As the EU Commission prepares to present its Fit for 55 legislative package, the European CEO Alliance has issued policy recommendations supporting a progressive and ambitious push to achieve climate neutrality. Tackling climate change requires strong collaboration between the public sector and industry, the Alliance announced after its meeting today in Paris. The Alliance would welcome a review of the EU’s major regulatory instruments, in particular subsidies for technologies with high CO2 emissions. The CEOs’ proposals include sending a strong carbon pricing signal, accelerating measures to decarbonize mobility and transport, buildings and energy systems, speeding up the renewal of key industry sectors in the EU.

“I am very pleased to have been able to exchange views today with the companies that provide solutions for the implementation of the Green Deal, the decarbonization of the economy, green transition and energy efficiency. As the European Commission prepares to present its “Fit for 55” energy and climate package with measures to reduce greenhouse gas emissions by 55% in 2030 and achieve carbon neutrality in 2050, the mobilization of industrial and economic players will be essential to achieving our climate objectives together.” said Clément Beaune, Secretary of State for European Affairs in the French government.

As one central instrument, Alliance members proposed a strong carbon price signal to achieve the EU’s climate targets. Carbon should have a price across the whole economy. The Alliance also called for continued enhancement of the EU’s Emissions Trading System (for power and heavy industry) and for the implementation of sector-specific cap-and-trade systems that would apply to mobility, transport and the buildings sector. Sector-specific systems could then converge beginning in 2030. Another proposal concerns a European carbon pricing system that would include measures to simultaneously achieve a social balance and emissions reduction.

Decarbonizing mobility, transport and buildings will be the major challenges. For the transport and mobility sector, electric mobility for passenger cars, light vehicles and heavy duty vehicles has proven to be the most efficient technology in terms of energy consumption and emission reduction. To foster the entire ecosystem around electric mobility, members of the CEO Alliance have initiated cross-sectoral projects to ramp up battery production and create a charging infrastructure across Europe.

Turning its attention to the EU Commission’s Buildings Renovation Wave, the Alliance supports ambitious renovation targets (of at least 3% p.a.) to accelerate the transformation of the building stock. Buildings should meet higher standards regarding energy efficiency, renewables and sustainable materials. The Alliance also calls for fossil-fuel heating systems to be rapidly replaced by rolling out electric heat pumps, district heating and digital solutions. The CEOs are committed to applying this recommendation to their companies’ own buildings.

The European climate targets require a rapid build-up of renewable power generation and the direct electrification of mobility, transport and heating/air conditioning for buildings. The CEO Alliance is working on a project to integrate power systems, in particular grids, in order to create a system based mainly on renewables and flexible solutions.

The CEO Alliance for Europe’s Recovery, Reform and Resilience was formed in 2020 against the backdrop of the Covid-19 pandemic and the historic European Green Deal. The Alliance’s shared goal is to make the EU the world’s leading region for climate protection while unlocking investments, fueling innovations in new technologies and creating future-proof jobs.

The members view themselves as an “action tank,” working together on cross-sector pan-European projects at scale: cross-EU charging infrastructure for heavy duty trucks, integration of EU power systems (in particular grids), digital carbon footprint tracking, sustainable and healthy buildings for the future of work and living, e-buses for Europe, green hydrogen value chains and the rapid development of battery production. Further projects are being prepared, including one involving low carbon steel. The CEOs will deliver their first tangible results and discuss implementation with high-level EU representatives at a summit set for autumn 2021.

The Alliance brings together 12 top executives from the energy, transport and technology industries: Björn Rosengren (ABB), Thierry Vanlancker (AkzoNobel), Francesco Starace (ENEL), Leonhard Birnbaum (E.ON), Börje Ekholm (Ericsson), Henrik Henriksson (H2GreenSteel), Ignacio Galán (Iberdrola), Frans van Houten (Philips), Christian Klein (SAP), Christian Levin (Scania), Jean-Pascale Tricoire (Schneider Electric) and Herbert Diess (Volkswagen). McKinsey & Company is serving as a knowledge contributor for the CEO Alliance and is providing additional research and data.

Source: Volkswagen Newsroom

Downloads

100 billion euros of investment to decarbonize their companies by 2030, a gradual introduction of a cross-sector CO2 price and ambitious phase-out dates for coal: These are some of the key points of ten top managers from the energy, transport and technology industries issued in a joint position paper. Thereby, the leading European CEOs are calling for far-reaching climate protection measures at the occasion of the seventh international climate strike on Friday, March 19, 2021.

The ten business leaders Björn Rosengren (ABB), Thierry Vanlancker (AkzoNobel), Francesco Starace (ENEL), Leonhard Birnbaum (E.ON), Ignacio Galán (Iberdrola), Søren Skou (Maersk), Christian Klein (SAP), Henrik Henriksson (Scania), Jean-Pascal Tricoire (Schneider Electric) and Herbert Diess (Volkswagen) are members of the “CEO Alliance for Europe’s Recovery, Reform and Resilience”.

This CEO Alliance formed in 2020 against the backdrop of the Covid-19 pandemic and the historic decisions on the European Green Deal. Their common goal is to make the EU the world’s leading region for climate protection while unlocking investments, driving innovations in tomorrow’s technologies and creating future proof jobs.

Today, the top managers published a joint position paper with ambitious proposals. They state:

“We firmly believe that the EU Green Deal and Next Generation EU will put Europe’s innovation and business ingenuity to the service of the global climate cause, will kick-start a wave of investments into sustainability and resilience and will create future-proof jobs across the EU.”

The CEOs encourage European policy makers to take bold steps towards climate neutrality such as “continuing to pursue a standardized cross-sector CO2 price” and “setting end-dates for carbon-intense technologies”.

The CEO Alliance considers itself an “Action Tank”, working together in concrete joint projects: Cross-EU charging infrastructure for heavy duty transport, integration of EU Power systems, digital carbon footprint tracking, sustainable healthy buildings, e-buses for Europe, green hydrogen value chain and rapid build-up of battery production.

The aspiration of the top managers is to work with their companies across sectors to find practical solutions for effective climate protection. In doing so, they strive for an ongoing constructive dialogue with the EU Commission. In a digital meeting on Thursday, the Executive Vice President of the Commission Frans Timmermans and the CEOs discussed the progress on the implementation of the Green Deal and the interim status of the Alliance’s joint projects.

Executive Vice-President Timmermans stated: “Making Europe climate neutral by 2050 is a huge challenge. The European Commission will propose legislation to put sectors like transport and energy on the right track. Our long term plan includes investment in charging infrastructure, battery production, renovation and renewable energy production. The NextGeneration EU recovery fund will help make this possible. Our goal is not any transition, it’s a just and fair transition, leaving no one behind. I welcome the CEO Alliance’s commitment to Europe’s green recovery and share their conviction that their companies have what it takes to build a sustainable future.”

Source: Volkswagen AG

Downloads

Yesterday, Dr. Herbert Diess, Chairman of the Board of Management of Volkswagen AG, and CEOs from 11 other European companies joined forces for a zero-carbon future and a more resilient Europe. The European Union is committed to net zero emissions by 2050, which is in line with the CEO Alliance companies’ own decarbonization strategies. All members support the Paris 2050 goals, the EU Green Deal and the ambition to raise EU climate targets. They represent different industries, generate a combined €600 billion in annual revenues and employ 1.7 million people. The CEO Alliance channels their decarbonization efforts: it connects sectors and strategies, identifies potential for collaboration, and fosters projects and investments for a sustainable economy and society.

At its inaugural meeting in Stuttgart, the cross-industry alliance underscored: “The climate targets of the European Union are feasible. Our industries do not block, but rather foster the shift toward a carbon-neutral economy. We see growth potential for all industries in the long run. If we manage this historic transformation successfully, sustainable development and new future-proof jobs will be the result. Together, we will support all efforts to reach a social consensus for more sustainability.” With yesterday’s start, the CEO Alliance becomes an association of action that unites corporate strategies, industries and societies on the road to a carbon-neutral Europe.

All members believe the new climate targets of the European Commission, envisaging emission reductions of 55% by 2030, are manageable. On the industry side, the CEO Alliance members have already pledged to invest more than €100 billion in their respective decarbonization roadmaps over the next years to help reach these targets. Every member has defined its own strategy to address decarbonization, by reducing carbon emissions across the relevant value chains and by offering sustainable products and services to customers. For reaching the respective CO2 targets, each member and each sector is dependent on other members and sectors, which especially calls for cross-sector activities.

Collaboration potential of the Alliance was identified in six fields: In energy systems, renewable power generation must be scaled up rapidly and power grids must be modernized. In terms of mobility and transport, the EV charging infrastructure must be expanded and the low-carbon transport or shipping of goods intensified. Zero-impact production – in particular for renewable power generation components – and sustainable battery production are key aspects in manufacturing and industrial processes. In terms of buildings and urban environments, the focus is on zero-emission offices and sustainable green city planning. In regard to new business models, the focus is on carbon tracking with digital technologies in the supply chain. The field of sustainable finance will also offer new opportunities.

The members also agree that the transformation towards a net-zero carbon future needs to be based on a broad public consensus. The CEO Alliance is willing to contribute to this consensus, and to establish a social contract, by intensifying the dialogue between stakeholders from the private sector, public sector and civil society. At the same time, the members call on political leaders to create the necessary political support and incentives. At the inaugural meeting, the dialogue started with a discussion with Frans Timmermans, Executive Vice President of the European Commission.

The CEO Alliance is convinced that ambitious decarbonization and cross-sector collaboration require ambitious and cross-sector policy frameworks, for example carbon pricing with a minimum floor price in the EU Emissions Trading System, a reform of the energy taxation system, and driving demand for sustainable, innovative and digital solutions, among other things by using renewal schemes, public procurement and investments.

The CEO Alliance represents members from key industry sectors: ABB, AkzoNobel, Eon, Enel, Iberdrola, A.P. Møller Maersk, Philips, SAP, Scania, Schneider Electric, Siemens and Volkswagen. Following an initial joint letter to the European Commission in June 2020, the first face-to-face meeting underscored the commitment to act fast and to recognize the urgency of the necessary transformation for future competitiveness.

Source: Volkswagen AG

Learning from the crisis to unlock chances for the future

We, the CEO Initiative for Europe’s Recovery, Reform and Resilience, represent multinational companies across different sectors that employ a total of 1.7 million people generating more than 600 billion euros in revenue. Our companies are staying committed to the Paris Climate Change Agreement and have adopted own decarbonisation plans.

While Europe is facing an unprecedented challenge by the disruptions of the Covid-19 pandemic, we stand ready to strongly support the EU Commission’s “Next Generation EU” to kick start the economies in short term, but also prepare for the longer-term transformation to build a more resilient, digitalized, prosperous and sustainable Europe for future generations.

Core principles for a sustainable recovery and the longer term transformation of European industries

Therefore, the following set of principles should guide EU choices in politics:

1. Prioritize measures that have immediate positive effects on employment, contribute to sustainable development and are in line with the environmental targets of the European Green Deal for 2030 and 2050
2. Remove existing barriers to private sector investments in low carbon and zero emission technologies, renewable energies, energy efficiency and circularity
3. Foster fiscal reforms and a holistic CO2-pricing system that introduce ambitious carbon pricing and as a central element of a future system, sending an effective price signal to the market while ensuring a socially just transition for European citizens and reaching targeted emission reduction
4. Drive demand for sustainable, innovative and digital solutions, among other by using renewal schemes, public procurement and investments and by increasing EU-level standardization.
5. Embrace digital technologies and sustainable finance as enabler for the transition towards a zero carbon and circular economy
6. Push for transparency around the sustainability of EU initiatives as well as corporate products and supply chains

Our contribution

We are ready to contribute our share to achieve the goals of the European Green Deal.

In line with our business models, experience and commitments, we have identified the following action areas of the European Green Deal, enabled by digitalization, where we would be pleased to contribute with constructive proposals in order to make it a success:

1. Decarbonisation and carbon pricing
2. Low carbon and zero emission innovations
3. Circular economy
4. Sustainable finance
5. For these action areas, we will elaborate specific recommendations that enable a business case for our companies’ contribution on decarbonisation, sustainable growth and creating future-proof jobs.

Specific recommendations

We believe that that the Green Deal must be based on a smart industrial policy framework that drives structural change and is coupled with enabling conditions for an industrial transformation. With regard to two core principles above, we suggest the following:

Fiscal reforms and a holistic CO2-pricing system

• A predictably growing minimum floor price and appropriate development of the EU-ETS to cover all sectors should be considered, maintaining competitiveness of European companies.
• Revenues from the ETS (and national environmental taxes) should be channeled towards sustainable innovation and industrial decarbonisation – in this context we welcome the EU innovation fund.
• While price signals for CO2 should primarily be triggered by the ETS, a reform of energy taxation and its directive should take the climate impact of all energy carriers into account to ensure decarbonisation of the energy market

Sustainable, innovative and digital solutions

• A rapid expansion of renewables capacities is needed as the base for the transformation of all industries
• With regard to fostering cost-efficient electrification, it is important to empower smart electricity grids, boost electric vehicle charging infrastructure development
• With regard to sector coupling, scaling the low carbon process technologies, sustainable hydrogen and sustainable fuels are needed. Alternative fuels are a key enabler for the decarbonisation e.g. of aviation, and some industrial processes. A revision of the alternative fuels strategy needs to focus on aligning initiatives EU-wide and enabling the scale-up of already existing and future solutions.

Enabling the successful implementation of the new Circular Economy Action Plan requires to promote innovation in different forms of recycling by creating a level playing field and maintaining a technology-neutral definition of recycling.

Signatories as of June 29, 2020

Source: Volkswagen AG