US Energy Secretary Granholm and European Commissioner Simson on ambitious climate targets and a just energy transition

The lignite coal power plant complex of German energy supplier and utility RWE is reflected in a puddle in Neurath, north-west of Cologne, Germany, on February 5, 2020. Photo via Wolfgang Rattay/Reuters.

Watch the EU-US Future Forum

Wed, May 5, 2021

EU-US Future Forum

8:30am

Event transcript

Speakers
The Hon. Jennifer Granholm
US Secretary of Energy

H.E. Kadri Simson
European Commissioner for Energy

Moderator
Amb. Richard Morningstar
Founding Chairman, Global Energy Center, Atlantic Council

RICHARD MORNINGSTAR: Good morning, everybody, to those joining from the United States, and good afternoon to those in Europe. I’m Richard Morningstar, the founding chairman of the Global Energy Center at the Atlantic Council, and a board director, also former ambassador to the European Union.

It’s my—really a huge honor to welcome you all to today’s panel, “A New Chapter for US-EU Climate Leadership: Aligning Strategies and Actions.” I also have the—again, another huge honor, to introduce our distinguished panelists, both of whom will be at the fulcrum of meeting, respectively, the ambitious climate commitments in the United States and the European Union.

Secretary of Energy Jennifer Granholm was sworn in as the sixteenth secretary of energy on February 20, 2021. Prior to her nomination as secretary of energy, among other things, she served two terms as governor of Michigan. And during that tenure, then-Governor Granholm emphasized new clean technologies and the jobs that they will create.

Kadri Simson is the European commissioner for energy and was appointed in 2019. And prior to that, starting in 2016, she was Estonia’s minister for economic affairs and infrastructure, and had an extended career in Estonian politics prior to that time.

Thank you both for joining us for this discussion today on how the United States and European Union can lead together on climate action. And this conversation has never been more timely than it is now.

And to those joining us today, you can follow the conversation by using the hashtag—capital letters—#EUFF2021.

Madam Secretary, Madam Commissioner, we are witnessing unprecedented momentum on climate commitments and actions in the United States and the European Union. Maybe at the beginning it would make some sense if both of you discussed your top priorities in the near future, in the coming months, in these areas. Perhaps we can start with Secretary Granholm and then go to Commissioner Simson, and then maybe you’ll be able to comment on each other’s—on what each other has said. Madam Secretary?

SECRETARY JENNIFER GRANHOLM: Thank you. Thank you so much. Thank you, Ambassador Morningstar. And welcome to everyone.

I want to start by really congratulating the Atlantic Council and the Delegation of the European Union for hosting an incredible event this week.

I’m so pleased to be on with Commissioner Simson. It’s such a pleasure to be sharing the virtual stage with you once again.

So I guess it’s fitting that we’re starting off with this question because the last time Commissioner Simson and I met we were—we were bearing witness in real time to unprecedented momentum, as you say, because President Biden’s global leaders summit on climate was a monumental week of international cooperation and a lot of bold new pledges on climate action. I’m so proud of the big pledge that America made, committing to a 50 to 52 percent reduction in emissions from 2005 levels by 2030. And that, of course, is right in line with the ambitious goals President Biden laid out in his very first weeks of office, which is 100 percent clean electricity by 2035 and net zero carbon emissions by 2050. So we’ve got to go, go, go—(laughs)—and use this momentum collectively to continue to raise both America and the globe’s ambitions around climate action and clean energy deployment, and really to do so in a way that puts millions of people to work.

I’m all about the jobs side. We need to lift up communities that have been knocked down. We—and we will need to do this in a way that guarantees our economic competitiveness, as well, for decades to come. And that absolutely means getting his—the president’s American Jobs Plan passed which he has proposed, which calls for massive investments in clean energy research and development—and deployment, very importantly. And that plan is something I think the whole world should be rooting for because America’s clean energy future is about all of our clean energy futures.

I think it’s important to acknowledge that for far too long the global climate conversation really has assumed that climate action is a zero-sum with the economy, and we all stand to gain from developing the latest and greatest in clean energy, and we have an interest in shared progress. So it’s not zero-sum from country to country and it’s not zero-sum from the environment or climate to the economy. We all can gain, and we all can gain economically by addressing this issue. We want to all build net-zero economies. We’ve got to create new jobs and businesses for our people. We all want to make good on our moral debts to those who have been bearing the burdens of fossil fuel pollution. And we can do it. We can do all of it if we pair our fierce competition with constructive international cooperation, and that’s why forums like this are so important.

So we have similar dreams, similar challenges. Let’s work on them together.

RICHARD MORNINGSTAR: Thank you, Madam Secretary.

Now I’ll turn to Commissioner Simson. It’s good to see you again. And if you could maybe tell us what some of your priorities are.

KADRI SIMSON: Good afternoon from Brussels. Dear Secretary Granholm, dear Ambassador Morningstar, dear viewers, well, it is a real pleasure to have this discussion at the EU-US Future Forum as we celebrate seven decades of successful cooperation between the EU and United States. And I am a true believer in a strong transatlantic relationship, so I’m convinced that by working together we will drive the change needed in the energy sector on both sides of Atlantic and all over the globe.

So it is a pivotal, exciting time for energy and climate policy. And as Secretary Granholm already mentioned, two weeks ago President Biden’s leaders summit was a turning point for the US and also for global commitment. Here in Europe, we have just agreed on a groundbreaking climate law. And we will present shortly major legislative changes to deliver our emission targets. So, at the same time, we know that COP26 is also on the horizon.

And as you know our commitment is to become the first climate-neutral continent by 2050, and already reduce our greenhouse gas emissions by at least 55 percent by 2030. And last year we set out our vision for each of these targets. In the energy sector, there’s a different strategic document on hydrogen and methane and energy system integration and offshore energy, and also wave of renovation of European buildings. But now the green transition is also at the center of our long-term budget and at the heart of our recovery plan, and we do have pretty significant firepower to finance it, but we have to keep in mind that we need also lots of private investments because the investment challenge is around 350 billion euros per year over this decade. But we do have vision, and we do have strategic plans, and we do have resources. So our priority this year is to add the last essential piece, and this is a wide range set of legislative changes to make sure that all sectors of economy will contribute to decarbonization agenda. And I truly believe that we will achieve this.

RICHARD MORNINGSTAR: Thank you very much, Commissioner.

Let me just ask you quickly whether you have any reactions to what Secretary Granholm said, and then I’ll ask Secretary Granholm the same question.

KADRI SIMSON: Well, I think that we are on the same page that still majority of the greenhouse gas emissions are coming from the way how we produce and consume energy. And in this regard, we do have common challenges. How to, well, define the hydrogen market that doesn’t exist? How to, well, have great global standards and certificates so that we know that it helps us to achieve our climate targets? And in this regard, I can only echo that—the policy of necessary cooperation ahead of us. And of course, together we can also create this global market for the rest of the world.

SECRETARY JENNIFER GRANHOLM: Right. And—

RICHARD MORNINGSTAR: Madam Secretary?

SECRETARY JENNIFER GRANHOLM: Yep. Together, we are stronger. I so appreciate Commissioner Simson’s acknowledgment that the global leaders climate summit was a turning point, or at least a recognition that the community recognizes—the European Community recognizes that the United States is back, that we are seriously committed to climate change abatement, that we want to be partners with you.

And I will say, too, that we recognize that the past four years where we were out of this conversation leads us to enter this with humility. And we know that so many of our allies have been working continuously on this, and we want to learn from you as well as partner with you to solve these big problems. So we’re excited about it.

RICHARD MORNINGSTAR: Great.

Let me—let me ask you this, Madam Secretary. You made reference—I think you were making reference to a just energy transition. And you know, to meet the climate goals it’s also going to be important that it be done in some—in a way that’s acceptable to, you know, wide sectors of the population feeling that it’s been fair, equitable, and just. Could you talk a little bit more about how you see a just energy transition and what it means?

SECRETARY JENNIFER GRANHOLM: Yeah. I mean, I don’t think we can do this in any of our countries without acknowledging that the people who [brought] us to the dance—meaning the people who have powered our respective countries—must be respected and brought to the future. So a just transition for them is a top priority for us in and of itself, in no small part because we know that the coal and the power plant workers who built this nation can really play a massive role in making America’s and the world’s clean energy future a reality. Their skills are needed. We need these workers. And I know many of you feel the same way about your own fossil fuel communities.

So we’re—in the US, the Biden administration, we are committed to advancing justice and equity alongside of our push for clean energy. We’re following through on that commitment by bringing these communities to the table, by working with them on job-creation strategies that are specific to their needs, to their challenges. During his first week in office, President Biden established a working group that’s administered by the Department of Energy and that collaborates across a number of agencies on solutions for communities with the highest concentrations of coal-dependent jobs. And through this listening session that we’ll continue throughout the year—we’ve released our first report from that effort. And it was last month, and that identified nearly $38 billion in existing federal funding that could be used to support economic revitalization and job growth and training in these communities. So we’re excited about that. We also—DOE alone, Department of Energy alone—announced more than $109 million for projects that will spark next-generation industries, that will support jobs for coal, and oil, and gas, and power plant workers. And it’s just the first of many investments to come. And the American Jobs Plan, then followed up with the president’s proposal, lays out the next critical investments that we should make.

In the short term, the American Jobs Plan is going to create thousands of jobs for workers to clean up, for example, abandoned land mines or plug leaking oil and gas wells right in their backyards, which are jobs that their skills already position them perfectly for. But the plan is also going to get to work on scaling up industries of the future—like hydrogen. I know Commissioner Simson mentioned that. Like carbon capture. Like, you know, in our country we haven’t done a whole lot with geothermal. We should be. But those skill sets can be transferred to those kind of production of clean energy these workers cannot just participate in but lead, while helping America move on decarbonization.

And looking at the international cooperation opportunities here, I was—I was personally thrilled to announce during the climate summit that the US is joining this Empowering People Initiative, which is formed by my European and Canadian colleagues, with an aim to launch at the 12th Clean Energy Ministerial in June. And Commissioner Simson and I are also co-chairing the US-EU Energy Council and its working groups, which we can and should use as a forum to focus on these just transition issues—both for our fossil fuel communities within the US and Europe, but also for developing countries as they navigate the energy transition as well.

RICHARD MORNINGSTAR: Thank you very much, Madam Secretary.

And, Madam Commissioner, you face a lot of the same issues in several of your member states that Secretary Granholm talked about. How do you see your green recovery plan and green transition dealing with these issues?

KADRI SIMSON: So, indeed, we know that clean energy transition will cut emissions and it will reduce pollution and improve our health. From the very beginning, when our President Ursula von der Leyen presented European green deal, she was very clear that fighting climate change can’t come at the cost of the most vulnerable in our societies. And luckily, we know that clean energy transition also has a strong potential to create jobs and to boost growth.

And according to our estimates, every billion euro of investment in renewably hydrogen, for example, will create ten thousand jobs around the supply chain. So, similarly, solar power could create four hundred thousand new direct and indirect jobs around the entire industrial value chain during this stage. And for comparison, the coal industry currently employs here in European Union less than two hundred thousand people. So, overall, we estimate that going climate neutral will create almost two million jobs across EU. And these will be high-quality, future-proof jobs, and these will bring revenues to local communities.

But of course, we have to take care that those jobs will be created in the regions where right now people get their incomes from mining activities. So we know that such a radical transformation will inevitably have a disruptive effect in those specific regions, ranging from loss of economic activities to the—to a change of the way of life for entire communities. And that’s why—while I’m—well, while I’m convinced that climate action will ultimately benefit all Europeans, it is also clear that some people and some regions and some industries may need support to create new opportunities. And this is what we call a just transition. First time we ever we have specific funds for those regions.

So we promise not to leave anyone behind. And there are a wide range of financial instruments and also ways how we can advise them to attract more investments and newer job opportunities to those regions. For us, this is not only about our own member states and own regions. We care about our close neighborhood, too.

And that’s why we have launched also similar programs for our neighboring countries and regions, in Western Balkans and in Ukraine, so that they can also accommodate their transition to a climate-neutral economy. And of course, we are also ready to work with the International Energy Agency to develop solutions for the regions that are most affected. And I am also very glad to see that the just transition is also getting the international attention it deserves. COP26, we will once again bring this into the spotlight.

RICHARD MORNINGSTAR: Thank you.

And both of you have really emphasized the importance of jobs, and jobs in sectors that would be—that could be adversely affected by the transition, which will be so important. Another area I think that it’d be good to get into—and I think there’s general agreement that if we’re going to meet our climate goals there’s going to have to be a lot of technology innovation. Both of you have mentioned hydrogen. Carbon capture came up earlier. There are other areas that are going to be important.

Maybe if you could talk a little bit on how you think that the US and the EU could best cooperate to move forward in these new technology areas. There are some vehicles in place—the US-EU Energy Council. In Europe they call it the EU-US Energy Council. In any event—(laughs)—one area. Cooperation with the private sector. I think Commissioner Simson—I think you may have referred to that. That’s going to be—that’s going to be important. And maybe if you could both talk about how you think we can best cooperate. Maybe I’ll start with the secretary and then go to you, Commissioner.

SECRETARY JENNIFER GRANHOLM: Great. So a thousand percent, Mr. Ambassador. And I know you’re asking about new technologies, but I just want to step back for one second to note that of course the most cost-effective step we could take toward decarbonizing the economy is to decarbonize the power grid. And those—we have technologies in place to do it. And we want to deploy them. It would clear the path to decarbonizing other sectors, like transportation and buildings, if we did the power grid.

But as for new technologies, we absolutely need massive investments to—so that we can deploy, deploy, deploy cheaper and more efficient renewable energy, as well as address the challenges that the grid faces today, particularly around transmission infrastructure and energy storage. Europe, we know, is already a global leader here. And in the US we are flooring the accelerator—I would say putting my foot on the gas, but we want to put our foot on the electric vehicle accelerator. Over the past few months DOE and the Biden administration have announced these ambitious new goals to cut the cost of solar, for example, by 60 percent within the decade, and deploy thirty gigawatts of offshore grid by—offshore wind by 2030 and expand and upgrade the grid. And if we work faster on these efforts, you know, it will just mean that we can also turn our attention—which we are doing simultaneously—to these new technologies.

And as we work on reinvigorating the US-EU Energy Council, I see offshore wind in particular as an opportunity for more dynamic engagement. Innovation is also key in energy storage, especially because that market is projected to increase fourfold by 2030. So since 2017, the Department of Energy has invested more than $1.2 billion in energy storage research and development, about four hundred million dollars a year. And we took a huge step forward in March as we announced the creation of our—what we call our grid storage launchpad. That is a $75 million research and development facility that’s going to help us accelerate the deployment of long-duration and low-cost grid energy storage and expand battery R&D capabilities.

Like the US, the EU is also pursuing innovation, obviously, and deployment in the energy storage space, which makes this another opportunity for possible engagement and cooperation under the US-EU Energy Council. And it all goes back to what I was saying earlier about paring competing with cooperation. If we work together here to prioritize more research and development and deployment of clean energy technologies, we can move more quickly to achieve our own net-zero goals while accelerating the global transition and lowering the cost of decarbonization for the rest of the world. Everybody benefits.

We all want to get to the solutions on hydrogen that’s cost-effective. We all want to get to the solutions on cost-effective CCUS. Maybe it’s blue hydrogen. Maybe it’s green hydrogen. Maybe it’s pink hydrogen—(laughs)—the next generation of nuclear technologies, for those who are interested in that. The bottom line is, there’s so much to cooperate on in these advanced energy technologies. And I look forward to working with the EU on them.

RICHARD MORNINGSTAR: Well, that’s great. And your enthusiasm is great as well. (Laughs.) And, Commissioner, there’s a lot that the secretary said that you may want to—that you may want to respond to. I have to mention that, you know, this offshore wind, that’s certainly important in your part of Europe, being from Estonia and the Baltic states, where so much wind is coming off of the Baltic Sea and offers a tremendous opportunity. But maybe you could give your comments on cooperation, the private sector, and some of the areas that the secretary mentioned.

KADRI SIMSON: Yes, indeed, Ambassador Morningstar. From where I’m coming, we do have shallow coastal waters. And we see a best opportunity on offshore wind. But we also see that climate change is a challenge that no country and no sector can solve alone. So to create meaningful global change I actually see no alternative to the good working relationship between the European Union and the United States. And in this regard, technology and innovation are, in my view, some of the most promising and impactful areas for that cooperation.

And we shared the vision that breakthrough clean solutions, they are needed to make the transition faster. But also they are needed to make the transition cheaper and more capable of generating growth. And, well, of course our aim is to relaunch the EU-US Energy Council this year, a soon as possible. We want to make it a dynamic setting where business will be able to share their experience and network and develop new projects. And we have also proposed a new clean tech alliance with the United States. But this idea is here that this clean tech alliance would be to create lead markets and cooperate on clean technologies like renewables and also, again, clean hydrogen. And this will pave the way for investments to the benefit of green companies on both sides of Atlantic. And we could create more opportunities for business and remove barriers and exchange knowledge, and I’m very much looking forward to sharing some initial ideas with you in the format of the dialogue.

But for global change, bilateral transatlantic cooperation will again not be enough, and we need to work together across the globe to promote topics of common interest. And I’m very pleased to see that you, Secretary Granholm, you are a candidate for the position of chair of 2022 IEA ministerial, along with the nominations of vice chairs from Denmark and Belgium, and this would be a dream team in the making. And we also warmly welcome the US offer to host the 2022 annual meetings of both the Clean Energy and Mission Innovation ministerials. So having the US at the steering wheel of those important multilateral fora will help to keep the momentum on raising clean-tech ambitions all over the world.

RICHARD MORNINGSTAR: Great.

I see the clock is ticking down, and so why don’t we do this? Why don’t I ask each of you if you have any closing comments—any further closing comments that you would like to make before we—before we sign off? Secretary, and then Commissioner.

SECRETARY JENNIFER GRANHOLM: Yeah. Just briefly, I mean, I just want to say the United States can learn from the EU’s approach to encouraging greater global policy action through both these targeted programs and funding to drive down costs for leapfrogging this clean energy technology. Together, we can do this. We can start with a focus on our existing forums that you have described, the Clean Energy Ministerial and Mission Innovation, to make this approach to clean energy collaboration more coherent and more consolidated, and therefore more effective.

So I say let’s do this. I can’t wait. We are more powerful together. And I look forward to working with you.

RICHARD MORNINGSTAR: That’s great.

Madam Commissioner?

KADRI SIMSON: Well, also from our side, well, I again agree on the need for cooperation. And I do know that new technological solutions, where interest is global, and we are very interested in working closely with the United States. And as part of the clean-tech alliance with the United States, we could develop joint research programs and also we have to work closely to create a well-functioning international hydrogen market. So lots of work ahead of us.

RICHARD MORNINGSTAR: Well, thank you, Commissioner. And thanks to both of you, Commissioner Simson and Secretary Granholm. You both were exceptional speakers. And these dialogues with the two of you are so important because it’s the two of you that will be driving much of the process over the next few years, so that’s really great.

I also want to thank our audience for joining the session and the EU Delegation for partnering with the Atlantic Council with respect to the forum. I hope all of you in the audience will continue tuning in for the EU-US Future Forum programming, and you can find the full agenda on the Atlantic Council website.

And this has worked out perfectly because there is a giant clock in front of me and we have eleven seconds left. (Laughter.) So thank you very much, and we’ll turn it back to the overall moderators.

SECRETARY JENNIFER GRANHOLM: Thank you.

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