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A fundamental shift in the way we live and run our industries is underway. The latest edition of the International Energy Agency’s October 2023 World Energy Outlook report shows that clean technologies will play a much larger role in the global energy system by 2030 than they do now.
Based on existing policy commitments by governments around the world, government agencies predict that there will be nearly 10 times as many electric vehicles on the roads. Solar power generates more electricity than the current U.S. power system. Additionally, the share of renewable energy in the global electricity mix is approaching 50%, up from the current 30%. It also expects sales of heat pumps and other electric heating systems to outpace fossil fuel boilers, and investment in new offshore wind projects to triple that of new projects. Coal-fired power plants and gas-fired power plants.
The positive impact of early acceleration of clean energy and clean technology is already being felt in the economies of countries such as China. And note that while progress toward clean energy is unstoppable, the IEA emphasizes that these advances are not enough to keep global warming below 1.5°C as set out in the Paris Agreement. It is important to do so.
The challenges ahead are significant, but accelerating the energy transition is a real opportunity to make businesses more competitive, create jobs and energize new industries. But on the other hand, political rhetoric and politicization in Europe, particularly as the EU and several European countries head to the polls, are playing down the region’s victory for weaning away from fossil fuels, risking delaying the transition.
Unlike the United States, Europe is almost entirely dependent on fossil fuel imports from unstable regions and countries, making it more vulnerable to geopolitical shocks. The Ukraine war and the ensuing energy crisis sounded alarm bells. In response, EU countries have seen that electrification and renewable energy are the best way to reduce energy dependence, and that countries with more renewable energy have been able to reduce high electricity prices. We decided to accelerate the energy transition.
But European companies are already feeling that China’s ability to offer renewable products and cars at much lower prices, as well as U.S. anti-inflation laws, are attracting European companies to invest in the United States. If the EU is to bring its benefits home rather than to China or the US, it needs a concerted focus on developing a long-term industrial strategy.
European companies have been calling on the EU for some time to flesh out a stronger industrial strategy to help them compete with the US and China. Despite the promising framework of the European Green Deal, which is at the center of European politics, the EU is unable to come up with a single investment and industrialization package that demonstrates its full commitment to the energy transition and the production of European business and products. I haven’t been able to do it. We are competitive with the rest of the world.
The recent Antwerp Declaration calls for a more business-friendly EU industrial policy that secures investment and sustains technology development and production in the US and China. Led by more than 600 companies from all sectors, this action plan centers on the need for competitiveness at a critical moment as we accelerate towards a new global net-zero model of industrialization.
It is certainly time to put ‘sustainability of competitiveness’ at the heart of EU industrial policy and rethink the meaning of competitiveness. Recognizing how the clean technology industry is growing and supported in China and the US, the EU has impressive regulatory capabilities that have been used for many years to achieve effective carbon pricing in Europe, for example. There is an opportunity to innovate and combine effective incentives to match. Its international competitors. The carrot is in both baskets, just as the U.S. incentive-driven anti-inflation law is considered by many to have matured into the need for a regulatory framework around power plants and disclosure. and stick This would be Europe’s best chance to maintain its position in the race to green electrification.
Ursula von der Leyen supported the Antwerp Declaration and came forward as a business candidate for a second term as Commission President. Supported by colleagues across Europe, she said competitiveness sustainability was key to how Brussels and European capitals “continue to support European industry through this transition period” and increase Europe’s competitiveness. It is important to clarify what is central to the method.
Whatever the outcome of June’s European elections, the European Commission and politicians across Europe must work together with business and industry to make the energy transition a reality. This is good for business, good for the economy and good for the planet.
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