Dear reader,
Welcome to the latest edition of the monthly Energy and Climate Policy Update. After plenty of bargaining between political groups in the European Parliament, the new European Commission was confirmed during the Strasbourg plenary session on 27 November. Below, we provide some key takeaways from the hearings of the new Commissioners in Parliament. But of course, that was not the only thing to happen over the past month. Among others, this month we put the spotlight on the impact of the US elections on Europe.
Stay tuned for our insights below!
Europe’s bold plan for sustainable growth, the “Clean Industrial Deal”, represents a major shift for EU businesses, especially in energy-intensive sectors. Don’t miss your chance to engage with the Commission to shape this deal and influence the policy direction for the next five years.
The spotlight
Trump back in the US Oval Office: what does this mean for Europe’s climate ambitions?
On 5 November, citizens of the United States of America voted for Donald Trump to be their 47th President. Trump won all seven swing states, thereby securing 312 electoral votes versus 226 for the Democratic candidate Kamala Harris.
Trump is still in the process of selecting his cabinet. Chris Wright – CEO of a fracking company Liberty Energy – will be nominated to lead the Department of Energy (DOE) as the Secretary of Energy. If confirmed by the Senate, he is likely to reverse measures to curb greenhouse gas emissions originating from the burning of fossil fuels.
Moreover, Wright announced that, once in office, he will restart the issuance of natural gas export permits that have been paused under the Biden administration since the beginning of 2024.
What can the EU expect?
Some Republican members are advocating for the repeal of the Inflation Reduction Act (IRA), which allocates over half a trillion dollars for initiatives in areas such as clean technology, hydrogen and renewable energy. The IRA has been a crucial catalysator for generating and attracting additional investment.
The EU has struggled to formulate a response to the IRA, although it eventually responded with a Net-Zero Industry Act (NZIA) designed to improve the rollout of cleantech projects. The EU will follow up on the NZIA with its new industrial strategy, the Clean Industrial Deal, in the first 100 days of the new mandate. Repealing the IRA may potentially benefit Brussels as it seeks to focus heavily on enhancing its competitiveness in a global, diffused world.
Trump is expected to withdraw the USA from the UN Paris Agreement once again, slowing down the pace of the green transition.
During our webinar on the outcomes of the US elections, Viktoria Vajnai, Managing Partner at Publyon EU, elaborated on how the new Trump administration might reshape US-EU relations and the global landscape.
She indicated that Trump’s focus on tariffs, climate, and alliances may impact European economies, pushing the EU to accelerate policy responses to strengthen its (autonomous) position. Moreover, while the Trump administration is unlikely to directly affect EU lawmaking on environmental issues, Trump’s election will likely deepen the divide between both, undermining the EU’s efforts to foster multilateral cooperation and global environmental standards.
Next steps
While the Electoral College cast their votes for President and Vice-President on 17 December, the Congress will officially count the Electoral College votes on 6 January 2025. It is expected that Trump will be inaugurated on 20 January 2025.
If you want to know more about how the US elections may impact your business, please contact our colleague Viktoria at v.vajnai@publyon.com.
Policy update
Commissioner hearings
On 27 November, the European Parliament approved the College of Commissioners, allowing the new Commission to start on 1 December. This followed the preliminary approval of the final seven Commissioners after a deal between the EPP, S&D, and Renew.
Below, you will find a recap of the hearings held in Parliament from 4 to 12 November for the most relevant new European Commissioners.
Teresa Ribera, Executive Vice-President for Clean, Just and Competitive Transition, Stéphane Séjourné, Executive Vice-President for Prosperity and Industrial Strategy, and Wopke Hoekstra, Commissioner for Climate, Net-Zero and Clean Transition, will work together on the Clean Industrial Deal, aimed at making European industry more sustainable while maintaining its competitiveness.
During his hearing, Séjourné focused on ensuring European industrial competitiveness and strategic autonomy, emphasising decarbonisation and on targeting key sectors such as steel, the automotive industry, clean technology, digital technology, biotech, and the chemical industry. He argued that the transport sector is also a key area in European industrial policy.
Ribera further stated that the Clean Industrial Deal is an opportunity to modernise EU competition policy by aligning it with the EU’s sustainability and innovation objectives.
Moreover, Hoekstra underlined that the 2026 review of the EU Emissions Trading System (EU ETS) will address sectors such as maritime, aviation, and municipal waste and may include negative emissions. He noted that the review process for the EU’s carbon border tax (CBAM) could be brought forward from 2027 to 2025, potentially adding new sectors to the mechanism.
Dan Jørgensen, Commissioner for Energy and Housing, stressed the importance of energy efficiency, renewable energy targets for 2040, and the potential of nuclear energy, including small modular reactors. He also mentioned the need for substantial investments in technology, energy infrastructure, and district heating and highlighted the need to support the development of new technologies such as energy storage and carbon capture and storage (CCS).
Member States issue joint statement on the internal combustion engine ban
Following the Czech Republic, Poland – which will take over the Presidency of the Council of the EU in January – has now also joined Italy in its call for an earlier review of the EU ban on the sale of new cars with internal combustion engines by 2035. The signatories of a joint statement call for, among other things, a revision of CO2 emissions standards for cars and vans to be brought forward by a year to 2025. They also propose reducing the impact of fines on car manufacturers who fail to meet the 2025 targets and call for a long-term strategy to ensure both economic competitiveness and climate neutrality for the automotive industry. Member States have discussed the statement during the Competitiveness Council on November 28.
On 27 November, President of the European Commission Ursula von der Leyen announced in European Parliament that a strategic dialogue on the future of the European car industry would be launched; we can thus expect that the automotive industry will be a major point on the European agenda.
COP29 conclusions
From 11 to 22 November, the COP29 climate summit was held in Baku, Azerbaijan. Countries signed an agreement in which wealthy states commit to providing at least $300 billion annually in climate finance to poorer nations by 2035. While this was seen as a positive start by some, others viewed it as insufficient. Moreover, global carbon market rules were finalised, although concerns about transparency and implementation remain.
At COP29, the EU also launched a roadmap to accelerate methane emissions reduction, announced its intention to present in 2025 a Paris-aligned Nationally Determined Contribution for Member States (NDC), and initiated a new partnership with the Beyond Oil and Gas Alliance for a transition away from fossil fuels. Further concrete measures to reduce fossil fuel use faster did not materialise, partly due to opposition from Saudi Arabia and other emerging economies.
New compromise text of the Energy Taxation Directive
The Hungarian Council Presidency circulated another new compromise text for the revision of the Energy Taxation Directive (ETD) in the Council of the EU. The updated text removes the previously proposed temporary tax exemption for maritime and aviation fuels, which means that the current tax rules for these transport fuels would remain unchanged.
Instead, the Commission would have to consider the need for new tax rates for maritime and aviation fuels by 31 December 2034 at the latest. This would allow member states to continue applying a zero-tax rate in the meantime. Hungary argues that this is necessary because unanimous support among Member States, which is necessary on taxation issues, has proven to be impossible. Following two discussions at the working group level within the Council, the next step would be to address the proposal during a policy debate at the Economic and Financial Council on 10 December.
Council adopts conclusions on EU industrial policy on renewable hydrogen
The Council of the EU on 5 November adopted conclusions on renewable hydrogen industrial policy, following a special report by the European Court of Auditors published this summer.
Member States welcome the report and emphasise the need for the swift implementation of the EU’s regulatory framework to support the development of renewable hydrogen. They call for coordinated action to attract investments and highlight the importance of national energy and climate plans (NECPs) in setting EU targets for hydrogen production and imports.
The Council also stresses the need for an interconnected transportation network for cross-border hydrogen transport and storage across Europe. Member States urge the European Commission to follow up on the recommendations from the Court of Auditors, ensuring that both the competitiveness of EU industry and the security of investments are addressed.
Business impact
Fuel EU Maritime & ReFuelEU Aviation
With the new Commission set to begin its term on 1 December, and major new initiatives like the Clean Industrial Deal on the horizon, we take a closer look at two important decarbonisation policies in the European transport sector from the past mandate: FuelEU Maritime and ReFuelEU Aviation.
What do these policies entail, and how might they impact your business both now and in the future? Keep reading to find out!
What are Fuel EU Maritime and ReFuel EU Aviation?
The FuelEU Maritime and ReFuel EU Aviation are part of EU’s Fit for 55 package. They aim to:
- Boost the demand for renewable and low-carbon fuels;
- Gradually reduce greenhouse gas (GHG) emissions;
- Align maritime and aviation transport with the EU’s climate targets for 2030 and 2050.
More precisely, FuelEU Maritime aims to reduce greenhouse gas intensity in shipping fuels by 2% in 2025, progressing to 80% by 2050 while promoting renewable fuels of non-biological origin (RFNBO). It mandates onshore power supply (OPS) for passenger and container ships in ports to reduce air pollution and boost renewables and introduces a voluntary pooling mechanism allowing ships to collectively meet emission targets.
For the aviation sector, ReFuelEU Aviation aims to boost the demand and supply of sustainable aviation fuels (SAF) to reduce aviation CO2 emissions and ensure fair competition in the EU. Aviation fuel suppliers must increase SAF use from 2% in 2025 to 70% by 2050, with synthetic fuels rising from 1.2% in 2030 to 35% by 2050. Eligible SAFs include certified biofuels, renewable hydrogen, and recycled carbon fuels, capped at 70%, excluding food and feed-based biofuels.
What is the impact on businesses?
Europe finds itself at a critical juncture, as highlighted in the reports Much More Than A Market by Enrico Letta and The Future of European Competitiveness by Mario Draghi. With the dual challenges of decarbonising its economy and maintaining its global competitiveness, the EU must act decisively to avoid falling behind economic powerhouses like China and the United States.
That sometimes leads to tensions with climate targets. Those in FuelEU Maritime and ReFuelEU Aviation mean that EU companies will have to take up significantly more sustainable fuels, even if the supply for those fuels is not there yet. The upcoming Clean Industrial Deal could potentially address such tensions, for example by stimulating the production of such fuels through financial and regulatory incentives.
In the meantime, impacted businesses, such as shippers, can anticipate the upcoming targets:
- Long-term fuel procurement: Businesses must ensure consistent access to sustainable fuels, such as SAF for aviation and biofuels for maritime operations. Achieving this requires a stable framework that guarantees sufficient renewable energy sources and feedstocks to meet demand. In the coming years, EU institutions and Member States must establish supportive conditions while addressing the practical realities on the ground.
- Swift fleet modernisation: Upgrading to fuel-efficient, environmentally friendly fleets is crucial to meet progressively stricter standards from 2025 to 2050.
- Increased monitoring and compliance requirements: Effective emissions tracking and compliance tools will be essential under initiatives like FuelEU Maritime and ReFuelEU Aviation. Additionally, businesses must account for other reporting obligations, such as those outlined in the Corporate Sustainability Reporting Directive (CSRD), ensuring they understand both what to report and how to do so accurately, even if such obligations might be watered down in the coming years.
With the new mandate approaching, Publyon is here to help your business navigate current policies like FuelEU Maritime and ReFuelEU Aviation, but also to help you prepare for future initiatives such as the Clean Industrial Deal.
Through our Clean Industrial Campaign, we provide the insights and strategies you need to stay ahead in a rapidly changing regulatory European landscape!
What’s next?
Now that the hearings have concluded, and the European Parliament voted to approve the College of Commissioners on 27 November, the new Commission can finally start working. While Christmas is around the corner, the first few weeks of December will be all but quiet in Brussels.
- On 1 December, the College of Commissioners is expected to take office.
- On 5 December, the Transport Council will meet.
- From 16 to 19 December, the European Parliament will hold its next plenary session in Strasbourg.
- On 16 December, the Energy Council will meet.
- On 17 December, the Environment Council will meet.
Martijn Meijer
Hi, my name is Martijn and I am curating the Energy & Climate Policy Update, aiming to bring you insightful updates straight from Brussels. At Publyon, I work mainly on transport and energy files. Do you have any questions on EU energy and climate policies or how these might impact your organisation? Feel free to reach out!
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