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Carbon Free Europe

Carbon-Free Europe welcomes the European Commission’s 2025 Work Programme and its commitment to strengthening Europe’s energy security, industrial competitiveness, and decarbonisation efforts. With the Clean Industrial Deal, the Action Plan on Affordable Energy, and the Roadmap to End Russian Energy Imports, the Commission has set a clear direction. It is critical that these commitments translate into tangible actions that deliver a secure, affordable, and competitive clean energy system for Europe.
<h2>A Strong Start, but Speed and Scale Are Critical</h2>
CFE supports the Commission’s recognition that energy availability and affordability is the foundation of industrial competitiveness. Europe's ability to lead in clean industrial innovation hinges on its capacity to turn policy ambition into real-world deployment. High energy costs and slow project approvals are eroding competitiveness, while global rivals move quickly to capture market share in clean technology. The Industrial Decarbonisation Accelerator Act and Fitness Check on Energy Security must do more than assess challenges—they must remove private investment barriers, and create the conditions for industries to scale clean solutions at pace. Without urgent reform, Europe risks not just higher costs but a shrinking role in the industries of the future. 
Removing barriers to clean hydrogen, carbon capture and storage (CCS), and low-carbon fuels is critical to ensuring that decarbonisation strengthens, rather than weakens, industrial competitiveness. Delays in clean energy investment and continued reliance on external energy sources expose Europe to supply shocks and rising industrial costs. Failing to accelerate clean technology deployment will only increase economic risk and undermine long-term energy security. 
Without decisive action, Europe risks losing its competitive edge to regions like the U.S. and China, which are rapidly scaling up clean energy but also benefiting from lower energy costs due to continued reliance on fossil fuels and less stringent climate commitments. While Europe has set the standard for ambitious decarbonisation, its ability to compete globally depends on making clean energy an economic advantage rather than a cost burden. By accelerating clean technology deployment, streamlining permitting, and ensuring affordable access to low-carbon energy, Europe can enhance its industrial competitiveness while maintaining its leadership in the net-zero transition.
<h2>Decarbonisation as an Economic Strategy</h2>
CFE recognises the ambition of the proposed 90% reduction target by 2040, as outlined in the amendment of the European Climate Law, and the EU’s ongoing efforts to phase out fossil fuel dependencies. However, ambition alone is not enough. To be credible, the EU must provide the right market signals, including unlocking private financing barriers, to ensure that European industries can decarbonise while remaining competitive. Technology inclusivity is key—all clean energy solutions, including renewables, nuclear, hydrogen, and CCS, must be fully leveraged to maximise Europe’s trajectory to achieving climate targets in the fastest and most economically beneficial way.
<h2>Where More Action is Needed</h2>
Further action is needed to ensure the success of Europe’s clean energy and industrial strategy. As part of the next Multiannual Financial Framework (MFF), the European Competitiveness Fund should guarantee robust investment capacity to support key technologies and strategic sectors vital to the EU’s competitiveness and decarbonisation pathway. The EU’s financing framework must provide clear mechanisms for Power Purchase Agreements (PPAs), investment de-risking, and infrastructure expansion to attract global capital. Expanding the <a href="https://climate.ec.europa.eu/eu-action/eu-funding-climate-action/innovation-fund_en">Innovation Fund</a> and introducing cleantech investment guarantees will help bridge the gap between policy ambition and market realities. 
However, achieving Europe’s climate and competitiveness goals cannot rely solely on public finances, it requires greater private investment. Therefore it remains key to further build out one of the EU’s greatest asset, its Single Market, and make significant progress on the integration of EU’s capital markets. While the upcoming communication on the Savings and Investments Union shows the recognition of this objective, it will be key to follow through on this project with ambitious initiatives to facilitate investments and promote the use of private capital to  scale clean technologies and drive industrial decarbonisation.
Permitting delays remain one of the biggest obstacles to clean energy deployment. Without meaningful reform, Europe risks losing momentum in building the infrastructure needed to meet its climate and competitiveness goals (see Figure 1). A technology-inclusive approach is also essential in driving deep industrial decarbonisation. Nuclear power derived hydrogen must be fully-recognised under EU policies, and CCS must be integrated into industrial decarbonisation strategies to provide viable pathways for hard-to-abate sectors.
<h2>Our Call to Action</h2>
The EU’s 2025 Work Programme sets the right direction, but now words must be followed by actions. Delivering a secure, decarbonised, and competitive Europe requires pragmatic, investment-driven policies that remove regulatory bottlenecks, provide clear financial incentives, and create a level playing field for all clean energy solutions.
Figure 1: A snapshot of CFE’s downscaled infrastructure map that provides a more granular picture of the deployment of clean energy for a variety of decarbonisation scenarios. Click on image to get to our downscaled infrastructure map tool and check out your area of interest. On the website, hover over the map to see just how much buildout is needed to reach net-zero.
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Ambition Must Translate into Action: 2025 Commission Work Programme

As energy security becomes the new battleground for global influence, the US and EU must decide—will they lead together or fall behind? 
At the World Economic Forum in January 2025, Ursula Von Der Leyen <a href="https://ec.europa.eu/commission/presscorner/detail/en/speech_25_285">highlighted</a> the European Union’s (EU) plans to strengthen its international cooperation in response to “rising global competition.” Von Der Leyen singled out the United States (US): “No other economies in the world are as integrated as we are.” As energy security has become the driver of many Western democracies, as shown by President Trump’s immediate announcement of a <a href="https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/">National Energy Emergency</a>, cooperation and competitiveness are now key to advancing clean energy and industrial policies. This reality is exacerbated by a shifting geopolitical landscape, threatened by a potential dependence on and direct competition with strategic adversaries such as Russia and China. As fossil fuel dependence is a geopolitical risk, decarbonisation should be seen as a strategic opportunity for energy security. Decarbonisation strengthens energy independence and resilience, making the US and EU less vulnerable to external pressures. As such, transatlantic allies must strengthen their collaboration on clean energy development to ensure long-term energy security and affordability while strengthening their competitive edge and economic growth.
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<h2>Key Takeaways:</h2>
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Transatlantic cooperation is essential for clean energy security and economic resilience for both the US and the EU amid rising global competition.
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Tariffs and trade tensions risk undermining US-EU collaboration, benefiting geopolitical competitors.
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Decarbonisation is a strategic advantage—aligning policies can enhance competitiveness while reducing reliance on hostile nations.
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Joint investment and regulatory alignment in clean energy can secure supply chains, drive innovation, and create jobs.
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A coordinated EU-US approach will strengthen industrial leadership and ensure long-term energy security for both.
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<h2>Facing the Challenge: US and EU Leadership Amid Rising Global Tensions</h2>
There have been continuous efforts over time to strengthen transatlantic cooperation and facilitate trade in the clean energy sector. Initiatives such as the Clean Energy Ministerial (CEM) and the US-EU Energy Council have played a key role in advancing collaboration, fostering policy alignment, and promoting innovation between the US and Europe to achieve decarbonisation. However, while the EU has historically had an ambitious commitment to climate action—as seen in the Green Deal and climate targets—a recent shift to a more tech-inclusive approach has made it more prone to cooperation with the US.
Indeed, Mario Draghi’s report, titled <a href="https://commission.europa.eu/document/download/97e481fd-2dc3-412d-be4c-f152a8232961_en">The Future of European Competitiveness</a>, emphasizes the EU’s new commitment to a more flexible energy strategy—balancing decarbonisation with business-friendly practices—bringing it closer to the US’ historical stance on energy policy. While this approach is relatively new for the EU, who’s been traditionally focused more on regulatory-driven solutions, Carbon-Free Europe (CFE) has long been <a href="https://www.carbonfreeeurope.org/publications">its advocate</a>, and such a change marks a key opportunity for cross-atlantic energy industry cooperation. Both the US and the EU are now aligned on the need to deploy flexible technologies and boost the competitiveness of their energy industries to strengthen their global leadership. 
Decarbonisation as an industrial strategy is key to increasing competitiveness in a rapidly evolving global energy market. However, a core takeaway of the <a href="https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en">Draghi report</a> is that no single region can secure supply chains or outcompete global competitors like China and Russia. Instead, the US and EU must work together to strengthen the clean energy economy to ensure it is competitive, secure, and innovation-driven.
Existing trade agreements and strategic alliances, such as NATO and the US-EU Trade and Technology Council (TTC), already provide a framework for stability, secure supply chains, and economic resilience. In an era of geopolitical uncertainty, it will be crucial to keep this safe transatlantic environment—one that fosters secure trade, manufacturing, and investment without the disruptions posed by external geopolitical competitors. Existing joint projects, such as shared renewable energy infrastructure and the development of nuclear power plants, are a proof of the success of this framework, as they boost energy security by reducing dependence on external competitors such as China which has been expanding its influence in the global energy market. Chinese investments alone account for <a href="https://www.iea.org/reports/world-energy-investment-2024/china">one-third</a> of clean energy investments worldwide. These partnerships enhance energy security while driving job creation and technological exchange in clean energy.
Cooperation also promotes economic growth by <a href="https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/united-states_en#:~:text=Bilateral%20trade%20and%20investment%20support,of%20the%20Atlantic%20are%20supported.">fostering job creation</a> in the clean energy sector through a mutual exchange of technology, skills, and knowledge, as seen through the DOE-led initiative,<a href="https://www.energy.gov/ia/partnership-transatlantic-energy-and-climate-cooperation-p-tecc"> Partnership for Transatlantic Energy and Climate Cooperation</a> (P-TECC). P-TECC aims to boost energy cooperation between the US and Central and Eastern European countries by reducing reliance on Russian energy, as the Commission is set to further its efforts on this topic through the upcoming Roadmap Towards Ending Dependence on Russian Fuel in March 2025, creating economic opportunities, and accelerating clean energy adoption. Such a framework also ensures that workers are trained for the right technologies, which facilitates the development of transatlantic projects, either in the US or in the EU, as an alternative to initiatives led by competitors. 
A key issue at stake: Under the Trump administration, US tariffs on Chinese goods may drive China to offload its overproduction in Europe, disrupting markets, including the potential for unfair competition and undermining pricing structures. In this context, a EU-US partnership must collaborate and lead on the deployment of mutually beneficial clean energy projects and technologies through joint policies, regulations, trade agreements, and other commercial initiatives facilitating fair access to the US and European markets.  
<h2>Protecting Transatlantic Prosperity: US-EU Cooperation Amid Trade Challenges </h2>
During his campaign, Trump had signaled his intention to impose tariffs on the EU, which he <a href="https://www.politico.eu/article/eu-warned-to-prepare-for-early-donald-trump-tariff-action-us/">confirmed</a> after taking office. Following his decision to impose tariffs on Canada and Mexico, President Trump cited concerns over the significant US trade deficit with the region. In response, the EU, though it has repeatedly mentioned it would collaborate with its transatlantic partner, is preparing for a potential retaliation.
However, the start of a transatlantic trade war will likely benefit China, as EU Foreign Policy Chief Kaja Kallas pointed out. “We need America, and America needs us as well,” she <a href="https://www.cbc.ca/news/world/eu-trump-tariffs-1.7448782">said</a> last week. Indeed, such protectionist measures risk undermining the broader economic and security cooperation between the US and EU—particularly in the context of shared challenges from Russia and China. Russia remains the most immediate security risk—especially after its invasion of Ukraine—while China continues to pose a long-term strategic challenge in technology, critical minerals, and economic influence. 
To address these challenges and counter the threats to industries and economic competitiveness, the US and EU must balance their national interests with the need for cooperation on strategic issues. Divisions on trade would only undermine their shared goals; instead, aligning policies to secure supply chains, invest in clean energy, and reduce reliance on hostile nations is essential. By presenting a united front both regions can enhance economic resilience and strengthen their position against geopolitical threats. In clean energy, a united US-EU front is more cost-effective and impactful than fragmented efforts, both for securing jobs and leading the global market. They can secure critical supply chains through mutually beneficial agreements and maintain a competitive edge in emerging industries, thus ensuring energy security and leadership. 
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Given that demand for clean energy is rising globally, the EU and the US have a strategic opportunity to lead the global clean energy economy. As Ursula von der Leyen <a href="https://ec.europa.eu/commission/presscorner/detail/en/speech_25_404">noted</a>, millions of American jobs depend on European trade and companies, underscoring the deep economic interdependence between these markets. Additionally, developing nations require vast amounts of steel and cement to build essential infrastructure, including electrical grids, transportation networks and urban developments. The EU and US should strive to be the main providers of these key infrastructures and technologies, and this can only be done through joint collaboration. The EU’s recent <a href="https://commission.europa.eu/document/download/10017eb1-4722-4333-add2-e0ed18105a34_en">Competitiveness Compass</a> highlights the crucial role of governments, noting that key policy levers—such as taxation, labor markets, and industrial policies—are largely controlled by EU member states. To drive progress, it calls for coordinated national reforms and investment through a Competitiveness Coordination Tool. The Compass makes the goal clear: Europe must become more business-friendly to keep pace with the US and China while maintaining its climate commitments.
Harmonising policies—such as coordinating <a href="https://taxation-customs.ec.europa.eu/taxation/excise-taxes/revision-energy-taxation-directive_en">tax incentives</a>, <a href="https://fsr.eui.eu/contracts-for-difference/#:~:text=What%20are%20Contracts-for-Difference%20%28CfDs%29%3F%20Contract-for-Difference%20%28CfD%29%20is%20a,used%20to%20protect%20consumers%20against%20high%20electricity%20prices.">Contracts for Difference (CFDs)</a>, and integrating the EU’s <a href="https://www.carbonfreeeurope.org/product/what-american-manufacturers-need-to-know-about-the-eu-cbam">CBAM</a> with US and UK frameworks—would strengthen transatlantic industrial leadership. Without coordination, fragmented policies could weaken market leadership, allowing China’s cheaper, <a href="https://www.iea.org/reports/co2-emissions-in-2023/the-changing-landscape-of-global-emissions">high-emission</a> alternatives to dominate. A cohesive transatlantic strategy will strengthen supply chains, accelerate innovation, safeguard jobs, and enhance long-term economic resilience in the clean energy sector.
<h2>Competitive Strength Through Cooperation: A Transatlantic Path to Energy Security</h2>
With impending threats to their energy markets, the US and EU must coordinate to maintain their leadership on the global stage, in line with their recent alignment on competitiveness strategies. Building on the momentum of its Competitiveness Compass and its upcoming Clean Industrial Deal, the next EU mandate should focus its transatlantic efforts on the following areas: 
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Harmonise Regulations and Market Standards for Clean Energy Technologies: As the EU has reaffirmed in its Competitiveness Compass, it should aim to harmonise its single market and simplify its regulations across member states. The goal is to facilitate access to its market and boost its competitiveness. This would entail a clear alignment on standards and certification processes for clean energy technologies to facilitate transatlantic trade and deployment. 
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Deploy Effective Financing Mechanisms: The EU and the US should establish a transatlantic clean energy investment fund to support companies working on emerging technologies, and promote mechanisms to de-risk project costs. Additionally, they should encourage joint ventures between EU and U.S. based companies through tax incentives and investment guarantees. 
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Leverage and Align Trade Agreements Across Member States: Since the effectiveness of EU-US trade agreements will be heavily tied to the tariff policy, the EU should focus on leveraging existing bilateral agreements between individual Member States and the US and harmonise them across the EU. This would entail ensuring that Member States follow specific EU guidelines that favor secure supply chains for clean energy deployments when engaging in bilateral trade agreements with the US. 
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The EU-US relationship is set to evolve significantly in the coming months as the Commission and the second Trump administration establish new norms for cooperation. Both the EU and the US are striving to be more competitive on the global stage, but instead of vying for individual dominance, they can use this as an opportunity for transatlantic cooperation. As both regions are converging on industrial growth, supply chain resilience, and economic security, it is vital that the US and EU partner in establishing a competitive edge over foreign adversaries. In the race for geopolitical influence via energy and its industries, Carbon-Free Europe will continue to support opportunities for transatlantic leadership in energy security, competitiveness, and economic innovation through the deployment of all clean energy technologies.

Power, Policy, and Partnerships: EU-US Energy Security in a Changing Geopolitical Landscape

Powering Europe’s Clean Future: Romania’s Role in Hydrogen and Carbon Capture and Storage Infrastructure

Open Letter: Championing Europe’s Cleantech Leadership for a Competitive Net Zero Economy

The European Union’s ambitious hydrogen targets are central to its strategy for achieving net-zero emissions by 2050, with hydrogen positioned to decarbonise hard-to-abate sectors like industry and transport. In 2022, the <a href="https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en" target="_blank" rel="noopener">REPowerEU</a> set strategic goals to produce 10 million tonnes of renewable hydrogen domestically and import another 10 million tonnes by 2030. By 2050, hydrogen is expected to supply around 10% of the EU’s energy needs.
Yet, the <a href="https://hydrogeneurope.eu/hydrogen-is-key-building-block-2040-targets/" target="_blank" rel="noopener">European Commission’s current impact assessment</a> projects only 3 million tonnes of hydrogen by 2030—far below the 10 million tonne target. This gap highlights a mismatch between the scale of the EU's ambitions and the capacities of its current policy. To scale hydrogen production, the EU must surpass tremendous technological, economic, and regulatory barriers—it should not come as a surprise that the <a href="https://www.eca.europa.eu/en/publications/SR-2024-11" target="_blank" rel="noopener">European Court of Auditors</a> has called for a "reality check,” noting concerns about whether sufficient demand can support such large volumes of hydrogen.
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Our <a href="https://www.carbonfreeeurope.org/modelling" target="_blank" rel="noopener">2024 Annual Decarbonisation Perspective</a>—which maps Europe’s various pathways to net-zero— suggests that Europe’s domestic clean hydrogen supply and demand could reach 20-22 million tonnes by 2050 (see Figure 1), around 4-5% of final energy consumption (see Figure 2), which is below the 10% projected by <a href="https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en" target="_blank" rel="noopener">REPowerEU</a>. 
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The central focus of these metrics should be to achieve EU decarbonisation through a balanced energy system. Rapidly scaling up hydrogen production, especially green hydrogen, which demands significant renewable energy, could divert resources from sectors where direct electrification is more efficient. A pragmatic strategy would prioritise hydrogen for hard-to-decarbonise sectors, like shipping and aviation, while reserving direct electrification for heating and other applications where it’s more effective. 
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<h2>Recommendations: </h2>
Tech-Inclusive PPAs: Implement PPAs for diverse low-carbon sources, ensuring a stable energy supply to support hydrogen production at scale.
Funding Mechanisms: The new EU budget should enable these funds (or these new fund structures) to address critical needs:
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The <a href="https://climate.ec.europa.eu/eu-action/eu-funding-climate-action/innovation-fund_en" target="_blank" rel="noopener">European Innovation Fund</a> can support hydrogen infrastructure and storage projects.
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<a href="https://research-and-innovation.ec.europa.eu/funding/funding-opportunities/funding-programmes-and-open-calls/horizon-europe_en" target="_blank" rel="noopener">Horizon Europe</a> can advance hydrogen R&amp;D, fostering innovation across the supply chain.
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The <a href="https://cinea.ec.europa.eu/programmes/connecting-europe-facility_en" target="_blank" rel="noopener">Connecting Europe Facility</a> can fund crucial grid upgrades and interconnections needed to integrate hydrogen production and demand.
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So while the EU may face challenges in meeting its ambitious 2030 hydrogen targets, this should not deter long-term planning. The 2040 hydrogen goals remain attainable with a pragmatic, balanced approach to decarbonisation and a flexible, adaptive strategy. This should involve setting clear intermediate milestones and regularly assessing infrastructure readiness, technological progress, and supply chain integration.
<h2>Expanding Power Purchase Agreements (PPAs) and Diversifying Energy Sources</h2>
To fully unlock hydrogen’s potential, immediate action is needed to address infrastructure gaps including electrolyser manufacturing and deployment, regulatory challenges, and the diversity of energy sources. Relying solely on renewables for hydrogen production could limit scalability and stability, while incorporating a wider array of low-carbon sources—such as nuclear via Power Purchase Agreements (PPAs)—will ensure a reliable hydrogen supply that can adapt to demand growth.
<h2>Leveraging EU Funding Mechanisms for a Resilient Supply Chain</h2>
Leveraging EU funding mechanisms such as the <a href="https://climate.ec.europa.eu/eu-action/eu-funding-climate-action/innovation-fund_en" target="_blank" rel="noopener">European Innovation Fund</a>, <a href="https://research-and-innovation.ec.europa.eu/funding/funding-opportunities/funding-programmes-and-open-calls/horizon-europe_en" target="_blank" rel="noopener">Horizon Europe</a>, and the <a href="https://cinea.ec.europa.eu/programmes/connecting-europe-facility_en" target="_blank" rel="noopener">Connecting Europe Facility</a> is crucial to support hydrogen infrastructure, R&amp;D, and necessary grid upgrades. These funds can drive essential investments to scale hydrogen production while supporting technological advances across the value chain. With targeted funding for both deployment and infrastructure, the EU can ensure a resilient hydrogen supply that aligns with its climate and energy security goals. The new EU budget should ensure these funding mechanisms are accessible and the process is as streamlined as possible. 
<h2>Supporting a Full Hydrogen Supply Chain through Hydrogen Valleys</h2>
The <a href="https://www.clean-hydrogen.europa.eu/get-involved/hydrogen-valleys_en" target="_blank" rel="noopener">EU’s Hydrogen Valleys</a> offer a whole-systems approach, integrating hydrogen production, storage, and usage across local economies. Supported by initiatives like the <a href="https://www.clean-hydrogen.europa.eu/index_en" target="_blank" rel="noopener">Clean Hydrogen Partnership</a>, these Hydrogen Valleys demonstrate hydrogen’s scalability and its role in building a skilled, competitive workforce for Europe. Projects in regions like the <a href="https://heavenn.org/about/" target="_blank" rel="noopener">Northern Netherlands</a> and <a href="https://www.moeveglobal.com/en/press/spain-and-the-netherlands-promote-the-green-hydrogen-maritime-corridor" target="_blank" rel="noopener">Spain’s Hydrogen Corridor</a> are essential for meeting both EU competitiveness and net-zero goals.
<h2>Conclusion</h2>
To achieve the EU's decarbonisation goals and enhance competitiveness, prioritising hydrogen for hard-to-decarbonise sectors while ensuring a balanced use of renewable resources is crucial. By investing now in Hydrogen Valleys, accelerating market creation for hydrogen and an inclusive framework, the EU can establish a resilient hydrogen economy, enhancing energy security and decarbonisation efforts across the continent.

Turning a 2030 Shortfall into a 2040 Win: The Case for Flexible Hydrogen Policy

Carbon-Free Europe (CFE) welcomes the European Commission’s continued work on developing a robust methodology for assessing greenhouse gas (GHG) emissions savings from low-carbon fuels. However, excluding key low-carbon energy sources from this process risks diminishing the role hydrogen can play in the energy transition, and more broadly slowing the transition overall . To fully realise the true potential of low-carbon hydrogen production, it is critical that the methodology takes into account the role of these key low-carbon energy sources in hydrogen electrolysis, such as nuclear power, particularly through Power Purchase Agreements (PPAs) and Contracts for Differences (CfDs).
One of the key issues with the current draft is the reliance on the bidding region/national average emissions intensities when calculating the GHG emissions associated with electricity used for hydrogen production. This approach risks distorting the actual environmental impact of hydrogen production by failing to reflect the specific energy mix used in real-time. In particular, averaging emissions at the country level can obscure the contributions of clean energy sources like nuclear power, which may supply low-carbon electricity during times when renewable generation is unavailable or insufficient. Such a distortion toward a resource with significantly growing demand in the coming decades could significantly impact its supply and thus any energy transition opportunities related to it.
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CFE’s energy systems modelling shows that clean hydrogen demand will grow 50x, with 4-5% of total final energy consumption by 2050 (see Figure 1). With that contribution, clean hydrogen has the potential to play a transformative role in decarbonising hard-to-abate sectors such as heavy industry and long-haul transport. However, the type of hydrogen supply—whether through steam reforming (grey hydrogen) or electrolysis (green/clean hydrogen)—makes a critical difference for emissions purposes. Our model foresees the use of grey hydrogen until 2045 (see Figure 2), and with that GHG emissions in the production of hydrogen. But to accelerate the transition to hydrogen produced via electrolysis, we must ensure the availability of sufficient clean electricity. This requires a commitment to supporting diverse low-carbon electricity sources, including nuclear, through mechanisms like PPAs. Electricity demand is growing everywhere and at a rapid pace, as the need to decarbonise our economy accelerates. Hence, the regulatory framework should reflect a pragmatic approach where all viable low-carbon energy sources are at our disposal. Doing otherwise significantly increases delivery risk as the EU prepares  for a tripling of electricity demand across all sources (see Figure 3). 
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Additionally, excluding nuclear PPAs from the Delegated Act risks underestimating the contribution that nuclear power can make to the energy system. Nuclear energy provides a low-emissions, stable electricity source that can complement renewable generation, especially during periods of low renewable output. The current methodology misrepresents the true emissions reductions that nuclear power can achieve in low-carbon hydrogen production. To prevent an unfair penalty toward low-carbon hydrogen producers, and to fully account for the actual source of electricity, and secure the energy system, nuclear PPAs should be included in the low-carbon hydrogen definition before 2028.
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Finally, to ensure that the EU’s hydrogen strategy is both effective and equitable, it is essential that the methodology for assessing GHG emissions savings represents a truly technology neutral approach that relies on all viable technologies. The EU’s climate targets and its broader decarbonisation strategy will require the scaling of multiple clean energy technologies in tandem (see Figure 2), and focusing solely on renewables for low-carbon fuels narrows the path to decarbonisation. By including nuclear PPAs in the low-carbon hydrogen definition and the emissions calculation framework, the EU can better support scaling of low-carbon fuels and ensure a competitive, secure, and cost-effective transition to net-zero.
Given the urgent need to meet the EU’s decarbonisation objectives, there is no time to delay the inclusion of nuclear PPAs in the current methodology. Long-term planning and significant investments are needed for nuclear facilities, so the sooner these PPAs are in place, the more effectively the EU can scale up hydrogen production. By acting now, the EU can ensure that the infrastructure and energy sources needed for hydrogen production are aligned with its long-term climate and energy security goals.
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<h2>Recommendations for Adjusting the Delegated Act</h2>
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Explicit Inclusion of Nuclear PPAs: The Delegated Act should explicitly include nuclear PPAs for low-carbon hydrogen production, as nuclear power provides stable, low-emissions electricity that complements renewable energy.
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Technology-Neutral Approach: Ensure that all low-carbon energy sources, including nuclear, are recognised in the emissions calculation methodology, encouraging flexibility in achieving net-zero and enhancing energy security.
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Shift to Source-Specific Emissions: Move away from using national average emissions for hydrogen production, and instead, account for the actual electricity source to provide a more accurate and fair reflection of GHG savings.
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Incorporating these recommendations would reflect the full spectrum of low-carbon energy options available. CFE emphasises the importance of including nuclear PPAs and adopting a technology neutral approach. By doing so, the EU can better support electricity growth and hydrogen production while maintaining its competitiveness in the global energy transition.

Ensuring Accurate Accounting for Low-Carbon Hydrogen Production through Nuclear Power PPAs

As part of implementing the emissions reduction targets outlined in the European Green Deal, Romania has adopted its Long-Term Strategy (LTS) for Decarbonisation until 2050 and is currently revising its National Energy and Climate Plan (NECP). To support Romania in finalising these strategies, Carbon-Free Europe (CFE), in partnership with <a href="https://www.evolved.energy/" target="_blank" rel="noopener">Evolved Energy Research</a> and the <a href="https://www.enpg.ro/" target="_blank" rel="noopener">Energy Policy Group</a> (EPG), have developed a detailed energy systems model to outline clear steps Romania can take to hit its 2030, 2040, and 2050 climate targets while driving economic growth.
This analysis explores multiple decarbonisation pathways for Romania, considering combinations of all carbon-free technologies and policies that can guide Romania towards climate neutrality. The study highlights key measures for policymakers and broader stakeholders  to consider  including expanding clean energy capacities, electrifying key sectors, reducing final energy consumption, and limiting natural gas investments.
Romania’s energy landscape is currently characterised by its reliance on coal and natural gas, making the transition to clean energy a complex challenge. To meet the EU’s ambitious climate targets, including a 55% reduction in net greenhouse gas emissions by 2030, the country will need to accelerate its shift to clean energy, increase energy efficiency, and invest in new technologies such as carbon capture and storage (CCS) and hydrogen. Deploying and expanding CCS and hydrogen infrastructure by 2030 and beyond will play a critical role in decarbonising Romania’s industry and ensuring energy security. 
With the right combination of clean technologies and policies, Romania can not only decarbonise its economy in line with the EU’s net-zero commitments, but ensure continued economic growth and durable energy security. This study provides Romania with insights into realistic pathways to meet climate targets, offering clear, data-driven scenarios. For more detailed analysis, click here for the full <a title="https://www.enpg.ro/pathways-for-decarbonising-romanias-economy/" href="https://www.enpg.ro/pathways-for-decarbonising-romanias-economy/" target="_blank" rel="noopener" data-ogsc="" data-outlook-id="142b919b-4b27-4048-8d5c-f760c69ebcdb">policy paper</a>, and deep dives on <a title="https://www.enpg.ro/the-role-of-carbon-capture-in-romanias-low-carbon-economy/" href="https://www.enpg.ro/the-role-of-carbon-capture-in-romanias-low-carbon-economy/" target="_blank" rel="noopener" data-ogsc="" data-outlook-id="68691cad-f839-478a-b7f9-ca423556cb10">CCS</a> and <a title="https://www.enpg.ro/the-role-of-hydrogen-in-romanias-low-carbon-economy/" href="https://www.enpg.ro/the-role-of-hydrogen-in-romanias-low-carbon-economy/" target="_blank" rel="noopener" data-ogsc="" data-outlook-id="57661c73-23fc-43af-90e6-9b161b60cbe9">hydrogen</a>.
To explore all of our results, see below the full data Tableau.
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Pathways for Decarbonising Romania’s Economy

Beware of declarations that the recent European parliamentary elections offered a clear verdict on the continent’s politics. It was neither the endorsement of the far-right that many feared nor the validation of the status quo that would make governing easy for the next five years. The European People’s Party (EPP), which leads the current EU governing coalition and is the home of European Commission President Ursula von der Leyen, remains in power. The agenda enacted over the past five years will remain in place. The results, however, are a cautionary tale. Policymakers and NGOs must quickly adapt to a future that could prove to be even more unstable than today’s economic and political turmoil.
Europe did dodge the bullet of a far-right sweep of the parliamentary elections. Voters across the Nordic countries, in much of Central and Eastern Europe, and on the Iberian peninsula backed mainstream parties. The news, however, was different in Europe’s three most populous and economically powerful countries, Germany, France, and Italy. There, far-right nationalist parties continued their march into the mainstream, offering a much more complex scenario for the future of Europe and the fate of clean energy and climate policy.  
The EU cannot maintain the status quo of how climate policy is formulated and communicated to voters. These policies, and how they are discussed, are alienating large groups of Europeans who feel left behind and disenfranchised. This is being exacerbated by populist extremists on both ideological fringes, particularly on the far-right. The question now is whether governments, political institutions, and NGO communities that have created Europe’s climate and clean energy agenda can adapt quickly enough to reassure Europeans and rebuff the far-right where it remains strong or is growing.
<h4>The Implications for the Next EU Parliament and Legislative Agenda</h4>
The conclusion of the European parliamentary election is only the start of the process of determining the next EU political leadership and ruling majority.  National delegations will now enter into negotiations to form the European political groups—large groupings of cross-national political families. While these negotiations are ongoing, the center-right EPP, which has secured the largest number of seats in parliament, is expected to solidify the ongoing majority coalition with the center-left Progressive Alliance of Socialists and Democrats (S&amp;D) and classic liberal Renew Europe. The far-right nationalist ID Party, and unaffiliated nationalist parties like Germany’s Alternative for Germany (AfD), will likely be excluded from the next government, though the European Conservative and Reformists (ECR) group may align with the EPP’s majority position on some issues. This balance of power in the Parliament will also determine the political leadership in other key EU institutions, including the appointment of the next European Commission President.
However the next EU government emerges, we expect the EU Parliament and Commission to follow only a slightly more center-right policy agenda than the current status quo. Current European Commission President Ursula von der Leyen, who has been in office since 2019, is likely to receive a second term. This means continued implementation of the Green Deal, industrial competitiveness, and the EU climate commitments enacted since 2019 remain in place.
It is, however, an open question as to how much new legislation the next government can enact, especially with a potentially narrower majority. A more empowered set of far-right and nationalist parties could cause more disruption and attempt to slow policymaking down. Even here the far-right’s actions are unpredictable. These parties are fragmented. While most are aligned in opposition to migration and criticism of enacted climate action, they hold conflicting views on how to deal with Russia and China and where they fall regarding Euroscepticism. They could try to undermine Europe’s unity in support of Ukraine and the overall strengthening of the Union, but that path is far from certain. Issues like agriculture, biodiversity, and migration policy could become more tenuous, with coalition partnerships shifting based on the topic. This will lead to more tension, less predictability, and potentially more protracted negotiations over some files.
<h4>National Influence of the European Election</h4>
We should also look at the results of the EU elections from a Member State by Member State perspective. Contrary to many headlines, there was not a far-right wave across the continent. Results can be divided into two camps. The far-right gained or reinforced their support in Europe’s three largest countries, Germany, France, and Italy. It failed to live up to expectations almost everywhere else, notably in Spain, Poland, Portugal, Slovakia, Sweden, and even Hungary.
The biggest takeaway from Germany, France, and Italy is the normalizing of the far-right. The AfD in Germany, the National Rally in France, and the Brothers of Italy all trace their roots to World War II-era fascist parties. Until Brothers of Italy leader Giorgia Meloni became Italian Prime Minister in October 2022, none had ever gained power.  During this election, France’s National Rally outperformed every other party, prompting President Emmanuel Macron to call a snap election for June 20 and July 7. If the National Rally emerges as the strongest party in France in these snap elections, yet another major European economy falls under the influence of the far-right. At the EU level, these three national far-right parties are not fully aligned and have not yet agreed to cooperate, with Meloni and the Brothers of Italy supporting Ukraine and the European Union, while AfD and National Rally are suspiciously pro-Russia.
Across the rest of Europe, there were a variety of national factors that led to the underperformance of the far-right. We shouldn’t read too much into the overall results and try to find pan-European trends. However, it is interesting to note that in several countries—Poland and Hungary in particular—incumbent or recently defeated far-right parties lost ground. This is in keeping with the global anti-incumbent mood among voters.  The combination of the mainstreaming of the far-right and general anti-incumbency sentiment will only make policymaking and navigating European politics more difficult.
<h4>Lessons for Policymaking and Framing</h4>
The broader challenge facing policymakers, political parties, and NGOs is how to interpret these results. There is a danger in viewing it as an endorsement of the past five years’ policies and framing of issues. Persistent voter discontent, a growing anti-incumbent backlash, and the mainstreaming of far-right nationalist parties point to systemic risk. The pace and the volume of legislation cannot continue in the next five years. Nor can it be oriented or framed around issues that many European voters feel are out of touch with, or negatively impact, their daily lives. The new EU leadership, and NGOs that support them, must be explicit about how the Green Deal’s implementation will help improve the lives of everyday Europeans, support industry and agriculture in the EU, and reduce costs.
Reframing the actions the EU has taken over the past five years, justifiably, around improving the continent’s security and competitiveness is an important start to addressing Europeans’ concerns. The next step is to use these policies to enable each Member State to take the actions that will accelerate decarbonization, and address the economic and security issues front and center in their citizens’ minds. If these policies, however, limit or are cast by the populist Right as limiting Europeans’ choices or increasing their costs in the name of “climate action,” the chance of creating an even greater backlash is significant.
<h4>Conclusion</h4>
It is still too early to form firm conclusions on the full impact of the EU elections, and the results were too varied to apply generalizations to the entire Union. Moving forward, members of the climate and energy community must acknowledge that a change of approach is needed in the new mandate to ensure the durability of the net-zero transition. Continuing to engage in technical support for policy implementation and highlighting the need for Transatlantic cooperation on these, ultimately global, issues is important. It is even more critical now to acknowledge and address voter discontent, which is also being exploited by the far-right. There is an opportunity here to build on some of the synergies across US and EU audiences to engage citizens who feel uneasy with the changes occurring, or more insecure because of the cost of living and security crises, and incorporate their concerns in building a broader vision for climate action that is centered around competitiveness, energy security, transatlantic cooperation, and democracy.

EU Election: Short-Term Relief, but Long-Term Threat from the Far Right

In anticipation of Poland’s submission of its updated National Energy and Climate Plan (NECP/KPEiK) to the European Commission in June 2024, Carbon-Free Europe (CFE) commissioned Evolved Energy Research, in collaboration with the Silesian University of Technology (SUT), the Institute of Power Engineering - National Research Institute, and Princeton University’s Andlinger Center, to conduct an extensive energy systems modelling study. The objective of the two-phase project is to delineate pathways for Poland to achieve net-zero emissions by 2050, thereby informing not only the NECP revision but also future policies, national strategies, and long-term investments.
The two-phase Net-Zero Poland (NZP) study provides a first-of-its-kind, detailed and transparent articulation of alternative pathways for Poland to transition to net-zero emissions by 2050. The study aims to inform energy-transition strategy, policy formulation, and investment decision making in both the public and private sectors. Below you can find the results of the first phase of the project, which was led by CFE and provides critical and data-based insights on a national and international level. The second phase, led by SUT, will use the data to run a higher spatial resolution model that enables key land-use, socio-technical, environmental, and investment challenges to be discussed at the voivodeship, powiat, and gminas level.
Poland’s energy landscape remains more heavily reliant on fossil fuels compared to other EU Member States. Because of this, Poland faces unique challenges to meet the EU’s ambitious emissions reduction targets under the Fit for 55 package, while ensuring coal regions are not left behind and energy prices remain affordable. The <a href="https://commission.europa.eu/publications/poland-draft-updated-necp-2021-2030_en" target="_blank" rel="noopener">NECP draft update</a> sets ambitious targets for Poland, aiming for a 29.8% share of renewable energy sources (RES) in gross final energy consumption by 2030 (compared to 9.4% in 2022).1
With a well-designed implementation strategy, Poland can achieve a just transition, zero-emission energy system, and improved air quality as outlined in the proposed <a href="https://www.gov.pl/web/climate/energy-policy-of-poland-until-2040-epp2040" target="_blank" rel="noopener">Energy Policy of Poland until 2040 (PEP2040)</a>. This strategy relies on a diverse energy mix to be successful, including accelerating renewable deployment alongside nuclear energy. 
Our analysis explored eight different pathways for Poland to reach net-zero, each of which has different cost implications and feasibility risks. In this report, we highlight results in six key areas: 1) achieving clean heat, 2) future of coal with carbon capture and storage, 3) role of nuclear energy, 4) renewable resource availability, 5) essential hydrogen interconnector, and 6) electric vehicles.
The full technical report can be found <a href="https://assets.ctfassets.net/228txxvb8tt7/2iDzvF9Di2nVrTywjEAdER/dbdcc3fbbd738d4abd902d190f4f1507/Poland_NECP_Analysis.pdf" target="_blank" rel="noopener">here</a>. A full data Tableau with interactive results can be found at the end of this publication.
<h2>Achieving Clean Heat</h2>
Achieving a clean and decarbonised heating system for Poland requires two main strategies 1) replacing in-home coal and biomass boilers with heat pumps and 2) decarbonising steam supply for district heating and industry. Today, around 60% of residential buildings rely on coal or biomass boilers, 35% on district heating systems, and 5% on heat pumps. In our Core pathway, the percentage of homes with heat pumps needs to jump to 17% by 2030 and 45% by 2050. These heat pumps replace in-home coal and biomass boilers while district heating systems are preserved and decarbonised upstream. To achieve this goal, Poland requires a supply chain to install heat pumps in over 200,000 homes per year and more than quadruple electricity supply by 2050. 
Below you can see how steam for district heating, as well as industry, is decarbonised. Currently, steam is principally produced through coal power plants and boilers. The coal phaseout for steam production is achieved primarily through the deployment of large heat pumps, with some gasification in the short-term. Beyond 2030, nuclear facilities also play an important role in providing steam, providing up to 14% of supply.
<h4>Figure 1: Steam production across all modelled pathways.</h4>
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<h2>Future of Coal with Carbon Capture and Storage</h2>
Our pathway “High Coal w/ CCS” models what would happen if Poland were to keep coal in its energy economy system with up to 15 GW of coal capacity by 2050, equal to about 50% of the current fleet. We ran this pathway not to recommend preserving coal capacity, but to demonstrate the trade-offs in a strategy banking on carbon capture technology with coal or hoping to delay renewable deployment for future technology breakthroughs. As you can see in Figure 2, keeping coal creates a lower need for gas power compared to the Core pathway, but it does not negate the need for nuclear and renewables.
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Figure 2: Electricity capacity in the “Core” versus the “High Coal w/ CCS” pathway
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There are two potentially insurmountable challenges with the “High Coal w/ CCS” pathway: 1) costs and 2) carbon capture transport and storage infrastructure needs. A future bound to coal is the highest cost pathway and extremely expensive toward 2050 with at least 8.0 billion EUR more investments compared to our "Core" Pathway in the year of 2050 alone. It also requires over 100 megatons (Mt) of CO2 exports annually on top of an annual 20 Mt domestic CO2 sequestration and some domestic CO2 utilisation (Figure 3). Achieving these scales of operations for both sequestration and export requires careful planning. Expanding CO2 pipelines to Germany and other Central European countries as well as the Nordics is required in all pathways, but needs to be scaled up significantly in the case of keeping coal within the energy system.
Irrespective of the economics of CO2 pipelines and deployment of carbon capture, utilisation, and storage (CCUS) technology, Poland will need to adhere to the European Union’s Renewable Energy Directive (<a href="https://energy.ec.europa.eu/topics/renewable-energy/renewable-energy-directive-targets-and-rules/renewable-energy-directive_en" target="_blank" rel="noopener">RED III</a>) and account for ageing coal infrastructure that will need replacement regardless of climate targets.
<h4>Figure 3: Carbon capture sequestration in Poland, export, and utilisation.</h4>
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<h2>Role of Nuclear Energy</h2>
In all our model pathways nuclear energy plays a significant role in providing zero carbon electricity for the power sector as well as steam for industrial processes and district heating (see “Achieving Clean Heat”) and hydrogen production (see “Essential Hydrogen Interconnector”). We consider the potential of different sizes and types of reactors, including large light water reactors and advanced small modular reactors. 
In the power sector, nuclear energy provides 19 GW of electric capacity by 2050 in our “Core” pathway. With less nuclear deployment due to cost constraints, represented with our “High Nuclear Costs” pathway, Poland would need to deploy more than three times the capacity of alternative clean energy resources. Figure 4 shows that replacing 19 GW of nuclear energy requires building more than 70 GW of alternative resources including majority solar, offshore wind, gas, and storage. The total electric capacity needs to be higher to provide the same electricity generation, including an increased gas peaker capacity and more electric storage to balance the grid. 
<h4>Figure 4: Change in electricity capacity for the “High Nuclear Costs” pathways compared to “Core”</h4>
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Offshore wind power becomes especially important in any pathway with limited nuclear energy deployment as solar and onshore wind power are using almost all available resources (see Figure 6). As you can see in Figure 5, the technologies have an inverse deployment relationship. High nuclear cost increases offshore wind demand and vice versa as shown by the “High Offshore Wind Costs” pathway. Considering cost and subsequent deployment uncertainties, a flexible framework that incentivizes the buildout of both nuclear and offshore wind is necessary.
<h4>Figure 5: Electricity generation across all modelled scenarios.</h4>
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<h2>Renewable Resource Availability</h2>
The EU requires Poland to reach 42.5% renewables in final energy consumption by 2030, a target that Poland can reach considering wind and solar resource potential. In our analysis, we consider the potential of renewable resources based on land use availability, resource quality, and relative economics compared to other clean energy resources. Reaching this target for final energy consumption will require Poland to ramp up its current power sector target of 50% renewables by 2030 and the electrification of the transportation sector (see “Electric Vehicles”). Our pathways suggest Poland should achieve 60-66% renewables in the power sector by 2030 even while total electricity generation increases by 50% compared to 2022.
Below you can see the Wind and Solar Resource Potential for Poland (orange) and how much of the renewable resources are used in each pathway over time (blue) to meet the renewable energy share. Onshore wind is a valuable resource that is maxed out in all pathways by 2040, except in a pathway where we explicitly prevent additional onshore wind builds. The vast majority of fixed offshore wind resources are used up over time as well and most pathways are also tapping into more expensive floating offshore wind resources. If nuclear power is prevented due to high cost or if onshore wind cannot be deployed, both fixed and floating offshore wind resources are facing maximum use. Solar is deployed across all pathways and large-scale deployment is maxed out if nuclear deployment is limited.
<h4>Figure 6: Wind and solar resource potential.</h4>
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<h2>Essential Hydrogen Interconnector</h2>
Poland is currently the third largest hydrogen producer (1.3 Mt H2/year2) and consumer (0.8 Mt H2/year3) in Europe and fifth largest producer in the world. Building on this workforce and experience, Poland can establish a clean hydrogen industry that fulfils domestic hydrogen demand (a key priority for energy security) and interconnects and exports hydrogen from the Baltics to Germany and other nations in need. 
Figure 7 shows Poland’s domestic hydrogen production. Across all pathways, Poland can leverage its hydrogen experience, future nuclear and offshore power, and biomass resources to become a large-scale hydrogen producer. The “High Biomass” pathway sees the most hydrogen product due to expanded BECCS hydrogen and nuclear heat electrolysis potential.
Poland’s strategic location makes it an essential hydrogen interconnector for pipelines between the Baltics and Germany and other Central European countries. As shown in Figure 7, Poland can take hydrogen from the Baltics and domestic production, use it as a feedstock to produce e-fuels and ammonia, and export these alternative fuels. Fostering collaboration and strategic partnerships with neighbouring countries will create a cohesive regional hydrogen and alternative fuel network, leveraging an economic opportunity for Poland as a hydrogen interconnector.
<h4>Figure 7: Hydrogen supply and demand</h4>
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<h2>Electric Vehicles</h2>
Early and large-scale electrification, especially of the transportation sector, plays a vital role in the transition to a net-zero emissions economy. The difference between a short-term (“Core” pathway) and long-term electrification (“Slow Consumer Uptake” pathway) in transportation is a much higher price tag during a delayed transportation electrification. 
Below are the additional costs or savings by 2030 or 2050 compared to our Reference pathway that does not achieve net-zero emissions. On the one hand, slow electrification in transportation saves money in the near-term as no or little investments are made into electric vehicle infrastructure. On the other hand, slow electrification ends up costing significantly more money in the long-term because the system has little build-out of cost- and energy-efficient EV infrastructure and requires a higher dependency on expensive zero-emissions liquid fuels to achieve net-zero targets.
The electric vehicle deployment differences between the Core and Slow Consumer Uptake pathway are significant. In the most economic Core pathway, Poland will have 8.5 million passenger and 660,000 freight EVs by 2030. In the Slow Consumer Uptake pathway, only 1.9 million passenger and 220,000 freight EVs will be in Poland by 2030—a third to a quarter of the capacity of the Core pathway.
<h4>Figure 8: Transportation system costs across scenarios compared to Reference.</h4>
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<h4>To explore all of our results from NZP see below the full data Tableau.</h4>
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<h3><a href="https://carbonfreeeurope.imgix.net/Polands-Pathways-to-Net-Zero-Emissions.pdf" target="_blank" rel="noopener">Click here to view the full PDF. </a></h3>

Poland’s Pathways to Net-Zero Emissions

On February 6, 2024 the European Commission <a href="https://ec.europa.eu/commission/presscorner/detail/en/ip_24_588" target="_blank" rel="noopener">announced</a> that it would recommend a 90% greenhouse gas emissions reduction by 2040. Carbon-Free Europe’s (CFE) energy systems <a href="https://www.carbonfreeeurope.org/modelling" target="_blank" rel="noopener">modelling</a> points to what steps and transformative investments the EU must make to reach its 2040 climate targets, as visualised in the infographic below. <a href="https://assets.ctfassets.net/228txxvb8tt7/2YhvvGthkBrF4O26Xuc1PV/0a4a15adfddf512200d6d11f247153ee/vision_to_reality_negative_90_percent.pdf" target="_blank" rel="noopener">Click here to view the full PDF. </a>
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