The Green Brief: The US is back. Should Europe rejoice?

Green brief

Greetings and welcome to EURACTIV’s Green Brief. Below you’ll find the latest roundup of news covering energy & environment from across Europe. You can subscribe to the weekly newsletter here.

After four year of Trumpism, the United States made its big comeback on the green diplomacy stage last week by organising a virtual climate summit in Washington.

As expected, the summit’s mainstay was the announcement of America’s new 2030 climate target. President Joe Biden proclaimed that the world’s largest economy will cut emissions by 50-52% by 2030 compared with 2005 levels, roughly doubling Barack Obama’s previous pledge to cut emissions by 26-28% by 2025.

“The cost of inaction keeps mounting. The United States isn’t waiting,” Biden said.

So is this good news for Europe? The short answer is yes. After four years of climate scepticism fuelled by the Trump administration, America’s return to the table means Europe is no longer isolated among Western powers when it comes to climate action on the global stage.

In Brussels, the European Commission has immediately understood the implications of Biden’s election and swiftly proposed a “transatlantic green trade agenda” in the wake of the US poll, saying the two sides “can lead the world towards a green, circular, competitive and inclusive economy”.

One key area of potential cooperation is the EU’s upcoming Carbon Border Adjustment Mechanism, which aims to restore fair competition with countries like China, which do not impose a price on carbon emissions from their industry.

What Europe and the US could envisage is to “work together to set a global template for such measures,” the Commission said, calling for a joint EU-US “Trade and Climate initiative” within the World Trade Organisation.

Other proposals include a “green technology alliance,” and a global regulatory framework for sustainable finance, where Europe has taken the lead with its sustainable finance taxonomy.

But while Europe has much to gain from closer cooperation with the US, it shouldn’t be naïve either.

Europe is currently a world leader on clean tech, according to a recent joint report by the European Patent Office and the International Energy Agency, with a 28% share of global low-carbon energy patents in the past decade, followed by Japan (25%), the US (20%), South Korea (10%) and China (8%).

Yet, when it comes to research and innovation, the US is capable of quickly surpassing the EU. One month ago, Biden unveiled a $2 trillion infrastructure plan that focuses chiefly on energy and climate technologies, like charging points for electric vehicles.

At first glance, the US plan roughly compares with the EU’s own €1.8 trillion budget and recovery plan, which has 37% earmarked for climate objectives.

However, the reality may be quite different when it comes to getting things done. In the US, the administration only has to seek approval from Congress, while in Europe, the EU’s €750 billion recovery fund is still bogged down in a complex ratification process involving the bloc’s 27 national parliaments.

With Biden in power, the prospects for EU-US cooperation on climate change have probably never looked as bright. But Europe should be aware: transatlantic relations are as much about cooperation as they are about competition. At the end of the day, the EU should remain focused on its own energy and climate agenda, regardless of what America does.

– Frédéric Simon

This week’s top stories

News from the capitals

MADRID. Spain approves €70 billion recovery plan. The plan is intended to promote an economic green transition through decarbonisation and electrification, notably by promoting the use of electric vehicles. It also seeks to reinforce the use of renewable energies generally and features a hydrogen road map. Read the full story.

BRATISLAVA. Brussels welcomes Slovak recovery plan, says PM. The national recovery and resilience plan, which includes €2.3 billion for green economic transition, has received positive feedback in Brussels, Prime Minister Eduard Heger said on Tuesday following his first in-person meeting with European Commission President Ursula von der Leyen and European Council President Charles Michel since he took office on 1 April. Read more.

BUCHAREST. Electric vehicles made in Romania. US car giant Ford announced on Tuesday it will invest $300 million to build a new light commercial vehicle at its Romanian plant in Craiova starting in 2023, with an all-electric model version added in the following year. This will be the first Ford all-electric volume vehicle to be built in Romania.

Ford is the first manufacturer to announce it will build an all-electric vehicle in Romania. Since buying the Craiova facility in 2008, Ford’s overall investment in its Romanian manufacturing operations – including the just announced investment – is close to $2 billion. (Bogdan Neagu | EURACTIV.ro)

PARIS | BERLIN. France, Germany present green recovery plans. “We are not introducing reforms for the benefit of the European Commission. We are introducing reforms for the benefit of French citizens and the nation,” said French Economy Minister Bruno Le Maire who spoke alongside his German counterpart Olaf Scholz at a joint press conference Tuesday. While both plans should heavily focus on the green transition, Scholz said Germany will also be aiming for a “major digital education initiative.” Read the full story.

BUCHAREST. Romania will ask the European Commission to postpone by one month the official filing of its national recovery and resilience plan, EU Investment Minister Cristian Ghinea said on Monday. Read more.

BERLIN. Germany’s finance minister and Social Democrat chancellor candidate Olaf Scholz has attacked the Green candidate Annalena Baerbock for lacking political experience, describing himself as better placed to lead Europe’s largest economy. Read more.

ZAGREB. Croatian President deems national recovery plan ‘insufficiently transparent’. “The recent presentation of the National Recovery and Resilience Plan was insufficiently transparent and that is problematic,” Zoran Milanović said on Saturday, adding that the public lacks precise information about how the EU funds will be spent. Read more.

LISBON. New European Bauhaus ‘crucially important’ for EU climate goals. Portuguese Prime Minister António Costa has said that the European initiative called the New European Bauhaus was of crucial importance to ensure that the bloc achieved its climate goals. Read more.

ROME. Italian government to unveil recovery plan. Italian Prime Minister Mario Draghi will present the Italian plan for the Next Generation EU programme to the Council of Ministers on Friday. According to drafts, the plan foresees the allocation of €221.5 billion, of which €191.5 billion will come from the EU and €30 billion from a complementary fund created by the government, business daily Il Sole 24 ore reported.

The plan will be accompanied by indicators for some reforms to be approved, such as those relating to public administration, justice, the simplification of bureaucratic procedures, and new rules for the production of energy from renewable sources. (Daniele Lettig | EURACTIV.it)

LJUBLJANA. Billions in green spending. Slovenia expects to spend between €21-27 billion to achieve net-zero greenhouse gas emissions by 2050, in line with EU targets on climate neutrality. Read more.

BUCHAREST. No recovery relief funds for irrigation. The European Commission has told Romanian authorities that irrigation works could not be funded by the Recovery and Resilience Facility and that the government allocated too large a share of the fund to transport infrastructure. Read more.

News in brief

EU-China biodiversity talks. The EU’s environment commissioner Virginijus Sinkevičius met with Huang Runqiu, China’s environment minister at the the 8th EU-China Ministerial Environment Policy Dialogue, held on Tuesday (27 April). The meeting comes ahead of the Fifteenth meeting of the Conference of the Parties to the Convention on Biological Diversity (CoP 15), which is scheduled to be held in China in October this year. More

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Carbon farming. The European Commission published its final report on Tuesday (27 April) to conclude a two-year study on how to set up and implement carbon farming in the EU. The Commission said it intends to promote carbon farming “as a new green business model that creates a new source of income for actors in the bioeconomy”. Brussels is currently developing a regulatory framework for certifying carbon removals.” More

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Aarhus Convention ‘right to be heard’. Europe must access to justice on environmental matters under the Aarhus Convention and make sure EU acts are in line with green goals, according to MEPs, who adopted a report in the European Parliament’s environment committee. They agreed to significantly broaden what can be reviewed and called for the costs of the process to be limited.

“The new text gives businesses and public authorities the right to be heard,” said Christian Doleschal, who is rapporteur on the proposal for the European People’s Party (EPP). “We averted the danger of an “actio popularis” where any citizen can put a stop to major EU projects and decisions via an administrative review that was intended to be a purely supplementary legal remedy,” he said.

“The EU’s breach of the international Aarhus Convention has been a longstanding environmental democracy and accountability issue. The revision of the Aarhus Regulation, that needs to be finalised before October 2021, must ensure that the EU complies fully with the Aarhus Convention and ensures access to environmental justice to NGOs and citizens,” said Harriet Mackaill-Hill from Climate Action Network Europe. Read more (Kira Taylor | EURACTIV.com)

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Hydrogen alliance for buildings. The CEOs of 20 companies in the local gas distribution and home heating sector made a pledge on Monday (26 April) to ramp up the use of hydrogen in buildings. The companies and organisations are members of the Roundtable on clean hydrogen for residential applications, a sub-group of the European Clean Hydrogen Alliance launched in July last year. In a statement, the CEOs committed themselves to “make the necessary investments to ramp up the use of clean-hydrogen technologies to make buildings carbon-neutral by 2050”. The statement was signed by the CEOs of gas distributors Sibelga (Belgium) and Portgas (Portugal) as well as domestic heating-systems Viessmann and Vaillant, among others. Full statement here. (Frédéric Simon | EURACTIV.com)

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Finnish MEP furious about forests’ inclusion in green finance taxonomy. The European Commission “treats the Nordic forest industry like a fool,” said Finnish MEP Petri Sarvamaa after the Commission presented its first batch of criteria under the EU’s sustainable finance taxonomy last Wednesday. The proposed criteria are disappointing for the forestry sector and fail to recognise climate action it’s already taken, said Sarvamaa who is from the centre-right European People’s Party (EPP).

“This is a flawed paper based on a green ideology, feeding certain Commission decision-makers’ personal ambitions. It is indeed absurd to punish the forestry practices that will help EU Member States such as Finland and Sweden to achieve more ambitious climate goals in a shorter timeframe than the EU average,” the Finnish MEP said. He called the proposal complex and unclear on the practical implications, saying in the worst-case scenario it would exclude the Nordic forestry sector from sustainable finance.

By contrast, green campaigners were disappointed with the Commission’s taxonomy proposal. Hours after the EU executive presented its proposal last week, NGOs walked out of the EU’s green finance group over the forestry and bioenergy rules, calling them weak and “unscientific”. Read more on the taxonomy here (Kira Taylor | EURACTIV.com)

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Agreement on ‘just transition’ public loans facility. Negotiators from EU member states and the European Parliament reached a political agreement Monday (26 April) on a proposed new Public Sector Loan Facility (PSLF), part of the EU’s €17.5 billion Just Transition Fund. The facility specifically targets public entities, creating preferential lending conditions for projects that do not generate sufficient revenue to be financially viable. It consists of a combination of grants (€1.5 billion) from the EU budget and loans (€10 billion) provided by the European Investment Bank (EIB). “This Facility is an important tool to help our regions and communities meet the challenges stemming from climate transition. It will complete our tool kit for supporting those living in just transition regions to develop new skills and create new businesses and jobs,” said Elisa Ferreira, EU commissioner for cohesion and reforms. 

Overall, the facility is expected to mobilise between €25 and €30 billion of public investments over the next 7 years, the Commission said. The Just Transition Fund, worth €17.5 billion, was agreed in December and is one of the EU’s key tools to support regions in the transition towards climate neutrality by 2050. More detail here

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Net Zero Banking Alliance. A new industry-led, UN-convened Net Zero Banking Alliance launched on Wednesday (21 April), one day ahead of the US-hosted climate summit. The new alliance sees 43 banks from 23 countries (with assets of US$28.5 trillion) committing to align operational and attributable emissions from their portfolios with pathways to net-zero by 2050 or sooner, including setting 2030 interim targets using science-based guidelines. More detail here. (Frédéric Simon | EURACTIV.com)

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Gas in central and eastern Europe. Gas grid operators published a study on Wednesday (21 April), arguing that gas can be “an intermediate fuel” in the transition to net-zero emissions in central and eastern EU countries. 

The research covers 10 EU member states: Austria, the Czech Republic, Germany, Greece, Hungary, Latvia, Poland, Romania, Slovakia and Slovenia. According to Boyana Achovski, Secretary General of Gas Infrastructure Europe (GIE), the analysis shows that “there is no one size fits all solution” to decarbonisation. 

“If we want to deliver climate neutrality by 2050, the specificities of all EU Member States must be considered when designing Europe’s decarbonisation pathways,” she said. “It will be a mistake if future legislation will ignore this,” she added, calling for “an inclusive and technology-neutral approach” to deliver on the EU’s 2050 climate neutrality goal. Read the full study and press release here. (Frédéric Simon | EURACTIV.com)

Upcoming events

  • 29 APRIL: Blue economy: the potential of our oceans to contribute to a green recovery. With keynote speech by Virginijus Sinkevicius, European Commissioner for Environment, Oceans and Fisheries. Programme and registration here. [Supported by Equinor]
  • 4 MAY: The role of gas in Europe’s future energy mix and the transition to zero carbon of Europe’s power sector. With keynote speech by Ditte Juul Jørgensen, Director General, DG ENER, European Commission. Programme and registration here. [Supported by GE]
  • 7 MAY. What can the US and the EU learn from each other to accelerate climate action?  With Diederik Samsom, Head of Executive Vice-President Timmermans’ Cabinet, European Commission. Programme and registration here. [Supported by the Environmental Defense Fund]
  • 20 MAY. Cogeneration and district heating: an enabler of the green transition?  Speakers to be announced soon. Programme and registration here. [Supported by PGE].

On our radar

  • 25 MAY: EU summit in Brussels (face-to-face). Discussions with centre on the coronavirus crisis, the battle against climate change and tensions with Russia. More.
  • MAY (date tbc): Commission to publish zero-pollution action plan for water, air and soil as part of the European Green Deal.
  • 21 JUNE: Environment council. Ministers are expected to adopt conclusions on the climate adaptation strategy.
  • JUNE (date tbc): Fit for 55 package. The Commission is expected to table a huge package of green legislation in June, including a revision of the renewable energy directive, a revision of the emissions trading scheme and our first glimpse at a carbon border adjustment mechanism.

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