New European Commission weighing energy affordability versus decarbonization goals

The European Parliament voted in Ursula von der Leyen’s second European Commission, with a mandate until 2029. Much of her team, including Executive Vice President Teresa Ribera and European Commissioner for Energy and Housing Dan Jørgensen, is tasked with the green transition and climate policy.

The European Union wants to maintain the rapid pace of decarbonization while enabling affordable energy prices for the industry and households. The new top officials aren’t enthusiastic about funding nuclear energy projects, but Jørgensen did confirm support for research including for small modular reactors.

Innovation, decarbonization and security (with energy security) – European Commission President Ursula von der Leyen presented the pillars of the policy framework for the new College of Commissioners. The European Parliament voted for the lineup at a plenary session in Strasbourg with 370 lawmakers in favor, 282 against and 36 abstentions.

The first major initiative is the Competitiveness Compass, Von der Leyen revealed. She explained the EU needs to close the innovation gap with the United States and China. Another priority is a joint plan for decarbonization and competitiveness, and the third is increasing security and reducing dependencies.

The EU has some of the most ambitious goals for the green transition in the world. After already stretching its finances in the previous mandate to overcome the impact of the pandemic and work on economic resilience, the 27-member bloc is struggling to maintain the pace.

It is jeopardized by deindustrialization, with high energy prices among the major factors. Therefore, there is a tough tradeoff between climate goals and competitiveness.

Von der Leyen: Success in green transition depends on strengthening people, businesses

The European Commission will start by unlocking the financing needed for the green, digital and social transition, according to Von der Leyen. Everyone in the team will contribute to achieving the main goals, she pointed out. The head of the EU’s executive arm also highlighted the plan to publish the Clean Industrial Deal within the first 100 days.

“We must and will stay the course on the goals of the European Green Deal. But if we want to be successful in this transition, we must be more agile and better accompany people and business along the way. And we need to play to our traditional strengths – our industries and SMEs, our innovators and our workers,” Von der Leyen told European parliamentarians.

At least a third of the new commission is directly responsible for the green transition and climate policy, but its chief stressed the need for everyone to contribute

At least a third of the new commission is directly responsible for the green transition and climate policy. It includes Executive Vice President for Clean, Just and Competitive Transition and Commissioner for Competitiveness Teresa Ribera, and European Commissioner for Energy and Housing Dan Jørgensen.

“We have done a lot to respond to Russia’s energy blackmail and the high inflation that followed. But the price of energy has to go down further. And this is what Dan Jørgensen will be working on, building on his previous experience. To bring down costs for households and companies. To invest in clean energy. And to replace Russian LNG imports,” Von der Leyen stressed.

Energy policy is at core of all challenges in Europe

At his confirmation hearing, Jørgensen said energy policy is at the core of all the challenges Europe currently faces – on competitiveness, jobs, growth, security with the war in Ukraine, climate change and social justice.

European companies pay two to three times more for energy than their competitors in the US and China while 10% of Europeans are not able to heat their homes adequately during winter, he added. Jørgensen vowed to lower the prices for the industry and people as a top priority.

Companies pay two to three times more for energy in the EU than in the US and China, Jørgensen warned

He also pledged to boost the deployment of renewables via faster permitting procedures, expand energy grids, develop interconnectors, boost carbon capture and storage (CCS), energy storage technologies and power-to-X or PtX solutions.

Southeastern Europe is, notably, suffering the most from energy price volatility and is in urgent need of more interconnection and storage capacities.

The new energy commissioner promised to come up with a strategy on geothermal energy. As for green hydrogen, he acknowledged a lot of work remains to establish an actual market. “We cannot afford to not have a 100 percent focus on speeding this up,” Jørgensen underscored.

Ribera highlighted water resilience, just transition among main tasks

In light of the devastating floods in Valencia and much of Spain, the European Commission’s Executive Vice President Teresa Ribera told members of the European Parliament before confirmation that it is necessary to do more on the EU’s resilience to extreme weather events. She put an emphasis on early warning systems and the response ability.

At her hearing, she promised a new European Climate Adaptation Plan to address those issues. Ribera also committed to making water resilience a priority.

Support is underway for industrial decarbonisation and a just transition including housing and quality jobs, she asserted.

Dependence on Russian nuclear fuel hindering energy security

The new top officials noted that the EU plans to cut greenhouse gas emissions by 90% from the 1990 level by 2040. It is a key milestone toward achieving carbon neutrality by mid-century.

While the EU formally supports the expansion in the nuclear energy segment, they showed little enthusiasm about funding, especially the projects based on conventional technology.

The new commissioner advised the nuclear energy industry to lean on private financing

In Jørgensen’s opinion, it is best to back a surge in private funding. “I don’t see it as the role of the European Union … to fund the building of a nuclear power plant,” he has told MEPs.

On the other hand, he confirmed support for scientific research. Jørgensen is also tasked with facilitating the development of small modular reactors (SMRs).

He warned against increasing Europe’s dependence on the nuclear industry and fuels-related foreign supply chains, notably Russia. The then-commissioner-designate said the issue would be addressed in an upcoming SMR strategy.

While the EU will respect the energy mix in every country, nuclear energy will be needed to achieve the climate transition and will be part of the commission’s clean energy plans, Jørgensen clarified.