EU wants to bypass the US federal government on renewables

The European Union plans to work with individual states and companies in the US on renewable energy projects and solutions to climate challenges. This is likely a response to the Donald Trump administration, which has taken a confrontational stance on renewables. The news was reported by the Financial Times, citing an EU policy paper due to be published soon.

Under Donald Trump’s second administration, the United States is once again steering its energy policy more towards fossil fuels. The administration has also withdrawn from the Paris Agreement again and is slowing the development of renewables in the US. This creates difficulties not only for American companies but also for some US states that have bet on renewables. It is also a challenge for the European Union, which considers the energy transition one of its main objectives.

The European Commission reportedly now has a plan for how to proceed, under which it intends to “work with the United States on clean technologies.” The continuation is more interesting, however: “with subnational entities, companies and think tanks.” This comes at a time when the United States is instead pressuring the bloc to back away from its ambitious climate targets and other regulations, such as the deforestation regulation and the law aimed at preventing environmental and social harm in supply chains.

Although voices in Brussels are also growing louder in favour of reducing or at least simplifying some regulations and rules, several delegations from various US states have already visited the EU headquarters this year to discuss different climate policies. The most frequent topic has been the introduction of a system for pricing carbon emissions, which is gradually being introduced in various forms in many parts of the world.

The document, which is due to be presented on Thursday, is intended to set out the Union’s diplomatic strategy internationally and explain how it plans to support the energy transition at the global level. This includes efforts to help other countries introduce carbon markets, as well as investments in “flagship” projects. These could include solar power plants in developing countries or investments in companies decarbonising their production, partly because this will help them cope with CBAM (the carbon border tax), which is due to take effect next year and has been sharply criticised, particularly by India and China.

Another announcement in the document is that the EU is preparing to establish a “business council for the clean transition,” which is also intended to help promote “clean” companies. One EU representative told the Financial Times that the document’s main aim is to “help countries with the transition while also reducing our dependence on China for natural resources.” The Commission has not commented on the document so far, and some parts may yet be revised. The overall framework, however, is likely to remain much the same.