The European Commission has proposed giving itself legally-enshrined power to plan the expansion of European electricity grids, as it scrambles to update an ageing network to meet the soaring demands of the clean energy transition. The proposed changes to the Trans-European Networks for Energy, or TEN-E, regulation, would give the Commission power to conduct “central scenario” planning to assess what upgrades are needed to the grid — a marked change from the current decentralized system of grid planning. The Commission would conduct this planning every four years. Where no projects are planned, the Commission would have power to intervene. The proposal was part of the European Grids Package, a sweeping set of changes to EU energy laws released Wednesday. Electrification of everything from transport and heating to industrial processes is essential as Europe moves away from planet-warming fossil fuels. But that puts huge strain on networks, and the Commission estimates electricity demand will double by 2040. An efficient, pan-European electricity grid is essential to meeting this demand. “The European Grids Package is more than just a policy,” said Teresa Ribera, the EU’s decarbonization chief, in a statement Tuesday. “It’s our commitment for an inclusive future, where every part of Europe reaps the benefits of the energy revolution: cheaper clean energy, reduced dependence on imported fossil fuels, secure supply and protection against price shocks.” Along with centralized planning, the Grids Package proposes speeding up permitting of grids and other energy projects to get the infrastructure faster, including relaxing environmental planning rules for grids. Currently planning and building new grid infrastructure takes around 10 years. It would do this by amending four laws: the TEN-E regulation, the Renewable Energy Directive, the Energy Markets Directive, and the Gas Market Directive. The package also proposes “cost-sharing” funding models to ensure those countries that benefit from projects contribute to its financing, and speeding up a number of key energy interconnection projects across Europe.

Mr. Marcin Laskowski | via PGE The European Union finds itself navigating an era of extraordinary challenges. From defending our shared values against authoritarian aggression to preserving unity in the face of shifting geopolitical landscapes, the EU is once again being tested. Covid-19, the energy crisis, the full-scale Russian war against Ukraine and renewed strains in international relations have taught us a simple lesson: a strong Europe needs capable leaders, resilient institutions and, above all, stable yet flexible financial frameworks. The debate on the next Multiannual Financial Framework (MFF) is therefore not only about figures. It is, fundamentally, a debate about Europe’s security, resilience and its future. From the perspective of the power sector, the stakes are particularly high. Electricity operators live every day with the consequences of EU regulation, carrying both the costs of compliance and the opportunities of EU investment support. Data confirms that European funds channeled into the electricity sector generate immense value for the EU economy and consumers alike. Why? Because electrification is the backbone of Europe’s industrial transformation. The Clean Industrial Deal makes it clear: within a few short years, Europe must raise the electrification rate of its economy by 50 percent — from today’s 21.3 percent to 32 percent by 2030. That means the future of sectors as diverse as chemicals, steel, food processing and high-tech manufacturing is, in reality, a debate about electrification. If this transition is not cost-effective, Europe risks eroding its global competitiveness rather than strengthening it. > That means the future of sectors as diverse as chemicals, steel, food > processing and high-tech manufacturing is, in reality, a debate about > electrification. Electrification is also central to REPowerEU — Europe’s pledge to eliminate dependence on Russian fossil fuels. It is worth recalling that in 2024 the EU still paid more to Russia for oil and gas (€21 billion) than it provided in financial support to Ukraine (€19 billion). Only a massive scale-up of clean, domestic electricity can reverse this imbalance once and for all. But this requires a fresh approach. For too long, the power sector has been seen only through the lens of its own transition. Yet without power sector, no other sector will decarbonize successfully. Already today, electricity accounts for 30 percent of EU emissions but has delivered 75 percent of the reductions achieved from the Emissions Trading Scheme. As electrification accelerates, the sector — heavily reliant on weather-dependent renewables — faces growing costs in ensuring security of supply and system stability. This is why investments must also focus on infrastructure that directly enhances security and resilience, including dual-use solutions such as underground cabling of electricity distribution grids, mobile universal power supply systems for high/medium/low voltage, and advanced cyber protection. These are not luxuries, but prerequisites for a power system capable of withstanding shocks, whether geopolitical, climatic or digital. > For too long, the power sector has been seen only through the lens of its own > transition. Yet without power sector, no other sector will decarbonize > successfully. The European Commission estimates that annual investment needs in the power sector will reach €311 billion from 2031— nearly ten times more than the needs of industry sector. This is an unavoidable reality. The critical question is how to mobilize this capital in a way that is least burdensome for citizens and businesses. If mishandled, it could undermine Europe’s industrial competitiveness, growth and jobs. The MFF alone cannot deliver this transformation. Yet it can, and must, be a vital part of the solution. The European Parliament rightly underlined that completing the Energy Union and upgrading energy infrastructure requires continued EU-level financing. In its July proposal, the Commission earmarked 35 percent of the next budget — about €700 billion — for climate and environmental action. These funds must be allocated in a technology-neutral way, systematically covering generation, transmission, distribution and storage. Public-good investments such as power grids — especially local and regional distribution networks — should be treated as a top priority, enabling small and medium-sized enterprises and households to deploy renewables, access affordable energy and reduce energy poverty. > The debate is not only about money, it is also about the way it is spent. The debate is not only about money, it is also about the way it is spent.  A cautious approach is needed to the “money for reforms” mechanism. EU funds for energy transition must not be judged through unrelated conditions. Support for investments in energy projects must not be held hostage to reforms not linked to energy or climate. This caution should also apply to extending the “do no significant harm” principle to areas outside the scope of the Taxonomy Regulation, where it risks adding unnecessary complexity, administrative burden and uncertainty. The focus must remain firmly on delivering the infrastructure and investments needed for decarbonization and security. Moreover, EU budget rules must align with state aid frameworks, particularly the General Block Exemption Regulation, and reflect the long lead times required for power sector investments. At the same time, Europe cannot afford to lose public trust. The green transition will not succeed if imposed against citizens; it must be built with them. Europe needs more carrots, not more sticks. The next EU budget, therefore, must be more than a financial plan. It must be a strategic instrument to strengthen resilience, sovereignty and competitiveness, anchored in the electrification of Europe’s economy. Without it, we risk not only missing our climate targets but also undermining the very security and unity that the EU exists to defend.

Policymakers are overlooking a $370 billion market that will determine whether climate goals succeed or fail.  In the grand narrative of the clean energy transition, materials like lithium, rare earths and silicon dominate headlines. Yet the most strategically important materials for this transition may be hiding in plain sight, dismissed by policymakers as environmental villains rather than recognized as the enablers of human progress they truly are. The $370 billion blind spot Polyolefins — the family of materials that includes polyethylene and polypropylene — represent perhaps the greatest strategic oversight in contemporary clean industry policy Here is a reality check. Polyolefins represent a global market approaching $370 billion, growing at over 5 percent annually.1,2 They make up nearly half of all plastics consumed in Europe.3 By 2034, global production is expected to hit 371 million tons.4  Yet in the European Union’s Clean Industrial Deal — a €100 billion strategy for industrial competitiveness — polyolefins receive barely a mention.4 This represents a profound strategic miscalculation. While policymakers focus on securing access to exotic critical materials like lithium and cobalt, they overlook the fact that polyolefins are already critical materials— they simply happen to be abundant rather than scarce. In the infrastructure-intensive clean energy transition ahead, abundance is not a weakness; it is the ultimate strategic advantage. > While policymakers focus on securing access to exotic critical materials like > lithium and cobalt, they overlook the fact that polyolefins are already > critical materials. The EU’s REPowerEU plan calls for 1,236 GW of renewable capacity by 2030 — more than double today’s levels.4 Every offshore wind farm, solar array and electric grid connection depends on polyolefins. They insulate cables, protect components and form structural parts of turbines and solar panels. Every solar panel relies on polyolefin elastomers to protect its inner workings for up to 30 years, even in harsh weather.8 And every grid connection depends on polyethylene-insulated cables to carry electricity efficiently across long distances. 7 Multiply these requirements across thousands of installations, and the strategic importance of polyolefins becomes undeniable. Yet, currently, the policy framework treats these materials as afterthoughts, focusing instead on the relatively small quantities of rare elements in generators and inverters while ignoring the massive volumes of polyolefins that make the entire system possible. Beyond energy: the hidden dependencies The strategic importance of polyolefins extends far beyond energy infrastructure. As one example, modern medical systems depend fundamentally on polyolefin materials for syringes, IV bags, tubing and protective equipment. Global food security increasingly depends on polyolefin-based packaging systems that extend shelf life, reduce waste and enable distribution networks — feeding billions of people. Meanwhile, water infrastructure relies on polyethylene pipes engineered for 100-year lifespans. These applications are rarely considered alongside energy priorities — a dangerous fragmentation of strategic thinking. The waste challenge and a circular solution Let’s be clear, plastic waste is a real environmental challenge demanding urgent action. However, the solution is not abandoning these essential materials, it is building the infrastructure to capture their full value in circular systems. The fundamental error in current approaches is treating waste as a material problem rather than a systems problem. Europe currently captures only 23 percent of polyolefin waste for recycling, despite these materials representing nearly two-thirds of all post-consumer plastic waste.3 That’s not because the material can’t be recycled. The infrastructure to do so isn’t at the scale needed to collect, sort and recycle waste to meet future circular feedstock needs. Polyolefins are among the most recyclable materials we have. They can be mechanically recycled multiple times. And with chemical recycling, they can even be broken down to their molecular building blocks and rebuilt into virgin-quality material. That’s not just circularity, it’s circularity at scale. This matters because the EU’s target of 24 percent material circularity by 20305 is unlikely to be met without polyolefins. However, current frameworks treat them as obstacles rather than enablers of circularity. The economic transformation The transition represents an economic transformation, creating competitive advantages for regions implementing it effectively. A region processing 100,000 tons of polyolefin waste annually could capture €100-130 million in additional economic value while creating up to 1,000 jobs.6 > A region processing 100,000 tons of polyolefin waste annually could capture > €100-130 million in additional economic value while creating up to 1,000 jobs. At the end of the day, the clean energy transition must be affordable. Polyolefins help make that possible. They’re cheaper, lighter and longer lasting than many alternatives. Manufacturers with access to cost-effective recycled feedstocks can reduce input costs by 20-40 percent compared with virgin materials. Polyethylene pipes cost 60-70 percent less than steel alternatives while lasting twice as long.9 These aren’t marginal gains. They’re system-level efficiencies that make the difference between success and failure at scale. The strategic choice The real challenge isn’t technical, it’s institutional. Polyolefins sit at the crossroads of materials, environmental and industrial policy, yet these areas are treated as separate domains. There’s also a geopolitical angle. Unlike lithium or rare earths, polyolefins can be produced from diverse feedstocks — natural gas, biomass and even captured CO2 — enabling domestic production and supply chain resilience. This flexibility is a major asset, but current policies largely overlook it. > The path forward requires recognizing polyolefins as strategic assets rather > than environmental problems. The path forward requires recognizing polyolefins as strategic assets rather than environmental problems. This means including them in critical materials assessments — not because they are scarce, but because they are essential. It means coordinating research and development efforts rather than leaving them to fragmented market forces. Most importantly, it means recognizing that the clean energy transition will succeed or fail based on our ability to build infrastructure at unprecedented scale and speed. And that infrastructure will be built primarily from materials that combine performance, abundance, sustainability and cost-effectiveness in ways only polyolefins can provide. The choice facing policymakers is clear: continue treating polyolefins as problems to be managed or recognize them as strategic assets enabling the clean energy future. The regions that understand this integration first will shape the global economy for decades to come. -------------------------------------------------------------------------------- 1. Grand View Research. (2024). Polyolefin Market Size, Share, Growth | Industry Report, 2030. Retrieved from https://www.grandviewresearch.com/industry-analysis/polyolefin-market 2. Fortune Business Insights. (2024). Polyolefin Market Size, Share & Growth | Global Report [2032]. Retrieved from https://www.fortunebusinessinsights.com/polyolefin-market-102373 3. Plastics Europe. (2025). Polyolefins. Retrieved from https://plasticseurope.org/plastics-explained/a-large-family/polyolefins-2/ 4. European Commission. (2025). Clean Industrial Deal. Retrieved from https://commission.europa.eu/topics/eu-competitiveness/clean-industrial-deal_en 5. European Commission. (2022). Circular economy action plan. Retrieved from https://environment.ec.europa.eu/strategy/circular-economy-action-plan_en 6. Watkins, E., & Schweitzer, J.P. (2018). Moving towards a circular economy for plastics in the EU by 2030. Institute for European Environmental Policy. Retrieved from https://ieep.eu/wp-content/uploads/2022/12/Think-2030-A-circular-economy-for-plastics-by-2030-1. 7. Institute of Sustainable Studies (2025). EU Circular Economy Act aims to double circularity rate by 2030 EU Circular Economy Act – Institute of Sustainability Studies 8. López-Escalante, M.C., et al. (2016). Polyolefin as PID-resistant encapsulant material in PV modules. Solar Energy Materials and Solar Cells, 144, 691-699. Retrieved from https://www.sciencedirect.com/science/article/pii/S0927024815005206 9. PE100+ Association. (2014). Polyolefin Sewer Pipes – 100 Year Lifetime Expectancy. Retrieved from https://www.pe100plus.com/PPCA/Polyolefin-Sewer-Pipes-100-Year-Lifetime-Expectancy-p1430.html --------------------------------------------------------------------------------

With the European Green Deal and the Clean Industrial Deal, the EU set a clear course for the economic transition, serving Europe’s strategic interests of competitiveness and growth while also tackling climate change. For the EU to reach its industrial decarbonization and competitiveness objectives, the Draghi report identifies an annual investment gap of up to €800 billion. High-quality, reliable and comparable corporate disclosures, including on sustainability risks and impacts, are key to inform investment decisions and channel financing for the transition. EU rules on corporate sustainability reporting have been expected to fill the existing data gap. While simplification as such is a helpful aim, it looks like the Omnibus initiative is going too far. With the current direction of travel, confirmed by the Council in its agreement on 24 June, the Omnibus is likely to severely hinder the availability of comparable environmental, social and governance (ESG) data, which investors need to scale up investment for industrial decarbonization and sustainable growth, thus impairing their capacity to support the just transition. > The Omnibus is likely to severely hinder the availability of comparable > environmental, social and governance (ESG) data, which investors need to scale > up investment for industrial decarbonization and sustainable growth. The European Commission introduced the Corporate Sustainability Reporting Directive (CSRD), the Corporate Sustainability Due Diligence Directive (CSDDD) and the EU Taxonomy to respond to real needs, voiced over the years by investors and businesses alike. These rules were intended to close the ESG data gap, bring clarity and structure to the disclosures needed to allocate capital effectively for a just transition, and foster long-term value creation. These frameworks were not meant as ‘tick-box compliance exercises’, but as practical tools, designed to inform capital allocation, and better manage risks and opportunities. Now, the Omnibus proposal risks steering these rules of course. Although investors have repeatedly shown support for maintaining these rules and their fundamentals, we are now witnessing a broad-scale weakening of their core substance. Far from delivering clarity, the Omnibus initiative introduces uncertainty, penalizes first movers, who are likely to face higher costs due to adjusting the systems they put in place, and undermines the foundations of Europe’s sustainable finance architecture at a time when certainty is most needed to scale up investment for a just transition to a low-carbon economy. THE COST OF DOWNGRADING SUSTAINABILITY DATA The EU’s reporting framework is a critical enabler of investor confidence, for them to support the clean transition, and resilience building of our economy. It aims to replace a fragmented patchwork of voluntary disclosures with reliable, comparable data, giving both companies and investors the clarity they need to navigate the future. Let’s be clear: streamlining corporate reporting is a goal that is shared by investors and businesses alike. But simplification must be smart: by cutting duplications, not cutting corners. The Omnibus is likely to result in excluding up to 90 percent of companies from the scope of CSRD and EU Taxonomy reporting, if not more, should the council’s position, which includes a €450 million turnover threshold, be retained. This would significantly restrict the availability of reliable data that investors need to make investment decisions, manage risks, identify opportunities and comply with their own legal requirements. Voluntary reporting is unlikely to bridge this data gap, both in terms of the number of companies that will effectively report and regarding the quality of information reported. Using basic, voluntary questionnaires that were designed for very small entities would result in piecemeal disclosures, downgrading data quality, comparability and reliability. Market feedback has already demonstrated that it is necessary to go beyond voluntary reporting to avoid these shortcomings. This is precisely why EU regulators designed the CSRD in the first place. As a result of the Omnibus initiative, investors will likely focus on a limited number of investee companies that are in scope of CSRD and provide reliable information — limiting the financing opportunities for smaller, out-of-scope companies, including mid-caps. This will also restrict the offer and diversity of sustainable financial products — despite the clear appetite of end investors, including EU citizens, for these investments. This runs counter to the objectives of scaling-up sustainable growth laid down in the Clean Industrial Deal, and of mobilizing retail savings to help bridge the EU’s investment gap as proposed in the Savings and Investments Union. CUTTING DUE DILIGENCE BLINDS INVESTORS The CSDDD is also facing significant risks in the current institutional discussions. Originally, the introduction of a meaningful framework to help companies identify, prevent and address serious human rights and environmental risks across their value chains marked an important step to accelerate the just transition to industrial decarbonization and sustainable value creation. For investors, the CSDDD provides a structured approach that improves transparency and enables a more accurate assessment of material environmental and human rights risks across portfolios. This fills long     standing gaps in due diligence data and supports better-informed decisions. In addition, the CSDDD provisions to adopt and implement corporate transition plans including science-based climate targets, in line with CSRD disclosures, are providing an essential forward-looking tool for investors to support industrial decarbonization, consistent with the EU’s Clean Industrial Deal’s objectives. By limiting due diligence obligations to direct suppliers (so-called Tier 1), the Omnibus proposal risks turning the directive into a compliance formality, diminishing its value for businesses and investors alike. The original CSDDD got the fundamentals right: it allowed companies to focus on the most salient risks across their entire value chain where harm is most likely to occur. A supplier-based model would miss precisely the meaningful information and material risks that investors need visibility on. It would also diverge from widely adopted international standards such as the OECD guidelines for Multinational Companies and the UN Guiding Principles. The requirement for companies to adopt and implement their climate transition plans is also at risk, being seen as overly stringent. However, the obligation to adopt and act on transition plans was designed as an obligation of means, not results, giving businesses flexibility while providing investors with a clearer view of corporate alignment with climate targets. Watering down or downright removing these provisions could effectively turn transition plans into paperwork with no follow-through and negatively impact the trust that investors can put in corporate decarbonization pledges. Additionally, the council proposal to set the CSDDD threshold to companies above 5,000 employees, if adopted, will result in fewer than 1,000 companies from a few EU member states being covered. Weakening the CSDDD would add confusion and leave companies and investors navigating a patchwork of diverging legal interpretations across member states. A SMARTER PATH TO SIMPLIFICATION IS NEEDED How the EU handles this moment will speak volumes. Over the past decade, the EU has become a global reference point in sustainable finance, shaping policies and practices worldwide. This is proof that competitiveness and sustainability can reinforce, not contradict, one another. But that leadership is now at risk. > How the EU handles this moment will speak volumes. Over the past decade, the > EU has become a global reference point in sustainable finance, shaping > policies and practices worldwide. The position taken by the council last week does not address some of the major concerns from investors highlighted above and would lead to even more fragmentation in reporting and due diligence requirements across companies and member states. While the window for change is narrowing, the European Parliament retains the capacity to steer policy back on track. The recipe for success and striking the right balance between stakeholders’ concerns is to streamline rules while preserving what makes Europe’s sustainability framework effective, workable and credible, across both sustainability reporting and due diligence. Simplify where it adds value, but don’t dismantle the tools that investors rely on to assess risk, allocate capital and support the transition. What the market needs now is not another reset, but consistency, continuity and stable implementation: technical adjustments, clear guidance, proportionate regimes and legal stability. The EU must stand by the rules it has put in place, not pull the rug out from under those using them to finance Europe’s future. --------------------------------------------------------------------------------