Mario Draghi has made a few hard truths in his assessment of the EU’s economic prowess, and in turn its ability to tackle climate change.

On the economic front in his report ordered by the European Commission he made plain that the EU faces an existential challenge unless it increases investment and reforms its industrial policy.

He said that the EU must increase spending by €800bn per year or be left behind by the US and China and would be “forced to choose” between climate, economic and foreign policy.

Here the report recognised that massive investment in carbon capture technologies is needed if hard-to-abate and energy intensive industries are to decarbonise, and Chris Davies, director of Carbon Capture and Storage Europe (CCS Europe) noted: “Achieving this will become increasingly urgent as free carbon allowances under the EU ETS come to an end and business has to start paying the full cost of its emissions.

“Carbon capture is a case study for the dilemma that Draghi addresses. European industry must decarbonise, but we will not have the finance to support the work needed unless we raise our productivity to record levels."

---