024-2029

By the middle of the century, Europe aims to be climate neutral. The industry supports this goal and acts as an enabler for the transition to climate-neutral production, developing the necessary technological innovations—from power plant pumps to low-emission aircraft. However, it's a fact that the ambitious sustainability program of the EU, the Green Deal, poses a significant challenge for companies, especially due to numerous new climate, environmental, and transportation policy regulations. The competitiveness of the industry has been neglected in European climate policy so far. The EU urgently needs to provide companies with a convincing perspective for competitive production within Europe.

Strengthen the production of European net-zero technologies

The EU should evolve the Net-Zero Industry Act (NZIA) into an industrial policy strategy that creates effective incentives and conditions for the market ramp-up of net-zero technologies, thereby contributing to the ambitious Green Deal targets. Investing in European projects must become more attractive through a technology-neutral approach, faster procedures, advantageous location costs, and regulatory reliability. Sector-specific challenges must be addressed with a technology-neutral approach that promotes not only a shift in electricity (green hydrogen, etc.) but also a shift in molecules.

Accelerate approval processes for industrial plants

The proposed NZIA only covers a narrowly defined group of key technologies. Beyond these technologies, the EU must take initiative to systematically speed up authorisation processes for industrial facilities in general, ensuring the success of the transformation and the competitiveness of the European industry.

Review the European Green Deal in terms of its impact on Europe as a business location

The EU must examine the individual elements of the Green Deal to ensure they for a coherent whole. It is crucial to set clear priorities to resolve the often-existing conflicts between individual measures, especially concerning the urgent challenges of climate transformation. This may also involve revising or withdrawing proposed measures such as the directives on industrial emissions and air quality.

Strengthen the competitiveness and innovative capacity of the industry in Europe

The EU needs to develop a strategy to strengthen the competitiveness and innovation capability of the industry in Europe in order to achieve the goals set in the Green Deal. This also requires a secure material basis. Regulations such as the proposal to restrict per- and polyfluoroalkyl substances (PFAS) run counter to this.

Align air pollutant limits with climate transformation measures

The reduction targets set in the air quality directive must be continuously reviewed and the timelines adapted in view of the climate transformation measures that have simultaneously been adopted.

Ensure value creation in the EU during the REACH revision

Any potential revision of the REACH Regulation must be approached with care. Regulatory measures to meet ambitious goals must be designed to preserve value creation in the EU. To promote innovative technologies, it must still be possible to use chemical substances provided if these do not pose a risk or if the risk can be adequately controlled.

Consider companies' contributions to biodiversity conservation

The European Commission should initiate an effort to systematically document the measures taken by companies to protect nature and strengthen biodiversity. These measures should be mandatorily taken into account under the regulation on nature restoration.

Guarantee water use in the context of economic and industrial activities

The Water Framework Directive (WFD) should undergo a fundamental revision. Economic and industrial activities utilizing water must be facilitated. As many water bodies will fail to meet the WFD goals within the given time frame, at least three additional management cycles should be introduced to both achieve these goals and provide more legal certainty for the stakeholders.

Close loops and strengthen innovations in the circular economy

The regulatory environment of the circular economy in the EU has fundamentally changed through legislation between 2019 and 2024 (e.g., EU batteries regulation, EU eco-design regulation, EU regulation on shipments of waste, EU packaging directive). To strengthen competition for innovations in the circular economy, numerous implementing and delegated acts must be developed and adopted between 2024 and 2029. It is of high importance that these acts are developed in coordination with relevant economic stakeholders and with the expertise of companies, using coherent definitions. This is particularly crucial for the implementation of the new eco-design regulation.

Increase coordination among relevant legal areas in the circular economy

For companies to think and plan in cycles, the relevant legal areas must be aligned. The interfaces of waste, product, and substance law are still not consistently oriented towards a Circular Economy. Moreover, product-related double regulations should be strictly avoided.

Support industries in their transformation

Relying solely on high CO2 prices in the EU ETS seems like a penalty for production facilities when crucial infrastructures are lacking. Carbon Contracts for Difference, lead markets for green raw materials and Green Public Procurement can significantly help create stable conditions for a successful transformation.

Simplify access to support measures

The funding and support landscapes for companies in the EU and member states should be merged and made significantly more transparent.

Support the ramp-up of the hydrogen economy

The EU should adjust conflicting regulations such as the Renewable Energy Directive III (RED III), EU Taxonomy, or the EU Gas Package to make investments in H2 technologies worthwhile.

Review CBAM (Carbon Border Adjustment Mechanism)

The EU should correct CBAM so that exports of CBAM goods are not rendered impossible by the loss of free allocation. If CBAM  proves not to be effective in preventing carbon leakage, the EU must reconsider and potentially abolish the mechanism.

Expand cross-border infrastructure for H2, CO2, and renewables

Crucial climate protection technologies such as Carbon Capture and Storage (CCS) and, especially, Carbon Capture and Utilization (CCU) technologies are energy-intensive and require a sufficient supply of renewable energy at competitive prices.

Honestly communicate the importance of innovative technologies for climate protection

To achieve climate goals at all, the application of innovative technologies is necessary, and this success depends on societal acceptance.

Correct developments consistently

The European Commission is urged to utilize correction options attributed to it in the review clauses, especially in the Alternative Fuels Infrastructure Regulation (AFIR), the CO2 fleet regulation for passenger cars and light commercial vehicles, as well as the ReFuelEU Aviation regulation, as applicable.

Support the ramp-up of alternative drives and green fuels

The EU should rapidly and proactively establish charging and refuelling infrastructure for all modes of transport, as well as for all drives and fuels. Furthermore, the EU should set clear CO2 price signals for road transport through the ETS and fuel taxation.

Strengthen cooperation with power-to-liquid (PtL) producer countries

To make enough PtL fuels available before 2030, international standards for sustainability and quality criteria, an international certificate trading system (Book & Claim procedure), and international requirements for the accreditation of sustainable fuels are necessary.

Prevent carbon leakage in air and maritime transport

The EU should compensate the unilateral additional costs of green fuels over fossil fuels for international air and maritime transport, both at the European and national levels. Otherwise, there is a risk of carbon leakage, i.e., the shifting of CO2 emissions. One financing option is the conversion of national air traffic taxes into a European, destination-based, and purpose-bound climate levy. European measures must be continuously complemented by initiatives for the international harmonization of climate protection ambitions.