We Mean Business Coalition response to EU Electrification Action plan and ETS review
We Mean Business Coalition
Today, the European Commission confirmed the central role of electrification in driving European energy security, industrial competitiveness and economic growth.
The Electrification Action Plan grasps hold of the economic opportunity of the 21st Century. It includes an indicative electrification target of 46% by 2040 that can send a positive signal to galvanize action and unlock economic benefits across European electrification value chains.
Focus now shifts to EU member states to get the policy conditions right to drive investment on the demand side. Levers including reform of fossil fuel subsidies and smart taxation to bring electricity costs down will create a level playing field for electrification of energy uses across buildings, transport and industry.
This ambitious Plan needs to be underpinned by a robust Emissions Trading System (ETS) that gives companies the confidence to bring forward the necessary investments to modernize their operations. Leading businesses have been calling for the predictability of a strong and stable ETS that rewards rather than punishes companies that invest in Europe’s clean industrial future.
In the ETS announcement today, the direct link with the EU 2040 target is welcome but proposed measures of reducing the speed at which the cap shrinks (LRF) to 3.7%, changes to how allowances are auctioned, and the continuation of free allowances risk undermining its integrity and send a mixed investment signal.
Maintaining a robust ETS would deliver the full promise of the EAP and accelerate the transition to a modern, electrified economy – and a cleaner, cheaper, more secure future for Europe.