It is well known that Mario Draghi has never been particularly sensitive to climate and ecological transition issues. However, given his undoubted prestige – and the tendency of politicians, the media and, above all, the European Commission to take his every word as gospel (even if very few of his most innovative proposals are actually implemented) – when his statements reveal a certain insensitivity or perhaps even insufficient knowledge of the subject, it is necessary to point this out and take note of it.

Because in his speech two days ago at the conference organised by the European Commission, “One year after the Draghi report”, alongside some memorable phrases, there were also some statements on decarbonisation and the energy system that contradict some of his own recommendations. For example, at the end of his speech, Draghi tells us that 'we must go beyond generic strategies and postponed deadlines. We need concrete dates and results, and to be held accountable for them. Deadlines should be ambitious enough to require real focus and collective effort. This has been the formula behind Europe's most successful projects: the single market and the euro. Both were achieved through clear stages, precise targets and constant political commitment.

Green Deal: results and discontinuities

Precisely. Given the evidence of the climate emergency, but also the geopolitical and economic challenges that have made European security and “sovereignty” even more urgent, this was the idea behind the Green Deal project, which was certainly imperfect, but based on “precise targets, collective effort”, the promise of “constant political commitment” and a clear strategy: progressive reduction of dependence on fossil fuels and their producers, priority for renewables and a decentralised energy system, circular economy, energy efficiency to achieve net zero emissions by 2050. And if one is acting in good faith, one cannot help but note that COVID and wars have made this strategy even more necessary, albeit certainly more difficult and costly. Moreover, the “results” are there. We are fairly in line with the emission reduction targets set for 2030, renewables are already the cheapest source of electricity production, our gas demand is falling by around 20% every year, Europe remains a leader in energy efficiency technologies, and in 2025 alone, 20 million tonnes of CO2 will be saved by the transition to electric mobility. As has been proven time and again, companies that invest in sustainability and “invent” new products are also the ones with the strongest presence in international markets and have positive prospects for production and job creation.

However, there is no doubt that for political and cultural reasons, due to the short-term economic interests of powerful sectors hostile to change and fierce competition for public and private resources, the situation today is far from straightforward, and the signs of discontinuity, hesitation, uncertainty and regression on the road to achieving the Green Deal are evident. Unfortunately, the effects that this inconsistency will have on the competitiveness and economic and social development of the Old Continent in the coming years are less evident. And certainly, Draghi's contribution to this debate is not always positive. Quite the contrary.

I would like to give three examples from his speech two days ago.

The CSRD and reporting obligations

Draghi says, “As we move forward with decarbonisation, the transition must also be flexible and pragmatic. The Commission has eased some of the more burdensome reporting requirements through its Omnibus on sustainability. However, in some sectors, such as the automotive sector, the targets are based on assumptions that are no longer valid.” Draghi is referring here to a measure proposed by the European Commission last February, known as the “Omnibus”, which slows down, postpones and lightens a series of reporting and environmental due diligence obligations by amending the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The aim is to reduce the administrative burden on businesses, particularly SMEs, and make sustainability regulations more accessible through a streamlined reporting system and the introduction of a voluntary standard for SMEs. Decided without any impact assessment and in the middle of the implementation process, when many companies had already invested and were adapting to the legislation, this measure – still in the process of being adopted – rather than simplifying matters, has made it uncertain and, in fact, much more complicated for many companies to understand the direction to take and the obligations to comply with; it has also signalled uncertainty regarding the possible amendment of other rules already adopted. It is no coincidence that the European Central Bank, the institution that Draghi brilliantly led, has strongly criticised it, arguing that this “simplification” would limit access to data essential for assessing financial and climate risks, threatening financial stability, EU competitiveness and the achievement of sustainable finance objectives.

Climate targets in the automotive industry

Draghi's second statement, according to which climate targets in certain sectors such as the automotive industry are based on “assumptions that are no longer valid”, is also perplexing. First of all, it is unclear which assumptions are no longer valid. Certainly not the need to accelerate the reduction of emissions and pollution in the transport sector. Despite many delays and obstacles, electric mobility already drastically reduces environmental impact and energy consumption, offers lower running costs, improves efficiency and reliability and performance of vehicles and promotes decarbonisation. When combined with a decisive shift away from “all cars” towards more public transport and soft mobility, it becomes a key lever for achieving climate targets and also for developing a climate-proof industry. Of course, we are behind schedule and the 13 million workers mentioned by Draghi must be supported and accompanied, and we are not starting from scratch; but it is a fact that in recent years, European car manufacturers, who at the time supported the setting of a definite date for phasing out combustion engines, have preferred to focus on high-end cars and rich dividends for their shareholders, rather than investing in research and development of affordable “made in Europe” electric cars.

Furthermore, as Draghi himself says, we need to “achieve results in a few months, not years”. It must therefore be noted that biofuels and e-fuels are not a sustainable and adequate alternative, but merely an excuse to continue cultivating the illusion that combustion engines can become “clean” in the distant future and that it is therefore not worth changing everything now.  E-fuels are synthetic fuels produced by combining green hydrogen and captured CO₂, but their production is currently limited, extremely expensive and less efficient than an electric motor. Biofuels are not “zero” emissions and will not be available on a large scale. Reopening the deadlines for the ban on the sale of internal combustion vehicles would introduce confusion and uncertainty, reduce the development of electric cars “made in Europe” or at least “also” made in Europe, and investments in the transition and timely development of specific skills.

In short, if, as Draghi asks, the next revision of the directive were to honestly apply a “technologically neutral approach and take stock of market and technology developments”, we can already say that it would conclude that “full-electric” is the only way forward: in other words, if being technologically neutral means bringing out the most effective and cost-effective technologies without preconceptions and letting the market act, then we must admit that there are technologies that work better today, are already operational and cost less; therefore, even with a “neutral” approach, renewables, energy efficiency and electrification are the directions to take without delay. As for the market's ability to be neutral, Draghi himself points out that the EU has fallen into the trap of having “blind faith that market forces will create new sectors”. This is not the case. We need rules that point the way forward and finances to support them. This is exactly, we repeat, what the Green Deal has attempted to do.

Nuclear energy and renewables

Furthermore, Draghi casually puts nuclear and renewables on the same level in terms of investment priorities and actual installation. And he repeats, without really proving it, a concept that President Von Der Leyen had already mentioned in her State of the Union address last week, namely that nuclear power is needed to provide a base load to respond to the intermittency of renewables. Here too, reality and experience tell us otherwise. The answer to intermittency is batteries and storage, which are undergoing phenomenal development and a drastic reduction in prices. Quite the opposite of nuclear power.

In short, if we follow Draghi's logic of acting “European” and focusing on the most innovative and effective sectors, nuclear power is not needed to ensure rapid decarbonisation: its costs are unsustainable, even in countries that already use it, the implementation times are very long, and none of the serious problems that have slowed its development in recent years, from waste to water requirements, have been resolved. Even Small Modular Reactors are still a long way from being operational, they are not that small or cheap, and they require huge public subsidies to move forward. In any case, there is no doubt that nuclear energy will not succeed in lowering energy prices in the short to medium term. And the answer cannot be to resign ourselves to depending on American gas instead of Russian gas.

Draghi's narrative on transition and the Green Deal

In conclusion, Draghi's strong call to act “in a European way”, to avoid the “trap” of “uncoordinated national action”, and the push to agree, at least among some countries, on common debt instruments and decision-making procedures that avoid fragmentation and vetoes, are important stimuli for the dull and ineffective EU that many citizens see. It is necessary and commendable that Draghi continues to consistently and in detail emphasise what needs to be done immediately, from a radical review of the increasingly national logic of state aid and public procurement, to common debt, to overcoming vetoes, to the federal perspective as the only truly decisive solution for the EU's weakness: this can have an impact not only on public debate but also on the actions of the European Commission itself, which, let us remember, has the exclusive power of initiative in the EU system. However, it is also important that Draghi's narrative on transition and the Green Deal is more informed and less superficially aligned with the sectors least interested in its effective implementation, which thus contribute to slowing down competitiveness and innovation.

Cover: Mario Draghi at the conference “One year after the Draghi report” - © Dati Bendo, European Commission