President Ursula von der Leyen said Tuesday that the European Commission will propose a net-zero industry act that sets out a series of clean technology objectives for 2030 to compete with Washington’s massive green subsidy package.
“The aim would be to focus investment on strategic projects along the entire supply chain,” von der Leyen told the World Economic Forum in Davos. “We will look in particular at how to simplify and speed up permitting for new clean technology production sites.”
The efforts come in response to Washington’s Inflation Reduction Act – a $369 billion green subsidy package that the European Union fears will drive industry overseas. Von der Leyen warned in his speech that the US’s actions have raised concerns in the EU capital.
“It is no secret that some elements of the design of the Inflation Reduction Act raised a number of concerns in terms of some targeted incentives for companies,” von der Leyen said in a keynote address.
He said the EU executive would also create a European Sovereignty Fund as part of a mid-term review of the bloc’s long-term budget.
This would be in addition to tax-exemptions for green industry and state aid rules for clean tech. The Commission is currently consulting with EU countries on how 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 growing division within the European Commission over how the EU can best respond to the United States’ barrage of green subsidies.
On Monday, EU competition chief Margrethe Vestager warned that the bloc’s competitiveness cannot be built “out of subsidies” and that upcoming changes to EU emergency state aid rules should remain tentative for fear of fracturing the internal market.
His views clash with Thierry Breton – the EU’s internal market chief Told That “short-term temporary solutions” were not enough.
Last week, Vestager Proposed A new temporary state aid framework, including “anti-relocation investment aid”, to prevent firms from leaving the bloc to seek more favorable conditions abroad.
EU countries have been given a deadline of 25 January to respond.