Trends in Sustainable Europe
The impact of green manufacturing on sustainability
Europe’s sustainability agenda is ambitious, broad, and important for businesses of all sizes to be aware of. Its legacy is likely to change workplaces, the product development cycle, consumer buying criteria and the very marketplace in Europe over the coming decade.
Like all disruption, these changes will create some challenges for business, but also a host of opportunities for innovative and agile brands.
The major themes of regulation stemming from the EU institutions in Brussels including energy efficiency, the circular economy, and reform of the carbon trading mechanism were covered in my first article in this series.
However, not all sustainability policy details emanate from Brussels. In this article, I wanted to offer a snapshot of the changing policy environment and drivers in the major national markets in Europe.
In Germany, national sustainability policy has had a notable impact on energy prices for businesses, but there have also been significant efforts to help businesses reduce their energy burden through government initiatives.
The government’s ‘Energiewende’ policy grabbed headlines internationally with its 2011 launch. The core focus is to transition away from nuclear and fossil-fuels, towards renewable energy generation. Targets include the total phase-out of nuclear power in Germany by 2020 and 60% of gross energy consumption sourced from renewables by 2060.
Despite criticism of resultant increases in energy prices, now the second most expensive in Europe, Energiewende is credited with driving down the cost of renewable technology globally. This policy may well position Germany as the home of innovative energy solutions that deliver real savings for business.
The government also estimates the energy efficiency savings potential for industry in Germany is approximately €10 billion annually. Germany’s National action plan on energy efficiency (NAPE) sets/out plans for CO2 reductions of 25 - 30 million tonnes. Much of this is to be implemented through energy-saving renovation to buildings.
Another opportunity called ‘the energy efficiency networks initiative’ encourages groups of 8 – 15 companies to work jointly to achieve a collective target for energy efficiency improvements, while share information and ideas on how to lower one another’s consumption. This initiative aims to establish approx. 500 new networks by 2020.
The World Economic Forum’s Global Energy Architecture Performance Index Report 2015 ranks France third globally, and first amongst EU countries, for sustainable energy infrastructure.
Nuclear power generation plays a key role, accounting for over 73% of electricity generation. France is keen to change this however, with 2015 legalisation aiming to reduce its share to 50% over coming years, raising renewables to fill the gap. This transition will not be easy, with predictions of reduced capacity and higher energy prices which could impact energy intensive business in particular.
In the wake of recent political upheaval of the referendum on EU membership, the Department for Energy and Climate Change was folded into the Department for Business, Innovation and Skills. It remains to be seen whether this downgrades the importance of climate policy, or demonstrates a realignment to support the vital role business will play in implementing sustainability policy.
The next 12 months will see significant scrutiny of policies emerging from the new department. Initial response from green business has been tempered by a generally well-received appointment of the new Minister of State for Climate Change and Industry.
And despite recent cut-backs in subsidies for renewable energy projects, the new administration’s altered economic policy could lead to more investment focus being given to sustainable business – much like the ‘green new deal’ stimulus package launched in the USA in the wake of the banking crisis.
Italy’s White Certificate Scheme is an initiative offering tradable proof of end-user savings aimed at driving efficiency in the energy industry. Advocates claim the scheme offers a market instrument which delivers energy efficiency without a burden on public finances, and it’s been effective in covering around 60% of Italy’s targets for the Energy Efficiency Directive.
Regulatory uncertainty, with the scheme only assured to 2020, alongside challenges accessing financing, could result in significant changes to the energy landscape. The success of the scheme over the next five years will play a vital role in defining that landscape.
Spain was perceived as a global leader in renewable energy a decade ago, but the financial crisis saw slashed subsidies and huge contraction in the sector, despite Spain having some of the highest solar potential in Europe.
A recent ‘sun tax’ on solar installations under 100kw has seen this potential further undermined, adding an economic burden to residential and business premises employing solar energy for self-consumption purposes. There is talk of a potential removal of this tax, which could symbolise a move towards further national support for sustainable solar energy production from a government perceived by the industry to be broadly sceptical.
A more efficient Europe requires active participation from business
The landscape around us is one which is shifting, and that shift will invariably be towards greater efficiency and ever more challenging goals for business. Ratification of the Paris climate agreement will require even more ambitious goals at a European and national level.
Businesses will have a huge role to play in delivering upon these targets, as their success will ultimately rely on a business community that is ready and able to adapt.
To read more about Epson’s own sustainability view the full report, or download the highlights from: