European Commission Unveils Green Deal Industrial Plan to Compete with US & China
By The European Commission has announced its Green Deal Industrial Plan, a series of strategies aimed at boosting the competitiveness of Europe’s net-zero industries in response to the US Inflation Reduction Act (IRA).[0] The plan, unveiled last week by European Commission President Ursula von der Leyen, has four core pillars: a Net-Zero Industry Act, a Critical Raw Materials Act, a Critical Raw Materials Club to foster green free trade agreements with third countries, and global cooperation and making trade work for the green transition.[0]
The Net-Zero Industry Act seeks to provide a regulatory framework suited for quick deployment of net-zero industrial capacity, while the Critical Raw Materials Act looks to ensure sufficient access to rare earth materials used in the manufacturing of key technologies and to reform the design of electricity markets.[1] Additionally, the plan aims to simplify regulations, speed up permits for new projects, and relax state-aid rules.[1]
The plan has sparked debate between some of the EU’s wealthier members and those less able to spend heavily on industrial support.[2] The European Commission’s competition chief, Margrethe Vestager, has proposed loosening state-aid rules, but many member states are concerned that this could create an unlevel playing field.[3] European leaders have toned down their criticism of the US and its large-scale environmental subsidy program, and are now concentrating on how to enhance their own strategies to make European businesses more competitive with the US and China.[4]
Ultimately, the plan seeks to help the EU reach the goal of making Europe the first climate neutral continent by 2050, as specified in the European Green Deal.[5] The EU summit on Thursday and Friday will be an important step in determining whether the Green Deal Industrial Plan will be able to accomplish this.
0. “European Commission unveils Green Deal Industrial Plan” FinTech Global, 6 Feb. 2023, https://fintech.global/2023/02/06/european-commission-unveils-green-deal-industrial-plan/
1. “Analysis | What Europe Needs to Compete With Biden's IRA” The Washington Post, 9 Feb. 2023, https://www.washingtonpost.com/business/energy/what-europe-needs-to-compete-with-bidens-ira/2023/02/09/9c89ff66-a83b-11ed-b2a3-edb05ee0e313_story.html
2. “EU leaders headed for showdown over US’ sustainability subsidies” Financial News, 9 Feb. 2023, https://www.fnlondon.com/articles/eu-leaders-headed-for-showdown-over-us-sustainability-subsidies-20230209
3. “How is international rivalry driving green industrial policy? The European response to the US Inflation Reduction Act” Osborne Clarke, 9 Feb. 2023, https://www.osborneclarke.com/insights/how-international-rivalry-driving-green-industrial-policy-european-response-us-inflation
4. “EU Scales Back Response to US Climate Law to Focus on Green Tech” Bloomberg, 9 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-09/eu-scales-back-response-to-us-climate-law-to-focus-on-green-tech
5. “The energy transition | European Commission announces €250 billion green deal industrial plan” Lexology, 6 Feb. 2023, https://www.lexology.com/library/detail.aspx?g=285c99a8-e5fb-4421-a46a-79538b62939a
