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News 21 August 2023

Top story of the week: EU advances on Green Deal Industrial Plan, nuclear technologies gain ground

Several pieces of EU climate legislation are expected to be completed before the year’s end, and critical decisions await the co-legislators in the autumn. While the summer recess meant no major milestone would be reached until September, the past five weeks have still brought significant developments on two key files of the Green Deal Industrial plan, namely the reform of the Electricity Market Design (EMD) and the Net-Zero Industry Act (NZIA).Regarding the Electricity Market Design reform, the ITRE Committee of the European Parliament adopted its report on the text on the 19th of July, with 55 votes in favour. The document, shaped by S&D rapporteur Nicolás González Casares, enhances safeguards for vulnerable consumers. For instance, it suggests forbidding power cuts to consumers facing difficulties in paying their energy bills. It also discards the contentious revenue cap on renewable and nuclear electricity production and the notion of imposing Contracts for Difference (CfD) as the obligatory mechanism for governmental market intervention.Unless political groups require a formal vote, the decision to enter trilogue negotiations based on the report should be announced during the 11-14 September plenary, providing the negotiating mandate for further discussions with the Council of the EU. However, tensions within the Member States have stalled the adoption of the Council’s general approach on the matter, with France pushing for further inclusion of nuclear energy in state aid schemes – when CfD funding is only granted to newly-built nuclear plants in the EP’s proposition.Similar discussions are ongoing regarding the Net-Zero Industry Act, and which technologies should be classified as “strategic” and benefit from faster and easier funding and permitting processes, as well as a 40% domestic manufacturing target. While nuclear technologies were not part of the Commission’s initial proposal, strong discussions have been ongoing within the ITRE committee to devise a new compromise list of strategic technologies. Spearheaded by French MEP Christophe Grüdler, pro-nuclear lawmakers succeeded in securing the inclusion of nuclear on the list, while EPP rapporteur Christian Ehler abandoned his original ideas of linking the list, which also includes renewable technologies, carbon capture and storage, and hydrogen infrastructure, to the EU taxonomy.The ITRE committee has yet to adopt a final report during a vote scheduled for 12 October, as discussions on several points, such as the creation of net-zero industry valleys or the relevance of distinguishing between net-zero technologies and strategic net-zero technologies, are still ongoing.Entering the final full semester of the EU Council presidency before the EU elections in June 2024, Spain, which holds the rotating presidency until December, will bear the responsibility of finalising these proposals, reaching agreements in the Council, and leading the ensuing trilogues with the Parliament.