2040 emission reduction target must take account of EU competitiveness

The Confederation of Industry of the Czech Republic recognizes the urgency of addressing the issue of climate change and global warming. We understand that the Commission's Communication is part of the process to achieve climate neutrality for the EU by 2050.

However, we consider the selected scenario 3 and therefore the proposed reduction target of 90% in 2040 to be unrealistic and extremely costly. The proposed scenario S3 effectively accelerates decarbonization and leaves little room for transformation of industry between 2040 and 2050.

Before further discussion, it is necessary to thoroughly assess the impacts on individual sectors and specific Member States, as the available impact assessment shows that the proposed targets will disproportionately affect energy-intensive industries and thus especially industrial countries such as the Czech Republic. The evaluation of the scenarios needs to thoroughly consider competitiveness of European industry vis-à-vis industry in third countries. The 2040 target must be accompanied by an "Industrial Deal".

The regulatory framework for 2040 needs to be considerably simplified and streamlined compared to 2030 framework. We suggest to keep only one headline target for emission reduction and scrap sector specific targets for renewables or energy efficiency.

For the Czech Republic as an industrial country, irrespective of the level of ambition, sufficient irreversible financial resources must be ensured. We refer in particular to the continuation of the Modernisation Fund, of cohesion funds, the Just Transformation Fund, etc. Given the different conditions in the Member States, purely European instruments such as the Innovation Fund will be far from sufficient.

Full position paper is available here.