The European Commission has announced plans to reduce the cost of energy for consumers and businesses, and billions of investments to promote green industries and keep manufacturing in Europe.

The plans are part of the so-called Clean Industrial Deal, the lynchpin of the new Commission programme which succeeds the Green Deal pioneered by Frans Timmermans.

Affordable energy

A key element of the plan are measures to make energy more affordable for consumers and industries.

The commission said it will tackle “all three components of energy bills… network and system costs, taxes and levies and supply costs”.

On the supply side, the commission will support member states in accelerating the permit process for renewable energy development. It will also recommend EU countries to reduce national taxes on electricity and to ensure that consumers can switch more easily to cheaper suppliers in order to save on the energy bill.

The Netherlands currently has among the highest energy prices in Europe.

In addition, the plan encourages improvements and more integration of the electricity grid and support for consumers to take up devices that use less energy. Here too the Netherlands has been struggling with a lack of grid capacity, impacting both new residential developments and industry.

The commission estimates savings will amount to €45 billion in 2025, that will increase to €260 billion by 2040.

GroenLinks-PvdA MEP Mohammed Chahim welcomed the announcement, saying the EU urgently need short-term measures to protect both citizens and industries from high electricity prices, to ensure stable energy markets and prevent speculation-driven price volatility. “A cap on electricity prices would also offer greater security against price surges,” he said.

‘Made in Europe’

As regards industry, the commission intends to “mobilise over €100 billion to support EU-made clean manufacturing” helping European companies face competitors from the US and China. The funds will be channelled through a new Industrial Decarbonisation Bank and will promote “clean tech, clean mobility and waste reduction.”

In order to stimulate demand for greener products, the commission will also introduce sustainability and “made in Europe” requirements in public procurements for strategic sectors.

In addition, the plan will seek to ensure that scarce materials are “used and reused efficiently” to reduce global dependencies, and to develop the necessary skills in the workforce for “strategic industries linked to the Clean Industrial Deal”.

Cleaner and competitive

Dutch commissioner Wopke Hoekstra, responsible for climate and clean growth, said presenting the package: “Europe needs to be cleaner, more competitive, and self-sufficient. The Clean Industrial Deal is our business plan: a decarbonisation strategy that re-industrialises Europe, driving competitiveness and boosting strategic independence.”

Ingrid Thijssen, chairman of the Dutch employers association VNO-NCW, welcomed the move saying that “the industry is under great pressure, especially due to too high energy prices and insufficient demand for sustainable products”.

Scaling back on green regulations

The commission also proposed scaling back green finance rules and corporate reporting obligations about sustainability, which were agreed in the past legislative term, as a way to cut bureaucracy for companies.

Brussels has “made life too difficult for companies,” Hoekstra said in an interview with some European newspapers, including the Financieele Dagblad.

“These proposals are crude and badly thought-out, risking actually creating bureaucracy and uncertainty,” MEP Lara Wolters, a lead parliament negotiator on the files, said on social media.

Parliament

The scrapping of these measures still has to be agreed by the European parliament and council, representing member states.

However, Dutch climate minister Sophie Hermans said it is essential to make European industry more competitive and sustainable.

“Our industry is under pressure due to the high energy prices, an uneven playing field and complex regulation,” she said. “The Industrial Deal allows Europe to tackle these challenges and focus on affordable clean energy, sustainable investments and an open functioning market.”