Rapid Transition to Energy Sovereignty

The EU Commission launched AccelerateEU in April 2026 to address rising energy prices and reduce dependence on imported fossil fuels amid the geopolitical instability of the Middle East conflict. Building on REPowerEU, it aims to accelerate electrification, homegrown renewable energy, grid upgrades, and clean energy investment, while protecting households and businesses from price shocks. AccelerateEU signals that Europe’s energy sovereignty agenda is increasingly becoming an investment agenda with the Commission exploring the introduction of further financial incentives including targeted tax credits, accelerated depreciation, and social leasing schemes for clean technologies.

Germany will provide up to EUR5bn through its 2026 round of 15‑year "carbon contracts for difference” (CCfDs), representing an investment opportunity to help factories switch to cleaner technology. The CCfDs will cover the extra costs of low‑emission production for major industries such as steel, cement, and chemicals, to encourage factories to remain in Germany while meeting climate goals.  This is a welcome step towards decarbonising EU heavy industry and aligns with the practical steps put forward in our new report on how the EU can deliver long-term energy security, competitiveness, and sovereignty.

The Brazilian Sustainable Taxonomy is expanding beyond climate mitigation through a second phase to include biodiversity protection and the circular economy, alongside implementation of the first phase. By expanding into biodiversity and circular economy activities, the taxonomy is potentially opening up new eligible investment categories beyond renewables and mitigation assets which will be particularly relevant for investors in sectors like agriculture, land use, waste, and industrial materials. 

In the Dominican Republic, the Superintendency of Banks has issued a regulatory circular requiring financial institutions to report their credit portfolios by sector and economic activity in alignment with the national taxonomy. Financial institutions are also required to designate a representative to coordinate directly with the regulator on taxonomy-related data preparation and registration. This is a noteworthy development for the Dominican financial system and begins to embed sustainability classifications into core supervisory reporting systems.

One to watch: The EU Commission is considering giving fossil fuel companies flexibility to avoid penalties originally designed to curb methane emissions. The EU Methane Emissions Regulation (EU MER) is set to come into effect over the coming years and enforces penalties for non-compliance with monitoring and emission reduction requirements. Recent reporting suggests that the Commission is considering giving national authorities the ability to grant exemptions to enforcing fines on energy security grounds. However, suspending the core enforcement lever in this way would be a major step backwards for climate policy. The EU MER should be seen as a powerful complementary tool to AccelerateEU, as our latest report makes clear.