European Commission President Ursula von der Leyen has proposed a “Net Zero Industry Act” to boost clean tech. At the World Economic Forum in Davos, she also vowed to support Ukraine “as long as it takes.”
She presented a “Green Deal Industrial Plan” at the World Economic Forum in Davos on Tuesday.
The EU must invest to stay competitive “before the fossil fuel economy becomes obsolete,” von der Leyen said.
The EU’s Green Deal plan aims to make Europe the home of clean technology and industrial innovation on the road to net-zero CO2 emissions by 2050.
“To help make this happen, we will put forward a new Net-Zero Industry Act,” the EU chief said. “The aim will be to focus investment on strategic projects along the entire supply chain.”
The EU Aims to be Competitive
The EU is concerned that European companies will move to China or to the US, which has a $369 billion (€341 billion) scheme to subsidize green production.
“We see aggressive attempts to attract our industrial capacities away to China and elsewhere,” von der Leyen said.
The EU plans to provide money for the industry “to keep European industry attractive.”
Von der Leyen added, “There is a need to be competitive with the offers and incentives that are currently available outside the EU.”
She also set out a framework to relax strict EU state aid rules, at least temporarily, to allow for “easier calculations. Simpler procedures. Accelerated approvals.”
The Commission President said that because not all countries in the 27-nation bloc have the same capacity to support national industries, using state aid alone could result in unfair competition and “fragmentation” that would damage the EU’s single market.
“To avoid a fragmenting effect on the single market and to support the cleantech transition across the whole Union we must also step up EU funding,” von der Leyen said.
“For the medium term, we will prepare a European Sovereignty Fund as part of the mid-term review of our budget later this year,” she noted.
Seeking a Level Playing Field With China
In her speech, von der Leyen also said the EU needs to work and trade with China on cleantech and push for a level playing field rather than seek to decouple from the world’s second-largest economy.
She mentioned that China had made boosting clean tech innovation and manufacturing a key priority in its five-year plan, dominating sectors such as electric vehicles and solar panels.
“But competition on net zero must be based on a level-playing field,” she said, adding that China heavily subsidizes its industry and restricts access to its market for EU companies.
“We will still need to work and trade with China – especially when it comes to this transition. So we need to focus on de-risking rather than decoupling,” she said.