With France 2030, the country is attempting to transform existing value chains, such as steelmaking, automotive and aerospace, from 20th century strengths into competitive industries for a decarbonising 21st century, while building the industrial and energy infrastructure necessary for that transformation to be one that is truly “Made in Europe”.

A project developer needs to be sure of their tools and materials before the workers can break ground. Any disruption to the supply of materials or connection to the grid leads to delays, cost overruns, and the prospect of failure. Transforming entire industries requires the same considerations, but on a national scale. In our latest I4CE paper, we examine the progress made across three value chains crucial for France’s green industrial base – batteries, green steel, and synthetic sustainable aviation fuels.  

Fortunately, policymakers can already point to good progress on the ground. From the gigafactories and the emerging “Vallée de la Batterie” in the north and Arcelor Mittal’s landmark €1.3bn investment in Dunkirk to Fos-sur-Mer in the south, new green industrial ecosystems are being built.  

Yet weaknesses in the supply chain could risk this momentum hitting a brick wall. Several projects across all three sectors are stalled, waiting for final investment decision. Investors, for their part, are hesitant to commit to risky, innovative projects in the face of higher productions costs and stiff competition from China and other global players.  

To keep this project on track, policymakers need to take another look at their toolbox, such as targeting public funds at supporting projects over the finish line and during their difficult first years of operation. Doing so is a matter of urgency. The plans are drawn, the groundwork laid – but unless financing catches up with ambition, the green industries of tomorrow will be built elsewhere. 

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L’article France has the blueprint for green reindustrialisation – but does it have the necessary tools ? est apparu en premier sur I4CE.

Many solutions exist to meet these objectives, but all require one essential component: planning, and in particular long-term investment planning. The forthcoming revision of the Governance Regulation of the Energy Union and Climate Action offers a unique opportunity to transform the National Energy and Climate Plans (NECPs) into genuine investment plans. These plans could enable Member States not only to address the current energy price crisis by accelerating the energy transition, but also to drive the modernisation and economic development of their countries. To achieve this, these plans must go beyond a tick-box compliance exercise and be backed by political ambition to reflect Member States’ strategic priorities. Their framework must also adapt to the investment strategies already in place within Member States.

In response to the European Commission’s consultation on the revision, I4CE outlines the key components of a climate and energy investment plan. We propose a toolkit to assist policymakers in designing these plans, from estimating climate investment needs, to defining public policies and spendings to close the investment gap, and accounting for macroeconomic implications. We also highlight critical success factors for implementation, including incentives linked to the EU budget, capacity building support, and the need for improved tracking of private investment data at the European level. 

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L’article Turning national and energy climate plans into investment plans est apparu en premier sur I4CE.

France, autumn 2021: faced with a sharp rise in energy prices, the French government announces a package of emergency measures within a few months to protect households and businesses. Cost to the public finances from 2021 to 2024: nearly €100 billion, including €10 billion for aid directly linked to rising fuel prices alone. 

France, March 2026: faced with a sharp rise in energy prices, questions about what the government should do are resurfacing. And whilst the French local elections partially overshadowed the search for solutions to the price crisis until last week, the French government will need to stand firm in the coming weeks. Particularly on the urgent issue of oil. 

No discount at the pump 

2022 was the year of the pump discount in France, and in many other Member States. In the absence of preparation, resorting to such a measure made political sense: immediate implementation; via an existing distribution channel; and visible assistance with every fill-up. 

But this discount suffers from the same three flaws as a generalised reduction in fuel taxes. Inefficient, it benefited many households that had absolutely no need for it. A drain on public funds, it cost France €8 billion in 2022. Disastrous for sovereignty, it further trapped the country’s economy in its costly dependence on imported oil. 

Imperative in 2026, for all the EU Member States: reserve any pump discount or similar measure solely for low-income households with no alternative, and set a time limit on it. The European Council, in its conclusions on March 19, called on the Commission to present a toolbox of targeted temporary measures to address the recent spikes in the prices of imported fossil fuels.  

Energy sufficiency 

Now, however, is the time to implement an energy sufficiency plan, as France and other EU Member States did in 2022. First, individual energy sufficiency, which can be implemented immediately, at least for those who have the means to do so: carpooling, driving more slowly to reduce fuel consumption, using public transport, cycling, and working from home. 

Collective energy sufficiency next, which can be implemented in the short term. By developing public transport, and more broadly by promoting alternatives to single-occupancy car use: utilising existing road infrastructure with cycle lanes or express bus lanes; using the current vehicle fleet to develop carpooling routes; developing on-demand transport with electric vehicles; and reducing speed limits. Local authorities will be key in implementing this collective aspect. 

Going electric 

Finally, let us remember that the problem with petrol prices at the pump… is petrol itself. Now is the time to switch to electric. A household with an old combustion-engine vehicle that buys an electric vehicle on credit saves around ten euros a month. Immediately. The millions of households that have already switched to electric are, in fact, largely spared by the rise in fuel prices. 

For low- and middle-income households, the high initial cost of an electric vehicle is a barrier. In France, social leasing has already enabled 100,000 low-income households to acquire one in 2024 and 2025. Expanding similar schemes across more EU Member States would provide permanent protection for more households, at a minimal cost. In the case of France, protecting a further 200,000 households each year would cost €1.6 billion per year – equivalent to a widespread discount at the pump of just 3 cents per litre. 

And for households unable to benefit from the scheme immediately, targeted, time-limited support with priority access to future leasing schemes. A way of preparing for the transition ahead. And of revealing latent demand to car manufacturers, as a prelude to ambitious electrification plans led by Member States. 

L’article Energy crisis: protecting people in the long term est apparu en premier sur I4CE.

The EU’s assumptions regarding the capacity of ecosystems to sequester greenhouse gas (GHG) emissions should be treated with caution 

By 2040, the majority of Europe’s GHG emissions sequestration is expected to come from the land sector, or the LULUCF sector (land use, land-use change and forestry). According to the European Commission’s impact assessment, the level of sequestration in ecosystems is projected to reach -317 MtCO2 in 2040.  

However, recent trends in the carbon sink should prompt Member States to be cautious about the level of carbon sequestration that can realistically be expected. Between 2014 and 2023, the EU’s average annual net carbon sink decreased by 30%, standing at -198 MtCO2. In light of this, the European Environment Agency therefore considers it unlikely that the target set by the EU LULUCF Regulation (which defines emissions targets for the land sector) of -310 MtCO₂ sequestered in ecosystems by 2030 will be met. Furthermore, the growing impacts of climate change make the future of the natural carbon sink particularly uncertain: projections estimate that European ecosystems could sequester between -100 and -350 Mt CO₂ eq by 2050.

The decline in the carbon sink is driven by the decline in the forest carbon sink 

Forests are the main carbon sink in Europe. Between 1990 and 2022, European forests absorbed nearly 10% of the EU’s GHG emissions.  

But over the last 10 years, this trend has been disrupted. Despite an increase in forest cover, the forest carbon sink is shrinking: forests continue to store carbon, but at a slower rate than before. Over the course of a decade, the forest carbon sink has thus fallen by nearly a third, from -456.9 MtCO2eq/year over the 2010–2014 period to -332.6 MtCO2eq/year between 2020 and 2022. This trend is evident across all European regions to varying degrees. In France, the forest carbon sink has been divided by two.  

This trend can be attributed to several interrelated factors, the exact extent of which has yet to be determined: 

• Increased harvesting; 

• Increased tree mortality due to climate change, which leads to a rise in extreme weather events and natural disturbances such as forest fires, droughts and pest outbreaks (bark beetles, pine nematodes, etc.);  

• Slower forest growth due to more frequent droughts; 

• A slowdown in afforestation and forest expansion in certain contexts.  

These factors can broadly be divided into two categories. On the one hand, there are long-term factors (spanning several decades), which are difficult to predict and therefore difficult to manage: first and foremost, the effects of climate change. On the other hand, there are factors whose effects are more predictable in the short term and can be managed through public policy and adjustments to forestry practices. These factors include, amongst others, the rate of afforestation and the level of harvesting.

Step up efforts on what we can manage

Several regulations need to be updated to effectively reflect the implementation of the agreement on the European target for 2040. These include the LULUCF Regulation (covering emissions from land use and forestry) and the Effort Sharing Regulation (ESR), which concerns emissions from transport, agriculture, buildings and waste. Failing to properly account for changes in the forest carbon sink during the revision of these regulations could jeopardise Europe’s decarbonisation pathway.  

To avoid this, one option could be to factor in a more modest contribution from forests and to step up efforts on the factors we can managed in order to safeguard the natural carbon sink.

In practical terms, this means: 

1. Calibrating European climate policies on the basis of a conservative assumption regarding forest carbon sinks and anticipating greater emission reduction efforts in other economic sectors; 

    

2. To raise the targets for manageable levers capable of increasing the natural carbon sink. These levers include:  

• Increasing the use of long-lived wood products. Depending on the scenario, this lever could sequester between -23 and -39 MtCO2/year by 2030. 

• Increasing storage in agricultural soils. A study estimates the potential of this lever at between -150 and -350 MtCO2/year at European level. It is based on three key practices:  

• • Agroforestry and the planting of hedgerows, which could sequester up to -60 MtCO2/year  

• • Prioritising grass in animal feed (without, however, increasing livestock numbers), with a sequestration potential estimated at -45 MtCO2/year 

• • The introduction of catch crops, which could also enable the storage of approximately -45 MtCO2/year; 

The publication of the impact assessment accompanying the revision of the LULUCF and ESR regulations, scheduled for the summer, will be a milestone in evaluating the EU’s strategy responding to the loss of the forest carbon sink. At the same time, the implementation of the CRCF (Carbon Removal and Carbon Farming) Regulation must provide a framework capable of supporting the development and financing of the various levers. For the CRCF to realise its full potential, the challenge will be to generate sufficient demand for European carbon credits.

L’article Reinforcing Europe’s carbon sink through actionable levers est apparu en premier sur I4CE.

However, the debate in Europe is not trending in this direction.  Part of the industry, supported by some European leaders such as German Chancellor Merz, warns against a decline in competitiveness and calls for a weakening of the ETS and a cap on carbon prices, calling into question the future of this crucial mechanism.

As our Chairman Jean PISANI-FERRY and Executive Director Benoit LEGUET argue in Les Echos this week, taking a step back now would jeopardise Europe’s progress towards a decarbonised industrial base. I4CE’s Panorama of Climate Investments shows that, in France, an additional €4 billion in annual decarbonisation investment is required until 2030, which would be made harder if ambition is lowered.   

Indeed, the debate in Brussels and national capitals this year should focus on strengthening, not weakening the ETS. Revenues are crucial not only for supporting domestic investment in decarbonising industry today, but to supporting European mechanisms developing the climate innovation needed tomorrow, such as the EU Innovation Fund and the forthcoming Industrial Decarbonisation Bank. If we take a step back on the ETS, these important funds will suffer.

Above all, it is counterproductive to get bogged down in negotiations on a price cap. This would undermine the business model of decarbonised industry, compromise the credibility of Europe’s climate objectives, while jeopardising our climate leadership just as carbon pricing gains momentum globally.  

In the face of a new wave of backlash against the ETS, it is important to remember that chaos does not support competitiveness. Europe must remain firm, strengthening the ETS to build a world-leading, innovative green industrial base.  

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L’article Stay the course: why a stronger ETS is the key to industrial competitiveness  est apparu en premier sur I4CE.

Since 2005, the Emissions Trading System (ETS) has imposed an emissions cap on European industry. This public policy is unique in terms of its scale – it covers 40% of the EU’s greenhouse gas emissions, including the electricity sector, energy-intensive industries and intra-European flights – and in terms of how it is implemented: quotas are tradable and, after a running-in period, prices have stabilised, reaching €60 to €80 per ton of CO2 in 2025. 

By gradually reducing the volume of quotas, the ETS has enabled emissions to be cut by almost half in twenty years. At these price levels, it has also stimulated innovation among manufacturers. 

2026 will see two major developments in the ETS. To reduce the risk of relocation to countries with lower carbon prices, energy-intensive sectors have until now benefited from free quotas: these will be gradually reduced until they are completely phased out in 2034. This is what worries manufacturers. 

On the other hand, to protect the European market, a carbon border adjustment mechanism has been put in place. However, it does not protect export industries. This fundamental issue can be addressed without weakening the ETS, as proposed, for example, by the Institut Montaigne. This is the first imperative.

Low-carbon leadership 

To ensure not only the survival of its industry but also its development, Europe must break free from its costly dependence on imported fossil fuels. It must therefore assume low-carbon technological leadership, the only sustainable guarantee of export competitiveness. 

This requires more innovation and more electrification. With the rise of renewables and the spectacular fall in storage costs, Europe has an increasingly abundant potential decarbonisation resource, from which manufacturers will benefit. France is particularly well placed in this respect, with abundant electricity and a good supply of biomass for decarbonisation. 

A firm hand 

It is therefore not a question of weakening the ETS, but of strengthening it. Restricting its scope or delaying its timetable would penalise manufacturers who have chosen to invest in decarbonisation and discourage future investment at a time when, on the contrary, we need to accelerate. 

The second imperative is to maintain the gradual reduction of free allowances, giving visibility to manufacturers. The auctioning of allowances enables Member States to recover substantial revenues. In France, the allowances auctioned to date represent around €2 billion per year, a figure that is set to increase. 

Supporting industry, promoting innovation 

In the future, allowances will also need to provide more substantial funding for the decarbonisation of European industrial sectors – this is the third imperative. It should be noted that this is already the case in France: French industry now receives much more for decarbonisation than it pays for the ETS. The fourth imperative is to strengthen the carbon border adjustment mechanism, for example by extending it to downstream sectors. 

The fifth and final imperative is to avoid getting bogged down in negotiations on a price cap, which could result in a very low price that would undermine the economic model of many projects and stifle innovation. It would be better to negotiate a floor price that would give manufacturers greater visibility, but this would then need to be financed. 

The same applies to the ETS as to the other components of the Green Deal: flexibility in implementation must not compromise the credibility of the objectives. This would send a disastrous signal of indecision to businesses. In an increasingly hostile international context, Europe must remain firm. This is the best service it can do for its industry. 

L’article To strengthen European industry, let’s strengthen the ETS est apparu en premier sur I4CE.

One of the main areas of focus will be the issue of financing adaptation, with the first key challenge being to mainstream the concept of resilience by design into all European funding currently under discussion, including structural policies such as the Common Agricultural Policy and the Connecting Europe Facility.

But while we need to invest better, we also need to invest more – at European level and in each Member State – to ensure climate resilience, a key component of European security and the continent’s economy.

The question is how much and in what. The difficulty lies not in a lack of analysis but in the absence of clear decisions on adaptation choices at all levels of government. What level of risk are we prepared to accept? And above all, what responses do we want to prioritise: which activities are we seeking to maintain at all costs, and what are we prepared to transform? 

Our work in France has already shown that adopting a reference trajectory – currently being considered at European level – provides a solid basis for clarifying the question of the risk to be considered. The preferred responses must be the subject of policy dialogue on a sector-by-sector and region-by-region basis. It is a question of understanding dependencies and making coherent strategic choices in terms of planning, equipment, technologies and solidarity. 

Close monitoring of expenditure contributing to adaptation shows that preparing for a changing climate has many co-benefits: it also means testing new technologies, helping to ensure the sovereignty of essential sectors, strengthening the robustness of critical infrastructure, and making agricultural, tourism and industrial development bets that may prove successful.

A clear understanding of these collective gains and how they are distributed is essential for developing the economic models that will provide the necessary fundings to meet this challenge. We come to the same conclusion when we consider the conditions for financing adaptation in developing countries. This is a central subject of I4CE‘s work programme in France, Europe and internationally in 2026. 

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L’article Risk levels and priorities: financing climate adaptation requires clear decisions est apparu en premier sur I4CE.

Just before the start of COP30 in Belém, EU Member States agreed to reduce net greenhouse gas emissions by 90% in 2040 compared to 1990 levels, including a 5% flexibility through international carbon credits. 

While this target provides medium-term visibility, a first milestone for 2030 is currently ahead. By then, Member are expected to reduce their emissions by 55% compared to 1990 levels. With only five years remaining, it is worth assessing whether the current pace of climate-related investment is sufficient to achieve the EU’s 2030 targets. 

In its latest report, The State of Europe’s climate investment, I4CE tracks climate investments and the associated investment needs in relation to the EU’s 2030 targets. This analysis includes, among others, the energy production sector, its transport and storage, and the production of clean technologies.

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L’article EU Member States set 2040 climate target – but is the Union on track for 2030 in the energy sector? est apparu en premier sur I4CE.

The current response to the sovereignty crisis: remove all production constraints to regain market shares 

The French agricultural and food sectors are experiencing a genuine crisis in their trade balance. The trade balance for agricultural products turned negative in 2025, reaching a level not seen since at least 2000. The balance for agri-food products has also deteriorated sharply in recent years, although it remained slightly positive in 2025. Without going into detail, this dynamic reflects both price effects and volume effects. 

As set out in the 2025 French Agricultural Orientation Law, food sovereignty conferences are being organised by the Ministry of Agriculture in 2026. The topic of food sovereignty will therefore remain central to agricultural debates this year. 

The current framing of the sovereignty issue is almost entirely limited to regaining market shares in France and abroad. The proposed solution is: remove production constraints and produce more of everything. 

This response could, however, weaken our strategic independence 

Without prejudging the effectiveness of this approach for recapturing market shares, it risks undermining our broader food sovereignty. Agricultural and food production already relies heavily on imports, much of it from countries outside the European Union. Two product families are specifically mentioned in the European Union’s Economic Security Strategy, published in December. 

First family: nitrogen mineral fertilisers, a cornerstone of crop production. These fertilisers, produced from gas, are widely used for non-organic crop production (notably wheat). More than two-thirds of nitrogen fertiliser consumption in France is imported, and 40% of these imports come from non-EU countries: Russia, Egypt, Algeria, Trinidad and Tobago, the United States (source1, source2, source3). Yet a European mechanism designed to reduce imports from outside the EU is under threat of dismantling. 

Second family: oilseed meals (soybean, rapeseed and sunflower seeds after oil extraction), a cornerstone of animal production. These meals provide a large proportion of protein in livestock feed. Approximately 45% of these meals are imported in France, and around 70% of these imports come from non-EU countries, including 62% from Brazil and 15% from Ukraine. Soy alone accounts for 70% of these imports. 

Increasing both animal and plant production would necessarily increase these imports, exposing farmers and consumers further to growing geopolitical risks. 

Genuine ecological planning is essential to truly strengthen our food sovereignty 

Improving food sovereignty and reducing imports logically entails not consuming significantly more than what our land and resources can sustainably produce. This objective aligns closely with many aspects of the ecological transition. More specifically, developing legumes, pasture-based cattle systems, organic farming, and so on — these are all levers that can reduce our dependency on fertilisers and oilseed meals and enhance farm-level autonomy. 

Ecological planning is therefore an essential response to food sovereignty, to be combined with others: adjusting the competitive framework, directing demand towards French, healthy and sustainable products in reasonable quantities, and so on. By coordinating these responses, it becomes possible to regain market shares without undermining strategic independence, and to produce today without compromising tomorrow’s production capacity. 

The ecological transition and strategic independence require investments in the agricultural and food sectors, and may involve potential capital losses. To limit the costs associated with these investments, they must be anticipated and coordinated. This need for coordination and planning is even more critical given that several waves of investment are currently underway or imminent across different agricultural and food sub-sectors in France. Food sovereignty conferences should therefore provide an opportunity to develop roadmaps by sub-sectors and regions, guiding upcoming agricultural and food investments in a logic of resilience and preservation of production capacity. 

L’article Food sovereignty relies on ecological planning est apparu en premier sur I4CE.

Carbon farming projects are in full swing in Europe: in France, the Label Bas-Carbone (Low carbon standard – LBC) is marking its sixth anniversary (see I4CE’s assessment). At the European level, the CRCF (Carbon Removals and Carbon Farming) is being developed by the European Commission and is expected to become operational in 2026. However, while the supply side is taking shape, the sticky point remains the issue of financing. This is where the LBC is currently struggling, particularly regarding agricultural projects, which face multiple problems in accessing finance. These challenges are not unique to France and could materialise at European level in going forward. The financing options currently being considered by European policy makers are mainly based on voluntary private funding. They will certainly be essential, but based on the experiences in France, we also know that they will most likely be insufficient.

In 2026, I4CE is therefore committed to contributing to the further developments for sustainable and appropriate financing for carbon farming at the European level: by analysing and sharing the lessons learnt from the Label Bas-Carbone, particularly via the European Commission’s CRCF expert group and various European research projects, but also by conducting new research to help structure credible demand, combining public and private funding, including from downstream parts of the agricultural value chain.

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L’article Financing carbon farming practices: lessons learnt in France can reinforce the EU level initiatives est apparu en premier sur I4CE.