Philipp Jäger

Climate Policy Is Still Good for Business The green transition will survive cuts to U.S. subsidies.

Is the climate strategy behind the IRA dead after the GOP's massive cuts to its clean energy subsidies?

In my new piece for @foreignaffairs.com, I argue: No!

www.foreignaffairs.com/united-state...

🧵 In the trade world, this week was a rather hectic one. The Turnberry outcome underline the fact that negotiations with Trump are not one-off events but an ongoing process. A fact that undermines the idea that this week has brought stability.

Essential reading for everyone working on anything EU - the budget isn't everything, but everything depends on it.

Europe’s Car Industry in Transition: Stuck in Neutral or Shifting into Gear? Europe’s automotive industry is entering a decisive decade but lacks a clear map for navigating it. While global competitors accelerate their shift toward electric vehicles, Europe’s strategic focus r...

Europe’s car industry may have just dodged a +25% US tariff – but this is no reason to relax. Deep structural challenges remain, and the EU lacks a common diagnosis for fixing them.

My new policy paper argues that a coherent EU strategy needs to rest on three uncomfortable truths: 🧵

Yes, but: hydrogen subsidies are mainly not for electrolysers, but for H2 OpEx so that heavy industry can decarbonise & that 'Dunkelflaute' can be dealt with.

Moreover, for optimal subsidy volume, maturity matters - batteries are already cost-competitive vis-a-vis their fossil-based alternatives.

No one’s holding their breath for big announcements from today’s EU–China summit.

But FDI remains one area where pragmatic cooperation is still possible and, under the right conditions, can strengthen EU industry.

In today’s Euractiv op-ed, I outline what it takes to make that happen.

Die Bundesregierung sagt, Sie könne den Kommissions-Vorschlag zum neuen EU-Haushalt nicht akzeptieren, weil ein "umfassender Aufwuchs" in Zeiten der Konsolidierung nationaler Haushalte nicht vermittelbar sei.

Ich halte das aus ein paar Gründen für keine kluge deutsche Position:

The EU's Defence of Democracy Dilemma The European Commission has made defending EU democracies from foreign interference a priority. A key legislative element in its democracy agenda is the ‘Directive on Transparency of Interest Represen...

An important step to defend European democracies from foreign interference or a misguided foreign agent law?

👇In my new policy brief out today, I analyse the Commission’s proposal for a directive on third country lobbying. 1/🧵

www.delorscentre.eu/en/publicati...

While often frustrating, a EU consensus always creates interesting dynamics: Poland's push for a bigger budget can politically only fly if the budget is also modernised & made greener - as demanded by countries opposing a bigger budget.

Highly recommend Nils' thread on Poland's budget position.

On the third column @gzachmann.bsky.social : it shows how much a company would pay per MWh after the subsidy on its *total* electricity consumption. Given that the subsidy can only be paid on 50% of a company's elec consumption, considering also the non-subsidized 50%, the subsidy shrinks by half

Thanks! Indeed, the 10% additional subsidy are not in the chart (should be added later). Seems a bit of a random addition to the criteria - and further complicates the scheme... not clear to me why this was introduced in this way.

"France is teaming up with the EU’s climate laggards to decouple discussions on the bloc’s upcoming 2035 and 2040 climate targets". Frankly, given its recent stance on a regulatory break, on CSRD & CS3D, France can no longer be considered as a a climate gatekeeper and might join the laggards club.

The new EU state aid framework CISAF is out. It allows to subsidise electricity prices for some EII (allowing versions of the DE "Industriestrompreis"). Given restrictions, the actual subsidy is smaller than one might think, as I illustrated below (inspired by a Handelsblatt article from yesterday)

here the link to CISAF: competition-policy.ec.europa.eu/about/contri..., and to the Handelsblatt article (which was nice enough to include my assessment). www.handelsblatt.com/politik/inte...

The new EU state aid framework CISAF is out. It allows to subsidise electricity prices for some EII (allowing versions of the DE "Industriestrompreis"). Given restrictions, the actual subsidy is smaller than one might think, as I illustrated below (inspired by a Handelsblatt article from yesterday)

🧵 Yesterday’s FT piece reported the EU is preparing to turn up the retaliatory heat as the July 9 deadline nears, and with it the threat of 50% tariffs on EU goods.
www.ft.com/content/3d3...

The Clean Industrial Deal is a flagship initiative of vdLeyen's 2nd term. It's a good strategy paper - but will its implementation live up to its promises?

It's still early, but first indicators, incl. first action plans, are not encouraging.

New policy brief w/ recommendations out today 🧵(1/n)

EU to go: Clean Industrial Deal Before the working day begins, there will once again be a short input on a current EU topic. Start the day with us, fresh croissants and coffee. On-site only, seats are limited.

and if you are in Berlin next Thursday, come discuss these findings with us at our EU to go: www.delorscentre.eu/de/veranstal...

Lost in Implementation? The Clean Industrial Deal demands urgent and bold delivery The EU’s Clean Industrial Deal (CID) finally offers a coherent strategy to make clean-tech manufacturing and energy-intensive industries competitive while cutting emissions. But being a high-level doc...

here the paper: www.delorscentre.eu/en/publicati...

🏁
An ambitious implementation of the CID is essential for EU competitiveness, sovereignty and climate objectives.

The good news: the EU can still get this right. But for this, CID implementation must match the scale and urgency of the challenges faced by EU clean industries (18/18)

The Commission should also be more explicit about the limits of industrial policies. For instance, the 40% domestic manufacturing objective set out in the NZIA is
neither realistic nor desirable for solar PV anymore - let's be clearer about this. More examples in the paper. (17/n)

4️⃣Being explicit about what EU industrial policies can realistically deliver

This requires, first, that COM provide more clarity on who does what - EU-level, member states, and the private sector. Hydrogen subsidies are a good example (explained in the paper) for why this needs improvement. (16/n)

3️⃣ Increasing speed of implementation

Doing industrial policy is complicated, and rushing it has risks – but so too does being slow.

One example: The first EU lead market strategy is from 2008 (!). We can't wait untill 2030 for the public procurement revision to be implemented to get them. (15/n)

2️⃣Widening the coverage of sector-specific policies to additional key industries

For key industries, COM should develop additional sector-specific strategies - e.g. for batteries and wind, as well as for energy-intensive industries such as paper and cement etc (i.e. NACE 17 & 23). (14/n)

1️⃣Implementing proposed instruments forcefully.

As the CID remains vague, it will be crucial that the EU is bold when deciding the specifics of its industrial policy tools. In the paper, I illustrate this with lead markets, state aid rules (opex subsidies!) and EV purchasing schemes. (13/n)

So, what's needed to ensure the CID is actually turned into hard-edged policy? The brief gives four recommendations (12/n)

One exception to this, and a promising tool, is lead markets. But their scope remains unspecified so far, to be spelt out in the IDAA. To make a noticable difference, lead markets must go beyond what the NZIA has done for clean tech - but the action plan says NZIA will be the model. (11/n)

But both action plans are rehashing, for the most part, policy measures that were already on the EU agenda before (like expanding renewables quickly) - and unless they are implemented with much more vigor than before, it's doubtful they will now bring about a sea change (10/n)

On energy-intensive industries, the CID again provides sharp analysis on high energy prices, challenging international markets, and decarbonisation costs. In March, two action plans, for metals&steel, and affordable energy, were published. (9/n)

That means many strategic questions for clean tech still remain unanswered. The extent to which clean tech will be covered in upcoming legislation, like the IDAA, also is open. Overall, it's unclear which EU policy is supposed to help turn the tide for clean tech (8/n)