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The EU plans to beat China and the US in the battle for clean technology

At the World Economic Forum in Davos, the President of the European Commission Ursula von der Leyen stressed out the bloc’s need to boost its cleantech industry and increase its competitiveness against the US and China — amid rising trade tensions with both countries.

The International Energy Agency (IEA) estimates that the market for mass-produced clean energy technology will be worth about $650 billion a year by 2030 – three times more than today. And according to von der Leyen, the intended net-zero transformation is already causing huge industrial, economic and geopolitical shifts, leaving the EU with a slim window of opportunity to invest and gain leadership in the industry.

The recently announced Green Deal Industrial Plan (GDIP) aims to make Europe “the cradle of clean technology”. To achieve this, it focuses on four main areas: regulation, financing, skills and trade.

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The first pillar creates a regulatory framework that simplifies and accelerates access to finance and permits, with a focus on critical net-zero sectors such as wind, solar and clean hydrogen. To support this, a new Net-Zero Industry Act will set clear targets for European clean technology by 2030. Essentially, it will focus on investments in strategic projects across the entire supply chain.

“Until now, the EU taxonomy has shortcomings that hinder the inclusion and growth of innovative players”, Dr. Andreas Sichert – CEO of the German cleantech company Orcan energy – told TNW in response to the GDIP. “We need to leverage the small window to foster innovation and clean technology and ensure they can be scaled up quickly by creating a fertile regulatory environment free of barriers.”

The second focus of the plan is to stimulate investment and financing of cleantech production. “To keep European industry attractive, one has to be competitive with the offers and incentives currently available outside the EU,” von der Leyen noted.

For this reason, the bloc should temporarily adjust its state aid rules to make them faster and easier for calculations, procedures and approvals – such as the tax exemption. And to guarantee financial support across the Union, the Commission will set up a European Sovereignty Fund.

The GDIP will also aim to grow the skills and skilled workers needed to facilitate the transition. It will ultimately strive for global and open fair trade.

“Ensuring that clean technology delivers zero globally will require strong and resilient supply chains. Our economies will increasingly rely on international trade as the transition accelerates to open more markets and access the inputs needed by industry,” said the Commission’s chief.

EU plan to boost the cleantech industry