19 October 2023 - Businesses and policymakers call for an accelerated green transition, including an ambitious 2040 target, to increase the EU's competitiveness and phase out fossil fuels.
On 10 October, policy-makers, business leaders and experts from all over Europe met in Brussels for the annual Green Growth Summit. On the agenda was: taking stock of the main climate policy achievements in the last ten years, looking towards targets for 2040, how to build competitive sustainability across European industry - and expectations for COP28.
So what were the main messages from the summit? First, the EU needs an ambitious 2040 target. Phasing out of fossil fuels and transitioning to clean energy should be a priority in the EU and globally. The green transition has already granted us economic benefits and will bring many more, but to unlock its full potential, businesses need a predictable framework to scale up action and investment. More action is also required for the nature and agriculture sectors.
Since 2013, the summit has been the landmark annual event of the Green Growth Partnership – the joint initiative of the Green Growth Group of Environment and Climate ministers, which currently brings together 17 Member States, and the Corporate Leaders Group Europe (CLG Europe) which unites progressive companies in supporting a climate neutral economy. The Green Growth Partnership is an example of the “ambition loop” in motion, in which businesses and policymakers encourage each other to take more ambitious climate action.
Here are some of the main takeaways of the Summit:
The EU needs an ambitious 2040 greenhouse gas emissions reduction target
According to the European Scientific Advisory Board on Climate, Change represented by its Vice Chair, Prof. Dr. Laura Diaz Anadon, the EU needs to aim for a 90-95% reduction in emissions by 2040. This is both feasible and fair from a global perspective. The sooner the action is taken, the more the EU can prevent the cumulation of negative impacts resulting from emissions and exploit the benefits.
Building on this scientific advice, CLG Europe recently adopted a calling on the EU to reduce its emissions by at least 90% by 2040. As Harry Verhaar, Head of Global Public & Government Affairs of Signify and Chair of the CLG Europe, said, “it’s not anymore about the direction we are taking – it’s about the speed.” Verhaar also noted that a quick mitigation measure was to reduce demand for energy. Berthold Goeke, representing the Head of Climate, at the Federal Ministry for Economic Affairs and Climate Action, Germany, stressed that the climate crisis and cost efficiency represent a strong case for deviating from linear pathways towards net zero. Ambassador Pierre Cartuyvels, Deputy Permanent Representative of Belgium to the EU, then indicated that in order to implement the 2030 target and move towards 2040, it is necessary to build on the existing strengths of economies and populations and drive competitiveness forward.
Coca-Cola Europacific Partners, represented by the Director for Environmental Sustainability, Megan Mitrevski Dale, supported a greenhouse gas emissions reduction target of at least 90% by 2040. The company itself aims to achieve net zero by 2040 – this will necessitate increasing recycled content, using 100% renewable energy, shifting to EVs and increasing the energy efficiency of coolers.
Support from policymakers will also be necessary, including through encouraging green electricity contracts and policies to move towards a more circular economy.
Phasing out fossil fuels and transitioning to clean energy should be a priority in the EU and globally
As Europe invests in the green transition and looks to increase its energy security, it must halt its dependency on fossil fuels. Rafael Mateo Alcalá, Chief Executive Officer of ACCIONA Energía, highlighted in his intervention that Europe is “addicted” to imported fossil fuels and is even escalating its consumption. He said, “this dependence is at the origin of the ongoing climate crisis”, putting not only the EU’s climate goals but also its security at risk.
At the same time, in the EU and globally, there is a broad range of technologies to promote green energy. Reflecting on the global state of affairs, Bas Eickhout, called for the EU to take an ambitious stance at the upcoming COP28 by advocating for a fossil fuel phase-out. This must also involve self-reflection and addressing the EU’s own challenges, if the bloc wants to maintain credibility on the global stage. María Mendiluce, CEO of the We Mean Business Coalition, a network of over 20,000 business leaders from around the world, echoed that it was time to ditch fossil fuels and urged governments to be courageous ahead of COP.
"We need to phase out fossil fuels as soon as possible and have energy affordable and secure for all."
- Teresa Ribera Rodríguez, Third Vice-President of the Government of Spain and Minister for Ecological Transition and Demographic Challenge
Businesses understand that climate action can improve their profitability, financial viability and competitiveness.
The green transition has already brought economic benefits and will bring many more but to unlock its full potential, businesses need a predictable framework to scale up action and investment
In his opening remarks, Kurt Vandenberghe, Director General of the European Commission’s Directorate General for Climate Action, pointed out that the last 10 years have seen a lot of progress with regard to both political decisions taken by the EU to combat climate change, and the way in which we think about decarbonisation.
Instead of seeing climate action as damaging to Europe’s competitiveness, we now see it as an integral part of our growth strategy, he said. Predictability and consistency are key. Without it business cannot trust government.
There is a sophisticated interplay between the public and private sectors, Vandenberghe stated. However, Europe is only halfway through the green transition: it needs to implement its climate targets, set a matching industrial policy and mobilise investment to achieve its climate goals. Berthold Goeke noted that decarbonisation of the German industry and energy system will require huge investments in alternative infrastructure and technologies, and it will also be necessary to support consumers, for example to achieve emission savings in the buildings sector.
Uroš Vajgl, State Secretary for Environment and Climate of Slovenia, said that the EU did not have time to backtrack from the climate goals it had set and urged that it uses investments wisely. This dedication from the private sector was further exemplified by Ingka Group/IKEA, which has invested in 1 terawatt of energy coming from renewable sources. Simon Henzell-Thomas, Global Director of Climate & Nature for the company said that the EU should “keep the regulatory momentum – it’s working!”
Kristi Klaas, Deputy Director General for the Green Transition, Ministry of Climate, Estonia, called for the Green Deal to be high on the next Commission’s agenda to help companies achieve their goals and remove obstacles for implementation.
"As social and economic difficulties driven by interlocking political, climate, nature and energy crises rock the globe, political and business leadership towards a climate neutral and nature positive EU is more vital than ever. This is the only way we can deliver a resilient and prosperous society."
- Ursula Woodburn, Director, CLG Europe
Greening the EU’s industry will increase its competitiveness
The EU needs to adopt a coherent, comprehensive and ambitious industrial policy with both sustainability and competitiveness at its core. Christophe Grudler, MEP from the Renew Europe Group, in his intervention called for a deep transformation of industry, with a focus on competitive sustainability. The aim is to achieve strategic autonomy in the EU and retain competitiveness globally in the face of growing competition from the US and China.
The US Inflation Reduction Act (IRA) was an answer to the Green Deal – “Europe was first!”, he noted.
Several other speakers highlighted the importance of circularity – according to State Secretary Uroš Vajgl, a circular economy is the way forward to rethink the ways in which we live and work, and truly escape the climate and environmental challenges the EU is facing. Bas Eickhout, MEP from the Group of the Greens/European Free Alliance, stated that the EU’s industrial policy should bring growth, jobs and climate together. Ambassador Barbara Cullinane, Deputy Permanent Representative of Ireland to the EU, said that strengthening competitiveness and sustainability can be done by using the single market, developing international partnerships and empowering businesses to do more.
Looking into business solutions, Dr. Kimmo Järvinen, Head of European Governmental Affairs, SSAB, a company developing fossil free steel, stressed that scaling up this technology would clearly show that investing in the green transition is a smart business move.
Kristi Klaas raised that digitalisation was an ally, as digitalisation and open data becomes an important factor facilitating both innovation and companies reporting.. For example, in Estonia, the electricity network is fully digitalised and all energy data is freely accessible, enabling a creation of multiple startups that develop solutions to reduce energy consumption.
"Beyond the current mandate of the Commission, we must take the next steps to close remaining gaps and set our sights on 2040 by delivering on a Green Deal 2.0 for the next Commission mandate."
- Leonore Gewessler, Federal Minister for Climate Action, Environment, Energy, Mobility, Innovation and Technology, Austria
More action is needed for the nature and agriculture sectors
Several speakers pointed out that the EU’s agricultural policy needs to become a part of the green policy toolbox. During his speech, Kurt Vandenberghe noted that the decarbonisation of the agriculture and food sectors will be high on the agenda, as well as carbon removals.
According to Ville Niinistö, MEP from the Group of the Greens/European Free Alliance, the current approach to agriculture and forestry is unsustainable and harmful for emissions, biodiversity, and air quality. From his perspective, the creation of an economic paradigm for green land use would be the biggest legislative paradigm shift of the 2020s.
Empowering and changing consumer behaviour is key
Simon Henzell-Thomas highlighted that the ability to influence consumer behaviour is fundamental – and it starts with listening to consumers’ concerns. Kurt Vandenberghe indicated that starting to influence consumers behaviour now will make the transition less costly. Additionally, as Ursula Woodburn, Director of the CLG Europe, noted, the EU also must make sure that we invest in green communities, skills, and decent jobs. Follow us on the social media to be alerted to the latest news about the CLG Europe and Green Growth Partnership’s activities.
CLG Europe is a cross-sectoral business group with the mission to support the transition towards a climate neutral, nature positive and sustainable EU. CLG Europe is diverse in its membership and representative of Europe in geography and sector, welcoming the innovative talent of SMEs and leading established companies. The group works closely with policymakers – particularly the Green Growth Group of EU climate and environment ministers, and supportive Members of the European Parliament through its Green Growth Partnership. The group also maintains a network of sister groups across the EU. It works in partnership with some of the largest business-focused organisations supporting climate action as one of the founders of the We Mean Business Coalition, for which it provides the EU policy lead.
The Green Growth Partnership (GGP) is a joint initiative between members of CLG Europe and ministers of the Green Growth Group (GGG). It provides a forum to promote positive exchange between progressive European governments and businesses, with regular involvement of like-minded parliamentarians, and other key stakeholders and opinion formers, determined to support the development of a climate neutral and prosperous Europe
