Estimated time of reading: ~ 2 minutes  

Step by step Europe works for gas independency from Russia. “A year ago, Europe had a massive dependency on Russian fossil fuels built up over decades. This made us vulnerable to supply squeezes, price hikes and Putin’s market manipulation. In less than a year, Europe has overcome this dangerous dependency”, the President of European Commission, Ursula Von der Leyen, said in her speech at Davos on 17th of January 2023. 

Von der Leyen expressed her satisfaction: “We have replaced around 80% of Russian pipeline gas. We have filled our storages and reduced demand by more than 20% in the period from August to November”. And through collective effort, “we brought down gas prices quicker than anyone expected. From its peak in August, European natural gas prices have now dropped by 80% this month. That is below the levels of before the Ukraine war. Europe has once again shown the power of its collective will”, she added.

At the same time, Von der Leyen underlined: “We should be under no illusions how difficult these periods of pandemic and war are for families and for business”.

Now the persistent rising of inflation is worrying Europe. “As your Global Risks Report sets it out, we see rising inflation making the cost of living and the cost of doing business more expensive. We see energy being used as a weapon. We see threats of trade wars and the return of confrontational geopolitics. In addition, climate change already comes with a huge cost and we have no time to lose in the transition to a clean economy”, the President of the European Commission said.

Regarding the Green transition, “in less than three decades we want to reach net zero. But the road to net zero means developing and using a whole range of new clean technologies across our economy: in transport, buildings, manufacturing, energy”, Von der Leyen said.

 The President of the European Commission believes there will be a revolution on EU industries in the near future. “Next decades will see the greatest industrial transformation of our times, maybe of any times. And those who develop and manufacture the technology that will be the foundation of tomorrow’s economy will have the greatest competitive edge. The scale of the opportunity is clear for all to see”, she said. 

The International Energy Agency estimates that the market for mass-manufactured clean energy tech will be worth around USD 650 billion a year by 2030, more than triple today’s levels. “To get ahead of the competition, we need to keep investing in strengthening our industrial base and making Europe more investment and innovation friendly”, Von der Leyen added. 

In Europe, “we moved first with the European Green Deal to set the path to climate neutrality by 2050”, Von der Leyen proudly underlined. “We have cast our net-zero target into law to provide the predictability and transparency business needs. We followed it up with the investment firepower of NextGenerationEU, our EUR 800 billion investment plan, the Just Transition Fund and other instruments across the economy. This is unprecedented investment in clean technology across all sectors of the green transition”.

The President of the EU Commission explains that “clean tech is now the fastest-growing investment sector in Europe, doubling its value between 2020 and 2021 alone. And the good news for the planet is that other major economies are now also stepping up. Japan’s green transformation plans aim to help raise up to JPY 20 trillion around EUR 140 billion through ‘green transition’ bonds”.

While certain elements of the design of the Inflation Reduction Act raised a number of concerns in terms of some of the targeted incentives for companies.

“We have been working with the US to find solutions, for example so that EU companies and EU-made electric cars can also benefit from the IRA. Our aim should be to avoid disruptions in transatlantic trade and investment”, Von der Leyen said.

Written by: Irene Giuntella