Somewhere in the architecture of EU policy, two offices are working against each other. One is writing energy strategy. The other is drafting environmental methodology. They haven’t compared notes, and European industry is starting to notice.
The stakes are not abstract. Europe is, again, staring at fossil fuel exposure it cannot control. Prices set by suppliers and conflicts it has no hand in. The Commission’s response, repeated by Ursula von der Leyen with unusual directness, is that domestic renewable capacity is the answer, and that private capital has to pay for most of it. Public budgets won’t stretch far enough. The investment needs to come from companies.
Many companies are already providing it. Corporate power purchase agreements, long-term contracts between businesses and renewable generators, have financed roughly 60 gigawatts of European wind and solar. The logic is straightforward: a manufacturer locks in a price for clean electricity, the generator gets the revenue certainty to build the project, and new capacity comes onto the grid without a government subsidy in sight. Salzgitter does it. Borealis does it. Ardagh Group does it. They do it partly to control their energy costs, and partly because customers and regulators increasingly expect them to demonstrate lower emissions. Both reasons matter. Take away either one and the investment case weakens.
The draft carbon calculation rules under the EU Batteries Regulation are threatening to take away the second.
Under the proposed methodology, a company’s purchase of renewable electricity may not be recognised when calculating the carbon footprint of its products. In practice, this means a manufacturer that has spent years building a PPA portfolio, funding real capacity, drawing verifiable clean power, could still have its products assessed as if it had done nothing. A competitor that bought fossil power throughout and switched to cheap offsets at the last moment might fare better on paper.
This is the kind of outcome that erodes trust in policy frameworks. Companies that took early action, at higher cost, carry no advantage. The regulatory signal says that what you do in the real world and what you’re credited for in product carbon calculations are unrelated. Given that corporate PPA growth in Europe has been one of the more effective mechanisms for pulling private capital into renewables, a rule that severs the link between that investment and its recognition is not a footnote. It’s a structural problem.
The companies affected are not lobbying for weaker standards. Salzgitter, Ardagh, and Borealis, among others, have written directly to policymakers asking for coherence, not concessions. They want the methodology to reflect what decarbonisation actually looks like when it happens through procurement and infrastructure rather than through accounting. That’s a reasonable position from companies that have put balance sheet resources behind clean energy commitments.
European energy policy and European environmental policy are, at this moment, pulling in opposite directions on the same rope. One side is asking the private sector to fund the clean energy build-out. The other is designing a system in which doing so confers no measurable advantage. Both cannot succeed simultaneously.
The correction is technically simple. PPA-sourced renewable electricity should count in product carbon footprint calculations. The companies that fund new capacity should see that recognised. Alignment between what energy policy requests and what environmental rules reward is not an unreasonable expectation.
But simple corrections still require political will. European leaders have a choice between letting the contradiction persist, with predictable consequences for investment flows, or sending a signal coherent enough for a boardroom to act on. In a period when energy security and industrial competitiveness have both become urgent, an avoidable contradiction at the centre of EU policy is a problem of their own making.
