The European Commission has proposed a new set of policies aimed at supporting more effectively domestic industries in the energy transition, in response to the large-scale funding programmes for green technologies put in place in the US.
Speaking in Brussels on Wednesday, EC President Ursula von der Leyen said the Green Deal Industrial Plan will simplify the regulation environment for European Union companies, accelerate access to financing and expand trade agreements to ensure availability of critical raw materials.
“To grow, our industry needs the right framework. It has to be simpler. It has to be faster. It has to be more predictable,” von der Leyen said in a news conference.
“Europe is determined to lead the clean tech revolution. Better access to finance will allow our key clean tech industries to scale up quickly.”
The EC will propose a streamlined regulation setup specifically for energy transition related sectors and its operators, to be defined in law under a new Net-Zero Industry Act.
This will simplify permitting, promote European strategic projects and develop standards for scaling of industries across member states.
“The major complaint when you speak to the industry is always the [length of the] permitting process. A big focus is on cutting red tape,” von der Leyen.
Faster access to funding is another pillar of the policy package. The authority has proposed a temporary loosening of competition rules for investments in sectors related to decarbonisation and renewable energy until 2025. This would allow member states to deploy financial support for projects that are considered in line with energy transition targets.
This would also take into account differences in funding capacity between states, so that a “level playing field” is maintained.
“If you have state aid, the other side of the coin is funding at EU level,” the commissioner said, adding the EU could redirect part of the funds from the RepowerEU policy — some €250 billion ($271 billion) — towards supporting net-zero industry developments. Member states would be able to access those funds through tax breaks for companies.
The EU will likewise assess how funding could be drawn from the InvestEU and the Innovation Fund European programmes in support of projects.
The policy package will include a Critical Raw Materials Act to support supply and availability of strategic raw materials and components, such as semiconductors or rare earths oxides, and an expansion of trade agreements with resource-rich countries.
In the US, the Ira passed last year by the Biden administration earmarked $369 billion to deploy in support of energy security and clean energy tech over a decade.
The law was singled out by industry for its effectiveness in setting out a clear financing outline to support development of sectors including carbon capture and storage, renewables, electric transport and hydrogen.
Europe has since been looking at ways to ensure it maintained an attractive business environment for companies and projects, and avoid a migration of investment and prospective developers across the Atlantic to take advantage of the US regime.
“What we are looking at is that we have a global playing field,” von der Leyen said.
The European Commission will ask member states to back its plan at a summit on 9 and 10 February.