EU: DESPITE COP28, INDUSTRIAL POLICY STUMBLES WITH GREENWASHING

On 18 December, only a few days after the end of COP28, during which the EU played an important role in the drafting of the final compromise ('transitioning away from fossil fuels'), two reports on the state of the EU's green transition came out, one from the European Environment Agency and the other from the European Commission, indicating that without more ambitious and better implemented measures, a major part of the targets related to the commitment to achieve zero net CO2 emissions in 2050 will not be realised.  It should be made clear that the targets set by the EU and its member states in 2019 to achieve carbon neutrality by 2050 and to reduce emissions by 55% by 2030 are not random numbers, as some people, including some in government, keep repeating, but represent the minimum path the EU must take to play its part in keeping the temperature increase within the 1.5° limit, substantially reducing pollution, the cause of some 400. 000 premature deaths per year in the EU (80,000 in Italy), start a virtuous transformation of the economy towards more sustainable and competitive models.

This gap between a European Union in the vanguard of the world and lagging behind when not in danger of regressing on the real numbers with respect to its climate commitments is also visible in one of the most important political decisions taken by the co-legislators (Parliament and Council) in recent weeks and concerns the first regulation ever adopted on industrial policy, the Net-zero Industry act.

For a few decades, industrial policy - a term that encompasses measures by which governments aim to stimulate specific economic activities within their territory - has had a bad reputation. The EU single market was seen as incompatible with national industrial policies, synonymous with waste of public money and fragmentation, as these could create unequal conditions and unfair competition within the EU. And so, as early as the 1970s, the Commission started to intervene in national competition and state aid; but, given the limited size of the EU budget, this was not compensated for by the introduction of effective measures and resources to strengthen industry at European level.

As Ferdi De Ville explains in his article on the return of industrial policy, for a long time, the EU believed, wrongly, that the world economy would gradually become similar to what its Single Market should become, a market undistorted by state aid or other forms of anti-competitive behaviour. Not only have things not turned out that way, but the context in recent years has changed radically; three reasons have forced the EU to react. The first is its ambition to become the first carbon-neutral continent, resulting in the need for huge investments and a profound rethinking of strategic product and technology priorities.  The second is the increase in geopolitical tensions and the risks to security and economic and social stability of depending on foreign countries for raw materials and industrial components; and finally, the very robust measures and huge resources made available by the EU's direct competitors: the United States, with its billion-dollar aid plan for green tech companies 'made in the USA', and China, with its highly successful strategy of grabbing materials that are essential for the transition and investing in time in renewables and electric mobility. Hence, the presentation last March by the Commission of the first proposal for a regulation dedicated to industrial policy, the "Net Zero Industry" Act; the regulation is now reaching its final stages; the European Parliament and the Council have adopted their negotiating positions and must now agree on the final text. The Commission's proposal had the very shareable goal of using the transition to a zero-emission economy as a compass for strengthening the EU's competitiveness and the massive creation of quality green jobs; it recognised the need to introduce sustainability criteria in public procurement and included solar, wind, batteries and heat pumps among the strategic technologies for achieving the 2030 climate and energy targets and therefore prioritized for funding and facilitation of various kinds.

Unfortunately, during the passage from Parliament to the Council, even this legislation fell victim to various industrial lobbies and a political and even cultural unwillingness to admit the extreme urgency of investing first in solutions that can rapidly ensure emissions reductions and new economic activity, namely renewables and energy efficiency; thus, the list of 'net-zero' technologies was expanded to include nuclear power and the role of carbon capture and storage (CCS), already present in the Commission's proposal, was further strengthened: yet, these are solutions that will not help us at all to reach our 2030 and 2050 targets, because they are not technologically mature, are overpriced or have safety and feasibility problems. It is no coincidence that Fatih Birol, the director of the International Energy Agency, himself described as 'fantasies' the possibility that with carbon capture we can obviate the urgency of speeding up the exit from fossil fuels. The fact that nuclear and CCS/CCUS are placed practically on the same level as renewables and heat pumps indicates a very serious risk of competition for the already scarce resources available to realise the Green Deal. These changes will hinder the achievement of the 2030 and 2050 targets and may greatly reduce the ability of this regulation to steer the choices of member states and the EU towards the green transition, weakening its innovative scope and effectiveness.

It is now truly essential that the industrial sectors concerned and civil society know how to mobilise to prevent precious public and private resources from being wasted in the implementation of the regulation on false and costly solutions and in green-washing that would make the 'gradual exit' agreement from fossil fuels signed in Dubai in a big way completely virtual.

DISEGNO DA ROARS