The European Union has announced that it is preparing a law that will make life easier for the green industry will be backed up with state aid and a European Sovereignty Fund to keep businesses from moving to the United States.
According to reports, the steps would be part of the EUโs Green Deal industrial plan that would help Europe in its bod to become the home of clean technology and industrial innovation as it also strives to achieve net-zero carbon emissions by 2050.
To achieve these, the EU is set to put forward a new Net-Zero Industry Act, said Ursula von der Leyen, president of the European Commission.
โThe aim will be to focus investment on strategic projects along the entire supply chain. We will especially look at how to simplify and fast-track permitting for new clean tech production sites,โ von der Leyen was quoted to have said.
The EU is worried about the possibility of European companies moving to the United States, which has a $369 billion scheme to subsidise green production and there is a need to keep the European industry attractive and also keep up with competitive offers and incentives that are currently available outside the EU.
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Out of 672 billion euros of state aid approved by the Commission this year, 53% was in Germany, 24% in France, and 7% in Italy, a situation that is worrisome to some EU members that believe that more state aid such as these will only create more problems for smaller countries as the biggest EU economies can afford much more support than others.
โI don’t think massive new state aid models do anything good for Europe,โ Danish Economy Minister Troels Lund Poulsen was quoted to have said.
However, the plan was welcomed by several EU countries which were quick to underline the importance of EU funding to even the playing field.
โIt has to be implemented through European mechanisms that ensure equality within the European space. The smaller European countries cannot lose to the larger countries in an internal competition,โ Portuguese finance minister Fernando Medina said, expressing support for the fund.
Also, Italian Finance Minister Giancarlo Giorgetti said the EU financing scheme should be modelled on the bloc’s existing 800 billion euros recovery fund, which offers grants and loans, and on the EU’s loans-based SURE programme to support employment.
Meanwhile, Von der Leyen did not give the size of the planned Sovereignty Fund, the idea she first floated in September. Such a fund does not yet have the support of all EU governments, notably Germany.
She said that both the Sovereignty Fund, as well as an intermediate pool of cash that could be mobilised faster, would offer both grants and loans in targeted support as the Commission was now working to identify the needs of the green industry.
Story was adapted from Reuters.
