Nordic business: Competitiveness Must Become a Genuine Priority in the EU’s Energy and Climate Policy

Nordic business: Competitiveness Must Become a Genuine Priority in the EU's Energy and Climate Policy

The Confederation of Finnish Industries (EK) and its sister counterparts in Sweden, Denmark, and Norway commend the European Commission's commitment to advancing the clean energy transition while simultaneously strengthening competitiveness. Now is the time for action: a credible shift toward enhanced competitiveness must be evident as the Commission prepares proposals on matters such as emissions trading, nuclear energy, and the regulatory framework for technical carbon removals.

As the new European Commission prepares its programs and legislation for 2031-2040, critical decisions lie ahead for EU energy and climate policy. Initial guidelines were presented in the Commission's "Competitiveness Compass" communication on January 29, with further details expected later this month in the upcoming "Clean Industrial Deal" initiative.

Finnish Industries EK, alongside its Nordic counterparts, has unveiled proposals in Brussels to reform the EU's key energy and climate policy tools for the post-2030 period. The focus is on aligning Europe's competitiveness with ambitious climate goals.

Ulla Heinonen, EK's Director of Green Growth, emphasizes the dual opportunity of clean energy transition:

"A clean energy transition offers a significant opportunity to enhance sustainable economic growth and well-being, provided that energy and climate policies are implemented in a way that strengthens Europe's competitiveness. Finland leads by example with its 2035 carbon neutrality target."

"To achieve the EU's 2040 interim target on the path to climate neutrality by 2050, we need a more flexible and cost-effective toolkit. Instead of introducing new regulations, focus must be placed on implementing existing legislation. Regulatory uncertainty and short-termism hinder investment decisions, jeopardizing even the 2030 climate targets", argues Kati Ruohomäki, Senior Advisor at EK.

We, Nordic Business federations, ask European leaders to:

1. Implement the Fit-for-55 -legislation and pre-2030 frameworks: Ensure robust enforcement of the 2030 energy and climate framework and legislation across all EU member states while finalizing outstanding regulations promptly.
2. Decarbonise industries and sectors that have not decarbonised yet: Prioritize hard-to-abate industries and sectors with remaining emissions through for example electrification, energy efficiency measures, circular economy technologies, and carbon capture, utilizstion, and storage (CCUS) technologies.
3. Support technology-neutral and cost-efficient decarbonisations: Treat all renewable and low-carbon energy sources equally to ensure cost efficiency.
4. Close clean investment gaps: Develop financial mechanisms to mitigate risks associated with green investments. Financing should be based on genuine competition to select the best projects and innovations.
5. Design Emissions Trading Scheme ETS for a post-2030 framework: Prepare regulation or ending of allowances and introduce incentives for negative emissions.
6. Improve Carbon Border Adjustment Mechanism (CBAM) to avoid carbon leakage of European industries: Strengthen its role in preventing carbon leakage while simplifying emissions reporting.
7. Strive towards a global price on CO2: Advocate for international carbon markets under the Paris Agreement framework.
8. Fast-track Permitting for clean technologies: Simplify permitting for clean technologies and energy production while ensuring compatibility across related legislation.
9. Acknowledge the pivotal role of energy infrastructure: Allocate sufficient resources to modernize Europe's energy infrastructure.

Business federations' vision for a post-2030 energy and climate framework