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Corporate Leaders Groups

Business leadership for a climate neutral economy

26 May 2021 - Ahead of the discussion at the Competitiveness Council on 27 May, CLG Europe welcomes the release of the EU’s Industrial Strategy as an important test for how Europe’s strategy for growth, the European Green Deal, is being reflected in its other economic policies.

Along with the upcoming ‘Fit for 55’ package of climate measures, expected in July, and the ongoing initiatives in the Circular Economy Action Plan, the new industrial strategy must build on the abundantly clear business case for increased ambition while creating the economic incentives for the rapid deployment of next generation zero-carbon technologies, services and business models.

It is therefore to be welcomed that the updated strategy: 

  • States clearly that the business case for the transition to climate neutrality and competitive sustainability is clearer than ever and for which the digital transition is a crucial enabler. 
  • Underlines the need to drive demand of climate neutral products and services in the Single Market through regulatory standards as a key complement to existing supply-side measures.
  • Highlights the global growth opportunities for European business in key energy markets as well as in areas such as mobility and construction where materials are also an essential focus. 
  • Uses the concept of industrial ecosystems as a new unit of analysis for its assessment of competitiveness and the basis for transition pathways for the 14 initially identified. 
  • Maintains the public-private collaboration in key climate neutral industries – such as batteries and hydrogen – through a combination of alliances and IPCEIs. 
  • Explores important new policy approaches such as Carbon Contracts for Difference (CCfDs) and further Power Purchase Agreements for public procurement of renewable energies 

With further analysis also necessary, the key questions for CLG Europe for the strategy in light of the new agenda of competitive sustainability are as follows: 

  • Does the strategy place the correct emphasis on the increased competition internationally in the climate neutral markets, ensure investment is targeted towards those opportunities, and minimise strategic dependencies? 
  • Does the strategy properly integrate a systemic approach to the circular and digital economies’ potential in using the EU’s Single Market rules to address all sustainability challenges? 
  • Will the strategy strike the right balance between the support for these huge opportunities and the industrial transition with a bold approach to ETS reform coupled with a measured one to the CBAM?
  • Will the EU coordinate its policies to satisfy the increasing industrial demand for cheap and clean energy?

Dr Martin Porter Executive Chair, CISL Brussels and senior advisor to CLG Europe, said: 

“This updated strategy offers further clear evidence of the benefit to the EU’s economy and society from an industrial ecosystem that prioritises innovation, digitalisation and resilience for competitive sustainability. 

The growth markets of the present and future are climate neutral and the EU has an excellent starting position in many. But it cannot afford any complacency given the increased global competition, so must double-down on the policies which accelerate investment to the key locations and players through the networks it has effectively developed. 

This means setting clear priorities on supporting industries that will be part of the competitive net zero future, and a jobs and skills agenda to match. It also means applying this new thinking at all levels of economic analysis and decision-making – through the European Semester and the Recovery Plans as well as the sustainable finance agenda – and ensuring that co-ordination and consistency of decisions are maintained both short and longer-term.”

Read Tomorrow’s markets today: Scaling up demand for climate neutral basic materials and products.

Read Developing the EU’s ‘competitive sustainability’ for a resilient recovery and dynamic growth.