EU sets out plan for competitive cleantech industry

European Commission (EC) president Ursula von der Leyen has outlined a plan to support Europe’s clean-tech industry to help the continent remain competitive in the transition to net zero as other major economies are also stepping up.

In a speech at the World Economic Forum in Davos on Tuesday, she unveiled a Green Deal Industrial Plan that will include four key pillars: the regulatory environment, financing, skills and trade.

As part of the first pillar, the EU will put forward a new Net-Zero Industry Act, which will identify clear goals for European clean tech by 2030. “The aim will be to focus investment on strategic projects along the entire supply chain. We will especially look at how to simplify and fast-track permitting for new clean-tech production sites,” von der Leyen said.

The second pillar will boost investment and financing of clean-tech production so that the EU is competitive with the offers and incentives available outside the bloc. The plans include speeding up and simplifying state aid rules, as well as stepping up EU funding. A European Sovereignty Fund will be prepared as part of the mid-term review of the EU budget later this year.

The focus on skills will cut access efforts on the other areas. The fourth pillar reflects the need for resilient supply chains and includes working on trade agreements and dealing with unfair practices. With respect to China, the focus should be on de-risking rather than decoupling, according to von der Leyen.

The EC president said that other countries’ clean tech investment plans are good news for the planet. The United States’ USD-369-billion (EUR 340bn) climate package in the Inflation Reduction Act (IRA), however, has caused concerns in terms of some of the targeted incentives for companies. “This is why we have been working with the US to find solutions, for example so that EU companies and EU-made electric cars can also benefit from the IRA,” she added. In her view, the EU and the US should work towards ensuring that their incentive programmes are fair and mutually reinforcing and should pursue joint benefits, for example by creating economies of scale across the Atlantic or setting common standards.

The EU's plan also comes as it sees “aggressive attempts to attract our industrial capacities away to China or elsewhere.”

Industry group SolarPower Europe welcomed the speech. Its policy director Dries Acke described the Green Deal Industrial Plan as a significant moment for European solar manufacturers. “A Net-Zero Industry Act is the tool that European solar manufacturers have been seeking in the wake of growing global competition for renewable value chains,” he said.

According to him, streamlined site permitting will help Europe build the factories to produce 30 GW of solar panels by 2025 as targeted by the European Solar PV Industry Alliance.

“President von der Leyen’s promise to temporarily simplify EU state aid rules, using straightforward tax-breaks, is critical,” Acke further commented.

(USD 1 = EUR 0.922)

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