A Call for Strategic Revision: Global Realities Challenge the European Green Deal

The EU’s Green Deal began as an initiative to change the world. Presenting the plan in December 2019, European Commission President Ursula von der Leyen declared: “Our goal is to reconcile the economy with our planet, to reconcile the way we produce and consume with our planet, and to make it work for our people.”

According to an April 2024 European Parliament assessment, the European Commission under von der Leyen has established a robust and comprehensive legal framework to achieve ambitious climate targets. The adoption of the European Climate Law in June 2021 marked a significant milestone.

The statements and actions of EU leaders suggest they expected the entire world to rally behind the Green Deal, particularly in terms of carbon reductions in transportation and industrial production processes.

The reality, however, has been quite different.

Europe’s plan to phase out nuclear power and move one of the world’s largest industrial bases to greener alternatives was thrown off track by Russia’s invasion of Ukraine in February 2022. Despite outrage over Vladimir Putin’s aggression, some parts of Europe remain dependent on Russian gas and subject to potential energy blackmail by Moscow.

While Europe struggles to resolve the quandary over its environmental and political ideals, China has used massive subsidies to emerge as a global leader in green tech manufacturing and enhance its stature as a geopolitical player.

The U.S. has strengthened its hand by providing gas to mitigate Europe’s energy crisis while also pursuing its own green tech initiatives.

Europe has found itself holding the short end of the stick after transferring 200 years of manufacturing know-how and industrial knowledge to countries like China that no longer rely on traditional European manufacturers and engineering companies. The political calculations that were effective in the 1990s and 2000s are suddenly no longer viable in a highly globalized but geopolitically unstable world.

As China and the U.S. jockey for global supremacy, Europe watches the two superpowers from the sidelines, hopeful of playing a supporting role. At their November 2023 meeting in Bali, Indonesia, Chinese leader Xi Jinping and U.S. President Joseph R. Biden extended a commitment to collaborate with other nations to address the climate crisis.

Nevertheless, the wheels of European efforts to achieve ambitious climate targets continue to turn. Nearly all the elements of the European Commission’s Fit for 55 package — aimed at reducing EU greenhouse gas emissions by 55% by 2030 — have now been approved.

Fit for 55 updates the entire EU climate and energy framework, covering legislation on effort-sharing, land use and forestry, renewable energy, energy efficiency, emissions standards for new cars and vans, clean maritime and aviation fuels, and energy taxation.

The U.S. perspective, meanwhile, is heavily driven by state investment, exemplified by the Inflation Reduction Act (IRA), which allocated $370 billion for clean energy investments to bolster the energy transition in America and beyond.

In the past year, China has commissioned as much photovoltaic (PV) capacity as the rest of the world combined did in 2022, installing 66% more wind turbines than the previous year. China accounted for 38% of total global clean tech spending in 2023, investing an impressive $676 billion. China continues to lead in terms of solar PV capacity additions, with 100GW added in 2022, representing almost a 60% increase compared to 2021. The 14th Five-Year Plan for Renewable Energy, released in 2022, sets ambitious targets for deployment, which are expected to drive further capacity growth in the coming years.

According to an IEA Energy Technology Perspectives Special Report, China alone accounts for more than 80% of global solar PV module manufacturing capacity and 95% of wafers.

This year’s European Parliament elections have sparked discussions about revisions to the European Green Deal. The joint election manifesto of Germany’s center-right CDU and its Bavarian sister party includes a call for the reversal of the EU’s 2035 ban on sales of new cars with internal combustion engines. The manifesto reads: “We want to abolish the ban on combustion engines and preserve Germany’s cutting-edge combustion engine technology and develop it further in a technology-neutral way.”

Waking Up to a Full Mess

Criticism of the European leadership’s “overregulation” of the economy is likely to lead to protectionism. Bloomberg cited French Finance Minister Bruno Le Maire as saying U.S. protectionism will continue whoever wins the November 2024 presidential election. He called on Europe to take a tough stance on trade.

The level of support of European citizens for the Green Deal will be clearer after the European Parliament elections. But the success of the Green Deal also strongly depends on whether the EU can persuade the world to adopt at least some of its environmental zeal. This is very unlikely to happen. Europeans themselves are still busy defining who they are and where they want to go.

The recent 2024 Eurobarometer survey revealed that 24% of Europeans want the EU’s 27 member states to focus on climate action and emissions reductions to “reinforce” the bloc’s position in the world. This was only the fifth most popular choice, below economic competitiveness, food security and agriculture, energy independence, and the top choice, defense and security, which was the top choice of 37% of respondents.

It’s time for new members of the European Parliament and allied political forces to start rethinking some aspects of the European Green Deal. More than a mere blueprint, the Green Deal is a key symbol of European willingness to be a purpose-driven economy.

The Green Deal should not be permitted to be gutted by populists — but lawmakers and experts should work together to thoroughly revise some chapters. Preferably, climate and environmental protection goals should not be compromised — but geopolitical and scientific realities must also be taken into account.

Europe must set aside the biases and naïveté that suggest policy prescriptions and bureaucratic enforcement can perfect the human’s way of living. Urgent steps must instead be taken to protect the intellectual property of European organizations and guard the continent for the future. Sustainability applies not just to the well-being of the natural environment, but to the well-being of people as well.

[Representational image. Credit: Robberd77, via Wikimedia Commons]

Jan Burian is a global industry analyst specializing in manufacturing and supply chain, and an author of opinion pieces on digital transformation and leadership. The views and opinions expressed in this article are those of the author and not affiliated with his employer. 

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