A Green Deal for a Sustainable & Competitive Industry

The European Commission will soon be presenting a strategy to put industry in Europe on the path to carbon neutrality by 2050. The Industrial strategy will be realised together with a Circular Economy Action Plan.

Central in this approach is the need to improve the energy efficiency of industrial processes, as a major source of greenhouse gas emissions. In addition, promotion of new value chains and industries will be based on the circular economy principles.

The Action Plan will be integrating the sustainable development strategies in our business models and integrating environmental and social concerns into all aspects of decision-making as well as staying economically healthy and prosperous.

The Green Deal will have to be a growth strategy while reaching climate goals. Its industrial policy will therefore have to allow access to fast-growing markets while safeguarding jobs through innovation and new technologies.

These developments need a governance process that needs to be up to the task: adjustments are to be made to monitor technological and industrial change as well as identify future emerging strategic value chains. This would not only meet the Green Deal goals, but would also make the Union less dependent on imports, and strengthen its strategic autonomy.

Aside from having a major influence on the developments within in the European industrial playing field, the plans require significant levels of investment. The Sustainable Europe Investment Plan initiative, presented under the Green Deal, is expected to mobilize at least €1 trillion of sustainable investment over the next decade. In addition, the Just Transition Mechanism aims to mobilise at least €100 billion in investments to accommodate such changes and reach climate objectives.

The digitalising our economy is of key importance in order to achieve the much needed industrial transformation. It is estimated that digitalisation has the potential to cut global CO₂ emissions by 20%. We need to leverage the link between digital and circularity, with the use of AI and the European Data Space.

The need for investment in digitalisation is also a clear example of the cross-sectoral aspect of these investments. The use of new technologies in the energy sector, as well as working on so-called “sector coupling” approach to further optimise our energy systems by better integrating renewables into our current energy mix through mobility, transport, industrial processes, and consumption.

The cross-sectorial aspect of it all is also reflected in the EU Circular Economy Action Plan, which aims to make circularity, or a closed-loop economical system, the new norm.

Lastly, energy-intensive industries especially, will need Commission support through extensive safeguards against global competition. Take the proposed carbon border adjustment mechanism, at European borders; This would make it possible to raise the cost of imported products, prevent environmental dumping avoid ‘carbon leakage’, and encourage our trading partners to align with European standards and norms, or to implement carbon pricing in their countries.

This issue of The European Files encourages the EU to take a comprehensive approach and engage each sector of the economy as an opportunity for growth under this new economic model. It is up to Europe to lead the necessary negotiations to create a greener world. An ambitious Green Deal trade policy will help internationalise EU standards and regulations to influence production and investment patterns worldwide. We have the opportunity to meet the challenge of a new industrial approach based on resource efficiency, circularity and innovation while being competitive and low carbon; We can no longer afford to waste this chance.

Editor-in-Chief 

Laurent ULMANN