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Europe will invest in “clean” energy in response to the US green law

Date: June 8, 2023 Time: 10:11:27

The President of the European Commission, Ursula von der Leyen, has presented the Industrial Plan of the Green Pact that the 27 are going to develop in response to the green subsidies law of the United States, in her speech at the Davos forum. The Eurogroup seeks to invest in “clean” industries to counteract its effects. According to the words of the community representative, the plan intends to cover the regulatory environment, financing, the qualification of workers and international trade.

This will focus on expediting permitting to facilitate investment in crucial sectors along the entire supply chain to achieve net zero emissions, including wind power, heat pumps, solar power , clean hydrogen and storage. To this end, the president has advanced that the community Executive will have a new Net Zero Industry Law, similar to the legislative project on chips, which will set “clear” objectives for European clean technology from 2030.

In addition, von der Leyen has proposed creating a Critical Raw Materials Club that works with like-minded partners – from the US to Ukraine – to collectively strengthen supply chains, diversify suppliers and reduce the EU’s reliance on China, which increases to 98%, for the manufacture of key technologies such as wind power generation, hydrogen storage or batteries.

Another of the objectives of the plan is to temporarily adapt the European rules on state aid to “speed up and simplify them”, for example, with simple tax relief models and specific aid for clean technology production facilities that help counteract foreign subsidies. such as the US investment plan in clean technologies worth 369,000 million dollars.

However, Von der Leyen has stressed that state aid will be “a limited solution that only a few Member States will be able to use”, for which reason he has insisted that, in the medium term, the solution to counteract the impact of US subsidies on the European economy will go through the creation of a sovereign wealth fund that will also avoid the “fragmentation” of the market.

International trade and distortions

The president of the Commission has also stressed the need for the EU to take advantage of trade agreements and strive to resolve its differences with powers such as Canada or the United Kingdom, while working for agreements with Mexico, Chile, New Zealand and Australia , and to move forward with India and Indonesia.

In the same way, he has encouraged the resumption of talks on the agreement with Mercosur -in deadlock due to the differences between the 27 themselves and doubts regarding Brazil’s climate commitment-, since international trade is “key” to help our industry to reduce costs, create jobs and develop new products.

“But when trade is not fair, we need to respond more firmly,” von der Leyen objected, referring to countries like China, which have openly encouraged energy-intensive companies to relocate all or part of their production. “They do it with the promise of cheap energy, low labor costs and a more permissive regulatory environment, while China heavily subsidizes their industry and restricts the access of EU companies to its market,” the critic added.

However, aware of the need to work and trade with China, it has established the EU concerned with “reducing risk” and using all its tools to deal with unfair practices, including the new regulation on foreign subsidies. “We will not hesitate to open investigations if we believe that our procurement or other markets are being distorted by such subsidies,” he announced.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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