On the 23rd of September 2025, PubAffairs Bruxelles organised an afternoon of discussion on the question of energy prices in Europe. This event also marked a timely opportunity to discuss how the EU can foster both the decarbonisation and the competitiveness of the EU economy, with our distinguished speakers: Rosalinde van der Vlies, Director, Just Transition, Consumers, Energy Efficiency and Innovation, European Commission, DG ENER; Elisabetta Cornago, Assistant Director, Centre for European Reform (CER); Nicole Haft-Zboril, Senior Vice President of Real Estate Management, BMW Group.
The discussion was moderated by Paola Tamma, EU Correspondent at the Financial Times.
The moderator welcomed the audience and provided an overview of the topic of the debate, recalling that, over the past few years, Europe has faced a number of challenges, from the energy price shocks to inflationary pressure and intensifying geopolitical risk. At the same time, she explained that the EU is pressing forward with the Green Deal agenda and rethinking the structure of its energy and industrial policy. The challenge is clear, the moderator stated, namely to deliver cleaner, cheaper and more secure energy without undermining the competitiveness of the European industry.
After welcoming the panellists, Paola Tamma, the moderator invited Nicole Haft-Zboril to deliver a keynote speech.
Nicole Haft-Zboril began her keynote by referring to the recently announced world premiere of BMW’s iX3 model, also known as the “Neue Klasse”, and by stating that forty more products sharing the same design philosophy will be developed over the next two years. With this approach, the BMW Group is transforming itself into a global, high-technology company that is electric, digital and circular at the same time. Dr Haft-Zboril further explained that BMW’s real estate team is responsible for preparing the blueprints from research and development to production and retail. She also emphasised that BMW is taking action not only on the real estate front, but also across the supply side of its operations.
Dr Haft-Zboril then explained that BMW Group’s main task over the past few years has been to prepare the production network and a global footprint for the “Neue Klasse”, which has involved several construction projects. This included building a greenfield site in Debrecen (Hungary) and establishing five high-voltage energy module assemblies simultaneously worldwide. She also noted that BMW consumes 6.2 TWh of energy globally, two-thirds of which is required for the Group’s operations in Europe.
Dr Haft-Zboril then emphasised that the European automotive industry must be evaluated considering the entire value chain. For example, 70% of the added value in BMW Group products comes from components sourced from their supply chain, while 30% derives from BMW’s own production processes. Although the automotive industry is currently classified as non-energy-intensive, a deeper look at the value chain reveals that individual components – such as those in chemistry, glass and steel – are energy-intensive.
She then highlighted BMW Group’s full commitment to the Paris Climate Agreement, noting that several measures have already been implemented worldwide to secure the company’s targets beyond 2030. However, she also pointed out the need to discuss the EU economy’s competitiveness, particularly in ensuring energy supply at a competitive price.
Subsequently, Dr Haft-Zboril introduced BMW Group’s holistic approach to energy supply and management, aimed at substituting natural gas with renewable energies. She stated that BMW will triple its electricity demand and continue to expand its use of power-to-heat processes by 2035, while utilising all available energy sources across its sites. When technology is mature enough, hydrogen will also play a significant role, she added.
BMW has already implemented several energy projects and begun diversifying its energy mix at different locations, she continued. In Debrecen, for example, the new greenfield site will be fully operated through electrification and power-to-heat processes, without using natural gas for heating. In addition, she stated that, by the end of 2025, BMW will install the largest photovoltaic (PV) system in Hungary. The company is also promoting wind power and preparing for hydrogen as a future energy carrier, as seen at its Leipzig facility, she added.
Dr Haft-Zboril also noted that the future depends not only on its decisions’ implementation, but also on the development of external infrastructure. Tripling electricity demand by 2035, she added, has the potential to secure energy supply in terms of capacity, flexibility and reliability, provided other actors pursue electrification as well.
The speaker then stressed that competitiveness remains an important concern. In Europe, she remarked, BMW faces a significant disadvantage compared to the United States and China in terms of energy costs per vehicle. In this connection, she reiterated the importance of considering the entire value chain rather than distinguishing solely between energy-intensive and non-energy-intensive industries.
Dr Haft-Zboril concluded her keynote address by reaffirming BMW Group’s commitment to the Paris Agreement, while emphasising the critical importance of uniting efforts and understanding the interdependence of technology-open decarbonisation, security of supply and competitiveness.
The moderator kicked off the panel discussion by asking Nicole Haft-Zboril how important the relative difference of energy prices is in determining where BMW Group decides to open a new plant or to make a green field investment.
Nicole Haft-Zboril explained that, if BMW Group increases its operational capacity, it must plan and make decisions 8 to 12 years in advance. She then added that these decisions need to align with the Group’s technological roadmap, as the company cannot invest twice in the same infrastructure and must account for technology upgrades.
On a broader scale, given BMW’s international footprint, the Group considers cost competitiveness when planning new production sites, and energy costs play a significant role in these assessments, she said. However, Dr Haft-Zboril also emphasised that the way forward for BMW is to maintain a strong, first-tier supply base in Europe for critical components such as batteries and semiconductors, which are essential for sustaining the competitiveness of European operations.
The moderator then turned to Rosalinde van der Vlies, asking whether she had observed any evidence of industrial leakage due to higher energy prices in Europe compared to other regions, and which policies the European Commission plans to implement to mitigate that risk.
Rosalinde van der Vlies referred to the State of the Union address (SOTEU), in which President von der Leyen warned that Europe is lagging behind in accelerating a clean energy transition that is affordable, supports the competitiveness and decarbonisation of European industry and ensures energy security. She then stated that the European Commission is implementing several policies aimed at making energy more affordable for both industry and households, such as the Affordable Energy Action Plan adopted in February 2025. This plan takes a holistic approach, addressing the market, infrastructure and consumer dimensions, she specified.
Ms van der Vlies referenced the Draghi Report, which highlighted Europe’s high energy prices, while noting that the EU is more energy efficient than the United States (by 20%) and China (by 40%). She also emphasised that infrastructure remains a major concern and stressed the importance of leveraging the benefits of EU membership, reiterating the European Commission’s commitment to enhancing cross-border collaboration in infrastructure development. In this context, the EU executive body is preparing the Grids Package, which will focus on strengthening grid infrastructure, making better use of it, and streamlining permitting processes.
The moderator asked Elisabetta Cornago to illustrate Europe’s current position in relative terms, particularly regarding bold actions it could undertake to bring energy prices down.
Elisabetta Cornago explained that numerous measures have been proposed, both in emergency mode (i.e. in response to the energy crisis of 2022–2023) and to prevent similar crises in the future (notably the Electricity Market Reform). To assess the effectiveness of these measures in decoupling power and gas prices, and to understand European businesses’ capacity to reduce their dependencies or exposure to high energy costs, she took into consideration indicators such as the uptake of long-term contracts with generators, the extent to which businesses can generate their own energy and the composition of businesses signing these agreements.
Recent statistics indicate that energy-intensive sectors, such as metal and chemical manufacturing, are particularly affected by these trends, she added. For the rest of the economy, Ms Cornago highlighted that there is a strong business case for taking a more proactive approach in choosing one’s own energy retailer. The same logic applies to households, where the main goal is to make demand as flexible as possible and to encourage consumers to take advantage of time-varying prices, using energy primarily when it is cheaper, she added.
Ms Cornago concluded her reply by noting that, as Europe electrifies and reduces its reliance on imported fossil fuels, its dependency and overall energy costs are likely to decrease. However, she added that electrification introduces another critical component of energy pricing that will become increasingly relevant for investment decisions: the financing of grid expansion necessary for electrification to succeed.
In this context, she raised a significant concern regarding the implementation of recent policy initiatives at EU member states’ level, highlighting the heterogeneity among member states and its potential impact on businesses’ decisions about where to build new power plants.
Building on Elisabetta Cornago’s remarks, the moderator raised the issue of electricity market design, asking Rosalinde van der Vlies whether it is the right time to consider fossil market design reform and the decoupling of renewable energy pricing from gas.
Rosalinde van der Vlies began by adding one indicator to those mentioned by Ms Cornago, namely how the industry is benefiting from energy efficiency potential. Energy efficiency is a triple win: for our climate, competitiveness, and security. At the same time, she acknowledged that considerable work remains to be done to expand the scope of energy efficiency solutions. This is why the European Commissioner for Energy and Housing pledged a renewed commitment towards energy efficiency.
By picking up on Ms Cornago’s point regarding implementation, Ms van der Vlies emphasised that, when examining electricity market design, it is crucial to secure the commitment of EU member states from the outset to ensure that decisions made at the EU level are implemented nationally.
She also highlighted that the European Commission adopts a “stick-and-carrot” approach, whereby, on the one hand, it can take member states to court, which is notably time-consuming, and, on the other hand, it facilitates implementation by promoting the exchange of best practices among member states and by running EU funding programmes to support on-the-ground execution.
Finally, she emphasised the importance of striking a balance between actions to be taken at the EU level and those that should be delegated to member states.
As a follow-up, the moderator asked Rosalinde van der Vlies whether a market design is currently under review.
Rosalinde van der Vlies replied that the EU aims to build a genuine Energy Union to ensure, through the European Commission and member states and under the guidance of the Commissioner for Energy and Housing, a truly interconnected energy market. She also stated that the Commission is approaching the issue from a systemic perspective. By the end of 2026, the EU executive body plans to present a package of proposals to deliver the Energy Union, in which governance will play a significant role.
She then highlighted the importance of simplification, emphasising that it does not equate to deregulation. While maintaining its ambitions and objectives, namely affordability, competitiveness, security and decarbonisation, the EU seeks to achieve these goals in the simplest way possible for member states and European industries, she added.
The moderator then turned to Nicole Haft-Zboril, asking how BMW Group is progressing with power purchase agreements (PPAs), whether this model should be adopted more widely within the industry and what barriers exist to scale it up.
In her response, Nicole Haft-Zboril stated that BMW currently uses PPAs for up to 30% of its energy needs and welcomed the flexibility provided by IFRS 9. From an industry perspective, she argued that, while a comprehensive masterplan is necessary, there are also low-hanging fruits, such as accelerating implementation and reducing bureaucracy.
She cited the example of a German site, where BMW decided four years ago to integrate geothermal solutions into its energy mix, but implementation will not occur until 2031. By contrast, she remarked, in China, BMW began discussions two years ago and would start operating the system the following month.
Dr Haft-Zboril also noted that BMW has already implemented all the necessary measures to stay on its target path beyond 2030. At the same time, she stressed the importance of pooling efforts and finding solutions that are not limited by territorial boundaries.
The moderator turned to Elisabetta Cornago, referring to the Draghi Report’s proposals for tackling high energy prices, such as centralising cross-border electricity flows to prevent incidents such as the April 2025 power outage in Spain and Portugal, and creating a single EU rulebook for electricity and gas trading. She noted that the report did not propose a full market redesign. The moderator then asked Ms Cornago whether these measures are sufficient and should be implemented at the EU level, or whether national interests in retaining control over utilities, infrastructure and operators remain too strong to overcome.
Elisabetta Cornago replied that, precisely because national interests are strong, much stronger EU action is needed. Regarding interconnectors, she argued that, if the existing rules on optimal utilisation – where 70% of interconnector capacity should be devoted to cross-zonal trade – had been fully applied, the price spikes seen in South-Eastern Europe two years ago during the summer season could likely have been avoided.
Alongside discussions about expanding the grid, coordinated EU-level action would be beneficial, as it would reduce overall system costs, she added, and stated that ensuring the adoption of best practices and better use of existing infrastructure could already deliver significant cost reductions. Ms Cornago also emphasised that the more homogeneous the rulebooks across the EU, the better, as this reduces operating costs for all actors in the sector, particularly in a context where the EU aims to establish a genuine Energy Union.
She noted the need for additional power market reform, pointing out that, as long as power prices remain closely linked to gas prices, questions persist about whether the current setup is appropriate. She considered a full market redesign unrealistic, especially since many member states are still struggling to implement the existing framework, let alone to align with the reforms proposed by the European Commission two years ago.
On the topic of low-hanging fruits, such as encouraging consumers to manage electricity use actively, the moderator asked the panellists whether the EU should prioritise supply-side measures, such as building infrastructure, or focus more on the demand side. She also inquired how demand could be modelled to reduce costs for retail and wholesale consumers.
Elisabetta Cornago stressed that the EU needs to act on all fronts. On the supply side, it should increase clean, low-cost generation and invest in infrastructure to meet demand, she said. At the same time, significant gains can be achieved on the demand side, even though incentives for both large and small consumers are not always clear, she added.
The speaker also noted that informing consumers that a flexible setup and time-based pricing can save money requires effective communication, but is feasible. In her opinion, utilities must play a larger role not only in providing contractual arrangements, but also in helping consumers understand how these arrangements can lower energy bills and simplify appliance use.
Nicole Haft-Zboril stepped in to emphasise the importance of dialogue in this context. As an industry, BMW currently buys gas and electricity, but through diversifying its energy mix and investing in PPAs, PV systems or wind installations on its plants and sites. She also said that BMW can become an active partner in the system, investing while also contributing to stability.
With the “Neue Klasse”, BMW will have the option to purchase directional storage. Consequently, she stated, in addition to consuming energy, it will also help balance demand and supply. Dr Haft-Zboril further noted the need to assess, both locally and industry-wide, who can operate flexibly.
She also explained that the automotive industry is under intense competitive pressure: most workers are in assembly, while BMW allows customers to modify option packages up until production. Although production cannot be planned based on the weather, BMW can contribute through its own energy system, illustrating the evolving interdependency between the energy sector and households.
Rosalinde van der Vlies also replied by adding that, on the demand side, while several low-hanging fruits exist, the EU must better inform and empower citizens. To this end, the European Commission is preparing a Citizens Energy Package, whose publication is expected in early 2026, alongside a series of accompanying measures.
From a communication perspective, Ms van der Vlies stressed that trust is essential to ensure consumers behave flexibly and participate as key actors in the energy system. Achieving this, she specified, requires collaboration between EU and national authorities and utilities who have an essential role to develop this climate of trust.
Elisabetta Cornago commented on Dr Haft-Zboril’s reply, noting that technology and its costs have now reached a point where BMW can establish systems that ensure supply stability and predictability.
In response, Nicole Haft-Zboril highlighted that relying mainly on power-to-heat requires understanding the real demands and flexibility potential. Otherwise, she clarified, the system would become prohibitively expensive due to the excess capacity required. She recalled that BMW was the first to negotiate with energy suppliers on capacity increases, cost structures, risk-sharing and future milestones, representing an innovative approach to shaping the energy transformation without compromising decarbonisation ambitions.
Dr Haft-Zboril also pointed out that the automotive industry brings significant experience in managing complexity, adapting to frequent changes, and collaborating with stakeholders to explore new solutions.
Paola Tamma followed up with Nicole Haft-Zboril on the need for substantial investments in energy production, storage, and transmission. She asked whether BMW Group’s investments in energy efficiency at its plants indicate a need to reduce energy use in specific sectors, how they collaborate with partners to achieve this, and whether regulators could provide support.
Nicole Haft-Zboril responded that, to date, the European automotive industry has invested over €250 billion in electromobility and digitalisation for electrification, underlining its commitment to securing Europe’s competitiveness. Continuous improvements in energy efficiency remain a priority and, although efficiency in China is lower, she noted that BMW monitors and compares plant performance monthly, encouraging ongoing technological advancement.
Beyond energy management systems, investments such as adapting paint technologies for plants such as Debrecen’s to fully run on power-to-heat are required. From a business perspective, BMW must sequence actions to meet climate targets while tracking technological innovation, the speaker specified. A larger European energy system that minimises taxes and incentivises investment would enhance competitiveness. Looking ahead to 2050, AI and data centres will become critical across industries, so a long-term, holistic view is essential to identify milestones for decarbonisation while remaining competitive, she concluded.
The moderator then referred to the European Commission’s forthcoming Industrial Decarbonisation Accelerator Act and asked Rosalinde van der Vlies which pressure points it will address.
Rosalinde van der Vlies highlighted common industry concerns, such as slow permitting processes, and emphasised the Commission’s interest in identifying where additional support and benefits for industries can lie and in accelerating solutions despite differences among EU member states.
She also mentioned state aid as an important area to harmonise support across the EU, helping clean-tech companies and frontrunners achieve decarbonisation goals alongside competitiveness. Additionally, she noted the EU’s role in facilitating the development, deployment and market uptake of technological innovations through the European Strategic Energy Technology Plan and the various EU programmes, from Horizon to the Innovation Fund.
When asked how the Clean Industrial Deal framework would incentivise energy efficiency without unfairly benefiting regions already performing well, Ms van der Vlies explained that state aid falls outside her department’s remit. She noted that the Clean Industrial Deal State Aid Framework, known as CISAF, was adopted by the European Commission on the 25th of June 2025. This new framework aims to support Member States in achieving clean industry goals while ensuring that the support to clean tech is compatible with the single market.
The moderator then asked Elisabetta Cornago whether current pricing structures and demand provide sufficient incentives for industrial actors such as BMW to invest, and where additional support from the Commission, namely state aid or guidance on interconnections and grid upgrades, might be needed.
Elisabetta Cornago explained that, while signals have been received from the State of the Union Address and the Draghi Report, more progress is needed to align energy prices with investment incentives. She argued that energy taxation still favours fossil fuel use, a temporary measure during the 2022 energy crisis that now warrants a full reassessment to support electrification and decarbonisation. Support is also still needed for sector-specific investments in energy efficiency and technological shifts, she added.
Nicole Haft-Zboril added that BMW must maintain its current industrial footprint in Europe and remain attractive to new investments. She highlighted the challenges of building five greenfield factories worldwide, noting that prerequisites differed across regions. Convincing suppliers from China and the US to invest in Europe involved complex discussions on energy security and bureaucratic hurdles, she emphasised, and concluded that Europe must become more attractive to remain competitive amid geopolitical pressures.
Rosalinde van der Vlies emphasised the need for a faster change in mindset, reducing bureaucracy and red tape, which currently hampers commercial success despite the EU’s scientific strength. On financing, she highlighted the Energy Efficiency Financing Coalition, which connects private investors with the industry to increase funding for energy efficiency. Additionally, partnerships with institutions such as the European Investment Bank, which committed €7.5 billion to support energy investment solutions for SMEs, are expected to benefit 350,000 SMEs.
The Q&A session covered the following topics: the long-term sustainability of projects heavily relying on state aid, such as BMW Group’s green field site in Debrecen, Hungary; ways to brand energy and to incentivise spending in sustainable energy; the carbon component in energy pricing and ways to leverage carbon use within Europe and outside of Europe in terms of competitiveness; whether the scope of the Carbon Border Adjustment Mechanism (CBAM) should be expanded beyond primary goods; negotiating PPAs from an energy-intensive industry perspective without deviating from the current wholesale pricing; the content of the European Commission’s Simplification Package within the Energy Omnibus bill; European Commission’s possible plans to use waste heat as an energy source in a heating and cooling strategy under public consultation; the comparison between the EU and the US manufacturing sectors in terms of energy pricing and labour costs, and their impacts on the production process; ways to incentivise investment for the digitalisation of the grid and the energy system in general; lack of skills when it comes to the digitalisation of the manufacturing industry; the establishment of a ‘Genuine Energy Union’ and how to incentivise lower-pricing EU member states to move towards a centralised planning of grids.
Do you wish to know more about the issues discussed in this debate? Then check out the selected sources provided below!
BMW Group, “BMW Group plant Debrecen”
BMW Group, “Circular economy and CO2 reduction”
CER, “A reform agenda for the single market”, 16th of October 2025
European Commission, “Carbon Border Adjustment Mechanism”
European Commission, “Clean Industrial Deal”
European Commission, “Clean Industrial Deal State Aid Framework (CISAF)”
European Commission, “Electricity market design”
European Commission, “Energy union”
European Commission, “Enrico Letta’s Report on the Future of the Single Market”
European Commission, “European Energy Efficiency Financing Coalition”
European Commission, “Industrial Decarbonisation Accelerator Act – speeding up decarbonisation”
European Commission, “State of the Union 2025”
European Commission, “Steering the EU towards greater sustainable competitiveness”
European Commission, “The European Green Deal”
European Commission, “The future of European competitiveness: Report by Mario Draghi”
New impetus for energy efficiency – European Commission
