“Making energy and environmental transitions drivers for competitiveness"This is the objective of the second stakeholder conference of the B7 Italy 2024 held in Turin in conjunction with the G7 Ministerial Meeting on Energy, Environment and Climate. A unique opportunity for companies to support ministers in addressing complex and urgent challenges.

Together with Emma MarcegagliaB7 Chair, key energy and financial sector players from the G7 countries, and representatives of international and multilateral organisations came together. Discussing key factors for navigating energy and environmental transitionsin a rapidly changing global economy, where geopolitical frictions, coupled with rising global energy demand, are calling the public and private sectors to strengthen their partnership and to move together towards shared goals by leveraging the best performing technologies.

The race to Net Zero requires substantial investments that must be directed towards critical sectors, innovative technologies and low-carbon processes by leveraging research, development and innovation. To this end, G7 countries must pursue a technology-neutral approachusing the options already available and the most promising ones according to their maturity and evolution.

Increasing demand for raw materials, components, semi-finished and finished products has led to increasing waste generation, calling for a shift to a circular model and immediate joint action by government and business for more efficient, safe, sustainable and resilient global supply chains.

All climate actionsincluding the adoption of clean technologies, must ensure competitive decarbonisation and support the energy transition embracing the widest possible technological neutrality in order to achieve the goals of the Paris Agreement.

"From these two days of talks we expect important decisions not only for Europe but for all major developed countries. We hope for an agreement on investments that will also support other countries rich in raw materials, such as Africa,' he emphasised. Emma MarcegagliaB7 Chair. "We also expect to be able to have the same taxonomy so that in all B7 countries we can establish what is green and what is not. Today in Europe the cost for CO2 is very high, so more integration of rules would help the industry in the G7 countries."

On the occasion of this event, Confindustria and Deloitte, the only knowledge partner in the project, produced the note B7 Flasha document that highlighted the scenario data and priorities for the energy transition.

The international scenario after Cop28 in Dubai

The COP 28 in Dubai in late 2023 saw the G7 countries reinforce their commitment to take action to reduce greenhouse gas emissions. The implementation of the first Global Stocktake (GST) enabled progress towards the Paris Agreement targets to be monitored. The focus was on accelerating the development of zero- and low-emission technologies and a commitment was set to increase global renewable energy capacity to at least 11,000 GW and to improve the annual rate of increase in energy efficiency from 2% to 4% by 2030. At the same time, 22 countries pledged to triple nuclear power generation capacity by 2050 and the role of low-emission technologies was recognised, along with transitional fuels such as natural gas. The COP 28 commitments on renewables development are in line with the IEA-NZE (Net Zero Emissions) scenarios.

Competitiveness challenges B7: the cost of energy and greenhouse gas emissions weigh heavily

Competitive disadvantages include the high cost of GHG emissions in the G7 compared to countries that have not yet adopted effective sustainability policies, with the European price of GHG emission allowances in 2023 at 90.26 $/tCO2e, ten times higher than the Chinese price. I high electricity costs are an additional burden, particularly for European companies and consumers who bear some of the highest prices internationally, double that of the Chinese market. Another aspect to consider is the high value of the stranded assets, due to the premature obsolescence of energy infrastructures of fossil fuels, borne more significantly by countries characterised by a faster energy transition and estimated by the Intergovernmental Panel on Climate Change (IPCC) at USD 4 trillion. It is necessary, then, to take note of the risk factor linked to the substantial Chinese control of the supply chains involved in the energy transition, with shares ranging from around 80% for photovoltaics to 65% for batteries, with the prospect of moving from the historical dependence of our energy system on fossil fuels to the supply of green technologies. Meeting these challenges requires a large increase in public and private investment, regulated by convergent public policies among the G7 countries. These policies must establish clear market rules to mitigate the economic impacts of the transition, promote a resilient and diversified global energy supply, encourage the transition and reduce market vulnerability.

Attached is the B7 Flash note - Energy, Climate and Environment

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