The draft, to which this medium has had access, seeks to facilitate a climate technology ecosystem in the Union in the face of the new subsidy war unleashed with Beijing and Washington.
The President of the European Commission, Úrsula Von der Leyen, will present this Wednesday before the European Parliament her new industrial roadmap to deal with the climate plans of China and, especially, of the United States. A strategy, according to the draft to which this medium has had access, focused on the elimination of obstacles to the deployment of climate technology and the creation of an ecosystem that prevents the exodus of companies to these two countries. “Europe remains an attractive destination for sustainable investments,” reads the text.
This is Brussels’ response to the Biden Administration’s Inflation Reduction Act to counter, in this case, Chinese investment in renewable technology. “Supply chains will start here,” said the president of the United States in mid-January. US regulations establish substantial tax benefits for companies that bet on green technology and settle in North American territory. “We do not want a war of subsidies,” reacted this Tuesday Paolo Gentiloni, European Commissioner for Taxation and Customs Union, Audit and Fight against Fraud.
Despite this, the community draft wants to deal with the 339,000 million euros put on the table by the White House to boost this sector. Brussels, yes, for the moment has not set a new amount to attract investment, but rather seeks to make life easier for the industry with fewer obstacles and more aid. According to the community text, with some figures not specified in its 17 pages, “Chinese subsidies distort the market.”
In recent years, aid from the Asian giant doubles that of the Union with an investment portfolio of 280,000 million dollars, the Commission points out in the draft. “Europe and its partners must do more to combat the effect of these unfair subsidies and the prolonged distortion of the market,” says the text, which could still be modified. Brussels, in addition, advance will make use of a regulation on foreign subsidies to investigate whether the subsidies granted by third countries have an impact on the community market.
The text known this week and that this Wednesday will be presented before the community chamber defines how the plan will be applied to the regulatory environment, access to finance, skills and trade under the title “A Green Deal industrial plan for the Net-Age.” Zero» and which details the announcement made by Von der Leyen herself at the Davos Forum at the beginning of the year. “We must respond more firmly,” assured the president of the European Commission in front of the rest of the world leaders in the great economic forum.
Measurements, yes; money no
Unlike its other two ‘competitors’, the European Union will not disburse any additional euro for this new economic and interest confrontation. Its strategy goes through “trade opening is an essential element of our strategy to maintain the EU’s position as a world leader in net-zero technologies,” the draft states.
An objective that will be reached after simplifying and accelerating “permits for new clean technology production sites” with a temporary adaptation of the Union’s state aid rules. Likewise, Brussels will promote a reduction in the obstacles to access to aid and subsidies “in an effort to prevent companies from leaving” the community territory.
A move in response to the giants of the wind and solar sector who have criticized the EU financing regime as being too complicated compared to the new US regulations. With this measure, the community leaders seek to achieve in the sector “more than 170,000 million euros of accumulated investments by 2030 in the manufacture of net zero technologies for solar, wind, battery and hydrogen energy.”
However, the text highlights the economic gap between the different Member States. “To avoid fragmentation of the single market due to differing levels of national support, to facilitate the green transition across the Union and to address the large gap between currently available funding and the funding needs to scale up the net-zero industry, we must also increase funding from the European Union.” Despite the alert, the creation of a new community fund is not expected, at least until summer.
In return, the community rules on subsidies and aid from community countries with their industries will continue with the easing period that began with the pandemic derived from Covid-19 and prolonged with the Russian invasion of Ukraine. Now, the response to Biden’s plan is the introduction of a “Crisis and Transition Temporary Framework” where Member States will be able to extend deadlines to complete renewable energy projects or grant tax benefits to attract new investment in production facilities, as occurs in the US Inflation Reduction Act.
Control of raw materials
In 2020, the European Union updated its list of critical raw materials, including cobalt, tantalum, magnesium, tungsten, vanadium, indium, niobium, lithium or the famous rare earths. This Wednesday, Brussels will propose a Critical Raw Materials Law. “Net-zero manufacturing of EU technologies is only possible if access to relevant critical raw materials, including recycled raw materials, is ensured to reduce Europe’s dependence on third countries and boost jobs and growth in the circular economy,” the draft states.
In addition, the community authorities will propose the creation of a world association for critical raw materials and deploy trade defense measures in this area.
This Wednesday the detailed presentation of the plan is scheduled, which will later have to be endorsed by the leaders of each of the Member States. “The Commission calls on leaders, governments and legislators to support the implementation of this plan and is ready to translate it into concrete proposals based on substantiated needs assessments before the March European Council,” the draft states.
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