6 ways to make EU industry climate neutral

An opinion by Henrike Hahn, Damien Carême and Michael Bloss, Greens/EFA MEPs.

Industry and its products are essential for our society. Our factories and manufacturers employ millions of workers and strengthen our economy. At the same time, industry utilises huge amounts of coal, oil and gas, water, raw materials, precious metals and chemical substances from all over the world, making it one of the leading sources of air, water and soil pollution on our continent. 

Global warming has already exceeded 1°C, and our current policies are steering us towards climate failure. 

We have to do better. Investments in innovation and efficiency, often driven by green policies, have paid off. Emissions reduction targets and energy audit obligations have led some sectors to improve their environmental footprint, and some European companies are world leaders on innovative and sustainable solutions. However, much more needs to be done. Industry can – and should – fully contribute to the achievement of the agreed climate targets, while reaping all the benefits associated with the green transition. 

The Industry and SME (Small and Medium-sized Enterprises) Strategies and the Circular Economy Action Plan, launched in March 2020 by the European Commission, have been a first indication to the industry as to the huge ecological transformation it needs to go through.

The recovery from the Covid-19 crisis is our best chance to transform our industry, and make it more sustainable, competitive and resilient. We’ve identified 7 steps where the EU and industry can take immediate action.

Europe must set increasing environmental, social and transparency standards for its industrial value chains. This will allow companies to understand which investments to make in order to realize the transition to a sustainable and competitive economy in consistency with the EU’s 2030 and climate neutrality target.  Focus should be put on resource and energy efficiency, the shift to a fully renewable energy system and circular economy practices. Ambitious objectives must be matched with financial and employment support to enable a just transition for all workers. Particular attention should be paid to the decarbonisation of steel, cement, chemical and other energy-intensive companies. SMEs should receive dedicated financial and local advisory support. 

Europe is already suffering more than € 13 billion in climate damages annually. If we’re serious about combatting harms like noise, air pollution or loss of clean drinking water, polluters must be held responsible for their actions. It is essential that all European industries pay the price for the environmental damage they cause. To this end, any exceptions from the payment of carbon emissions costs must be phased out, with the money redirected to green investments. This will help companies with sustainable business models to become competitive and grow!

Foreign companies selling their products in Europe should pay the same price for their emissions as European businesses. We don’t want industrial emissions to relocate from the EU to other parts of the world; we want to decrease emissions everywhere!  That is why the implementation of a coherent Carbon Border Adjustment Mechanism will be a key measure for the transition of the European industry.

To decarbonise the energy use of industry, we have to implement energy efficiency measures. We need to identify where energy consumption can be reduced and eliminate any waste. Industry needs to tap the full potential of renewable energy and electrify its processes. Solar technology has become cheaper than coal and gas in most major countries. Energy efficiency and renewable energy are providers of a massive number of local, skilled jobs. To maximise job opportunities, we must invest strategically in a domestic clean energy industry! The acceleration of renewable energy deployment will allow us to produce more renewable hydrogen, which is key for most polluting industries where renewable-based electrification is not yet feasible.

Consumer demand for sustainable products is essential. Besides making sustainable solutions more affordable for consumers, we must increase demand both from private and public consumers. We should improve the information provided to them, by making it clear on the label how long-lasting and easy to repair the products they buy are. We need to improve transparency from the sourcing of the raw materials throughout the manufacturing process. Public authorities, which drive demand in certain sectors, should consider the sustainability of the products and services they buy, and not just take the cheapest offer! 

Keeping public funding in line with the goal of climate neutrality and focused on the green industrial transition will be key to guaranteeing that there are no stranded investments. Clear EU definitions of sustainable activities are now available (EU Taxonomy): these definitions should be the compass for all EU and national funding, starting with the COVID-19 recovery schemes. Going forward, it will also be important to set up a robust monitoring framework for EU funding, particularly of large industrial and infrastructure projects (so-called “Important Projects of Common European Interest”). 

As Greens/EFA members in the European Parliament, we are convinced that this is the right way forward. To keep our air fresh, our planet cool and to get a competitive, resilient and sustainable economy. It is time for a greener European industry!