Decarbonisation Remains a Priority
Central to von der Leyen’s agenda is the continuation of her first term’s decarbonisation efforts. The focus remains on overhauling Europe’s industrial base and modernising its energy infrastructure. This sweeping initiative is expected to impact nearly every stakeholder involved in energy and climate matters.
Despite her unwavering commitment to climate action, von der Leyen’s new directives have a pronounced pro-business orientation. New commissioners will be tasked with advancing the Green Deal framework initiated during her initial mandate. In her correspondence with climate commissioner-designate Wopke Hoekstra, von der Leyen emphasised the need for implementation to be "simple, fair, and effective." The letter also hinted at a potential easing of the 2035 combustion engine ban, proposing a "targeted amendment" to accommodate vehicles powered by synthetic ‘e-fuels.’
The mission letters also reaffirm von der Leyen’s commitment to the 90% carbon reduction target by 2040, a significant leap from the 55% reduction goal for 2030. To achieve this ambitious target, which still requires legislative endorsement, Spain’s Teresa Ribera and Hoekstra will need to commence consultations on a comprehensive "post-2030 framework."
Electrification at the Forefront
Electrification is set to play a pivotal role in von der Leyen’s decarbonisation strategy. Danish socialist Dan Jørgensen, appointed to drive this initiative, is expected to spearhead efforts to accelerate the deployment of renewable energy and energy storage solutions. His mandate includes developing a strategy to boost investment, expanding the electricity grid, and revising regulatory frameworks to streamline permitting processes. Additionally, Jørgensen will be responsible for phasing out fossil fuel subsidies and formulating a plan to reduce reliance on Russian energy imports.
The European Commission’s focus on securing energy supply will be under scrutiny, with Jørgensen tasked with reviewing the EU’s security of supply framework. French liberal Stéphane Séjourné, as executive vice-president for prosperity and industrial strategy, will concentrate on ensuring access to critical raw materials.
Von der Leyen’s strategy also envisions bolstering Europe’s cleantech industrial sector. Ribera, Séjourné, Hoekstra, and Jørgensen will collaborate on initiatives such as accelerating industrial decarbonisation and updating procurement rules to favour EU-produced goods. Noteworthy among von der Leyen’s proposals are the introduction of small modular nuclear reactors and the development of markets for CO2 capture and storage.
Budgetary Challenges and State Aid Reforms
The success of von der Leyen’s plans will hinge on national governments’ willingness to increase the EU budget, whether through collective debt or higher contributions. In a potential fallback scenario, Ribera has been tasked with revising state aid rules to facilitate greater national investment in decarbonised industries.
While the mission letters address the social implications of the green transition, the primary focus remains on stabilising energy prices. Ribera and Jørgensen are expected to propose additional measures to alleviate energy poverty. Despite her title of ‘Just Transition,’ Ribera’s role will likely centre on managing existing Social Climate and Just Transition Funds. Her ability to advocate for social justice may be influenced by the perspectives of other Commission members who may not share her emphasis on this issue.