Saturday, April 1, 2023

Von der Leyen announces an investment plan in “clean” industries in response to green subsidies from the United States

The President of the European Commission, Ursula von der Leyen, has announced this Tuesday at the economic forum in Davos (Switzerland), an investment plan in “clean” industries that counteracts the impact that the US green subsidies law has had on the community economy as well as legislation for a “zero emissions” fabric with “clear” objectives from 2030.

As explained by Von der Leyen, the Industrial Plan of the Green Pact, as Brussels calls it, aims to cover the regulatory environment, financing, worker qualifications and international trade and will focus on streamlining permits to facilitate investment in the sectors across the entire supply chain to reach net zero emissions, including wind power, heat pumps, solar power, clean hydrogen, and storage.

To this end, the president has advanced that the community Executive will present a new Net Zero Industry Law, similar to the legislative project on chips, which will set “clear” objectives for European clean technology from 2030.

In addition, von der Leyen has proposed creating a Critical Raw Materials Club that works with like-minded partners — from the United States to Ukraine — to collectively strengthen supply chains, diversify suppliers and reduce the EU’s reliance on China, which It amounts to 98%, for the manufacture of key technologies such as wind power generation, hydrogen storage or batteries.

Another of the objectives of the plan is to temporarily adapt the European rules on state aid to “speed up and simplify them”, for example, with simple tax relief models and specific aid for clean technology production facilities that help counteract the relocation risks derived of foreign subsidies such as the US plan to invest in clean technologies worth 369,000 million dollars.

However, Von der Leyen has stressed that state aid will be “a limited solution that only a few Member States will be able to use”, for which reason he has insisted that, in the medium term, the solution to counteract the impact of US subsidies on The European economy will go through the creation of a sovereign wealth fund that will also avoid the “fragmentation” of the market.

The President of the Commission has also stressed the need for the EU to take advantage of trade agreements and strive to resolve its differences with powers such as Canada and the United Kingdom, while working to conclude agreements with Mexico, Chile, New Zealand and Australia, and to move forward with India and Indonesia.

In the same way, he has encouraged the resumption of talks on the agreement with Mercosur – at a standstill due to the differences between the 27 themselves and doubts regarding Brazil’s climate commitment – ​​since international trade is “key” to help our industry to reduce costs, create employment and develop new products.

“But when trade is not fair, we need to respond more firmly,” von der Leyen has objected, referring to countries like China, which has openly encouraged energy-intensive companies to relocate all or part of their production. “They do it with the promise of cheap energy, low labor costs and a more permissive regulatory environment, while China heavily subsidizes its industry and restricts access to its market for EU companies,” he criticized.

However, aware of the need to work and trade with China, he has urged the EU to focus on “reducing risk” and using all its tools to tackle unfair practices, including the new regulation on foreign subsidies. “We will not hesitate to open investigations if we believe our hiring or other markets are being distorted by such subsidies,” she warned.


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