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The European elections in the face of climate and geopolitical challenges

European citizens are voting in June against a backdrop of multiple crises, high inflation and war, calling climate policies into question and encouraging a shift to the right.
Élections Européennes Défis Climatiques

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Shaken by several crises over the past five years, EU citizens are voting in the June elections with concerns about high inflation, rising energy costs and war on their doorstep. Climate action could be a tougher sell, and polls point to a shift to the right. A new European Commission will also have to forge a path through complex geopolitical relations with China, a key player in the EU’s cleantech supply chains. Voters go to the polls from June 6 to 9 to elect their countries’ members of the European Parliament and potentially a new Commission President.

Political and economic context

The current Commission, led by President Ursula von der Leyen, who is standing for re-election, has been introducing a series of significant energy and climate laws since 2019, starting with the European Green Pact, aimed at making Europe the first carbon-neutral continent. The bloc is committed to reducing emissions by 55% by 2030, as part of the “Fit for 55” plan. However, this strong emphasis on carbon neutrality is disrupted by the energy crisis following Russia’s invasion of Ukraine in early 2022. Through its REPowerEU plan, the bloc almost completely ceases to receive Russian gas by pipeline, replacing it with LNG from partners such as the USA, Norway and Azerbaijan. REPowerEU also aims to accelerate the deployment of clean energy and focus on bottlenecks such as permits and bureaucracy.

Change of narrative

Rising energy costs and the war in Ukraine are changing voters’ attitudes and the mood in Brussels. At the same time, positions on climate policy are at the heart of pre-election campaigns. Pro-climate action political blocs are likely to see their representation decline after the formation of the new parliament, according to the latest polls. In particular, the Green and Renew Europe factions could suffer losses, while right-wing groups should gain seats.

“No party, with the exception of the extremists, would want to abandon all the work accomplished under the Green Pact,” says Maximo Miccinilli, senior vice president and head of energy and climate at FleishmanHillard, a Brussels-based communications firm.

However, the narrative is changing, and parliamentarians are framing green policies as remedies for economic and security challenges.

Implementing climate legislation

While the von der Leyen Commission is putting in place a series of ambitious climate and energy laws, the Commission to be elected in June must implement many of these laws and oversee their transposition into member states’ legislation. One area where this is particularly evident is in the decarbonization of heating.

“It doesn’t seem like the right time to introduce consumer mandates, unless the state can bear all the costs,” says Coralie Laurencin, senior director of the energy and climate policy team at S&P Global Commodity Insights.

Recent examples include a weakening of Germany’s renewable heat mandate, France’s closure of discussions on banning gas boilers, and the UK, no longer a member of the EU, reneging on a proposal to impose heat pumps on those using oil for heating, adds Laurencin.

Focus on renewable energies

As part of its REPowerEU plan, the Commission is committed to speeding up permits for renewable energies across the bloc, but implementation is lagging in some countries.

“Where a new European Parliament and Commission could have an impact is on regulations that directly affect consumers: the new carbon market for buildings and transport, the ban on internal combustion engines by 2035 and perhaps decarbonized heating,” says Laurencin. “I don’t see a large majority going back on the objectives we decided on.”

The new Commission must also propose an emissions reduction target for 2040, she adds. Now that the new Commission President has been given the task of defining the program for the next five years, its content needs to find the support of the European Parliament and the European Council.

“Opinions are very polarized,” says Hartstein at a May 21 webinar organized by SolarPowerEurope, a trade group.

Yet some in the renewables sector are now questioning whether a target of 42.5% of electricity generation from renewables by 2030 is achievable.

“The mood is considerably less optimistic and that’s not surprising because the ambition is high and it will take time to achieve,” adds Laurencin.

Relations with China

The geopolitical backdrop to energy supply chains is also changing. With the Inflation Reduction Act, the US is introducing a mountain of incentives for clean energy development and manufacturing that the EU can’t match. At the same time, a US trade ban on Chinese solar panels is amplifying a glut of equipment in Europe, much to the chagrin of local manufacturers who are closing in large numbers. Another test of this will be the US tariff hike on Chinese electric vehicles and other clean technologies, recently introduced by the Biden administration.

“Europe isn’t energy-rich like the U.S. and can’t afford to domicile all manufacturing,” says Laurencin.

Adding that the Net-Zero Industry Act, which focuses on diversifying the supplier base rather than advocating a trade ban, is driven by the understanding that Europe must depend on imports. In reality, the “prohibitive” US tariffs will put the EU under pressure to apply its own, writes the Brussels-based think tank Bruegel in a May 16 paper.

Reactions and outlook

The wind power sector is also struggling with China. Europe’s supply chain is struggling to produce the manufacturing output needed to meet 2030 installation targets, according to Zipf. At the same time, WindEurope is lobbying against Chinese turbine manufacturers importing equipment into the bloc, and also against such players setting up sites in Europe.

“Acceptance is not the same problem as it used to be. Both in terms of safety and affordability, we’re well positioned,” says WindEurope spokesman Christoph Zipf in an interview about the group’s approach to the EU elections.

The European elections in June are taking place against a backdrop of major economic and geopolitical crises. Climate policies, although central, are challenged by economic and security concerns. The new Commission must navigate a complex landscape to maintain climate commitments while responding to the immediate challenges posed by inflation, energy costs and geopolitical tensions.

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