July 15. 2024. 7:13

The Daily

Read the World Today

EU can win cleantech race if Germany and France stop sending mixed signals

The European Commission, with its Green Deal Industrial Plan, has realised how important it is for the future of global cleantech to be written in Europe. On the other hand, Germany and France – focused on short-term policies and divided on nuclear power – are confusing investors and hampering the competitiveness of the continent, write Sabine Nallinger and Brick Medak.

Clean technologies are at a critical moment of expansion. Multi-billion euro investments are being decided right now with decisive implications for the future prosperity of every country.

Yet, with their recent focus on short-term politics, instead of holding a vision for the build-up of pragmatic long-term public policies, the French and German governments are setting unnecessary obstacles to the continent’s competitiveness for the coming decades.

France should widen its perspective beyond nuclear energies to step up the development of all renewable energies.

In Germany, the current debate on the phase-out of combustion engines should be the kick-start to make the future of electric cars a reality – and keep the focus on technologies that have the potential to be successful.

The recent petty fights might also send the wrong message to investors. Corporate executives read the news. Those making decisions about the location of their next battery gigafactory, or the next large-scale solar project certainly do.

Last week, France and Germany had another opportunity to establish themselves as true leaders in the race to the top of clean energy as European institutions and member states agreed on a new EU renewable energy consumption target for 2030.

The target was finally set at 42.5%. This is a step forward but falls short of what is needed to accelerate the European energy transition.

The European Commission and Parliament had called for a more ambitious 45% target, which Germany supported. However, France was reluctant to raise the target and tried to include nuclear.

In another mixed signal, the previous week, much to the irritation of other EU leaders, Germany carved out a compromise to possibly exempt e-fuels from the sales ban on internal combustion engine cars from 2035.

The exemption itself will probably have little effect in practical terms. Manufacturing e-fuels requires much more electricity than powering EVs, the expansion of which is already a reality. Synthetic fuel cars are likely to be a very marginal segment of the market.

Meanwhile, in presenting the Green Deal Industrial Plan, the European Commission is showing a move to ensure the future of global clean industries is written in Europe.

Brussels is trying to go beyond legislation and put money on the table because it understands how critical cleantech and the transformation of its industry are to Europe’s economic future.

Germany and France should now send a clear, joint signal: We will lead on the industrialisation of cleantech manufacturing that the world needs: solar panels, heat pumps, electrolysers, wind power systems, etc. This starts with championing the Net Zero Industry Act proposed by the Commission.

France and Germany must work on the next steps together, setting aside their differences about nuclear energy, and focusing their cooperation on the technologies on which they do have common views.

Mixed signals only confuse the industry in the global race to the top of clean technologies. With the US Inflation Reduction Act in full swing, Europe must send clear signs toward a clean energy future to attract investors. To win the cleantech race, Europe needs decisiveness.

Together, France and Germany should improve the climate investment framework and work towards a long-term EU Climate Investment Plan.

This way, the EU will send a clear message: we want to develop, manufacture, and deploy in Europe the cleantech and renewable energy technologies that are vital for our green transition, and our technological sovereignty.