Ursula von der Leyen, President of the EU Commission, spoke at the World Economic Forum.
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DAVOS, Switzerland – European Commission President Ursula von der Leyen said Tuesday her institution is drafting new law targeting the region’s green industries in hopes of making Europe the home of clean technology and innovation.
“We will propose a new Net-Zero Industry Act… The goal will be to focus investment on strategic projects across the supply chain. In particular, we will look at how to simplify and speed up the approval of new clean-tech manufacturing facilities,” she said at the World Economic Forum in Davos.
“We need to create a regulatory environment that allows us to scale quickly and create favorable conditions for sectors critical to reaching net zero. These include wind, heat pumps, solar, clean hydrogen, storage and others.”
The announcement comes just months after the US introduced its own Inflation Reduction Act. Sweeping US legislation passed by US lawmakers in August, envisaging $369 billion in spending on climate and energy policies, has provoked some angry reactions across the EU-27. The European Commission, the EU’s executive arm, has previously said there are “serious concerns” about the design of the financial stimulus package.
The EU and the United States have been at odds for several months after Washington decided to give tax credits to citizens who buy electric cars made in North America. This poses a threat to investment in Europe and has prompted European companies to consider a possible relocation to the States.
The US Treasury Department issued guidelines in late December that would allow EU companies to benefit from certain loans without having to change their business models. However, other guidance on how to implement the legislation is still pending.
“The EU continues to seek similar, non-discriminatory treatment of EU clean vehicle manufacturers under the Clean Vehicle Credits of the Inflation Reduction Act. This system remains a concern for the EU as it contains discriminatory provisions,” the European Commission said in a statement at the end of December.
American officials, including President Joe Biden, have been accused of protectionism. Speaking to his French counterpart in December, Biden said, “We can sort out some of the differences that exist, I’m confident.”
US Treasury Secretary Janet Yellen already admitted in October that major legislative changes were unlikely.
While talks with the US continue, von der Leyen wants to cut bureaucracy in Europe and push green investments.
“We will prepare a European Sovereignty Fund as part of the mid-term review of our budget later this year. This will provide a structural solution to increase available resources for upstream research, innovation and strategic industrial projects critical to achieving net zero. But since this will take some time, we will look for an interim solution to provide quick and targeted support where it is most needed,” said von der Leyen in Davos.
Speaking to CNBC earlier this week, Spanish Prime Minister Pedro Sanchez also said Europe should learn from the United States when it comes to supporting its green industries.
“We need to reform some internal aspects of our industrial policy, like state aid, cutting red tape and trying to send a message to industry globally that Europe and of course Spain is a good place to be,” Sanchez told CNBC.
