Europe’s rentrée: Shaping competitiveness, Germany’s flexibility strategy, and the future of climate-neutral aviation
EPICO KlimaInnovation is a non-profit and independent energy and climate policy think tank providing a platform and network for policy development. In our Monthly Policy Update, we dive into the latest and most relevant developments in energy and climate policy and share the outcomes of our events and publications.
Class of 2029: The EU’s new competitive mandate
As the Brussels rentrée kicked off, one key issue returned to the spotlight: competitiveness. To make sure this would not become an empty buzzword, on 9 September, Italy’s former Prime Minister Mario Draghi published his long-awaited report setting out 172 concrete recommendations on how to decarbonise the EU while securing global economic and industrial leadership.
Draghi’s main message is clear: the EU needs to rethink its economic and industrial policy if it wants to stay afloat. To meet the objectives laid out in the report, the Union needs an additional annual investment of 800 billion euros, which could partially be reached through EU common and safe assets.
Alongside the initial flurry of reactions, EPICO’s Senior Policy Specialist, Joachim Schmitz-Brieber, and EU Policy Specialist, Julian Parodi, deep-dove into Draghi’s specific recommendations on how to bring down energy prices, improve infrastructure, and advance flexibility in the electricity market. Their blog post offers a detailed assessment of Draghi’s report, pointing out its strengths and weaknesses and comparing his suggestions to EPICO’s own recommendations.
In their analysis, Julian and Joachim support Draghi’s call for a decarbonisation and competitiveness agenda but argue that the report remains vague when it comes to bringing down energy costs.
Their key quote?
Diving deeper into Draghi’s recommendations shows that several solutions already exist, but they still need to be discussed at the Member State level. Without a proper Energy Union that massively invests in interconnections and grids and addresses energy costs, the green and energy transition will be delayed and more expensive.
Interested? READ the blog post here.
Commission President-elect Ursula von der Leyen must now ensure that Draghi’s agenda becomes a pillar of the new mandate. On 17 September, she presented the structure of the new Commission, which will have a clear focus on competitiveness.
How to integrate industrial competition and the Green Deal will be a crucial question not just for the institutions, but also for Europe’s main industry players. In EPICO’s new interview series, “Meet the Advisory Board”, we asked our incoming member, Christoph von dem Bussche, Managing Director of Gascade, about his plans to achieve Europe’s climate ambitions while maintaining the EU’s position in the global industrial race. Calling for pragmatism and technological openness, von dem Bussche urged the EU to address the pressing questions of where large, affordable quantities of hydrogen will come from. In his interview, he pointed out the need to create stable investment frameworks to boost hydrogen infrastructure.
Von dem Bussche’s main takeaway?
We need to think about one integrated energy system, where cables and pipelines complement each other. If we succeed, we can leverage the benefits of large-scale pipeline infrastructure: a few interconnected pipelines carrying large amounts of hydrogen are more cost-effective and space-efficient.
Want to know more? READ the interview here.
Stay tuned! Our “Meet the Advisory Board” series will introduce a new member soon.
FOLLOW us on LinkedIn and Twitter to know more!
On 15 October, EPICO and the Konrad Adenauer Stiftung will host a panel discussion to delve deeper into the issues of Europe’s energy resilience and green industrial transformation.
This in-person event taking place at KAS Europe office will feature a conversation with Dr Christian Ehler (MEP, EPP/DE), Joaquim Nunes de Almeida (Director, DG GROW), Agata Zalewska (Adviser, BusinessEurope), Dr Bernd Weber (CEO, EPICO), and moderator Emanuela Barbiroglio (Correspondent, Carbon Pulse).
Seats are still available! SIGN UP here.
How can hydrogen fuel climate-neutral aviation in the EU?
As Europe strives to be a leader in the energy transition, Draghi’s report highlighted the urgent need to unlock investments to decarbonise hard-to-abate sectors, with aviation at the forefront.
Europe’s airspace is one of the busiest globally, and its GHG emissions account for 5% of the EU’s total. With passenger demand and air traffic expected to double by 2050, advancing climate-neutral aviation is crucial to ensuring Europe meets its climate targets. Green hydrogen is the key to the decarbonisation of this sector, as it not only reduces CO2 emissions but also mitigates many non-CO2 ones.
On 18 September, EPICO published a Policy Report on scaling up hydrogen use in the aviation sector. The paper marks the end of EPICO’s sustainable aviation project and provides concrete recommendations to accelerate the sector’s transition, including:
- Scale up finance & R&D;
- Develop a hydrogen market to ensure supply;
- Ensure infrastructural capabilities across the value chain;
- Level up the domestic and international playing field.
Why is hydrogen central to the future of the aviation sector? We asked EPICO’s Energy Policy Specialist, Holly Attwell:
Hydrogen has the potential to transform the aviation industry. Its versatility opens the door to highly effective applications for climate-neutral aviation. To harness its full potential and scale its use, swift and decisive action from policymakers is essential if we are to come close to the 2050 climate targets.
Don’t miss it! READ the paper here.
On 2 October, EPICO hosted an online conference to present the paper’s main findings. The presentation was followed by a panel discussion with Hildegard Bentele (MEP, EPP/DE), Jane Amilhat (Head of Unit, European Commission), Nathalie Errard (Senior Vice-President and Head of EU Affairs, Airbus), and Dave Keating (Brussels Correspondent and Moderator).
The discussion emphasised the importance of preserving European leadership in aircraft manufacturing and the crucial role of aviation for connectivity and employment. Panellists highlighted the need for a balanced policy mix that supports various technologies — beyond hydrogen alone — to achieve climate neutrality in the sector.
Want to know more? WATCH the recording here.
A summary of our discussion is available here.
National focus: A pragmatic approach to transforming Germany’s electricity market
In his report, Draghi also addresses the future of Europe’s electricity market, stressing the importance of pushing demand-side flexibility. Strengthening flexibility is crucial, as it will allow industry to achieve lower electricity prices, guarantee security of supply, and prepare Member States for future power price peaks. As Germany phases out coal and responds to rising energy demand, the German government has recently announced its intention to develop a flexibility agenda that incorporates industrial flexibility.
In July, EPICO published a paper, in collaboration with Aurora Energy Research, on developing an integrated approach to strengthening flexibility in the German electricity market. On 26 September, EPICO’s CEO, Bernd Weber, took part in discussions during the “Platform on the Future Electricity Market Design” – also known as PKNS – conference opened by German Minister for Economy Robert Habeck.
During the conference, Bernd had the opportunity to present the main ideas of our new Policy Brief on the need for a gradual and pragmatic approach to transforming the electricity market. Our key recommendations include:
- Building on successful practices from other EU countries to lower barriers for innovative technologies;
- Avoiding the addition of unnecessary security margins to auction sizes, giving the market space to develop flexibility solutions independently;
- Strict monitoring: Consistently assess whether innovative flexibility providers are being effectively integrated.
READ our full proposal here.
How were EPICO and Aurora’s suggestions received by the PKNS? We asked EPICO’s CEO Bernd Weber:
During the conference, I was very happy to see many positive reactions to our proposal. There is a clear consensus that a tiered, pragmatic approach is the best strategy to transform Germany’s electricity market. This approach must integrate experiences from other European countries and be open to further development.
Stay tuned for more updates! The government will present the key points of the future capacity market model this October, and the European Commission is expected to give the green light by June 2025.
WATCH this space as we continue to follow the discussions!
Spotted: EPICO in the media
- On 2 October, Joachim Schmitz-Brieber published an opinion piece in Tagesspiegel Background on Germany’s new electricity market design. READ it here.
- EPICO and Aurora’s Policy Report on Germany’s capacity market was mentioned in articles by Tagesspiegel Background, Handelsblatt, Münchner Merkur, and Energate Messenger.
- EPICO’s Policy Report “How can Hydrogen Fuel Climate-Neutral Aviation in the EU?” was mentioned in an article by Tagesspiegel Background and in Euractiv’s “Green Brief”.
EPICO is growing!
During the summer, EPICO welcomed two new colleagues: Ingrid Bunker, Policy Specialist – Sustainable Agriculture and Food Systems, and Ayana Trüper, Working Student – Climate Politics.
REACH out to them to find out more about their work!
Are you passionate about energy, climate, and industrial policy and looking for a dynamic and flexible work environment? We currently have three open vacancies:
- EU Communications Specialist (Brussels)
- Policy Specialist – Decarbonisation of the Building Sector (Berlin)
- Executive Assistant (Berlin; part-time)