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Europe and France are refining their transformation frameworks

Olivier ABULI, advice and analyses consultant

February 28, 2022

The 2021 second half heavy diplomatic sequence (IPCC pre-report, European Commission roadmap, G20 Summit, Cop26) has clarified the international mapping of strategies, trajectories and commitments regarding the climate emergency.

Under the French presidency, E.U. and its member states are now working to make clear the transformation timetables associated with their political and technological arbitrations so that investors and manufacturers can efficiently mobilize themselves on these agendas.

We need a Plan !

This is the leitmotiv of the beginning of the year. In order to massify the electrification of economy, to create new energy production sectors, to curb the risks of carbon evasion, to influence the evolution of international standards... it is essential to resurrect planning on a continental scale. Only a few months ago, this scenario of a stronger role for public authorities in the transversal management of economic activities would have seemed incongruous. Today, this scenario is aiming at playing a prominent role : in Brussels, under the impetus of Pascal Canfin who is at the helm of the European Parliament's Environment Committee and also in Paris, as it is evidenced by the convergence of views between the General Secretary of the CFDT and the President Delegate of the MEDEF during a presentation of the Plan for the Transformation of the French Economy (PTEF) developed by the Shift Project1, at Sciences-Po, on February 7th. No wonder if the summary of this "white-label plan for the presidential candidates" sold out in bookstores within a few days.

It is a common sense issue. The race against time that has started and the scale of the systemic reforms to be carried out call for proactive and, dare we say it, partly interventionist governance. There is no other way to achieve the objectives set for 2030 and 2050 while maintaining the balances that will determine the success of these transformations. It is then a question, over the long term, of
- directing and supporting massive public and private investment efforts over 30 years. The European Court of Auditors has put a figure of 11,200 billion euros to be invested during the single 2021-2030 period ;
- arbitrating step by step degressive access to fossil fuels and non-renewable raw materials between countries and by sector of activity ;
- developing joint reaction and adaptation capacities to deal with the hazards that will inevitably disrupt projections (technological, geopolitical, climatic delays, etc…) ;
- ensuring the social acceptability of the pace and severity of change.

The European Commission is speeding up

It only took a few weeks after the end of Cop26 for the Commission to build on the most convincing advances that were made at the Cop26 and to complete the final links in the « Fit for 55 » climate package. The actions are correctly aligned with the E.U. intentions and confirm the its ambition to spearhead the climate fight.

An immediate translation of the commitments undertaken in Glasgow

In Scotland, two sectoral agreements concerning the fight against deforestation and the reduction of methane emissions were able to gather the signatures of some 100 countries.

On the first point, the Commission immediately proposed the adoption of a regulation focused on « imported deforestation » which aims, among other things, to close its market to raw materials and products from « recent deforestation ».

On the second point, it proposes to strengthen its internal standards (for instance, banning flaring and venting practices) and to monitor methane emissions and leaks from the fossil fuel sector, including its imports, under observation by satellites.

Gas and nuclear power are conditionally included in green taxonomy

Negotiations were tough, but the E.U. Commission has finally included gas and nuclear power within the classification of activities that substantially contribute to « climate change mitigation and adaptation ». If the Parliament and the European Council are not against it, these two sectors will be eligible for subsidies and « green investments » from this summer to help increase our electricity production capacity. As many reservations remain, this measure is very explicitly limited to covering transitional needs. If adopted, its scope would be limited in time and with conditions :
- gas-fired units would only come on line when taking the place of more polluting facilities, with construction permits only to be issued until 2030. In addition, governments and operators will have to anticipate the Commission's intention to prohibit the renewal of fossil natural gas supply contracts beyond 2049 for these sites ;
- regarding nuclear power, upgrading work on the existing fleet would only be possible until 2040 and authorization to launch new reactors would be limited to 2045. For the latter, the funds that are necessary for their dismantling and for the treatment of waste will have to be provided for.

Hydrogen and carbon-neutral buildings : the two building blocks that complete « Fit for 55 »

After 2050, low-carbon renewable gases, including hydrogen, should gradually take over. The next few years will therefore be devoted to determining a certification system for these gases and to developing the networks and infrastructures that are essential to the emergence of a mature market. A governance and regulatory structure will be dedicated to this.

Finally, following the example of the decisions already taken by France2 , all European Union countries are invited to adapt their standards to renovate the most energy-intensive old buildings and to be able to produce new zero-emission buildings by 2030.

By taking advantage of the impetus provided by its rotating presidency of the European Union, Paris intends to accelerate the process of convergence on the most structuring proposals between members while continuing to make its own transformation levers coherent.

Bercy is putting the finishing touches to a draft decree aimed at « greening » public procurement. More precisely, it is expected to increase from 130 to 300 the number of large local authorities required to draw up a multi-year plan to promote socially and environmentally responsible purchasing (SPASER).

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To go further :

1. Presentation of the Shift Project Plan for the Transformation of the French Economy on February 7th, 2022

2. See our monthly news dated February 4th, 2022
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