Eurosummer Heat Check: Why Flexibility, Electrification and CO₂ Storage Can’t Wait
EPICO KlimaInnovation
Energy and Climate Policy and Innovation Council - Think Tank | Network | Platform
Welcome to our July Policy Update!
Have you felt the heat lately? If you're in Europe, chances are you've been glued to your fan, or sweating over your AC bill... and you're not alone. The rising risks are getting harder to ignore, and when staying cool becomes a luxury, even the most sceptical must concede that climate change is affecting us like never before. As more households reach for energy-hungry cooling systems, the strain on electricity grids and wallets is becoming painfully clear.
The thing is, most Europeans can’t actually shift their electricity use to when energy is cheaper or greener. Why? Because their grids simply aren’t built for it. That’s a problem not just for households trying to save a few euros, but for the entire energy system. In this context, one term to keep on your radar is ‘flexibility’. Flexibility is what makes renewables work at scale, keeping costs down and reliability up - something we explored in our latest webinar, where we discussed why demand-side solutions are still missing in Germany and how smarter grid design could make a real difference. You can read more on it below.
Of course, it’s not only households feeling the heat. Rising energy prices are a key concern for European industry, significantly hindering competitiveness and slowing down the green transition. Electrification is one of the main ways forward, but how to finance it remains a pressing question. Our new policy paper maps the existing EU-level funding tools and highlights where support still falls short.
Still, electrification won’t cut it everywhere. What about those industries where CO₂ isn’t just a by-product of energy use, but baked into the process itself? For these harder-to-abate sectors, carbon capture and storage still holds real potential. That’s why we brought together key stakeholders on 30 June to explore what’s missing - from scaling up infrastructure in the North Sea to moving beyond national silos. Catch all the insights and recommendations below.
The EPICO team is also feeling the heat... from our laptops and the ongoing debates on the EU’s 2040 climate targets and the next MFF. So, just like many of you, we’ll be taking a short summer break. There’ll be no August edition of this newsletter, as we swap policy briefs for some salt air and mountain breezes.
Before we sign off, a quick heads-up: we’ve made space for two new desks in our Brussels office and we’re on the lookout for two great new colleagues to fill them. If you or someone you know is interested, scroll down for all the details.
NEW POLICY BRIEF SERIES – Electrifying Energy Intensive Industries: Assessing the EU Financial Framework for Industrial Decarbonisation
Decarbonising Europe’s heavy industry is one of the biggest challenges on the road to climate neutrality. For sectors like steel, cement or chemicals, electrification is a real opportunity, but scaling it up won’t happen on its own. That’s why on 8 May we brought together industry leaders, EU officials, NGOs and researchers for a closed-door workshop to tackle the big question: how can we speed up the transition in a way that is affordable, practical, and competitive? The result is our new series, Electrifying Energy-Intensive Industries.
The first policy brief of the series, Assessing the EU Financial Framework for Industrial Decarbonisation, focuses on the financing gap. Everyone agrees that public money has a role to play, but what we have right now just isn’t cutting it. Funding is still scattered across too many programmes, it’s hard to access, and often not aligned with real climate impact. With the Commission plans for the post-2027 EU budget unveiled, this is the moment to push for something better.
With this in mind, we have put together key recommendations to help improve the current framework. These include linking funding to emissions intensity and resilience criteria, scaling up competitive and blended finance instruments, and streamlining access to EU-level support. We also highlight ways to mobilise private capital, particularly through better use of InvestEU and clearer de-risking mechanisms.
To kickstart and support a clean industrial revolution, these changes are essential. Getting this right means setting industry up for success and making sure Europe stays competitive in a greener future.
Next up: hydrogen takes the centre stage in our series. With pressure building to deliver clean fuels where they’re really needed, our next brief will explore how to prioritise hydrogen use and get the infrastructure and incentives right. We’ll be back after the summer with more insights, so keep your sunglasses on and stay tuned.
Our latest Workshop: the European Carbon Management Dialogue
Decarbonising Europe’s industrial base is proving especially difficult in sectors like cement, steel or chemicals, where emissions are not just energy-related but often inherent to the production process. For example, even if a cement plant runs entirely on renewable electricity, it still emits CO₂ through the chemical reaction that turns limestone into clinker. In these cases, electrification or fuel switching simply won’t be enough—making carbon management a necessary part of the net-zero equation. As a result, carbon capture, utilisation and storage (CCUS) is gaining ground as a key solution to reduce emissions where other options fall short. But to be effective, carbon management must move beyond isolated national efforts and become part of a broader, cross-border strategy, with a plan to make the most of the North Sea’s vast CO₂ storage potential.
To explore this, EPICO hosted a closed-door workshop—the European Carbon Management Dialogue—on 30 June, gathering around twenty stakeholders from across the carbon management value chain. The discussion aimed to map out policy priorities for enabling large-scale, cross-border carbon management in Northern Europe. Participants examined how national strategies could align with shared infrastructure development, and what’s needed to streamline permitting, clarify liability, and ensure the North Sea can fulfil its role as Europe’s carbon sink.
The workshop highlighted a strong consensus: a coordinated European approach is urgently needed. Stakeholders stressed that without shared infrastructure and harmonised rules, national plans risk falling short of what’s needed to meet climate targets.
And while many will be heading off on summer holidays, EPICO’s policy specialists will be staying close to the (policy) heat, working on recommendations for a North Sea carbon management framework, to be published after the summer break. Stay tuned as we turn this conversation into concrete proposals for a more connected European approach to CCUS.
NEWS FROM BERLIN - Our Webinar on the Priorities for a Flexibility Agenda for the German Electricity System
Our Flexibility Agenda publication has made one thing clear: Germany is still missing a solid plan to tap into demand-side flexibility - the smart kind that lets electric cars charge when there’s plenty of renewable energy, heat pumps adjust their timing, and homes shift electricity use away from peak hours. Without this, the grid risks becoming more expensive to run, and hitting climate targets will take longer than necessary. That’s why we joined forces with Guidehouse to host the webinar Priorities for a Flexibility Agenda for the German Power System, digging into the key priorities for boosting flexibility in Germany’s power system.
Several key priorities emerged during the conversation. The current rollout of smart meters is too slow to support the level of digital integration needed, and grid charge structures are not yet aligned with flexibility goals. Price signals remain weak or inconsistent, particularly at the local level, and this is limiting the uptake of flexible processes in industry. For households, highly dynamic tariffs remain a niche solution, as most consumers prefer simplicity and predictability. Automated, time-based models offer a promising middle ground, especially when combined with smart technology.
Digitalisation was also identified as a critical bottleneck, with fragmented data systems and uneven IT infrastructure making it difficult to scale flexible solutions. A centralised approach to data access could ease complexity, reduce costs and enable smarter coordination across the energy system. Meanwhile, caution is needed when simplifying regulatory processes. Quick fixes, like a light version of the smart meter rollout, may appear attractive but could undermine data security and long-term system trust if not carefully designed.
We are grateful to Guidehouse for the excellent collaboration and would like to thank all speakers for their thoughtful contributions – if you’d like to learn more, head over to our website for the full summary and presentations.
Moving forward, flexibility must be understood not as a technical add-on, but as a core component of the system. It requires investment in infrastructure, targeted incentives, and a regulatory framework that reflects the real needs of consumers, businesses and grid operators alike. Without greater flexibility in the power system, Germany’s energy transition could hit some serious roadblocks.
Spotted: EPICO in the Media
Are you a climate and energy journalist looking for new voices to interview? Reach out to EPICO’s Senior Communications Specialist Agata Gurgenidze (Germany) and EU Communications and Media Specialist Michela Sandron (EU).
EPICO is Growing!
We’re growing our Brussels team and looking for two new colleagues to join us: a Director for EU Affairs and a Policy Specialist on Energy. If you're passionate about shaping smart climate and industrial policy, we’d love to hear from you. Applications are reviewed on a rolling basis, so don’t hesitate to drop us an email.