Policy Update–Incoming EU Commission Special Edition
November 15, 2024
Welcome to the latest edition of your one-stop-shop for all things cleantech policy. In this Policy Update we focus on the proposed new College of Commissioners, their hearings in the European Parliament and what this new Commission means for clean technologies in Europe.
This update covers:
What we have been reading:
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On September 17, President von der Leyen presented her proposed College of Commissioners and the portfolios she will ask them to manage over the next five years. Of the 26 Commissioners-designate, six will act as Executive Vice-Presidents, if they are confirmed. The proposed Commissioners were interviewed between November 4 and 12 by Members of the European Parliament from the committees most concerned. They must be confirmed first by these committees and then by the European Parliament in plenary session at the end of the month – if not delayed due to negotiations between political groups.
For the time being, all the Commissioners-designate have been approved by the parliamentary committees, except for the Hungarian Commissioner Olivér Várhelyi and the Executive Vice-Presidents, whose future will be decided in the next few days, probably on November 18.
The Commissioners’ portfolios most relevant to cleantech are the following:
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A Clean Industrial Deal in the first 100 Days
Mr. Séjourné, Executive Vice-President-elect and Commissioner-designate for Prosperity and Industrial Policy, Mr. Hoekstra, Commissioner-designate responsible for Climate, Net-Zero and Clean Growth, and Mrs. Ribera, Executive Vice-President-elect and Commissioner-designate for a Clean, Just & Competitive Transition, reaffirmed the commitment of the Commission to present a Clean Industrial Deal in the first 100 days of the mandate, comprising:
To finance these objectives and the continued implementation of the Green Deal, the new Commission will have a strong focus on investment. The necessary Clean Investment Plan (which Cleantech for Europe has been advocating for) and a revised budget capable of achieving this involve the following steps:
Other relevant commitments for cleantech include:
ETS Review
According to Commissioner Hoekstra, the next review of the EU Emissions Trading System (ETS) Directive will occur in 2026, examining the inclusion of municipality waste management from 2028 and cover international flights from 2027 onwards. The expansion to cover maritime transport will also be assessed. By mid-2026, the European Commission will evaluate how to integrate negative emissions in the ETS. The former has the potential to be a particularly important step for the development of carbon removal technologies. The ETS review will also explore how carbon pricing can support the circular economy.
CBAM Review
The Commission will release a review report to the co-legislators by the end of 2025 based on the review clause, with possible extensions (also to indirect emissions) to organic chemicals, and polymers, emissions from the transport of goods and transportation services, as well as other input materials, so-called precursor.
EU Climate Law Review (90% target for 2040)
The Dutch Commissioner, Wopke Hoekstra, committed to a proposal that would enshrine in EU law a 90% emissions reduction target for 2040.
Critical Raw Materials
Commissioner Šefčovič committed to work on aggregate demand and European common purchase of CRM.
CO2 emission performance standards for new cars and vans Review
The review will occur in 2026, with amendments on the inclusion of e-fuels.
EU Innovation Act
As part of a Startup and Scaleup Strategy, the Innovation Act will involve Mrs. Zaharieva and Mr. Séjourné collaborating on how to lighten the regulatory and administrative burden for innovative companies, include the first legislative definition of a startup and propose a 28th regime.
Sustainable Finance Disclosure Regulation review
Despite the 2024 European Commission’s consultation on the review of the SFDR, Mrs. Albuquerque did not say much on the timeframe. Based on these results, the Commissioner will assess the proper course of action. It is necessary to change the ESG disclosures for financial products and assess the feasibility of a sustainability-related categorization system for financial products.
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Teresa Ribera, Executive Vice President designate for a Clean, Just and Competitive Transition
Commissioner-designate Ribera, Spain’s Vice-President in charge of the Ecological Transition, presented her three main priorities for the new term. They are firstly to ensure “access to affordable and stable energy for all;” secondly “to count on a competitive Europe to ensure that all the tools are fit for purpose, including the competition tools, identifying and working with the new clean tech possibilities, but also clean tech challenges so that the industry in Europe, traditional and new, can count on a level playing field;” and thirdly “to provide solutions that can help the rest of our partners in other countries.”
Mrs. Ribera will thus defend a “new approach to competition policy that is more supportive of companies scaling up in global markets and allows European business and consumers to enjoy the benefits of effective competition.” It will rely on a new State aid control framework to enable Member States to provide swift and effective state aid, drawing on the experience of the Temporary Crisis and Transition Framework (TCTF), “to accelerate the rollout of renewable energy, to deploy industrial decarbonisation, and to ensure sufficient manufacturing capacity of clean tech. This means a simplification of State aid, prioritizing our work on the most distortive aids.”
Mrs. Ribera’s work will notably focus on a simpler and faster State Aid assessment process for so-called Important Projects of Common European Interest (IPCEIs), “so that they could be used for innovation in strategic sectors by making the most effective use of IPCEIs and strengthening their cross-border dimension.”
Stéphane Séjourné, Executive Vice President designate for Prosperity and Industrial Strategy
Commissioner-designate Séjourné, the former chairman of the Renew group in the European Parliament, explained that the Clean Industrial Deal would focus on strategic sectors, including clean technologies, the automotive industry, green steel, biotechnologies and the chemical industry. It will include a specific chapter on SMEs. As part of the Deal, he will propose the Industrial Decarbonization Accelerator Act for heavy industry and action plans tailored to each of the aforementioned strategic sectors.
Regarding investment, Mr. Séjourné called for an “electroshock, especially when it comes to scale-ups,” based on a genuine Savings and Investment Union and a new European Competitiveness Fund. The latter is “to be targeted, streamlined and flexible with a funding toolbox, with equity and guarantees.” For the time being, he does not expect all funds to be merged into one, but rather insisted on the one-stop-shop principle. “De-risking will allow us to give these public funds more clout” by leveraging private funding. IPCEIs are, in this respect, an effective tool with “a proper leverage effect” that must be sped up and simplified.
The review of the Public Procurement Directives will also be key in this field, by expanding the Net Zero Industry Act’s use of Sustainability and Resilience criteria. This will ensure “that price is not the sole criterion” and that European production, green standards, and social and quality jobs provisions are included.
With widespread agreement that trade policy issues pose a rising threat to the EU’s competitivenss, Mr. Séjourné explained that “our traditional trade policy is no longer tailored to reality. In order to protect our interests and values, we have to strike the right balance between an offensive approach.”
Wopke Hoekstra, Commissioner for Climate, Net Zero and Clean Growth
Netherlands’ former Minister of Finance and of Foreign Affairs, Mr. Hoekstra committed to “table a targeted legislative proposal to enshrine a net 90% emission reduction target for 2040 in the European Climate Law.” He wants “to create the framework for affordable energy and clean investments. I see several building blocks in this, such as supporting industrial decarbonization, enabling industry to access sufficient and affordable energy, promoting clean technologies, creating investment incentives and lead markets, and promoting skills.”
For Mr. Hoekstra, global carbon pricing and carbon markets are “at the heart of our diplomatic efforts” and “rolling out our Carbon Border Adjustment Mechanism will prevent carbon leakage for our industries and encourage others to start pricing carbon.” Regarding the ETS, the Commissioner made clear that the ETS revision in 2026 will touch upon maritime, aviation, municipal waste and negative emissions. Mr. Hoekstra stated that “negative emissions are a cornerstone of making it to net zero” and those negative emissions “should also be part of the 2026 review.”
The importance of a level playing field for European industry is clearly a priority for Hoekstra, as he affirmed he will “fight ferociously for this. We have an unlevel playing field. Europe needs to have more of a level playing field in the battery industry, in the car industry, in the wind industry, in the solar industry, basically all across the board.”
Ekaterina Zaharieva, Commissioner for Startups, Research and Innovation
Commissioner-designate Zaharieva, former Deputy Prime Minister in Bulgaria and current Member of the National Assembly, emphasized that “the two most challenges for our innovators: access to capital and excessive red tape.” On the one hand, she aims to “strongly expand and enhance the European Innovation Council offering more opportunities especially for disruptive and high-risk ventures.” To “stop Europe’s innovation drain”, and “to unleash the full potential of R&I, [Europe] clearly need[s] to invest more resources, more strategically and in more coordinated way.”
Apart from funding, simplification will be the second leg of her policy. This will take the form of “a comprehensive Startup and Scaleup Strategy and organise a forum as quickly as possible. Specifically, [the] new EU Innovation Act will address regulatory burden for our innovative companies.” On the Single market, Commissioner-designate Zaharieva asserted the “need [for] a 28th regime that will provide a European wide status.”
Apostolos Tzitzikostas, Commissioner for Sustainable Transport and Tourism
Commissioner-designate Tzitzikostas, former Greek regional governor and President of the European Committee of the Regions, defended the measures of the Green Deal in transport areas, highlighting in the automotive industry that “the rules are very clear and were set years ago. There is market clarity and certainty and stability.” To help the industry make its transition, and avoid weakening the 2025 targets, the Clean Industrial Deal will provide incentives, one of them being the development of “green corporate fleets to minimize the cost of the car.”
To achieve these targets, the inclusion of e-fuels will be considered in the review of the Regulation on CO2 emissions in 2026. On the aviation and maritime side, alternative fuels will be at the heart of the decarbonization policy. Mr. Tzitzikostas stated that under the Sustainable Transport Investment Plan “private public partnerships, SAFs allowances, even a SAFs Bank are issues we should consider.” Railroads were also in the spotlight at the hearing, as the main measure—a single ticket reservation system — remains vague in its contours. Regarding trade policy, Mr. Tzitzikostas supported the European’s recent duties on Chinese EVs as the continent needs “to protect [its] industry from unfair competition and not to be dependent on foreign partners.”
Maria Luis Albuquerque, Commissioner for Financial Services and Savings and Investments Union
Commissioner-designate Albuquerque, former Minister of State and Finance in Portugal, explained her main aim is “to deliver more opportunities to finance investments, based on an improved environment for institutional, retail and cross border investments, deepening the Single market for capital, notably in equity, with a focus for companies at the growth and scale up stages.”
Commenting on what the Savings and Investments Union will look like, she considered the hypothetical case of a startup that “often finds enough funds on the very first stage to develop their project. But then they come to a point where they actually need more to test their ideas in the markets. That requires significant funds but not bank loans. They have no collateral, so they need risk capital. […] If we want to deliver, we will need to make sure that our own financial market is big, has this scale, this depth, this liquidity so that no matter the entry point, we can all find the appropriate solution within the EU.” This requires, among other measures, “more integrated supervision”, the development of securitization, and new products for retail investors.
Apart from the issues concerning financial markets, Mrs. Albuquerque highlighted that “There is the need of having more risk capital in Europe obviously. But the lack of risk capital is not only about regulation or public support. There is also a cultural issue here. […] That being said, the public fund can also leverage the private funds to invest more on VC.”
On the specific sustainable finance side, she highlighted it is time to “shift the focus of sustainable finance policy towards making the framework more usable, particularly for smaller companies and for those in transition, while keeping greenwashing at bay.”
Questioned about the review of the SFDR, she replied that considering “the framework is being misused as a pseudo labeling regime [she will] look into the possibility of creating a proper labelling system for green investments, but also for transition investments”.
Dan Jørgensen, Commissioner for Energy and Housing
Danish Commissioner-designate Jørgensen, a former Minister for Global Climate Policy, emphasized the importance of reducing energy prices for both industries and households, recognizing the financial strain that high energy costs impose on citizens across member states. To carry out this project, the Commission will propose “a Clean Investment Plan because we do need massive investments in our energy sector. We need it in renewables. We need it for energy efficiency. We need it for nuclear energy. We need it in physical infrastructure, grid capacity, interconnectors, physical infrastructure for hydrogen, for carbon.”
The focus will be boosting the deployment of renewables via faster permitting procedures, expanding energy grids with a dedicated Action Plan, developing interconnectors, and developing Carbon Capture and Storage (CCS) and new storage technologies, as well as “Power to X" solutions.
Jessika Roswall, Commissioner for Environment, Water Resilience, and a Competitive Circular Economy
Mrs. Roswall, the new Swedish Commissioner who served as Minister for European Union Affairs and Nordic Cooperation, highlighted the importance of circular economy to the Clean Industrial Deal: “The circular economy is the best example of this. I want to deliver it as a priority and a key part of the clean industrial deal.” The Critical Raw Materials (CRM) was also a central matter in this hearing with the Commissioner noting how much work needs to be done in recycling these materials and the potential of single market: “Yet while we rely on 8 billion tonnes of raw materials per year, only about 11 % of those come from recycled materials. I want to use the full potential of our biggest asset, the single market, to address this.”
The Commissioner-designate also summarized her priorities when it comes to the Clean Industrial Deal: “I see three main key areas: first is the circular economy: that's the key to decarbonise. The second is the chemical industry package: that will be essential. And third, we need to accelerate the permitting processes to make this happen.”
Maroš Šefčovič, Commissioner for Trade and Economic Security & Interinstitutional Relations and Transparency
An experienced diplomat from Slovakia, Maroš Šefčovič took a firm stance on trade and the relevance of a level playing field, stating that “Unfair practices and state interventions are increasingly widespread” and that “it is time to double down on our efforts to safeguard a level playing field. EU industry must get rapid and effective relief when faced with dumped or unfairly subsidised imports, non-market overcapacities, or negative spillovers from foreign industrial policies.”
Building on the idea of a more affirmative Europe, Mr. Šefčovič underlined that “We need to use the European bargain power. We clearly have to diversify. We cannot be dependent on some CRM by more than 90 or 95% on one supplier.” He continued to say that he is “very much pushing for making sure that CRM chapter is in every agreement we have, and we would also work on the aggregate demand and common purchase of CRM for the EU as we did with the gas.”
Mr. Šefčovič commented that “the major economies are not following rules” and that “we have been seeing more power and less rules in chartering trade.” But this does not mean that Europe has turned its back on rules, he concluded by saying: "We will always be for a rule-based system and fair trade, but we will be much more ready to defend our interests, much more agile and much more prone to ensure that we will defend the EU interest and the interest of our companies and citizens.”
Piotr Serafin, Commissioner for Budget, Anti-Fraud and Public Administration
Commissioner-designate Serafin, until now Poland's ambassador to the European Union, oversees a future budget fit for EU’s ambitions, which should be more focused, simpler, more impactful, and more flexible. It requires fewer, more focused programs, and a policy-based budget with a plan for each country linking key reforms with investment targeted to where EU action is most needed. The European Competitiveness Fund will provide here the investment capacity to support strategic sectors critical to the EU’s competitiveness. He highlighted that the EU budget can further contribute to leverage and de-risk private capital, with the support of promotional banks, most importantly the EIB/EIF. Serafin sees a need to reduce rigidity in terms of strictly pre-defined budgets and overengineered planning of resources, to become more responsive to fast-changing needs.
Mr. Serafin confirmed that “the European Competitiveness Fund will concentrate on strategic sectors, on our strengths – research, development – and to address our weaknesses – related with scaling up and deployment into the real economy.” However, he was unable to comment for the time being on the route taken to finance it: “There is no clear answer at this point, but I hinted to STEP.”
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We must wait until November 27th for the final formal approval of the College of Commissioners – a single vote for the College that is due to happen in Strasbourg later this month.
COP29 is already ongoing and there is good news regarding agreements on the carbon markets. But to many other topics such as the New Collective Quantified Goals or the Parts commitments on Climate Finance. Europe represents a third of all climate finance and is pushing for new countries (such as China) to join the donor’s list that has not been updated since 1992!
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Coming Monday, November 18: the Cleantech Reality Check
To provide policymakers with actionable insights on how to enable the scale-up of clean technologies in Europe, Breakthrough Energy and Cleantech for Europe are launching the Cleantech Reality Check. This new series of research reports uses analyses from Systemiq to reveal that Europe is off-track in building clean industrial capacity, and that the EU is at risk of missing 2030 targets unless cleantech rollout is accelerated.
With a new political cycle commencing in Brussels and a Clean Industrial Deal expected within the next 100 days, it is a critical time for a ‘reality check’. Our “by-the-metrics” accounting to determine where Europe stands on scaling up specific clean technologies. The Cleantech Reality Check will initially focus on where Europe stands on the emergence of key technologies for the green transition.
Leveling the Playing Field for European Cleantech Manufacturing
Europe is at a crossroads in the global cleantech race. While it has led the way in innovation, developing critical technologies for a net-zero future, its manufacturing capacity has lagged behind countries like China and the US which actively cultivate their domestic cleantech manufacturing ecosystems, scaling their cleantech industries at breakneck speed.
The stakes are high: without a stronger cleantech manufacturing base, Europe risks losing its industrial leadership, jobs, and even the socio-political support needed for the energy transition. Our upcoming report outlines a bold path forward. It calls on Europe to Wake Up to the realities of global competition, Be Faster in its policy responses, and Be Bolder in leveraging its market power.
By sharpening existing tools like the Foreign Subsidies Regulation and introducing new ones such as local content requirements, Europe can ensure fair competition and secure its place in the $2 trillion global cleantech market. Stay tuned as we detail how a cohesive industrial, competition, and trade strategy can repower Europe’s cleantech leadership.
What we have been reading:
The International Energy Agency released in November its updated Energy Technology Perspectives 2024 report. It highlights a surge in global cleantech investment, up by 50% year-over-year, with batteries and electrolysers leading future growth projections and a significant increase in wind capacity announcements. However, China is far ahead in actual new capacity additions across solar, batteries, and wind, establishing itself as a global leader in renewable energy production. The EU’s competitiveness remains challenged, especially on price, where it only closely competes with China on wind production costs.
The report illustrates how targeted policies can reduce this gap, as seen in the U.S., where the Inflation Reduction Act (IRA) has lowered solar and battery manufacturing costs below China’s. The report highlights that global trade in clean technologies, valued at $200 billion, is led by electric cars and solar PV, and could reach $575 billion by 2035. Trade policies, such as U.S. tariffs, also help domestic electric vehicles remain cost-competitive. The EU’s proposed tariffs may boost its EV sector, but Chinese EVs are projected to capture 40% of the global market by 2035.
Innovation, especially in battery technology, is essential to close the competitiveness gap, with potential cost reductions narrowing from 50% to 10% versus China. However, the EU lags both China and the U.S. in R&D spending. The report emphasizes how by 2035, EU wind capacity and manufacturing could meet demand more independently by diversifying imports and strengthening local production.
The Member States agreed in November on the Budapest Declaration on the New European Competitiveness Deal. In response to economic, demographic, and geopolitical challenges, the European Council outlines it to strengthen the EU’s global standing. Key priorities include deepening the Single Market, with a strategy due from the Commission by June 2025 to maximize innovation, growth, and resilience, relying on a roadmap with clear timelines. By 2026, the EU leaders aim to create a Savings and Investments Union, boosting capital access for SMEs and innovative startups. An urgent industrial strategy, probably including the Clean Industrial Deal, is prioritized to secure competitive industries and quality jobs.
A “simplification revolution” will streamline regulations, with the Commission tasked to cut reporting requirements by 25% by mid-2025. To advance technological leadership, the EU should accelerate digital transformation across industries, with new proposals requested by June 2025. To meet climate neutrality and energy sovereignty goals, leaders committed to a sustainable Energy Union characterized by a fully integrated and interconnected energy market as a matter of priority.
To support these 12 drivers of competitiveness, the heavy investments required call for the Multiannual Financial Framework (MFF) as an essential means of achieving our strategic priorities, the Capital Markets Union to mobilize private financing, and greater involvement of the European Investment Bank.
