EU launch Green Deal Industrial Plan to accelerate net zero efforts

Green Deal

The European Commission has announced its Green Deal Industrial Plan in a bid to keep pace with the US and China in the race to net zero.

President Ursula von der Leyen this week set out the Green Deal plan that aims to enhance the competitiveness of Europe’s net-zero industry and support the fast transition to climate neutrality. The Plan aims to provide a more supportive environment for the scaling up of the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s ambitious climate targets.

The Plan builds on previous initiatives and relies on the strengths of the EU Single Market, complementing ongoing efforts under the European Green Deal and REPowerEU. It is based on four pillars: a predictable and simplified regulatory environment, speeding up access to finance, enhancing skills, and open trade for resilient supply chains.

“We have a once in a generation opportunity to show the way with speed, ambition and a sense of purpose to secure the EU’s industrial lead in the fast-growing net-zero technology sector,” said Ursula von der Leyen, president of the European Commission. “Europe is determined to lead the clean tech revolution. For our companies and people, it means turning skills into quality jobs and innovation into mass production, thanks to a simpler and faster framework. Better access to finance will allow our key clean tech industries to scale up quickly.”

The first pillar of the plan aims to create a simpler regulatory framework. The Commission will propose a Net-Zero Industry Act to identify goals for net-zero industrial capacity and provide a regulatory framework suited for its quick deployment, ensuring simplified and fast-track permitting, promoting European strategic projects, and developing standards to support the scale-up of technologies across the single market.

The framework will be complemented by the Critical Raw Materials Act, to ensure sufficient access to materials, like rare earths, that are vital for manufacturing key technologies, and the reform of the electricity market design.

The second pillar of the plan will speed up investment and financing for clean tech production in Europe. Public financing and further progress on the European Capital Markets Union can unlock the huge amounts of private financing required for the green transition. Under competition policy, the Commission aims to guarantee a level playing field within the single market while making it easier for member states to grant necessary aid to fast-track the green transition. To speed up and simplify aid granting the Commission plans an amended Temporary State aid Crisis and Transition Framework and it will revise the General Block Exemption Regulation in light of the Green Deal, increasing notification thresholds for support for green investments. This will further streamline and simplify the approval of IPCEI-related projects.

The Commission will also facilitate the use of existing EU funds for financing clean tech innovation, manufacturing and deployment to achieve greater common financing at EU level to support investments in manufacturing of net-zero technologies. The Commission will focus on REPowerEU, InvestEU and the Innovation Fund to provide fast and targeted support. For the mid-term, the Commission proposes a new European Sovereignty Fund.

To help member states’ access the REPowerEU funds, the Commission has today adopted new guidance on recovery and resilience plans, explaining the process of modifying existing plans and the modalities for preparing REPowerEU chapters.

The new plan aims to enhance sustainability skills. As between 35 per cent and 40 per cent of all jobs could be affected by the green transition, developing the skills needed for well-paid quality jobs will be a priority for the European Year of Skills, and the third pillar of the plan will focus on it.

Open trade will be key to securing supply chains. The fourth pillar will be about global cooperation and making trade work for the green transition, under the principles of fair competition and open trade, building on the engagements with the EU’s partners and the work of the World Trade Organisation. The Commission will develop the EU’s network of Free Trade Agreements and other forms of cooperation with partners to support the green transition.

The Commission will also protect the single market from unfair trade in the clean tech sector and will use its instruments to ensure that foreign subsidies do not distort competition in the single market, also in the clean-tech sector.

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