Green Deal and “Drill, Baby, Drill”
We do live in interesting times nowadays when the world is changing fast, and Romania is still in a state of an electoral suspense.
1. While the USA may go less green, EU seems to go greener
One of the first executive acts of the new US President was to suspend all new leases on federal land and generally the support for renewable capacities[1]. “Drill, baby, drill” is the new slogan in the US.
This might make up to a point some good sense for US, given the extent of its gas and oil reserves and the enormous gas and oil generation industry. Thus, on the one hand, US is currently the no. 1 worldwide producer of both oil and natural gas, and no. 4 worldwide in terms of proved reserves of natural gas, and on the other hand no.11 worldwide as regards proved reserves of crude oil[2]. With such good reserves, the “Drill, baby, drill” policy attempts to solve two problems with one solution – putting to use a natural resource and saving an existing large industrial segment (among the largest in the world). But it is also the weaponization of oil and gas in the global power struggle against Russia and China that presumably plays a role here.
In this geopolitical storm, EU seems to remain consistent with the past years. Thus, the EU Commission has largely reconfirmed its commitment to the green policies, as stated by the President of the Commission, Mrs. von der Leyen[3], and as also reflected in the recent EU Commission Communication called “A Competitive Compass for the EU” issued on 29 January 2025 (the “Competitiveness Compass”).
The Competitiveness Compass draws on the conclusions of the Mario Draghi report on the future of European competitiveness from September 2024[4], meant as a strategic roadmap for future actions enabling EU to boost its competitiveness on the global scene and keep pace with its greatest competitors – US and China. While one of the targets pursued by the Competitive Compass is to simplify bureaucracy and encourage innovation, the Green Deal’s targets/policies do not seem to be questioned and green energy remains a key EU goal as opposed to the “Drill, baby, drill” path that USA is looking to for the following period.
Thus, the Competitiveness Compass states that “Europe has set out an ambitious framework to become a decarbonised economy by 2050. It will stay the course, including through the intermediate 2040 target of 90%”. Also, “the EU must thus accelerate the clean energy transition and promote electrification”. To this end, simplified and accelerated permitting is a tool specifically promoted by the Competitiveness Compass. On the other hand, the Competitiveness Compass adds a Clean Industrial Deal to the Green Deal, which will be “aimed at securing the EU as an attractive location for manufacturing, including for energy intensive industries, and promoting clean tech and new circular business models, in order to meet its agreed decarbonisation objectives”.
In the context above, the changes of policy in the US with respect to green projects (for instance, large offshore wind projects are put on hold) may be to Europe’s advantage as the green energy investors may relocate from US to Europe.
[1] https://www.datacenterdynamics.com/en/news/trump-blocks-renewable-energy-approvals-on-federal-land-and-waters/
[2] See, for example https://www.worldatlas.com/industries/the-world-s-largest-oil-reserves-by-country.html and https://worldpopulationreview.com/country-rankings/natural-gas-by-country.
[3] https://www.politico.eu/article/ursula-von-der-leyen-paris-climate-deal-donald-trump-eu-commission-us/
[4] https://commission.europa.eu/topics/eu-competitiveness/draghi-report_en#paragraph_47059
Read here the full article prepared by Cosmin Stăvaru, Partner.