 Good morning, Ministers Distinguished Guests. It's a great pleasure and the honor for me to welcome you to International Energy Agency headquarters today for discussion on a very strategic topic for Europe. I would like to particularly to welcome Madame Christine Lagar and Dr. Verna Hoya and thank them and their colleagues at the ECB and EIB for the excellent collaboration. A special welcome to Mr. Draghi. Thank you very much for giving us the honor. The title of this meeting, the conference as we call it, is the Europe's competitiveness and financial stability in a period of global energy transition. And we believe that this is a pivotal topic for Europe. We all know after the 24th of February last year, the world entered an energy crisis and Europe was at the center of it because Europe's energy imports were especially for gas and oil coming from Russia. When we look at what happened in the last several months, I can tell you that I personally believe Europe, European governments deserve a significant credit for their response. The Russia taught that they play an energy card and win by cutting the gas supply, but what we see today is very different. I remember the early days of the, after the invasion, there was a statement from Kremlin saying that the Europe would freeze and European economy would collapse. Thanks to the right policies of the European countries, thanks to their solidarity, and with the help of the mild weather, Europeans didn't freeze and the economy in Europe didn't collapse. Russia, in other words, played the energy card and lost. But many households and industrial consumers have been left with bruises since we have the crisis. But more importantly, we believe today Europe faces some difficult strategic dilemmas. The prices, the natural gas prices, electricity prices are a bit lower than the peaks we have seen, but the situation is still fragile and there are still several uncertainties in play that could have significant impacts on the prices soon. This potential high energy prices, energy costs in Europe is particularly a key issue for the vulnerable groups in the society who are struggling to pay the upfront costs for certain policies, for efficiency improvements at home, for buying electric cars or installing heat pumps. We think the governments need to make sure that the transitions are inclusive and the benefits are shared by everybody. But our worries go beyond the households and the industry sector is a critical part when we look at the price, energy prices and their competitiveness. We say natural gas and electricity prices came down, but today they are still two and a half times higher than they are in the historical averages. So even the lower, the moderated one after the crisis, still two and a half times higher than the historical averages. And when we compare other economic players in the world, it is the situation is even worse. Today the natural gas prices, which we say it came down, five times higher than that of in the United States. And the electricity prices today in Europe are three times higher than in China. This is definitely a bad news for the European industries, especially energy-intensive industries which employ close to 10 million people across Europe today. I was mentioning Madame Lagarde a couple of minutes ago. We are in touch with several heavy industry leaders, and I can tell you that many of them want to understand how will it evolve as they are reviewing their European strategies and operations. Should we stay here? Should we go? What shall we do? So this is something that we need to take into consideration. So this is the one part of the problem I see. Existing industries, how we are going to compete with the other players in the world. But there is a other pressure point on top of this. Namely, the world is entering a new industrial age, the age of clean energy technology manufacturing. And here when we look, some of the key players are already cementing their positions in the next chapter of the global industry. And as such, it is important for Europe to have a look at it. Let me start with China. China had, since years, if not decades, had a policy to push certain clean energy technologies and today has a very strong pole position, both in terms of the refining of critical minerals and manufacturing of key critical technologies such as batteries, solar PV, such as wind and electrolyzers and others. This was a policy of the Chinese government. And as such, I should also mention that by bringing the cost of these technologies down through learning by doing, China provided a service to the world. We have to also acknowledge that positive part here. But today has a very strong position. Regardless of which country it is, at the IEA we have a magic word, which is diversification. You shouldn't rely on one strategic good, on one single country, one single trade route, and one single company. Diversify as much as possible. In fact, the recent history in Europe is a good example for that. In terms of critical minerals as well, in order to manufacture the electric cars, solar panels and windmills, it is everywhere around the world. But again, in terms of production, not the deposit, but production and refining, there is a huge concentration. In fact, yesterday, just yesterday, we had another meeting at the IEA. We brought more than 50 governments, many ministers, seers of the mining companies, investors, civil society, to discuss the critical minerals issue in terms of its diversification, in terms of its social and environmental aspects. And there was a general understanding that we really need to diversify before it is too late. Now, it is not only China who is taking this new industrial age seriously and having an important position. The other countries, such as the United States, made a major move as a result of the Inflation Reduction Act. And I can tell you that the many companies around the world, not only the U.S. companies, would like the benefit from the incentives coming from Inflation Reduction Act and giving a big boost to the U.S. clean energy technology manufacturing. In the last year or two, we already see in terms of data what an acceleration it is in the United States in terms of the clean energy technology manufacturing. Japan is also a green transformation program of Japan, providing incentives. And India has a very strong policy, which is called production-linked incentives to provide incentives of domestic clean energy technology manufacturing. And Europe here needs to find its position, how Europe is going to position itself in the new industrial age, the age of clean energy technology manufacturing. Last year in December, I shared with an op-ed in the Financial Times, which we call our mini manifesto in this context, why Europe needs a bold new industrial strategy and the master plan for the future that goes beyond the survival mode. We cannot, the situation is so, that the survival mode would not be enough to put the Europe in a gain, a position being one of the key players in the next chapter of the industry. We know that there are some, only the elements in Europe, there are some work going on, Commission's new Green Deal industrial plan, and there are many nation-level initiatives as well. But, despite it is large internal market, skilled workforce, work-beating research and development, we are yet to see how Europe will put its ambitions into practice. We think the governments must take action and very soon for the region to remain a global industrial power, if we really want to stay elected. And at the IEA, we look at all the clean energy technologies and their supply chains. Europe cannot compete in all clean energy technologies. Some of them, it is already over, finished. And we cannot even look at the other technologies, which are not finished by big dominant position, the entire supply chain, but there may be some areas that we identify where our competitive edge. This is very important. Very Europe's competitive edge is compared to other countries. The identification analysis is very important. There are some areas, I can give you at least two, three areas that we think are important for Europe. One of them is for hydrogen, everybody talks hydrogen, everybody loves hydrogen. Electrolyzers. Currently, Europe and Russia more or less close to each other in terms of position, leadership and advance. This is an area that we can take it through and be a global leader or have an important position. The second one is the heat pumps. Some innovative, most of the heat pumps, Europe is not doing that. It can be another area that we can be, that can be an important position for Europe, or the steel plants. I didn't see the hydrogen-based steel production. This is an other area Europe can play an important role. But the important thing is here. There are two issues, if I can simplify. First, we look the entire world and all the supply chains. Very Europe has a good chance to be a leader or have a strong position. And second, after identifying this, what kind of incentives, what kind of policies we need to put in place in order to go forward. Because Europe made a lot of strategic mistakes. In the past, one of them is, in my view, solar energy. Some of you may remember that Europe was number one in terms of solar 25 years ago, 22 years ago. We put the subsidies and so on. Europe was the leader, but afterwards Europe dropped the ball and China took it over and today 80 percent of the solar panels in the world are manufactured in China. So for a clean energy technology, you not only start good, but you have to continue, have stable programs to go forward. It is like a development of clean energy technology is like running a marathon. Nobody gives you a medal in the marathon if you finish the first 10 kilometers the first. You get the gold medal if you finish 42 kilometers the first. In Europe, we finish the first in the first 10 kilometers and we didn't get anything or not much, I should say here. So therefore, there is a need for a strategy, well-established strategy and the investors get the right signals from the policy makers here. This is another job for Europe. Finally, we think in Europe, it is important the European foreign policy, trade policy should be reviewed under the current circumstances I tried to tell you. We need to foster a new network of internship partnerships with a diverse range of countries that have resources for critical minors and those who can quickly and cheaply manufacture cost-effective technologies. Perhaps there is a need for our trade, foreign trade and international policies. As we believe, no country is an energy island. So dear colleagues, we think it is a high time for Europe to think about this industrial policies, how we remain competitiveness in the light of the recent developments both under energy markets and in the geopolitical context and it is the reason we thought that we come here together and have a discussion with such a distinguished group. I forgot to mention this first session is webcast live and we will finish the live webcasting after the first session, but may I once again thank Madame Lagarde and Dr. Hoya for the great partnership we have. We are very much looking forward to have a good discussion and we are very happy that this discussion will take place in front of you and especially that of Mr. Draghi who has a keen interest in these issues and with this, if I may, I will pass the floor to Madame Lagarde. Well thank you so much Dr. Fatih Birol and good morning to all of you ministers, ambassadors, commissioner, presidents, representatives of civil society as well as academics. It's a real pleasure to be here today and you have to note that this is the first time that our three institutions co-sponsor this kind of initiative and it owes a lot to you Dr. Birol, there is no question about that. If it wasn't for your persistence and your passion, I don't think that we would all be there but you are very convincing. So you all know that. So why are we here together aside from your conviction and your passion? We're here because all three of us believe that there is urgency and that it matters to all of us, to our societies but also to our respective institutions. From my perspective in the presence of my esteemed and highly respected predecessor whom I salute here, the recent years have shown that volatile energy prices are persistent shifts in energy markets and they can have a significant impact for inflation dynamics and inflation is what a central bank focuses on, certainly the European central bank which has a single mandate. So each of us we have our respective mandates and despite the fact that they're different we have a shared interest in an orderly energy transition. In the last few years two points about this transition have become increasingly clear. The first which is a no-brainer is that scientific consensus on climate change is being borne out. You can't find, well maybe you can in some very remote countries on the other side of the pond, anyone challenging that we are facing a massive danger resulting of climate change and that something's got to be done about it and urgently. Everywhere we look we see natural disasters becoming more frequent, more severe. Just remember the fires in Canada this summer or those fires destroyed the equivalent of the whole French forest in one summer and closer to us when we look at what happened in respectively Greece and Libya we have prime examples of massive weather caused disaster. Over the past 50 years the number of weather related disasters has increased by a factor of five. So that's point number one. Point number two there will be high social cost if we get the green transition wrong or delayed. Last year's energy crisis was unrelated to the green transition but it highlighted how vulnerable we are to energy price volatility and that drew the attention to the potential burden decarbonization might put both on industry and on people increasing as a result support for those who favor delaying climate action. We have time on our hands technology will take care of it. So how do we meet the urgency of the challenge but also be less disruptive? To my mind and if you were to remember only that from the remarks that I make with humility because this is not the direct field of a central bank. First of all avoid procrastination. Second understand the challenge. Third share the burden fairly. So what do I mean by avoiding procrastination? It is very tempting because of the difficulty of the task to think that we can smooth out the cost of transition by just pushing back climate targets. How many times have we heard yeah 2030 but let's set targets for 2040 and short of 2040 let's set targets for 2050 and anything that happens before that well we'll see. The evidence suggests that pushing out in the future is not going to smooth out the cost of transition. Procrastinating to the country is likely to increase the bill we will end up having to pay. In our recent recently published economy-wide climate stress test we showed that under a late push transition the most vulnerable banks would face low in portfolio losses twice as high as the median and pushing back targets will not buy us more time for the investment required. The latest ECB survey again on the access to finance of enterprises for the first time included a question on what encourages or hinders green investments and the answers that we have published actually two days ago are clear. According to firms stricter climate standards provide a stronger incentive to invest than the physical impact of climate change. In other words procrastinating will mean we run the risk of ending up in a halfway house where we are phasing out polluting energy sources before we can replace them with clean ones. A recipe for more price volatility and more political backlash. So the second element of a smooth transition in our view is understanding the challenge and by this I mean the specific obstacles that firms are facing in investing in the green transition. Our survey of euro firms that I just mentioned shows that companies are actually ready to spend. Three quarters have already made plans or are making plans to make climate related investment within the next five years. But the cost of the financing of these investments is an issue. More than half of the firms and 60 percent of small and medium enterprises indicated that too high financing costs pose very significant obstacles. So this underscores the need to foster the market for green finance in Europe which would reduce the risk premium and lower financing costs. So in this context let me highlight two results of our survey. First firms view subsidized loans from public sources as an important tool to reduce the cost of green investment and more than one third said they would use them in the future. However around half the firms surveyed said that public guarantees would be insufficient. An issue today's conference will aim to address. Second nearly 40 percent of firms see lack of investor willingness to finance green investment as a very significant obstacle. At a time when huge pools of private financing is actually searching for ESG investment which is something that you also hear. This points towards a major market inefficiency in Europe. This is why I have consistently emphasized the need to complete the EU's capital market union. I know that some will argue that in and of itself it will not suffice and we need more in order to have the equivalent of the massive US Treasury bonds market but and this this is absolutely right but as a way to expand the investor base to which European firms have access I think it is worth considering what a green CMU market would imply and would require and if there is one area where consensus could be built for a European issued by the Europeans green bond would make sense. It might be worth actually considering this green CMU. We know that progress is slow in Europe. In that area there might not be so many vested interest and protected turf and it might be worth pushing that envelope because Europe is a location of choice for green bond issuance with almost 60 percent of all green senior and secured bonds issued globally last year originating here in Europe and it would be a huge missed opportunity not to build on the head start we have in this area to meet the financing challenge. You know what I'm saying here reminds me of what you said about solar panel. We were in the race we were ahead of the game and halfway through we just dropped the ball and somebody else picked it up. This might happen right here again and China is not very much behind us in that particular field. So fostering the market for green finance requires a combined policy efforts including multiple public institutions. As public institutions we therefore need to ask how we can contribute within our mandates this is also a key part of understanding the challenge. For the ECB the most important contribution we can make is to maintain price stability. Well what's new this is the mandate but this is even more important for green investment because those green investments are those of which the return point is much further out in time for which financial stability is important but price stability is key and for investors to know that down the road on a consistent basis prices will be kept stable is vitally important. But in so far as price stability is assured we can also act to protect our balance sheet from climate risk and thereby support the green transition which we are already doing. This is not major because our corporate bond portfolio is not that huge but it has a signaling impact that actually matters. So the measures we have taken include sharpening incentives by tilting our corporate bond purchases towards companies with a better climate performance limiting the share of assets issued by entities with a high carbon footprint that can be pledged as collateral for our operations and having stricter disclosure requirements. Again signaling effects but don't underestimate the size of the collateral that we hold and will continue to hold even when corporate bonds will not be purchased at some stage. So for 24 and beyond in order to be Paris agreement compliant we will also look at ways to continue addressing climate considerations in our monetary policy within our mandate. The third and final element in our view of a smooth transition is sharing the burden fairly. If we succeed in front-loading green investment there will be short-term costs and related backlashes. For example as I mentioned in a recent speech we could see stronger price pressures in commodities markets owing to the resource intensity of green technologies as was just mentioned by FATI and we know that can lead to a greater loss of welfare for those with the lowest income but here we can learn from what we have done during the pandemic and during the energy crisis. The fiscal measures adopted to cap high energy prices and support incomes were effective in containing aggregate inflation and crucially in reducing inequality. New ECB research has found that these measures compensated euro area households for about one third of their welfare loss. In some countries households were almost fully compensated. The energy crisis was a one-off event and hopefully we will not need such large fiscal outlays in the future but this experience suggests that to ensure the fairness of the transition temporary measures well targeted can help the most vulnerable so that they can remain part of the process and actually take ownership in the transition. So the green transition poses a uniquely difficult policy challenge because the stakes of failure are so high and yet the path to success is so complex but the answer to this challenge is not to dilute our ambition, not to push out the targets, it is not to detract our focus from the goal of net zero and it is not to delay the time fraction. The answer is to follow through with the transition by understanding the challenges it entails and ensuring that the costs are shared fairly. By bringing together a wide range of expertise and intellectual and financial power this conference provides us with a unique opportunity to map out such a strategy. I hope we can succeed in that endeavor. Thank you Fatih and I hand the floor over to you. Thank you very much Madame Lagal for this excellent speech so so much to learn and so much to follow but also special thanks for putting the green CMU on the table here thank you very much much appreciate it. So I would now before passing the floor to Dr Hoja once again I want to remind you that this is a live streamed and my colleagues told me that the it must be important subject for the Europeans more than 20 000 Europeans are following this debate here what we have but with this I'm going to turn to Dr Hoja for his remarks over to you sir. Thank you very much Dr Birol, thank you very much Dr Christine Lagarde and thank you very much for attending this conference. We at EIB are very happy and proud to co-host this event and at first people who have been thinking how does that fit together IEA ECB and EIB how where are the interfaces and I hope at the end of this morning or this day we will find out that we better organize these interfaces quickly in order to produce the necessary synergies to reach our objectives. How to change the way we fuel our economies and how to do this as we heard in orderly fashion. We have come a long way since the world's leaders made a collective commitment here in Paris to accelerate the decarbonization of our economies to limit global warming. So since then a lot has been done but what has been achieved so far is not enough and it's not orderly. For too long we lived under the illusion that fossil fuels were a cheap and reliable source of energy and only when Putin put its armies arrived in Ukraine we realized that they are neither cheap nor reliable and we should have known better and we should have moved faster but it's not just about Russia until we complete the energy transition Europe will remain hostage to the whims of foreign powers which control the supply of fossil fuels. Each time they decide to cut output prices across the economy increase the result here and her colleagues at the ECB must deal with a severe inflation problem. European companies find themselves at a disadvantage vis-à-vis global competitors and our households are suffering from skyrocketing costs. The transition to clean energies is not only a moral imperative to protect the life of future generations on our planet it has also become a necessity in safeguarding the competitiveness of our industry and Europe's economic prosperity not tomorrow but today. Let's be fair Europe is already doing a lot the European Union devotes vast public resources to the energy transition. The EIB stands behind the effort last year we signed more than 17 billion euros in new financing for clean energy projects inside the EU and more of it outside the EU that's more than ever before. IEA data show that clean energy investment in Europe is rising and that the increase is accelerating but as I said dear friends doing a lot doesn't mean doing enough first of all public offers are simply not public offers are simply not deep enough to bankroll the huge investment needed we need to mobilize the private sector and private investors ladies and gentlemen value certainty clarity and efficiency but certainly I mean that we cannot leave any doubts about our commitment talk of watering down pausing or even reversing the green transition only creates confusion and tempers investment by clarity I mean that our rules must be uniform and facilitate investment too many essential projects for the transition are today stuck in bureaucracy our regulatory framework is often too complex we simply have no time for this this brings me to efficiency our banking union is still incomplete in our capital markets union the work in progress as Christine has clearly outlined this means that clean tech tech innovators in Europe find it difficult to raise capital to scale up their businesses sometimes we are good at funding startups but when it comes to scale ups we get weak that's why the eab group launched this year the european tech champions initiative funder funds that will provide much needed late stage growth capital to european innovators and so far five EU countries have joined the fund I really encourage others to follow suit some of you may ask why I mentioned high cat high tech startups in the context of energy transition because dear friends many of the essential technologies needed for the for an orderly energy transition are not there yet or if they are they are still too expensive so we must change a little bit our mindset away from preserving what we can preserve from the past instead of going into future and new technologies you see for some areas like electricity production clean sort of solutions are already cheaper and faster to deploy than fossil fuels but for others like aviation or heavy industry we still need clean alternatives which are economical and that's why innovation is key that was the reason the eab launch dedicated package of support to the repower EU we are committing an additional 45 billion euros for the next five years on top of our on top of our regular lending to support clean energy investment and europe's green industry at the time of high interest rates our financing will offer essential funding but as I said before this is not just a question of money a share of these additional funds is earmarked for risky highly innovative investments we seek to de-risk these investments and crowd in private capital that's what we had done 20 years ago with wind offshore wind farms where the sector was selling its infancy and we're doing it again now and we're moving it towards floating wind farms on the high seas and all these things which bring a great progress crucially we're not just financing renewables energy storage grids or energy efficiency we're also expanding our scope to finance the deployment of start of state of the art manufacturing capacity in strategic and zero technologies moreover the additional funds will be used to support investment in critical raw materials there are two reasons for doing this the first reason is unfortunately because we risk entering a global subsidies rates race in clean technologies this is counterproductive and may stifle investment mitigating climate change is a global good Europe the US China and everyone else should be working together the fact that we don't always do is a tragedy ladies and gentlemen I cannot hide the fact that I spent most of my life in government and parliament in foreign affairs and security affairs and strategic discussions and I must say the discussion that we often lead also last week when we worked together in New York was not always strategic the way to strategic thinking is impossible without acknowledging the link between climate technology i.e innovation and development and if we continue to think climate innovation and development in different boxes then we have already lost now we must bring these things together we must answer questions from our partners in the global south who say what's in it for us and they point at the maps who show you the development of the riggs countries then they put another map to it and say let's see where the locations of the most critical raw materials that we in europe badly need and you will get a shock and you better wake up and draw the consequences of this and this then means that when we convince partners in the global south not to rely upon fossil fuels but to join us on the way towards new technologies then we must answer this question which i heard from a very important african statesman who said what's in it for us what you're doing with your wonderful wind farms on the high seas which produce enormous amounts of electricity which you then do not bring into our villages and towns in the mountains of my country you use this electricity in order to fuel the electrolysis capacity you need for your green hydrogen which you then put on boats or pipelines bring it to the global north the further value chain begins there isn't this colonialism 2.0 we need to take that seriously if you want to get the global south on board we better walk the talk when we talk about partnerships so far for me it's often rather empty word so mitigating climate change is a global good in this situation eib financing is meant to offer targeted support to european industries to help them compete on the global stage but we but make no mistake we are not writing blank checks we want to finance bankable and state of the art projects which will produce the essential goods and materials not that not just europe but the entire world need for the transition the second reason behind our initiative is that support for green manufacturing is creating jobs and the energy transition will not be orderly unless we create new jobs here in europe and elsewhere if our people feel that they are being left behind that the transition creates new dependencies they will push back social cohesion will be threatened and the transition will fail so dear friends an orderly transition can only be a just transition the eib is deploying the full range of its resources to support investment that will lead us there i'm looking forward to our discussions thank you very much thank you very much mr. Hoya so dear colleagues with this three welcoming remarks we are finishing the opening session and as such we are also finishing the our live stream and we are moving to the session one which is going to focus on the implications of the global energy crisis which is going to be chaired by my colleague mr. Tim Guld who is the chief energy economist of the year mr. Guld over to you thank you very much indeed executive director