#CleanTechEU - Summary thread for innovation and climate action in the EU

Present conflicts and the rise of energy prices have resulted in a push to replace fossil fuels where innovation can play a key role. 

This article is written in the name of a collective of leading institutions (Climate Strategy is a member) in the innovation arena, which frequently publishes reports, factsheets, and related information using #CleanTechEU tag in an effort to further the decarbonisation of the economy. On this day, we want to walk readers through the current policies, regulation, and technologies associated to innovation, and their relevance to climate action within society.

We begin highlighting that during this month’s #G7Summit -hosted by the German Government-, its leaders can shift their finance out of #FossilFuels to reduce, by 2025, gas consumption in an amount equal to Russian exports. A GreenPeaceDE report indicates that the annual potential gas savings in #G7 countries could be upwards of 264 billion cubic meters. Also, the report states that in order to achieve these savings, two steps must be taken: 

• An installation initiative for heat pumps, wind, and solar energy.
• Measures to increase energy efficiency.

Last week, members of this group of organisations joined forces in an open letter directed at the following: heads of State and Government, permanent representatives to the EU, Charles Michel (President of the European Council), Ursula von der Leyen (President of the European Commission), Executive Vice-Presidents of the European Commission, Chairs of the European Parliament Committees, and Members of the European Parliament.

The letter describes how we remain convinced that to boost the #REPowerEU, we need to supercharge cleantech innovation and its deployment through delivering a policy framework fit for innovation, that truly links European programs (like HEU, IF, EIC) to develop, scale-up and deploy clean technologies. The letter underlines some of the policies in the #Fitfor55 package which we together believe will deliver climate innovation and deliver our energy independence and strategic autonomy. Policies include: carbon pricing, financial instruments, energy efficiency and embodied carbon, mobility, renewable energy, grid and storage, carbon capture, removal and storage.  

Experts and an array of stakeholders agree that energy savings are indeed the quickest and most cost-effective way to address the present-day energy crisis and to reduce bills. Thus, a few weeks ago, the European Commission proposed to enhance long-term energy efficiency measures. including an increase from 9% to 13% of the binding Energy Efficiency Target under the ‘Fit for 55' package of European Green Deal legislation.

It is very important for the European Commission to bolster the cooperation with the different financial institutions on energy efficiency investments and to mobilise their commitment toward the achievement of the REPowerEU as well as the European Green Deal objectives. As mentioned in the ‘EU Save Energy Communication', in order to increase private financing for energy efficiency, the Commission will:

• Launch, in cooperation with Member States, a high-level European Energy Efficiency Financing Coalition with the financial sector, based on the successful Energy Efficiency Financial Institutions Group (EEFIG);
• Examine possible additional measures to trigger further private investments, e.g. through Mortgage Portfolio Standards (MPS) or pay-for-performance schemes.

The energy crisis is putting pressure on the European Commission and the member states alike to find ways to lower electricity prices and to achieve energy independence. Interestingly, if #Spain had delivered the energy savings from its 2014 “Long Term Strategy for Energy Renovation in the Building Sector” (in Spanish ERESEE), it would by now have delivered around 3 mm toe of energy savings -amount equivalent to the energy in the gas it imported from #Russia in 2021. Since 2014, and until 2019, Spain’s real home renovation rate actually slowed down, and at just 0.08% it significantly lags other EU countries like France (1.75%) and Italy (0.77%), none of which reach the 3% target required to deliver the EU’s Renovation Wave. Read the latest Climate Strategy paper “How energy efficient buildings could help at Spain’s energy independence goals while deepening decarbonization”, which proposes a Marshall Plan for Spanish Buildings that can be executed in three steps: 

1. To best identify and target public and private renovation investments
2. To ensure easy access to long-term, low cost finance and funding packages
3. To ensure an effective and efficient execution

Ahead of the EU #InnovationFund’s 3rd call on Q4 2022, the European Commission should ensure there is at least 1 expert of each renewable sector, represented amongst the evaluators. This would improve the evaluators’ detailed knowledge of the potential of renewable energy.

We welcome the European Commission proposed EU Solar PV Industry Alliance, which will provide a framework for coordinating actions aiming to help diversify supply chains, retain more value in the EU and deliver efficient and sustainable products based on #NextGeneration technologies. The alliance will:

• Map the availability of financial support
• Attract private investment
• Facilitate the dialogue and match-making between producers and offtakers

Did you know ultra-deep geothermal is a reliable source of green baseload energy and a possible key to green energy independence? Moreover, deep geothermal doesn’t rely on rare-earth minerals – in fact, it can be a sustainable source of lithium –thus avoiding the risk of creating new global dependencies. Read piece “Planet A and Cleantech for Europe’s joint deep-dive on novel opportunities for renewable baseload energy in Europe” to know more about the work of Cleantech for Europe and Planet A’s joint work on how ultra deep geothermal energy could give us access to a permanent supply of renewable heating, cooling and power. 

The European Parliament can make improvements in both the #EUETS & #CBAM by: 

• Ending free allowances by '30. Free allocations slow down the uptake of clean technologies, as industries are not incentivized to adopt them fast enough. Also, sustainable front-runners developing clean alternatives are kept out of free allowances because benchmarks are based on processes, not products.
• Reforming benchmarks asap to support sustainable frontrunners. The EU ETS benchmarks disadvantage sustainable front-runners by treating them differently than incumbents, as they are based solely on specific products and production processes.
• Expanding the EU Innovation Fund for #cleantech. Its funding should be increased to reflect the EU’s ambition to become the industrial and climate leader of the next decades. It should support projects carried by independent scale-up companies instead of only large corporates.

We hope you enjoyed this article, and that it provided you with key insights. Should you have any comments or suggestions kindly enter them in the box below. Stay tuned for this group’s next article authored by Clean Air Task Force in two weeks!

#CleanTechEU

#CleanTechEU

Clean Air Task Force @Jacques Delors Institute Future Cleantech Architects EUREC - The Association of European Renewable Energy Research Centres Negative Emissions Platform Cleantech for Europe E3G BPIE - Buildings Performance Institute Europe The Good Food Institute Europe 1.5° Ventures Jeff B. Breakthrough Energy Cambridge Institute for Sustainability Leadership (CISL) EIT InnoEnergy EIT Urban Mobility EPICO KlimaInnovation EUREC - The Association of European Renewable Energy Research Centres DTU - Technical University of Denmark Information Technology and Innovation Foundation Renewable Hydrogen Coalition SolarPower Europe WindEurope Transport & Environment (T&E)