The European Commission will propose a Net-Zero Industry Act that lays out a series of clean tech objectives for 2030 in order to compete with Washington’s massive green subsidy package, President Ursula von der Leyen said Tuesday.
“The aim will be to focus investment on strategic projects along the entire supply chain,” von der Leyen said at the World Economic Forum in Davos. “We will especially look at how to simplify and fast-track permitting for new clean tech production sites.”
The efforts come in response to Washington’s Inflation Reduction Act — a $369 billion green subsidy package that the EU fears will drive industry abroad. In her speech, von der Leyen warned that the U.S.’s actions had provoked concern in the EU capital.
“It is no secret that certain elements of the design of the Inflation Reduction Act raised a number of concerns in terms of some of the targeted incentives for companies,” von der Leyen said in a keynote speech.
The EU executive will also prepare a European Sovereignty Fund as part of the mid-term review of the bloc’s long-term budget, she added.
This will come in addition to tax-breaks for green industry and leaner state aid rules for clean tech. The Commission is currently in consultation with EU nations over how best to revise the bloc’s emergency state aid rules, following several spiraling economic crises provoked by the pandemic and the war in Ukraine.
Von der Leyen’s announcements come amid broadening divisions within the European Commission as to how the EU can best respond to the United States’s green subsidy splash.
On Monday, the EU’s competition chief Margrethe Vestager warned that the bloc’s competitiveness can’t be built “out of subsidies” and that forthcoming changes to the EU’s emergency state aid rules should remain temporary, for fear of fracturing the internal market.
Her views collide with those of Thierry Breton — the EU’s Internal Market chief — who said that “short-term temporary solutions” were not sufficient.
Last week, Vestager proposed a new temporary state aid framework, including “anti-relocation investment aid” to keep firms from leaving the bloc to seek more favorable conditions abroad.
EU nations have been given a deadline of January 25 to respond.