Written by Nicolas d’Hanis
Dear reader,
As negotiations accelerate across several major EU files, policymakers are shaping the future of Europe’s energy transition, industrial competitiveness, and climate ambitions. In this edition, we explore the latest developments on the EU Grids Package, ETS reform, industrial policy, and clean energy initiatives, alongside key international climate discussions and strategic technology developments across the EU.
The spotlight
The state of play on the EU Grids Package
The European Commission is pushing for the adoption of its European Grids Package by Q3 of this year. Designed to modernise network infrastructure and accommodate the influx of clean energy, the legislative package has become a battleground over national sovereignty, regional planning, and financial autonomy. As the Cyprus Council Presidency attempts to broker compromises across the file, key debates around congestion revenues, centralised planning, and permitting rules are defining the final stretch of negotiations.
Curious about the current discussion points in the Council? Explore below!
Challenge one: Who gets to plan Europe’s electricity networks?
National governments and transmission system operators (TSOs) are fighting to maintain control over grid planning, resisting the Commission’s bid to centralise these powers in Brussels. A coalition of countries recently warned that a top-down approach risks creating underused infrastructure and unnecessarily inflating consumer energy prices.
Parallel debates in the European Parliament echo this resistance; Shadow rapporteur Virgil-Daniel Popescu (EPP, Romania) has argued that the grid planning scenario must be a Council decision rather than a Commission Delegated Act to ensure every Member State remains directly involved.
Challenge two: Who controls the revenues from grid congestion?
Member States are deadlocked over a draft provision that forces national regulators to forfeit 25% of their unused congestion revenues to finance common EU interconnector projects. Sweden, which accounts for over 50% of all unspent congestion income across the EU, has protested by halting all planning for new export cables, stating that the EU should not be allowed to take Swedish electricity revenues. While the latest Council compromise under the Cyprus Presidency attempts to address these issues by exempting congestion income arising from internal bidding zones, this is not enough for Sweden and other Member States.
Challenge three: How far will permitting fast-tracks be scaled back?
The latest compromise apparently excluded final decisions on grid permits from “tacit approval” rules. The tacit approval mechanism proposed by the Commission would have meant that permit applications automatically would have gotten approved if reply from administrations took too long.Furthermore, the proposed two-year permitting deadline can now seemingly be extended by up to eighteen months under special circumstances. Member states have also introduced clauses allowing specific areas to be excluded from expedited permitting due to security and defence interests, alongside provisions allowing authorities to compel developers to register small-scale solar installations.
What’s next?
The Council and Parliament are racing against their self-imposed timeline from AccelerateEU to finalise and adopt the Grids Package Q3 2026 – an impossible deadline as the Parliament is still discussing the files in Committee and is rumoured to vote make a final decision in autumn. . The Council is also still divided and not ready for negotiations. The file is therefore likely to only find an provisional agreement around new year’s – if the negotiations go well.
For businesses operating across the energy value chain, these shifting rules on permitting timelines, network charges, and cross-border interconnectors will alter project economics and grid connection queues. Publyon is tracking every twist of the negotiations in Brussels and national capitals. Want to know more? Reach out.
Impact analysis for your business
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Policy updates
EU Member States back ICJ climate obligations in UN vote
On 20 May, 26 EU Member States supported a UN General Assembly resolution reaffirming that countries have legal obligations under international law to address the climate crisis, while Czechia abstained. The resolution reinforces backing for a landmark ruling on states’ climate obligations by the International Court of Justice (ICJ). It was opposed by several major emitters, including the US, Russia and Saudi Arabia, highlighting persistent international divisions on climate accountability.
In July 2025, the ICJ found that a state’s failure to take appropriate action to reduce greenhouse gas emissions could constitute an internationally wrongful act, and that countries are obliged to protect the climate system irrespective of their participation in the Paris Agreement. While the opinion is non-binding, it is expected to strengthen climate litigation globally and increase political and legal pressure on governments to align domestic policies with international climate objectives.
EU ETS reform enters crunch phase following key signals ahead of the 15 July reviews
European Commissioners will hold an orientation debate on 24 June ahead of the 15 July ETS review, signalling the political sensitivity of upcoming reforms. So far, the Commission excludes the use of international carbon credits from the mechanism. The Commission is also consulting on 2026-2030 benchmark values until 8 June and plans to add 4 billion euros in extra free allowances to cover indirect electricity emissions.
In this context, Czechia, Greece, Poland and Romania are pushing for more free allowances tied to verifiable decarbonisation plans, while also opposing the proposed benchmark update. In parallel, Commissioner for Climate Wopke Hoekstra and the EPP align on the need to condition additional flexibilities with investments in Europe. Meanwhile, NGOs warn that easing the emissions cap or lowering the linear reduction factor could undermine the EU’s 2040 target, while some Member States argue for competitiveness safeguards.
European Parliament sets timeline for negotiations on Industrial Accelerator Act (IAA)
On 19 May, co-rapporteurs Pierre Jouvet (S&D, France), Christophe Grudler (Renew, France), and Anna Cavazzini (Greens/EFA, Germany) agreed on the European Parliament’s negotiation agenda for the Industrial Accelerator Act (IAA), a key file aimed at boosting EU industrial competitiveness. The appointment of three co-rapporteurs is rare and underlines the political importance of the file.
The joint draft report is expected by 7 September, formally launching the parliamentary phase of negotiations. MEPs will then have until the end of September to table amendments, with a plenary vote expected in December before interinstitutional talks with the Council begin.
The co-rapporteurs appear broadly aligned on strengthening European preference and competitiveness, although divisions are likely over specific policy tools. “European preference” remains highly contentious: S&D and parts of Renew, particularly French MEPs, support stronger Made in Europe provisions in public procurement and EU funding, while the EPP and more market-oriented Renew members are expected to resist changes, citing risks of market fragmentation and trade retaliation.
Germany joins IPCEI on nuclear technologies, focusing on fusion only
On 18 May, the German federal government announced its participation in the Important Project of Common European Interest (IPCEI) on innovative nuclear technologies, limiting its involvement to nuclear fusion. Germany joins 13 other Member States in the fusion pillar, including France, Italy, the Netherlands and Spain. The move is particularly notable given Germany’s longstanding nuclear phase-out policy (“Atomausstieg”), completed in April 2023 with the shutdown of its last nuclear power plants. However, the government explicitly confirmed that nuclear fission, including Small Nuclear Reactors, is excluded from its participation, reflecting Germany’s continued opposition to conventional nuclear energy while supporting fusion as a strategic technology with strong industrial potential and as a long-term decarbonisation option.
Announced in April 2025, the IPCEI aims to support breakthrough technologies like fusion and SMR through more flexible State aid rules. The initiative seeks to bring together research, start-ups, and industry from early-stage R&D to industrial deployment. Joint projects are expected to be defined in the coming months, with a view to launching the initiative in 2027 subject to Commission approval.
Commission publishes catalogue of best practices to accelerate EU clean energy transition
On 13 May, the European Commission put forward the “AccelerateEU” catalogue, a non-binding list of best practices designed to support Member States in reducing fossil fuel consumption, drawing on existing national measures and initiatives. It echoes the approach of the EU 2022 RePowerEU plan, launched in response to the energy crisis triggered by Russia’s war against Ukraine, focusing on accelerating the clean energy transition and reducing energy dependencies.
The Commission outlines a number of replicable measures particularly relevant for businesses, including the roll-out of smart grids, targeted incentives for zero-emission transport and sustainable fuels, the use of digital and AI-assisted permitting to speed up projects or mandatory follow-ups to industrial energy audits to support cost-effective decarbonisation. Overall, the initiative provides policymakers with a flexible toolbox rather than legislative obligations, aiming to support rapid replication of proven measures across the EU while leaving Member States flexibility in implementation.
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