Dear Commission President von der Leyen,
As a new year starts, Europe faces a multitude of compounding challenges. The ongoing Russian war of aggression in Ukraine and the aftermath of the pandemic have created massive challenges to our energy system and for global supply chains, which together have detrimental effects on the European economy. Meanwhile, the challenge of climate change is only growing increasingly urgent.
The CEO Alliance strongly believes that climate mitigation efforts by individual companies and of Europe as a whole can also improve Europe’s resilience against these other, parallel crises. To succeed, strengthened European cooperation is essential. With coordinated and unified European action – aiming especially at the energy sector, infrastructure for renewables, electrification, energy efficiency, digitalisation, and industrial value chains – we believe we can achieve our vision of a more prosperous, sustainable and resilient Europe.
With this letter, the CEO Alliance would like to offer our input on key actions required within the year ahead in key sectors:
Firstly, concerning the energy sector, two high level tasks will be key for the year ahead, addressing the short and longer term respectively:
Short-term measures must be taken to address the energy crisis and the challenge of ensuring adequate energy and gas supply for the winter of 2023-2024, while accelerating the transition away from dependence on fossil fuels. Action should be taken to speed up electrification and energy efficiency, and to increase renewable electricity production e.g. through harmonisation of policy frameworks and simplified permitting. We call upon policymakers in the EU and its Member States to continue building on the momentum of the RePowerEU plan in 2023.
Complementing and building on these short-term measures, we must work towards the fundamental transformation of the European energy system, including sector coupling. To fully address the climate crisis, the EU and its Member States must build a fossil-free energy system, which will be a cornerstone of European sovereignty, resilience, competitiveness and prosperity. To be successful, the upcoming revision of the EU electricity market design, the development of the hydrogen market and the overall approach to the polluter-pays principle must be built on market principles and strong price signals and be designed to attract and promote private investment in the right direction. Proper carbon pricing will accelerate direct electrification in industrial processes, while an accelerated ramp-up of renewable hydrogen production can enable decarbonization of hard-to-abate industrial processes.
Digitalisation presents uncaptured potential for improving energy efficiency, and should therefore be seen as an indispensable part of the transition to a low-carbon society. Connected devices, edge control and mobile technologies – not least facilitated by 5G networks – are essential enablers of monitoring, visualisation and management of energy production, distribution and consumption. Active energy efficiency technologies are readily available, can be installed without permitting procedures, and provide up to 30% energy savings with quick return on investment (approx. five years).
Second, the transformation of our energy system can only reach its full potential if coupled with an ambitious deployment of corresponding and adequate infrastructure, which would enable direct and indirect electrification of industry and the transport sector:
- To enable rapid electrification of industries and transport, European power grids must be rapidly developed and adapted to the new needs: increased demand, and new load and generation patterns. A key step in this regard would be the development of more agile permitting procedures for electricity grids, similarly to what the EU and its Member States have achieved with regard to deployment of renewable energy generation. Increased flexibility, more interconnectors, distributed generation and demand-side optimisation through digitalisation will be crucial in this new reality; but are still hampered by regulatory barriers. Recent research by smartEN shows that the full activation of flexibility in buildings, electric vehicles, and in industry could generate savings of 37.5 million tonnes (Mt) annually in GHG emissions.
- For the transport sector, the soon-to-be finalized Alternative Fuels Infrastructure Regulation and subsequent national implementation plans must take the realities of the sector into account and ensure a widespread coverage of megawatt charging stations for heavy-duty road transport across the TEN-T Network so that long-haulage road transport can realistically be electrified in the short term.
Thirdly, on industrial value chains and key technologies, the EU should strengthen both its domestic manufacturing capacity and upstream value chain activities as well as global partnerships with other countries. Achieving the energy transition is crucial for the competitiveness of European industries, but more needs to be done. In this regard, we commend the European Commission for its efforts to create a genuine and circular market for carbon removal technologies and to secure critical raw materials needed for batteries, microchips and photovoltaics. We urge EU and Member States’ policymakers to build on these initiatives to strengthen the European industrial base and to create competitive and resilient European markets for these crucial materials and technologies, not least through the recently announced Net Zero Industry Act and an ambitious EU Industrial Strategy.
The US Inflation Reduction Act will accelerate the needed transformation in the US, but the EU must take action to ensure that investments in Europe will not be adversely affected. In doing so, we strongly recommend to avoid actions that would be considered to go against our US partners. Europe and its likeminded global partners must stand together and provide a level playing field for citizens and companies. Sustainability is key to competitiveness and to Europe’s economic success.
Fundamentally, the CEO Alliance recommends that the EU and its Member States take bold and concerted actions to accelerate the transformation of our economy in light of the current challenges. The EU should focus on its strength in a common, unified and market based approach, and should continue to build global partnerships and strengthen free trade.
The CEO Alliance is convinced that the mitigation of the climate crisis, and hence decarbonization of all industries, is possible while preserving and strengthening European prosperity and protecting vulnerable communities. That is why we are working towards this transformation through massive investments in electrification and decarbonization of our products and services, in required infrastructure and in industrial value chains – as individual companies and through our joint projects.
We would highly appreciate to continue the dialogue with you in 2023, to support the journey of Europe towards a more prosperous, digitalised, sustainable, decarbonized and resilient future.
On behalf of the CEO Alliance
Chairman of CEO Alliance
CEO of Traton Group and Scania Group
This letter has been sent to the following recipients:
Ursula von der Leyen, President of the European Commission
Frans Timmermans, Executive Vice-President, European Green Deal
Margrethe Vestager, Executive Vice-President, A Europe Fit for the Digital Age Valdis Dombrovskis, Executive Vice-President, An Economy that Works for People
Thierry Breton, Commissioner for Internal Market
Paolo Gentolini, Commissioner for Economy
Adina Vălean, Commissioner for Transport
Kadri Simson, Commissioner for Energy
Roberta Metsola, President of the European Parliament
About the CEO Alliance: We are a cross-sector action tank consisting of 13 leading European companies representing key industry sectors, with ~1.6 million employees and ~EUR 560 billion annual revenue. We use our broad platform to make decarbonization of European industry happen. In spite of the challenging times we firmly believe that the only way forward for a competitive, prosperous, resilient and sustainable Europe is an acceleration of the transition to green energy and technology. Further information about our work is available on our website, www.ceo-alliance.eu.
Industries and EU policy makers: together transforming the energy crisis into an opportunity for Europe.
When the CEO Alliance was founded in 2020, it was all about climate protection. Two years later, it is also about defending the future of “industrial Europe”. And these two goals are closely linked. When talking of climate targets, the evidence is clear: the time for action is now or never. We’re not on track, we need to be bolder to be able to stay below 1.5C. Decarbonization, electrification and digitalization of the European industrial sector are the only way to achieve this goal. Read the rest of the CEO Alliance Joint Statement below.
Battery electric trucks are ready to completely transform Europe’s transport landscape by 2030. But to be able to do this, the charging infrastructure needs to be in place. A massive roll out will be necessary in the coming years and it is up to the decision makers to make it possible. As we approach the 2030 deadline to more than halve EU greenhouse gas emissions, there is a strong sense of urgency to address carbon emissions from heavy duty vehicles. These account for over 25 percent of EU road transport emissions and around 5 percent of total EU CO2 emissions - a greater share than international aviation or shipping.
The electrification of heavy-duty vehicles will be necessary to reach the EU’s climate target. The good news is heavy duty vehicles is not a hard-to-abate sector anymore. Battery electric trucks provide a solution that is scalable and ready to be deployed and can completely transform Europe’s transport landscape by 2030.
ABB, Scania, E.ON, Enel, Ericsson, Iberdrola and SAP have worked together to identify key technologies for this transition and to identify priority corridors to allow the fastest-possible decarbonisation of heavy duty vehicles. Since we started this joint project in 2020, battery-electric trucks are reaching ranges that allow them to operate across Europe according to existing rest obligations and charging solutions are already being deployed at scale in depots and will soon (2025) include MegaWatt chargers for ultra-rapid stops along key transport corridors.
At this stage of development, regulation is critical to incentivise and provide a stable framework for green electricity, additional grid capacity,the deployment of charging infrastructure, and the uptake e-trucks in logistics. Both ambition and speed will be crucial to meet our climate goals, the good news is trucks don’t stand in the way anymore.
@ AkzoNobel in Amsterdam on 11 October 2022 with an inspiring exchange with Paul Heemskerk, Head of Unit European Industrial Policy and Ko Voskuilen, Policy Officer from the Dutch Ministry of Economic Affairs and Climate Policy.
A Call for a strong Europe of Transformation
Europe must become the benchmark for the green transformation. Reaching climate neutrality while promoting economic growth and social standards might appear as a complex task, but we firmly believe it is a great industrial and economic opportunity for Europe. The EU must become climate neutral by 2050. As companies, we are committed to sustain this objective with investment, innovation, and job creation. Read the rest of the CEO Alliance Position Statement below.
On June 29, Iberdrola welcomed at its office in Madrid members of the CEO Alliance to discuss how we can further support climate targets of the European Union to become the first carbon-neutral continent by 2050.
- 12 business leaders meet in Paris to discuss ways to further support the EU Green Deal
- A strong carbon pricing signal on the European level is regarded as a key to achieving carbon neutrality by 2050 and cutting greenhouse gas emissions by 55% of 1990 levels by 2030
- The European CEO Alliance believes that fighting climate change will require a collective effort by all EU member states and collaboration between the public sector and industry
- Several cross-sector projects and policy recommendations will serve the global climate cause and foster sustainable growth and future-proof jobs
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
- 10 European business leaders invest 100 billion in decarbonizing their companies and products as part of their corporate strategies and call for far-reaching climate protection measures at the occasion of the international climate strike
- The “CEO Alliance for Europe’s Recovery, Reform and Resilience” was formed in 2020 as an Action Tank, working together on practical solutions in cross sector climate protection projects
- The Alliance strives for an ongoing constructive dialogue with the EU Commission
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
- Members agree at first meeting: “We support the EU Green Deal. The climate targets are feasible, with sustainable growth and future-proof jobs ahead”
- Volkswagen and 11 leading European companies collaborate on decarbonization of economy and society
- Investments of over €100 billion underpin members’ decarbonization roadmaps
- Member companies represent all key industry sectors, over €600 billion in annual revenue and 1.7 million employees
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:
- 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
- Remove existing barriers to private sector investments in low carbon and zero emission technologies, renewable energies, energy efficiency and circularity
- 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
- Drive demand for sustainable, innovative and digital solutions, among other by using renewal schemes, public procurement and investments and by increasing EU-level standardization.
- Embrace digital technologies and sustainable finance as enabler for the transition towards a zero carbon and circular economy
- Push for transparency around the sustainability of EU initiatives as well as corporate products and supply chains
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:
- Decarbonisation and carbon pricing
- Low carbon and zero emission innovations
- Circular economy
- Sustainable finance
- 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.
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
- Björn Rosengren, ABB
- Thierry Vanlancker, AkzoNobel
- Francesco Starace, ENEL
- Dr. Johannes Teyssen, E.ON
- José Ignacio Sánchez Galán, Iberdrola
- Søren Skou, Mærsk
- Christian Klein, SAP
- Henrik Henriksson, Scania
- Jean-Pascal Tricoire, Schneider
- Joe Kaeser, Siemens
- Dr. Herbert Diess, Volkswagen
Source: Volkswagen AG