29th Mar 2023

'The race is on', EU Commission warns on green tech

  • EU Commission president Ursula von der Leyen told MEPs Europe needs to get its 'act together' if it wants to stay a frontrunner (Photo: European Parliament)
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EU Commission president Ursula von der Leyen hit an optimistic note on Wednesday (15 March) on the European bloc and the US managing to solve a trade dispute over subsidising clean technologies, and pledged to help EU industries more.

The commission chief said the EU is set to create simpler state-aid schemes, allow tax breaks and the flexible use of EU funds as a response to the US's plans to support domestic green tech as part of US president Joe Biden's $369bn (€350bn) Inflation Reduction Act (IRA).

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Last week, during her Washington visit, an understanding was reached on electric vehicles to allow European carmakers to get access to the US market, and US tax breaks, she said.

EU and US negotiations are also set to launch on giving EU producers of critical minerals access to the US market.

The bloc aims to produce at least 40 percent of the clean tech needed by 2030 in the 27-nation bloc, von der Leyen added, as the EU and US seem to get entangled in a race for the bulk of green and digital industries.

The commission is expected to detail its plans on Thursday as part of the Net-Zero Industry Act on industrial incentives.

The other proposals set for Thursday, the Critical Raw Materials Act, seeks to reduce EU over-reliance on China on materials key for the digital industry, such as lithium.

Currently, the EU gets 98 percent of its rare earth supply from China, and 97 percent of its lithium from China.

Russia's invasion of Ukraine hammered home the point in Europe, which had been overly reliant on Russian gas exports, not to be too exposed to one source.

The commission's plans are expected to boost capacity in the EU and improve recycling of these materials.

The net-zero act would accelerate technologies including solar panels, wind turbines, and batteries.

"By 2030, we want to be able to produce at least 40 percent of the clean tech that we need here to fulfil our green transition," von der Leyen said.

"The race is on. The race on who is going to be dominant in this [net-zero technologies] market in the future. We must get our act together if we want to stay frontrunners," she told MEPs in Strasbourg.

Where is the money?

German MEP, and leader of the centre-right European People's Party's group in the parliament, Manfred Weber, said that Europe is not competitive enough.

Weber also said the failed Transatlantic Trade and Investment Partnership (TTIP) could have avoided the frictions caused by IRA, arguing that the EU needs more free-trade deals.

For his part, the liberal Renew Europe leader, French MEP Stéphane Séjourné criticised the commission for not doing more to help businesses.

"I still don't see any exemptions for European companies on the America market I see unfair competition everywhere, particularly in Asia," he said, adding that may small European businesses are still waiting for their recovery funds from EU subsidies.


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