Europe First protectionist policies will hamper the green energy transition

As Europe’s energy markets face up to the green transition they must remain open and preserve competitivity, said panellists at a workshop on the green energy transition at this week’s Science|Business conference.

Closing off markets to other countries could endanger European competitiveness, said Teresa Ponce de Leão, president of Portugal’s National Laboratory of Energy and Geology. “We should continue to have an open market, open science and open innovation,” she said.

Ponce de Leão’s concerns can be seen as pushing back against the EU’s current focus on technological sovereignty, which has bounded up the agenda since the COVID-19 pandemic revealed a high level of reliance on imports of high tech goods. As a result, the German presidency of the EU Council has made digital sovereignty one of its priorities.

However, the energy industry is not convinced taking a protectionist approach is best for its global competitiveness, or will support it in making the green transition.

“The European energy market is a fantastic open lab,” said Simone Mori, head of Europe at the Italian energy company Enel Group. “For us, it seems quite natural … to catch and mix technologies coming from different parts of the world and valorise them.”

The global market is here to stay even though governments around the world are adopting more protectionist policies, said Christian Cahn von Seelen, chief of global regions at car manufacturer Škoda. Instead of going down this route, Europe should reflect on, “what technology we need to have in our own hands to be relevant players in the global market,” he said.

Instead of ‘Europe First’, it should be a ‘Europe Smart’, said Ponce de Leão. That would better reflect what is needed in terms of the transition towards a carbon neutral Europe by 2050, which will require a lot of effort in terms of research, investment and regulation.

In the next 30 years, Europe is planning to largely transition to generating electricity from renewable sources where possible, and replacing fossil fuels with clean hydrogen in transport. In July, the European Commission published a communication detailing the plans, including a hydrogen strategy.

Batteries, hydrogen and fuel cells will be at the core of this transition, and research and innovation will play a key role in making the use of these technologies feasible across Europe.

“Across industry, we have to work together to make sure Europe can be a lighthouse in this process, by applying itself to the medicines we are prescribing here,” said Cahn von Seelen. This will also help Europe stay in the top tier of knowledge generation.

However, large-scale innovation requires an adequate budget, said Ponce de Leão. She is worried about cuts to the budget of the EU’s next research programme, Horizon Europe. “This seems to be a contradiction to the priorities.”

For Mori, the ambition and the targets already set are adequate. Now, it is time to finance the development of key technologies and separate short-term goals from the long-term ones, which must not be rushed and should allow enough flexibility.

Cahn von Seelen emphasised that the focus should remain on a holistic approach to the green transition. While lots of individual initiatives have sprung up, a full transformation requires a joint and integrated effort from all players, he said.