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Green Deal: Expectations, Impacts and Requirements


How do businesses react to the Green Deal? We had the opportunity to talk to our member Ursula Menhart (Shell) and asked her what she thinks about the Green Deal idea, how it could shape economic and trade relations between the US and Germany and which impacts the deal could have on Germany as an investment location for companies.

 

Ms. Menhart, what do you expect from the Green Deal?

The Green Deal illustrates the European Commission´s serious pursuit of European climate neutrality by 2050. If we want to take the Paris climate accord seriously, we need to act. However, we should not underestimate the challenges ahead. The Green Deal is the cornerstone of an ambitious project to restructure Europe´s economy, and it needs careful preparation. The development of a climate action plan is necessary, but any such plan will have to include measures that support the maintenance and creation of jobs and prosperity in Europe, in order to be practical.

 

Which impacts can the EU Green Deal have on Germany as an investment location for companies?

It is too early to assess the consequences. While we have seen a list of projects, we do not yet know how the proposed measures will be implemented. There are risks and opportunities. The Green Deal may help to boost energy efficient and innovative technologies, but it requires the appropriate framework conditions to do so. If we were to leverage the full potential of innovative technologies such as hydrogen, this could position Europe as a global leader in technology. At the same time, it is essential to keep an eye on Europe’s competitiveness and possible cost effects. Carbon leakage effects need to be avoided.

 

Particularly in the emerging markets of Asia and Latin America, there is little willingness to make energy consumption more expensive. Ursula von der Leyen is therefore having a measure drawn up to ensure that European companies are able to survive the ambitious agenda and at the same time to help the EU achieve global political recognition. What do you expect from these measures?

As already mentioned, it is too early to say. We do not yet know how proposed measures, such as the carbon border adjustment mechanism will be designed. New approaches deserve to be fully considered, but it should also be evident that there are no benefits for the planet, if energy intensive industries move away and emit the same levels of CO2 outside Europe. Taking the Paris climate accord seriously, the ultimate goal should be a global solution- and this year´s COP in Scotland provides a platform to address this. Europe should encourage other continents to follow on the pathway to climate neutrality. Adopting an effective mechanism that enables global trading of emissions is a key element. 

 

What do you think should be included in the Green Deal? What are your requirements for the Green Deal?

Since we do not yet have all the answers on how to achieve climate neutrality by 2050, the Commission needs to work closely with the member states and with partners in industry and society. A technology inclusive approach that provides opportunities for cross-border cooperation and best practice sharing, while simultaneously enabling the modernisation of the European economy, is the right way forward. The Dutch government´s hydrogen strategy and the German government´s commitment to publish its strategy until mid-March both provide a good basis for cooperation. In addition, for the remaining unavoidable emissions, carbon sinks like CCS/CCU or nature based solutions would be options. Overall, impact assessments of proposed policies have been effective instruments in finding suitable technologies. Besides economic and technical considerations, public acceptance is a further key ingredient for any successful energy transition. This is a task for all of us. We need to work hand in hand, if we want to make the Green Deal a success story.

 

Ms. Menhart, what do you expect from the Green Deal?

The Green Deal illustrates the European Commission´s serious pursuit of European climate neutrality by 2050. If we want to take the Paris climate accord seriously, we need to act. However, we should not underestimate the challenges ahead. The Green Deal is the cornerstone of an ambitious project to restructure Europe´s economy, and it needs careful preparation. The development of a climate action plan is necessary, but any such plan will have to include measures that support the maintenance and creation of jobs and prosperity in Europe, in order to be practical.

 

Which impacts can the EU Green Deal have on Germany as an investment location for companies?

It is too early to assess the consequences. While we have seen a list of projects, we do not yet know how the proposed measures will be implemented. There are risks and opportunities. The Green Deal may help to boost energy efficient and innovative technologies, but it requires the appropriate framework conditions to do so. If we were to leverage the full potential of innovative technologies such as hydrogen, this could position Europe as a global leader in technology. At the same time, it is essential to keep an eye on Europe’s competitiveness and possible cost effects. Carbon leakage effects need to be avoided.

 

Particularly in the emerging markets of Asia and Latin America, there is little willingness to make energy consumption more expensive. Ursula von der Leyen is therefore having a measure drawn up to ensure that European companies are able to survive the ambitious agenda and at the same time to help the EU achieve global political recognition. What do you expect from these measures?

As already mentioned, it is too early to say. We do not yet know how proposed measures, such as the carbon border adjustment mechanism will be designed. New approaches deserve to be fully considered, but it should also be evident that there are no benefits for the planet, if energy intensive industries move away and emit the same levels of CO2 outside Europe. Taking the Paris climate accord seriously, the ultimate goal should be a global solution- and this year´s COP in Scotland provides a platform to address this. Europe should encourage other continents to follow on the pathway to climate neutrality. Adopting an effective mechanism that enables global trading of emissions is a key element. 

 

What do you think should be included in the Green Deal? What are your requirements for the Green Deal?

Since we do not yet have all the answers on how to achieve climate neutrality by 2050, the Commission needs to work closely with the member states and with partners in industry and society. A technology inclusive approach that provides opportunities for cross-border cooperation and best practice sharing, while simultaneously enabling the modernisation of the European economy, is the right way forward. The Dutch government´s hydrogen strategy and the German government´s commitment to publish its strategy until mid-March both provide a good basis for cooperation. In addition, for the remaining unavoidable emissions, carbon sinks like CCS/CCU or nature based solutions would be options. Overall, impact assessments of proposed policies have been effective instruments in finding suitable technologies. Besides economic and technical considerations, public acceptance is a further key ingredient for any successful energy transition. This is a task for all of us. We need to work hand in hand, if we want to make the Green Deal a success story.

 

 

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