EU Climate and energy framework

Joint Statement in support of a strong and stable EU Emissions Trading System, signed by 21 organisations including EGEC. Europe’s competitiveness and energy security hinge upon a strong and stable EU ETS At the European Leaders Summit in Alden Biesen, the EU-27 Heads of State and Government reaffirmed that Europe’s energy transition remains the best strategy to achieve long-term strategic autonomy and low energy prices. Yet, some leaders suggested Europe must intervene now and backtrack on its flagship climate change instrument – the EU Emission Trading System. Europe’s competitiveness and energy security require the fast deployment of more clean energy and industrial decarbonisation solutions. Stable and credible policy instruments like the EU ETS are the bedrock for such investments. The EU ETS provides an efficient, market based, and technology-neutral signal guiding industry’s capital allocation, risk management and industrial transformation. It is important to recall a simple fact, however: the EU ETS works. Combined with marginal pricing in electricity markets, it provides a clear signal that prioritises the dispatch of clean energy in real time and incentivises investment in low-carbon technologies. Since 2005, emissions in ETS-covered sectors have fallen by 50% while economic output has grown by 71%, proving that decarbonisation and competitiveness go hand-in-hand. The EU ETS has been instrumental in driving Europe’s push for clean energy, while reducing dependency on fossil fuel imports. Europe should not repeat the mistakes from the energy crisis when ad hoc interventions in core market fundamentals undermined investments in competitive electricity assets and industrial decarbonisation projects. Undermining the EU ETS or introducing short-term corrective interventions will raise the cost of capital and delay Final Investment Decisions for clean energy projects. Such instability would undermine the bankability of clean energy and industrial decarbonisation projects — investments needed to lower European energy system costs, strengthen energy security, and enhance Europe’s competitiveness. At a time of geopolitical instability and industrial transformation, concerns about energy prices and competitiveness are legitimate and must be addressed. This is where the upcoming EU ETS review can provide a way forward: a targeted update of selected ETS parameters can enhance predictability and address emerging competitiveness concerns, while preserving the system’s integrity and long-term investment signal. With approximately €43 billion generated in 2025 alone, the ETS also offers a powerful opportunity to further reinforce competitiveness through strategic revenue recycling into industrial decarbonisation. Strengthened by the Carbon Border Adjustment Mechanism (CBAM), the EU ETS is a powerful tool for Member States to strategically invest in Europe’s long-term competitiveness, as highlighted by Mario Draghi in his European Competitiveness Report. Regulatory stability remains fundamental to drive investments and financing across Europe’s electricity sector and industrial value chains. We call on European Leaders to stay the course on the EU ETS for Europe’s energy security and industrial competitiveness amidst this dynamic geopolitical context. List of signatories: Carbon Capture & Storage Association Climate Group (international NGO) Danish Chamber of Commerce E3G (transnational think tank) Energy Traders Europe Eurelectric European Energy Exchange (EEX) European Geothermal Energy Council (EGEC) European Heat Pump Association (EHPA) French Electricity Union / Union Française de l’Électricité (UFE) German Association of Energy and Water Industries (BDEW) Hydrogen Europe Intercontinental Exchange, Inc. (ICE) International Emissions Trading Association (IETA) Nuclear Europe Renewable Hydrogen Coalition Rockwool SolarPower Europe Stegra Wind Europe World Business Council for Sustainable Development (WBCSD) Joint Statement (PDF version)

The European Geothermal Energy Council (EGEC) welcomes the European Commission’s review of the energy labelling and Ecodesign requirements for space and combination heaters. These revisions are both timely and necessary to reflect technological progress and ensure consistency with EU climate objectives. EGEC considers the review a key opportunity to correct long-standing shortcomings affecting geothermal heat pumps (GHPs), whose performance has historically been misrepresented due to outdated and unrealistic testing assumptions.

The European Geothermal Energy Council (EGEC) welcomes the European Commission’s initiative to review the Climate and Environmental Delegated Acts of the EU Taxonomy legislation. We strongly support the objectives of simplification, reduction of administrative burden, and alignment of Taxonomy with the EU’s industrial and climate ambitions. In this context, and with the intention of contributing to a more coherent and technology-neutral sustainable finance framework, we wish to suggest the following modifications. Remove the emission threshold and mandatory LCA requirements for geothermal technologies Create a coherent taxonomy category for geothermal heat pumps Clarify the scope of the “Manufacturing of renewable energy technologies” category Address practical challenges in DNSH criteria for DHC networks   EGEC Response to the Call for Feedback on EU Taxonomy – Review of Climate and Environmental Delegated Acts (PDF)  

EGEC 's proposals for a European Geothermal Strategy and Action Plan, published on 5 December 2025. 

Planned for publication in the second quarter of 2026, the EU Heating and Cooling Strategy will support the implementation of current legislation to accelerate decarbonisation of the sector and improve its efficiency and system integration through integrated planning of energy infrastructure district heating and cooling development waste heat recovery It will address both supply and demand by accelerating the deployment of clean heating and cooling, and by encouraging their use in important sectors such as buildings and industry. EGEC submitted its response to the stakeholder consultation on 19 November 2025.   EGEC's response to consultation on the Heating and Cooling Strategy (PDF)

On 3 October 2025, the European Investment Bank published the Climate Bank Roadmap for the 2026-2030 period together with an Energy Sector Orientation. EGEC contributed by responding to the consultation of civil society organisations and other stakeholders, which closed on 7 August 2025.   EGEC's response to consultation on the EIB's Climate Bank Roadmap and Energy Sector Orientation (PDF)

In February 2025, the European Commission announced in the 'Communication on the Clean Industrial Deal: A joint roadmap for competitiveness and decarbonization' a new auction to promote the decarbonization of key industrial processes, drawing on the experience of the hydrogen auctions of the Innovation Fund. It was proposed to allocate the budget of up to EUR 1 billion through fixed-premium auctions in support of projects that decarbonise industrial process heat through innovative electrification technologies such as heat pumps, electric boilers, resistance heating, induction heating, plasma heating and other solutions as well as renewable heat solutions (solar thermal and geothermal). First ideas for the auction scope and design were presented and discussed with stakeholders during a Workshop on 16 April 2025. As a follow-up, the European Commission invited all interested stakeholders to provide feedback on the proposed design elements of the new auction by participating in a survey. EGEC took part in the survey on 15 May 2025.   EGEC's response to consultation on Innovation Fund Heat Auction (PDF)

In January 2025, the European Commission opened a call for feedback on Renewable energy auctions – Implementing Act on non-price criteria in the framework of the Net-Zero Industry Act. EGEC submitted its contribution on 17 February 2025.   EGEC contribution to the Call for feedback on Renewable energy auctions – Implementing Act on non-price criteria (PDF)

On 8 January 2025, the Platform on Sustainable Finance published a draft independent report on preliminary recommendations for the review of the Climate Delegated Act and the addition of activities to the EU taxonomy for sustainable activities. EGEC responded to the call for feedback, which closed on 5 February 2025. EGEC also wrote to Valdis Dombrovskis, EU Commissioner for Economy and Productivity. EGEC called for simplification of the Sustainable Finance Taxonomy by placing geothermal on an equal footing with wind and solar energy in relation to lifecycle emissions, as the existing rules put a brake on capital market investments in geothermal.  Geothermal energy technologies are clearly identified as sustainable investments in the sustainable finance taxonomy. Geothermal power plants, geothermal district heating and cooling, geothermal cogeneration, geothermal heat pumps, UTES and other forms of thermal energy storage can all be eligible as a “sustainable investment”. Nevertheless, pursuant to the substantial contribution criterion to climate change mitigation, the production of geothermal electricity and heat and cool generation are all required to comply with an emission threshold of LCE<100g CO2e/kWh verified by independent third party. This criterion is not asked for other renewable energy sources.  EGEC contribution in brief  EGEC deems that the abovementioned threshold should be removed for all geothermal technologies for the following reasons:  As regards the respect to the ability to comply with and/or implement (e.g. technical feasibility) the technical screening criteria for substantial contribution of the activity, the criteria put in place for geothermal appear to be unfair when compared to the ones applied to other renewables. The EU taxonomy has so far sent the wrong signal for electricity, heat and cool generation from geothermal energy, despite the low CO2 eq/kWh.  After evaluating several scientifically based life cycle analyses for geothermal plants, it can be stated that the threshold value of 100gCO2-eq/kWh specified in the EU taxonomy for the LCA is always undercut for representative plants. This threshold should then be removed for all geothermal technologies.  The obligation to carry out an LCA is seen as an additional obstacle for geothermal heat and cool generation.  The mandatory performance of an LCA contradicts the general endeavour to speed up the planning and construction of geothermal plants.  Therefore, EGEC wishes to see the same criteria applied to all renewable energy technologies and proposes then to erase from Commission delegated Regulation (EU) 2021/2139 the threshold for geothermal and the LCA obligation required to geothermal activities to comply with the substantial contribution to climate change mitigation.    EGEC's response to consultation on the EU Taxonomy Regulation (PDF)

On 20 December, EGEC commented on the Commission draft Delegated Act that sets out a reporting scheme to rate the sustainability of data centres in the EU. The Delegated Act stems from the recast Energy Efficiency Directive (Directive 2012/27/EU), which introduces a requirement to report on the energy performance and sustainability of data centres.