The European Commission proposed legislation Thursday designed to enhance the European Union’s (EU) “competitiveness” with the United States and China on green technologies.
The new legislation, known as the Net-Zero Industry Act, is poised to simplify permitting for green projects, increase funding for carbon capture and develop an information platform to support projects’ financial needs, among other incentives, according to a Commission press release. EU officials have been growing increasingly concerned that its transition toward green technologies would leave it reliant on industries located in the U.S. and China, spurring plans to reinvigorate the bloc’s industrial sector, Reuters reported March 10. (RELATED: Democrats’ Climate Bill Sparks Potential Green Trade War With Europe)
“The bottom line is that we want to be leaders in the green industries of the future,” European Commission Vice President Valdis Dombrovksis said at a news conference Thursday, according to Reuters. The Commission estimates that global investment in green technologies will climb to $3 trillion by 2030, tripling 2022’s funding level.
EU leaders such as French President Emmanuel Macron have criticized President Joe Biden’s signature Inflation Reduction Act, alleging that the bill’s provisions that require products be manufactured or mined in America to qualify for tax credits and other incentives were protectionist and “aggressive” toward European businesses, according to Bloomberg. While EU companies are unlikely to abandon Europe entirely — European incentives combine to roughly $1 trillion compared to the IRA’s $369 billion — the relative ease with which projects and funding can be secured in the U.S. may prompt European firms to focus their attention on the U.S. instead of their home nations, Bloomberg reported.
The proposed Act will:
▪️Foster investment with more predictable permitting processes
▪️Boost demand for net-zero tech
▪️Support innovation through sandbox testing
▪️Promote net-zero tech skills
▪️Help build international partnerships➡ https://t.co/J4DBPiqG7x#EUGreenDeal
— European Commission (@EU_Commission) March 16, 2023
“The IRA serves as an electroshock for Europe,” Pascal Canfin, a French lawmaker who leads the European Parliament’s environment committee, told Bloomberg. “We need to change to simplify rules and we need to give companies predictability on energy prices.”
The commission also introduced the Critical Raw Materials Act, which would set a target for the EU to mine at least 10% of its own critical minerals by 2030 and process at least 40% of all critical raw materials it consumes, according to a press release. It also sets a goal that no more than 65% of the EU’s annual consumption of critical raw materials be supplied by a single nation.
“We are not a resource-rich continent,” Dombrovskis told reporters, noting that Europe relied on a small collection of partners to provide many materials, according to Reuters. “This is not a stable nor reliable way to build the industries of the future. So we urgently need to diversify.”
China currently dominates the international supply of minerals, such as lithium and cobalt, which are critical to green technologies and batteries. American automotive giant GM recently invested $650 million in a major lithium mine in Nebraska operated by Canada-based Lithium Americas, whose largest investor is the Chinese mining giant Ganfeng Lithium.
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