Politics & Economics

No EU-wide political understanding reached on the Hungarian plea for competitiveness

28
November 2024
By Editorial Staff

The last EU Ministers responsible for Competitiveness meeting resulted in no give-and-take on a text of conclusions fiercely prepared by the Hungarian presidency of the EU Council. The text was expected to provide guidance to the incoming Clean Industrial Deal that the European Commission is pledged to launch in the first 100 days of her mandate.

When announced in July 2024 by the president of the European Commission, Ursula von der Leyen, it was introduced as a set of policies aiming at creating fair conditions for businesses to meet the 90% CO2-emissions target reduction by 2040.

While seeking credit from the European Parliament to gain a second mandate at the helm of the European Commission, von der Leyen vowed to propose new legislation to accelerate industrial decarbonization, extend aggregate demand mechanisms beyond gas to include hydrogen and critical raw materials to guarantee security of supply and strike consistent commercial partnerships to foster clean investments and secure the supply of critical raw materials.

During a debate on the text of the conclusions, the German State Secretary for Economics and Climate Action, Bernhard Kluttig, spoke out against the wording of the text, contesting the inclusion of nuclear fission power among the technologies that can be financed with European resources. Kluttig’s view is that “each Member State has the right to choose its own mix,” but strenuously defended the use of “important EU instruments” to be “available for those technologies that are supported by all Member States.” This means narrowing financing just to some technologies. “We have a common opinion on renewables, while on nuclear fission, the opinions differ,” she stated.

The text, that included many reference to the special report on competitiveness presented by former ECB President and Italian Prime Minister, Mario Draghi, finally earned support from 25 Member States but lacked the unanimity necessary to pass as a text of conclusions adopted by the EU Council.

The text also calls upon the European Commission to develop an EU industrial action plan for the automotive sector, “including electromobility and the related battery value chain, based on a holistic approach.”

By tabling a non-paper on the future of the automotive sector, Italy, Austria, Bulgaria, Czech Republic, Poland, Romania, and Slovakia raised the issue of an urgent assessment of the CO2 emission standards for new passenger cars and new light commercial vehicle regulation. The seven countries fear the outflow of investment from green technology research and development and proposed a progress report “to be brought forward as soon as possible with a revision being proposed by the Commission in 2025.”

“We also recommend keeping the same approach to accelerate the review of the heavy-duty vehicle CO2 emission standards, currently planned for 2027, to ensure that the entire automotive sector benefits from a more open-minded and flexible regulatory environment”, the text reads.

Car manufacturers now risk paying the price as early as 2025 if they do not comply in time with the stricter emission targets for new cars registered under the CO2 emissions regulation. The rules envisage the entry into force of the first limits more stringent on average emissions for new vehicles placed on the market in the next twelve months.

Manufacturers exceeding the 94 gram/km emissions limit for new sales will be fined €95 per g/km of excess carbon dioxide emitted multiplied by the number of vehicles sold that year. Italian Minister for Made in Italy and Enterprises Adolfo Urso stated that the penalty system is designed to discourage and indeed “collapse all their investment possibilities.”

In her address to the Parliament to gain support for the next College of European Commissioners, Ursula von der Leyen announced a strategic dialogue on the sector, similar to that concluded last September on the future of Agriculture. The game is afoot, and the EU Executive President wants to intervene before witnessing a re-edition of tractors rage.