Staying the Course in Turbulent Times

Staying the Course in Turbulent Times

Insights on the current state and ways forward for the EU's climate, energy and finance policy architecture

Publication: Report
Citation: Michael Pahle, Ulrich Fahl, Benjamin Görlach, Ronja Busch, Simon Feindt, Nikolas Messerschmidt, Jana Nysten, Sebastian Osorio, Darius Sultani et al. (2025): Staying the course in turbulent times: Insights on the current state and ways forward for the EU's climate, energy and finance policy architecture. Kopernikus-Projekt Ariadne, Potsdam. DOI: 10.48485/pik.2025.008

With the Fit for 55 package, the EU has raised the ambition of its energy and climate targets for 2030: at least –55 % GHG emissions, at least 42.5 % renewables, and improved energy efficiency. To reach these targets, the EU has amended its regulatory framework – making it more ambitious, more comprehensive and more diversified.

Yet, key challenges remain: overlapping instruments such as ETS 2 and the Effort Sharing Regulation (ESR), unclear governance arrangements, distributional effects and limited financial resources will all shape the implementation process in the coming years.

Against the backdrop of geopolitical tensions, sustained high costs and increasing political polarisation, this Ariadne background paper examines central elements of the revised EU policy architecture, highlights tensions and trade-offs, and outlines options for the post-2030 period – including market integration, financing strategies and the role of hydrogen.

The goal: a consistent, efficient and socially just framework for the transformation towards climate neutrality by 2050 – despite tightening constraints.

On the evolution of the EU climate, energy and finance policy architecture towards 2040

Between Climate Action and Competitiveness: Towards a coherent industrial policy in the EU

Principles for an EU industrial policy for climate action

Year 2024

Publication:Document

The analysis by Ariadne project partners examines Germany's climate foreign policy during the current legislative period. Beyond the international context, they also consider the organizational structure within the German government and the responsible ministries. The researchers conclude that Germany has been able to set the pace for international climate policy by transferring the responsibility for international climate policy to the Foreign Office and creating the role of Special Envoy for International Climate Policy. In contrast, the record of Germany's engagement in bilateral and plurilateral formats has yielded mixed results.

Deutschlands Klimaaußenpolitik: Kontext – Rückschau – Weiterentwicklung

Ariadne-Analyse

Year 2024

Publication:Report

A coherent German foreign climate policy is essential for the success of the national and European energy transition, as well as for the effective support of ambitious climate policies outside the European Union. This Ariadne background paper provides cornerstones and discusses options for the elaboration and further development of Germany's foreign climate policy. To this end, it distinguishes four categories of relevant goals: traditional climate policy goals, industrial policy goals, security and trade policy goals, and broader foreign policy goals. For each goal, it is necessary to identify appropriate means by which it can be achieved and barriers that stand in its way and need to be considered accordingly.

Eckpunkte zur Entwicklung einer Klimaaußenpolitikstrategie Deutschlands

Ariadne-Hintergrund

Year 2023

Publication:Report

This paper is a slight adaptation of the German-language analysis "Wasserstoffimportsicherheit für Deutschland – Zeitliche Entwicklung, Risiken und Strategien auf dem Weg zur Klimaneutralität", published in December 2021. The analysis takes a close look at Germany’s future need for hydrogen imports, hydrogen import-related risks as well as strategies to secure hydrogen imports.

Securing Hydrogen Imports for Germany: Import needs, risks and strategies on the way to climate neutrality

Ariadne-Analysis

Year 2022

Publication:Conference Paper

This document presents main takeaways and insights from a workshop organised by the Ariadne Project in Brussels on 30 November 2022. The workshop convened experts from seven organisations that operate carbon market models – academic institutions as well as carbon market analysts.

The EU-ETS Price Through 2030 and Beyond: A closer look at drivers, models and assumptions

Input material and takeaways from a workshop in Brussels

Year 2022

Event:Conference

With the Fit-for-55 package about to be put into law, and the RePowerEU plan adopted in response to the energy crisis, EU climate and energy is undergoing the most profound change in years, getting the EU on track to a post-fossil energy system. In a three-day series of events, partners from the Ariadne research project presented key insights from their work that is relevant for the further development of EU climate and energy policy, and discussed these with representatives from political institutions, academia, civil society and business. The events served to share research insights, to discuss and validate findings and their relevance for EU policy process, and to gather inputs for further research.

Shaping EU Climate and Energy Policy: Insights from and for the Ariadne Project

30 November - 2 December 2022
Brussels, Belgium

Event:Digital Event

While policymakers are currently mulling over the EU-ETS reform, it is a good time for analysts and scientist to take a step back and discuss the analytical tools used to project the outcome – specifically: the expected, predicted or necessary carbon price(s) towards 2030. To that end, the Potsdam-Institute for Climate Impact Research (PIK) and Ecologic Institute organize a workshop in Brussels on 30 November 2022.

The EU-ETS Price Through 2030 and Beyond

A closer look at drivers, models and assumptions

30 November 2022
online

Publication:Article

Social concerns around introducing a carbon price for transport and heating fuels (ETS2) are legitimate. But the EU Parliament overshot the mark in its aspiration to cushion households, which becomes apparent in its request for changes to the Social Climate Fund (SCF), write Michael Pahle, Nils aus dem Moore and Benjamin Görlach in their article for EURACTIV.

How to Make ETS2 Work for Climate and People

Year 2022

Publication:Report

Experts from Ecologic Institute, Potsdam Institute for Climate Impact Research, RWI – Leibniz Institute for Economic Research, Mercator Research Institute on Global Commons and Climate Change, Stiftung Umweltenergierecht, ZEW – Leibniz Centre for European Economic Research and IER Stuttgart analyzed various options for the relief and level of the CO2 price – and identified advantages and disadvantages as well as implementation requirements of different design options. The focus is on two key political points of contention, where scientific findings can prevent an impending hardening of the position and thus promote a consensus that is conducive to climate protection. This German-language abridged version summarizes the findings.

Ein fairer und solidarischer EU-Emissionshandel für Gebäude und Straßenverkehr

Zusammenfassung

Year 2022

Languages

German

English

Authorship

Benjamin Görlach

Leon Martini

Credits

Authors:

Michael Pahle, Potsdam Institute for Climate Impact Research
Ulrich Fahl, University of Stuttgart – Institute of Energy Economics and Rational Energy Use
Ronja Busch, Stiftung Umweltenergierecht
Simon Feindt, Potsdam Institute for Climate Impact Research
Nikolas Messerschmidt, University of Stuttgart – Institute of Energy Economics and Rational Energy Use
Jana Nysten, Stiftung Umweltenergierecht
Sebastian Osorio, Potsdam Institute for Climate Impact Research
Darius Sultani, Potsdam Institute for Climate Impact Research
Jan Abrell, University of Basel
Markus Blesl, University of Stuttgart – Institute of Energy Economics and Rational Energy Use
Johannes Brehm, RWI – Leibniz Institute for Economic Research
Nils Bruch, Technical University of Darmstadt
Jonas Egerer, University of Technology Nuremberg
Natalia Goryashchenko, University of Technology Nuremberg
Veronika Grimm, University of Technology Nuremberg
Henri Gruhl, RWI – Leibniz Institute for Economic Research
Alyssa Gunnemann, Eidgenössische Technische Hochschule Zürich
Conall Heusaff, Bruegel
Lena Kittel, University of Stuttgart – Institute of Energy Economics and Rational Energy Use
Michèle Knodt, Technical University of Darmstadt
Gunnar Luderer, Potsdam Institute for Climate Impact Research
Fabian Ostertag, University of Stuttgart – Institute of Energy Economics and Rational Energy Use
Fabian Pause, Stiftung Umweltenergierecht
Grischa Perino, Universität Hamburg
Robert Pietzcker, Potsdam Institute for Climate Impact Research
Christoph Plate, University of Greifswald – Institut für Energie-, Umwelt- und Seerecht
Sebastian Rausch, ZEW-Leibniz Centre for European Economic Research and Heidelberg University
Renato Rodrigues, Potsdam Institute for Climate Impact Research
Sabine Schlacke, University of Greifswald – Institut für Energie-, Umwelt- und Seerecht
Tobias Schmidt, Eidgenössische Technische Hochschule Zürich
Frederik Schmitz, Universität Hamburg
Antonia Schwarz, Potsdam Institute for Climate Impact Research
Bjarne Steffen, Eidgenössische Technische Hochschule Zürich
Eva-Maria Thierjung, University of Greifswald – Institut für Energie-, Umwelt- und Seerecht
Dimitrios Tsoutsoulopoulos, University of Stuttgart – Institute of Energy Economics and Rational Energy Use
Falko Ueckerdt, Potsdam Institute for Climate Impact Research
Georg Zachmann, Bruegel
Peiwen Zhang, University of Stuttgart – Institute of Energy Economics and Rational Energy Use

Funding