3rd Oct 2023

EU calls for new joint debt tool to compete with US clean-tech

  • Ursula von der Leyen: 'A global green tech race has started", she told MEPs in Strasbourg (Photo: EC - Audiovisual Service)
Listen to article

EU Commission president Ursula von der Leyen said Europe must "beef up" investments in green energy and technology if it wants to compete with China and the US in the race to net zero.

"A global green tech race has started," she told MEPs in Strasbourg on Wednesday (14 December.) "This is what we want. Only when advanced economies compete for net zero will we reach our common goal. But this new competition also calls for a rethink on how we support our industries."

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

In a letter sent to the member states, ahead of the final EU summit of the year on Thursday, she outlined a strategy she has been developing at least since her State of the Union address in September.

The plan would see the EU's state aid rules relaxed and is centred around a new public investment fund, supported by European borrowing, which she suggested should be presented next summer.

Permitting laxer state aid rules will allow EU member states to increase direct public investment in green technology in the face of more aggressive US and Chinese spending.

This can already be done at the start of 2023, von der Leyen said.

In the short term RepowerEU — the EU's €300bn clean energy push, which was adopted by parliament and member states on Tuesday—can be used to help poorer member states increase their investments.

But to ensure fair competition within Europe longer term, and prevent wealthier countries from out-competing economically weaker member states, a new 'sovereign investment fund' is needed to help all member states ramp up investments.

"It is clear that not every member state has the fiscal space for state aid, and we need complementary European financing . . . to all move together in the same direction," she wrote in her letter.

Some EU leaders have already voiced support for new joint borrowing, but especially Germany and the Netherlands have so far been strongly opposed.

Although details of the fund are not yet clear, in September von der Leyen invoked the €800bn pandemic recovery fund as a model which could be repeated to deal with the energy crisis — a logic which is now extended to foreign competition.

Dispute with Washington

It is the latest development in an ongoing dispute with Washington over the Inflation Reduction Act (IRA), a massive package of protective subsidies and tax breaks for US clean technology, which EU leaders have come to see as a direct assault on European green industry.

Negotiations with Washington to exempt EU businesses from certain discriminating tax rules are still ongoing.

"We already have a war. The last thing we need is a trade war on top," said executive vice-president and commissioner for competition Margrethe Verstager, who recently met with her US counterpart, secretary of state Anthony Blinken.

In an effort to seek common ground, von der Leyen said the EU "shares" US worries about Chinese control of critical materials needed for clean tech.

In the face of this, she suggested the US and the EU could create a 'raw materials club' to prevent unwanted competition between the Atlantic allies.

EU leaders are set to debate the European response to US competition on Thursday.


Is the ECB sabotaging Europe's Green Deal?

The European Central Bank (ECB) recently raised interest rates to the highest point in the currency's 21-year existence — but the effects of its policies on renewables are badly understood.


How do you make embarrassing EU documents 'disappear'?

The EU Commission's new magic formula for avoiding scrutiny is simple. You declare the documents in question to be "short-lived correspondence for a preliminary exchange of views" and thus exempt them from being logged in the official inventory.

Latest News

  1. The EU-Kenya free trade deal shows a waning 'Brussels effect'
  2. Hoekstra pledges to phase-out fossil fuel subsidies
  3. 10 years on from the Lampedusa shipwreck — what's changed?
  4. EU ministers go to Kyiv to downplay fears on US, Slovak aid
  5. Hoekstra faces tough questioning to be EU Green chief
  6. Frontex shared personal data of NGO staff with Europol six times
  7. Why EU Commission dumped Google's favourite consultant
  8. Slovak's 'illiberal' Fico victory boosts Orbán, but faces checks

Stakeholders' Highlights

  1. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  2. International Medical Devices Regulators Forum (IMDRF)Join regulators, industry & healthcare experts at the 24th IMDRF session, September 25-26, Berlin. Register by 20 Sept to join in person or online.
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. International Medical Devices Regulators Forum (IMDRF)Join regulators & industry experts at the 24th IMDRF session- Berlin September 25-26. Register early for discounted hotel rates
  6. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch

Stakeholders' Highlights

  1. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations
  2. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  3. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  4. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  5. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  6. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics

Join EUobserver

Support quality EU news

Join us