What the EU election result means for the environment and decarbonisation

By Lizzy Roberts, Director, Energy and Clean Tech

The European Parliament’s shift towards more climate-sceptic parties, at the same time as a significant hit to the green vote, is pretty disheartening for a climate campaigner.  

But after the initial punch to the gut, moments like these can be a good time to take stock of new dynamics, measure them against policy progress and figure out where to go next. Below we look at what the shift in seats means for the ability of the European Parliament to pass legislation and how policy might need to adjust to meet the expectations of different parties. 

A shift back to nation-state ownership of green agendas 

The composition of the coalition needed to pass legislation in the European Parliament is still to be determined, however the European Peoples Party (EPP) remains the lead party. European Commission president Ursula von der Leyen is currently in conversations with parties to secure a second five year term as President (the European Commission president needs the backing of Parliament as well as EU national leaders) but she is already expected to need the support of a much broader church. 

The EPP’s mandate will remain the guiding force behind European legislation. Though lacking on environmental initiatives, the EPP’s manifesto remains committed to the EU Green Deal,  and continues to see the set of proposals as crucial to the competitiveness of the EU block. The Socialists and Democrats (S&D) were more ambitious in their manifesto commitment to the Green Deal, but with such a significant right of centre force in the form of the European Conservative and Reformists Group (ECR), it’s likely some of the climate ambition will need to be tempered, to prevent backlash. The good news is that we’ll see the impact of environmental legislation already laid in member states in any case, like the Water Framework Directive requiring good status in all bodies of surface water and groundwater by 2027.  However, for upcoming environmental legislation a slight shift further to the right increases the prospect of the need to broker compromises and trade-offs.    

What this may mean in practice is greater autonomy or flexibility left to nation states on how to achieve the outcomes in the detail of the next phase of environmental legislation or Green Deal.  

The social justice elements of the transition are more important than ever 

A further conclusion we can draw is that action on climate change will be acutely sensitive to issues of fairness and costs. Whether or not it’s justified, there’s no doubt that the attack line that climate action has negatively impacted on the cost of living has cut through in some European nations, and has been used to fuel backlash to ‘green initiatives’.  

Fairness has been prominent across EU party manifestos and commitments, with signposting to SMEs, farmers and fishers that they’ll be supported in the transition (EPP), that social justice and climate justice are interconnected (S&D) or that transfers of EU funds need to go to the mining regions of Europe most affected by the transition (ECR). We can expect any climate change initiative to be more focused on cost impacts.  

This also translates to greater ‘optionality’ in how nation states reach their targets and which technologies they use. Which technologies are categorised as ‘green’ has been cause of great contention between EU nation states in recent years. We’re likely to see approaches that leave greater potential for biomass, nuclear, gas and hydrogen under the guise of a technology neutral approach.  

The role of private business and leadership is more important than ever  

Faced with waning climate and nature momentum from the EU, we can take comfort in the growing number of corporate green frameworks and net zero strategies introduced in recent years.    

2024 and 2025 will see the introduction of major sustainability reporting legislation, demonstrating which businesses worldwide are effectively moving their operations sustainably and responsibly toward net zero.  

Though ambition for the implementation of the European Green Deal may soften, market innovations, sustainable finance initiatives and consumer choices will continue to drive change. Evolving demand side response markets are making better use of renewable generation, carbon and nature markets are channelling finance into environment and decarbonisation, and circular economy products are improving understanding and interest in the life cycle of waste. 

When campaigning for a lower carbon future it’s long been the case that we need to keep a consensus and to do that, a just transition and arguments around economic benefits are critical. This election brings this need into sharper focus.  

It would be an enormous mistake to confuse this week’s result as a ‘down and out’ moment for the green agenda, but environmental initiatives do need to be coherent and fair to consumers. What’s crucial now is that campaigners and leading businesses celebrate what works, explain the benefits and opportunities to households and economies across Europe, and continue to emphasise that clarity and consistency in regulation is crucial to investability and competitiveness of EU markets and businesses.