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Kelsey Paulding Horizontal

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Lindsey Walter

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Berlaymont

Kelsey Paulding

EU Government Affairs Director

Blog

Memo

Co-founder of Carbon-Free Europe

Josh Freed

Board Chair

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.
<a href="https://public.tableau.com/app/profile/cfe2024/viz/DownscaledMaps/MAP"><img src="//images.ctfassets.net/228txxvb8tt7/2aFpNby6TKLARMhtkmgQGD/cae9bdc4876b34afbf82078d6706fe0a/CFE-Infrastructure_.png" alt="" width="2407" height="1080"></a>

Ambition Must Translate into Action: 2025 Commission Work Programme

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

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.

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Team

Ambition Must Translate into Action: 2025 Commission Work Programme

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

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