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The four pillars of the EU’s Green Deal Industrial Plan

The European Commission presented the Green Deal Industrial Plan to enhance the competitiveness of Europe’s net-zero industry and support the fast transition to climate neutrality. The Plan, first announced in January during the World Economic Forum in Davos, aims to provide a more supportive environment for the scaling up of the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s ambitious climate targets.

The Plan builds on previous initiatives and relies on the strengths of the EU Single Market, complementing ongoing efforts under the European Green Deal and REPowerEU. It 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.

“We have a once-in-a-generation opportunity to show the way with speed, ambition and a sense of purpose to secure the EU’s industrial lead in the fast-growing net-zero technology sector,” said Ursula von der Leyen, President of the European Commission. “Europe is determined to lead the clean tech revolution. 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.”

The first pillar of the plan is about a simpler regulatory framework. The Commission will propose a Net-Zero Industry Act to identify goals for net-zero industrial capacity and provide a regulatory framework suited for its quick deployment, ensuring simplified and fast-track permitting, promoting European strategic projects and developing standards to support the scale-up of technologies across the Single Market.

The framework will be complemented by the Critical Raw Materials Act, to ensure sufficient access to those materials, like rare earths, that are vital for manufacturing key technologies and the reform of the electricity market design, to make consumers benefit from the lower costs of renewables.

The second pillar of the plan will speed up investment and financing for clean tech production in Europe. Public financing, in conjunction with further progress on the European Capital Markets Union, can unlock the huge amounts of private financing required for the green transition. Under competition policy, the Commission aims to guarantee a level playing field within the Single Market while making it easier for the Member States to grant necessary aid to fast-track the green transition.

To that end, in order to speed up and simplify aid granting, the Commission will consult Member States on an amended Temporary State aid Crisis and Transition Framework and it will revise the General Block Exemption Regulation in light of the Green Deal, increasing notification thresholds for support for green investments. Among others, this will contribute to further streamlining and simplifying the approval of IPCEI-related projects.

The Commission will also facilitate the use of existing EU funds for financing cleantech innovation, manufacturing and deployment. The Commission is also exploring avenues to achieve greater common financing at the EU level to support investments in manufacturing of net-zero technologies, based on an ongoing investment needs assessment. For the mid-term, the Commission intends to give a structural answer to the investment needs, by proposing a European Sovereignty Fund in the context of the review of the Multi-annual financial framework before summer 2023.

As between 35 per cent and 40 per cent of all jobs could be affected by the green transition, developing the skills needed for well-paid quality jobs will be a priority for the European Year of Skills and the third pillar of the plan will focus on it.

To develop the skills for a people-centred green transition the Commission will propose Net-Zero Industry Academies to roll out up-skilling and re-skilling programmes in strategic industries. It will also consider how to combine a “skills-first” approach, recognising actual skills, with existing approaches based on qualifications and how to facilitate access of third-country nationals to EU labour markets in priority sectors, as well as measures to foster and align public and private funding for skills development.

The fourth pillar will be about global cooperation and making trade work for the green transition, under the principles of fair competition and open trade, building on the engagements with the EU’s partners and the work of the World Trade Organization. To that end, the Commission will continue to develop the EU’s network of Free Trade Agreements and other forms of cooperation with partners to support the green transition.

While welcoming the launch of the plan, Brussels-based association SolarPower Europe showed concerns regarding a lack of focus in the Commission’s work.

“We need support specifically for the bulk technologies that net-zero and energy security are based on,” commented Dries Acke, Policy Director of SolarPower Europe. “Solar is the reality of the energy transition. Energy geopolitics is being redrawn specifically around solar technology.”

“Not all net-zero technologies are in the same boat – not in terms of strategic importance, or even the impact they’re feeling from the Inflation Reduction Act,” he continued. “We also have concerns about the timeframe involved – proposed state aid revisions under this Communication will apply until 2025. The US is operating on a 10-year time frame. We were advocating for flexibility until 2030.”

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