In a recent ‘Re-think Europe’ podcast hosted by the Jacques Delors Institute, Marco Mensink, Cefic Director General, shared his insights on the future of Europe. Marco shared what he believes is needed for the continent to undergo a green transition while ensuring a resilient European industry, and what can be expected from the new EU mandate.
With global demand declining, EU energy prices soaring higher than those in any other region, a more and more complex EU regulatory landscape, and the shift towards climate neutrality becoming increasingly urgent, securing financing and investments in the EU is a key concern for achieving a successful transition.
“We’re undergoing this huge transition at a time where demand is gone. You want industry to invest 6.6 times its historic average every year from now until 2050 when there’s no demand for more sustainable products. This is huge.”
With gas prices at 4.7 times higher in Europe compared the US, and electricity prices being double, Marco highlighted the societal risks of failing to address energy prices.
“We need to double electricity production in Europe. If everyone wants something, the price goes up. If the price goes up, the price of energy for citizens will become unaffordable. And that means by the 2030s, we risk having more yellow vests in the streets than you’ve ever seen before.”
Such risk cannot be taken, which is why the transition needs to be just for people and the trend reverted.
Marco emphasised the importance of regulatory simplification, efficiency and predictability to encourage investment, contrasting the swift permitting process in China, where permits can be granted in under a year with Europe’s lengthy procedures. “Even the simplest permits can take years,” he remarked, advocating for leaner, smarter regulations to accelerate Europe’s clean energy transition. He suggested we need to re-think what we regulate and how: pointing to ‘the principle of self-constraint’, as raised by Mario Draghi in his recent report, and suggesting we make rules as though Europe is a small region in the world surrounded by big players such as China and the US, rather than the other way around.
While acknowledging the challenging road ahead, Marco left listeners with a message of hope:
“People invest in a region because they feel something is happening and there’s optimism. The one thing the Commission has to come out with is that feeling: We’re going to implement the EU Green Deal. And everything is possible and discussible to make it happen If this is the tone of the next Commission, we will get the investments.”
A shared sense of purpose to move towards the same target will help Europe get the investments it needs.
