The EU Commission has aligned its positions regarding the Union’s industrial policy and state subsidies. The aim is to respond to the controversial US IRA aid package.
1.2. 16:39•Updated 1.2. 16:56
BRUSSELS The EU Commission has presented an industrial program aimed at accelerating the green transition. The goal is to improve the competitiveness of emission-free industry and speed up green investments.
Chairman of the Commission Ursula von der Leyen listed four ways to support carbon-neutral production in Europe: simplifying regulations, securing financing, improving skills and creating flexible supply chains.
Among other things, the Commission intends to allow exceptions to EU state aid to the extent that they promote the EU’s green goals.
According to Von der Leyen, exceptions to state subsidies can be granted for the manufacture of batteries, solar panels, wind turbines, heat pump electrolyzers and technology intended for coal recovery.
Member states could also decide more freely on the granting of state aid without the need to notify the Commission. Exceptions related to state subsidies would be valid until the end of 2025.
A response to US government subsidies
The proposals are a response to the US IRA climate bill, which is set to channel $360 billion into green sectors by 2032.
The EU’s attitude towards the IRA package is divided: while Europe rejoices that the United States is once again committed to the fight against climate change, its effects on European companies raise concerns.
The IRA package has been seen as a way to attract European green technology companies to move their production to the United States.
The actions of the United States have increased the pressure on member countries to support their own companies with direct state subsidies.
– Our goal is to create equal operating conditions on a global level and in our internal market, von der Leyen said.
A new fund is being prepared
The Commission also proposes to free up existing EU funds for the goals of the green industry program.
A new sovereignty fund is also being prepared in the EU, which is seen as a longer-term solution for maintaining strategic investments, research and competitiveness.
Ursula von der Leyen did not take a position on what size the new fund could be or how it would be financed. We will return to the matter in March, when the implementation of the EU’s multi-year budget framework is examined.
Finland has a critical attitude towards the establishment of new financial instruments. According to sources in Brussels, it is likely that a new fund will be established.