EU plan fails to reflect Europe's crisis, lacks concrete measures, says Czech industry association

The EU plan to improve conditions for industry in Europe and reduce energy costs fails to reflect the crisis facing European industry or the current situation in Europe, representatives of Czech industry and analysts told the Czech News Agency (CTK). They fault the Commission in particular for a lack of concrete measures and substantial changes, as well as for continuing with its existing environmental targets.

The European Commission today presented the Clean Industrial Deal, setting out its plan to reduce energy costs for businesses and citizens, complete the Energy Union, attract investment and improve preparedness for potential energy crises. The plan aims to save Europeans 45 billion euros (CZK 1.1 trillion) this year, rising to 260 billion euros (CZK 6.5 trillion) a year by 2040, the Commission said.

However, the Commission's proposal does not adequately reflect Europe's declining competitiveness or the current geopolitical situation, according to the Confederation of Industry of the Czech Republic. Its main cause for concern is the Commission's continued call for a 90 percent reduction in emissions by 2040 and carbon neutrality by 2050, which the confederation says severely limits the scope for change. Representatives of Czech industry reject the proposed target as ideological and fatal to a number of sectors. The document also fails to set out clear measures to deliver the promised reductions in energy costs, the confederation said.

„It is good that the European Commission has finally realised just how serious the problems facing European industry and the European economy in general have become as a result of EU climate and other policies, but it still has not found the courage to make a genuine change of course. Europe cannot compete with China, the US and other countries. We are losing our pharmaceutical, chemical, defence and steel industries. We will not be resilient enough to withstand crises, especially the security crisis, which is urgent in the current geopolitical situation,” said Jan Rafaj, president of the confederation.

Some analysts have also criticised the document. Jiří Tyleček, an analyst at XTB, said the final version of the proposal showed that European politicians had little capacity for self-reflection. „It does not respond to recent political developments at all. Based on the preliminary document, the system is essentially considered to be working properly, with only minor adjustments in the pipeline. I see no substantial changes in the proposal that would help European industry,” Tyleček said.

He sees the document's main shortcomings as its failure to revise the emissions-reduction target, the lack of a cap on emissions allowance prices and the absence of relief for key industries. „The document also proposes lower electricity taxes at a time when Europe should be sharply increasing its defence spending,” Tyleček noted.

Among the plan's specific points, Radim Dohnal, an analyst at Capitalinked.com, welcomed the intention to reduce dependence on fossil fuel imports, citing the balance of payments, Europe's independence, avoiding support for hostile regimes and pressure to reduce its carbon footprint. „The proposed approaches are broadly right. I would simply avoid subsidies and instead incentivise greater use of renewable energy sources, which would indirectly come at the expense of fossil fuels. It would also be beneficial to further strengthen the interconnection of electricity transmission systems and gas transport networks,” Dohnal said. When it comes to developing renewables, he called for easier permitting of new energy sources and infrastructure for energy transmission and distribution. He sees gaps, for example, in the operation of pumped-storage power plants.