Strategic Lawyering The Green Deal Industrial Plan: Securing the European Union’s clean tech leadership
On February 1, 2023, the European Commission presented its Green Deal Industrial Plan to enhance the competitiveness of Europe’s net-zero industry and support the fast transition to climate neutrality.
The overall objective is to stimulate the development of clean technologies in the European Union and to ensure Europe’s strategic autonomy by reducing its dependence on third countries.
Outlined by Ursula von der Leyen, President of the European Commission, in her speech at the World Economic Forum in Davos in January 2023, the Green Deal Industrial Plan[1] builds on previous initiatives and relies on the strengths of the Single Market for the European Union to sharpen its competitive edge through clean-tech investment and to continue leading on the path to climate neutrality.
The Green Deal Industrial Plan is based on four pillars: a predictable and simplified regulatory environment, speeding up access to finance, enhancing skills, and open trade for resilient supply chains.
A predictable and simplified regulatory environment
A Net-Zero Industry Act should be proposed by the Commission in order to set goals for net-zero industrial capacity and to provide a regulatory framework suited for its swift deployment.
This Act should, in particular, provide for a simplified and fast-track procedure for delivering permits, promote European strategic projects, and develop standards to support the scale-up of technologies across the Single Market.
This framework should be completed by the Critical Raw Materials Act – which aims at ensuring sufficient access to those materials, like rare earths, that are vital for the development of key technologies – and by a reform of the electricity market to make consumers benefit from the lower costs of renewables energies.
Faster access to funding
The second pillar of the Green Deal Industrial Plan aims at speeding up investment and financing for clean tech production in Europe.
In line with its concern of guaranteeing a level playing field within the Single Market while making it easier for the Member States to grant necessary aids to fast-track the green transition, the Commission should, in order to speed up and simplify aid granting, consult Member States on the temporary state aid crisis and transition framework.
The temporary adaptations should result in the simplification of aid for renewable energy deployments and for decarbonizing industrial processes, enhanced investment support schemes for production of strategic net-zero technologies and the creation of more targeted aids for major new production projects in strategic net-zero value chains.
The Commission should also propose a revision of the General Block Exemption Regulation by increasing notification thresholds for support to green investments.
Lastly, the Commission should facilitate the use of existing EU funds for financing clean tech innovation, manufacturing and deployment.
Enhancing the availability of green and digital skills
According to the latest studies, 35% to 40% of all European jobs are likely to be affected by the green transition. As such, the development of the skills needed for well-paid quality jobs constitutes the third pillar of the Green Deal Industrial Plan.
The Commission is currently working with Member States to set targets and indicators to monitor supply and demand in skills and jobs in the sectors relevant for the green transition, considering age and gender aspects.
It should propose to establish so-called net-zero industry academies to roll out up-skilling and re-skilling programs in strategic industries, facilitate the recognition of qualifications, and combine a “skills-first” approach, recognizing actual skills, with existing approaches based on qualifications.
The Commission should also support the alignment of public and private funding for skills development, and stimulate increased investment in training.
Open trade for resilient supply chains
The fourth pillar of Green Deal Industrial Plan focuses on global cooperation and the proper functioning of trade in support of the ecological transition, under the principles of fair competition and open trade.
In this respect, the Commission should, in particular, explore:
- raw materials partnerships with like-minded partners to establish a critical raw materials club bringing together raw material “consumers” and resource-rich countries to ensure global security of supply through a competitive and diversified industrial base, and
- clean tech/net-zero industrial partnerships that promote the adoption of clean technologies globally and support the role of EU industrial capabilities in making the global clean energy transition possible.
It should also protect the Single Market from unfair trade in the clean tech sector with the trade defense instruments and, thanks to the Regulation on Foreign Subsidies, ensure that non-EU countries’ subsidies do not distort competition in the Single Market, including in the clean tech industries.
During the official presentation of the Green Deal Industrial Plan by the Commission on February 1, 2023, Ursula von der Leyen said “We have a unique opportunity to set an example with ambition and determination to ensure the EU’s industrial lead in the growing sector of net-zero technologies. Europe is determined to play a leading role in the clean technology revolution. With simplified coaching, it will be easier for our companies to turn skills into quality jobs, and technological innovation into large-scale production. Better access to finance will help European clean technology players develop faster.”
[1] https://commission.europa.eu/system/files/2023-02/COM_2023_62_2_EN_ACT_A%20Green%20Deal%20Industrial%20Plan%20for%20the%20Net-Zero%20Age.pdf
Jean-Luc Soulier
Member of the Paris Bar