€250bn of redirected EU funds for net zero projects in Green Deal Industrial Plan
LONDON (ICIS)–€250bn of funds from the EU’s REPower emergency energy crisis support mechanism can be redirected to member states to support investment in net zero industries, European Commission President Ursula von der Leyen said on Wednesday.
Von der Leyen was outlining bridge funding and incentives for net zero industries in the bloc, including tax breaks for corporate investment, and the possibility of creating an EU Sovereign Fund, to underpin its ambitious climate control targets.
The Commission presented its expected Green Deal Industrial Plan on Wednesday, which has been developed in response to the energy transition subsidy frameworks that are being put in place in other parts of the world, particularly in the US and China.
It involves a temporary adaptation of EU state aid rules to facilitate faster, directed net zero investment.
The Commission is proposing a Net-Zero Industry Act to identify net zero industrial capacity goals, and a permitting and regulatory framework to cut stifling red tape.
This would be complemented by a Critical Raw Materials Act to enable access to important raw materials for batteries and the wider electricity market.
Critically, the plan seeks to address the problems associated with EU-wide funding for net zero projects and industries while upholding EU Single Market principles.
The Commission said it will work with Member States in the short term on a bridging solution for “fast and targeted support” from REPower EU, InvestEU and the Innovation Fund.
Proposals for a Sovereignty Fund would be made before the summer.
A third pillar of the plan will focus on skills and a fourth on global cooperation and “making trade work for the green transition”.
Von der Leyen said that the EU had a once in generation opportunity to secure the EU’s industrial lead in the net zero technology sector.
“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,” she said.
The 27-country bloc had been shaken by adoption of the Inflation reduction Act (IRA) in the US and the positive response from industry in investing in green transition projects.
The EU is also aiming to respond to the funding frameworks available for net zero projects and industries in other parts of the world.
Front page picture: The European
Commission’s President Ursula von der Leyen at
a meeting in Brussels on Wednesday
Source: Stephanie Lecocq/EPA-EFE/Shutterstock
EU Commission College meeting in Brussels, Belgium – 01 Feb 2023
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