Contextual changes require R&I policy adaptation, including addressing infrastructure, decarbonisation of energy and diversification of supply chains.
The European Commission has published an independent expert report on ‘addressing European Research and Innovation Challenges for System Transitions in Energy and Mobility’. The report first identifies four macro-level changes to the European context that may provide opportunities for growth in sustainable directions and for societal benefits to emerge, and how these changes have an impact in the field of energy and mobility. Following the identification of these challenges, the report proposes R&I actions along specific innovation pathways, as well as broader policies, to address them.
The first change identified is that low-carbon transitions have now entered the diffusion and development stage in electricity and auto-mobility, which provides promising opportunities for climate mitigation in the two fields where alternatives are becoming more cost-effective and accepted by the public. However, while Europe has reduced its emissions of greenhouse gases, it is not on track to meet the targets, and thus more work must be done. Complementary to these transitions is the second change, the fact that low-carbon and clean energy developments have become part of an innovation race. According to both the Draghi report and this report, Europe is falling behind in this race, and thus concerns about Europe’s ability to keep up with other actors, its competitiveness, is being questioned. Third change is the rise in geopolitical tensions, which has created security concerns. In the context of energy and mobility this is especially palpable in fears that Europe is overly dependent on external production of critical materials. International relations, previously shaped by fossil fuel trade, may also experience great shifts as Europe transitions to greener technologies. Thus, calls for “open strategic autonomy” echo amongst policymakers. Fourth and final contextual change presented is the increasing presence of the low-carbon transition in societal debates. Concerns over equity, justice and inclusion in the distribution of these new technologies are being voiced by many and because societal acceptance of these technologies is vital for their success, it must not be underestimated.
With these four changes in mind, the report presents a vision of future energy and mobility systems that would address them. These systems must be low-emission, cost-competitive, energy-and resource-efficient, integrated and flexible. Furthermore, to address the challenge of falling European competitiveness and improve economic viability, European manufacturing must be supported and involved in the transition. The report speculates that it may not be viable to do so for all technologies and that Europe must therefore specialise on the innovation areas where its companies have a specific competitive advantage over those in other parts of the world. The systems must also rely on diversified international supply chains and increased domestic manufacturing of low-carbon technologies. Furthermore, in the future, the energy and mobility systems must offer societal benefits such as better affordability and health benefits by means of for example cleaner air.
In line with this vision for the systems’ future, the report presents R&I actions it recommends taking along nine ‘innovation pathways’ which were selected based on their expected desired impact. These nine include integrating the systems, especially using digital technologies, to align different innovators and working towards infrastructure innovations in the two fields. Actions also include decarbonising energy production, specifically with solar and wind, and increasing energy efficiency to decrease primary energy demand. Also listed are working towards more electric vehicles, biofuels in transport and hydrogen in energy systems. The report cautions that the latter two may show difficulties scaling up, however. Lastly, the report highlights its requirement to work on social innovations towards sustainability and shifting towards more shared transport use. Of note, is that the report also explains why it does not address the important factor of energy- and resource-efficiency improvement in depth. The reason stated is that these require incremental innovations instead of radical ones, which is what the report focuses on. Furthermore, the limited scalability and deployment potential of Carbon Capture and Storage (CCS) is the reason why it is not included in the report.
Beyond the selected pathways, the report also proposes broader R&I policy to address the energy and mobility systems. Increase public R&I support, specifically by providing incentives for R&I at the company level and combining public spending with an increased focus on strengthening the power of market dynamics. Strike a balance between supporting new technologies where Europe can compete, innovations that can transform Europe’s position in industries that are key for jobs and economic vitality and technologies that can mitigate supply chain risks, even if Europe cannot compete in them on an international level. Thus, another suggestion is to decrease the risk of over-dependency in supply chains through innovation, scaling up European manufacturing capacity. Additionally, combining and aligning basic research, applied R&I and deployment actions to scale up resilient innovations is also proposed as a crucial measure. Important is also aligning R&I actions with infrastructure policies to achieve better competitiveness and consider constitutional changes to take better advantage of opportunities that arise, improved coordination between EU institutions and member states is listed as an example thereof. Bridging the perceived lack of social acceptance is also proposed. The report proposes to focus more on better understanding the dynamics of system transition to do so by placing more emphasis on broad analyses of co-evolutionary processes within them. Finally, the last proposal of the report suggests looking into the importance of new stakeholders rather than keeping emphasis on incumbents.