The year 2023 began ambitiously for the European Commission, at least at the declarative level. Since the Davos Forum, European Commission President Ursula von der Leyen has announced that the EU will soon present a Green Industrial Plan, and the long-awaited moment finally arrived on February 1 when the European Commission published a plan for the EU to become more competitive and invest heavily in a digital, sustainable and clean European industry .

The European Commission has developed a comprehensive plan to help member countries prepare their industries for the technological tsunami. In 5, 10, 15 years, many jobs will be gone, our people will need to acquire new skills, and our industries will become obsolete in the face of the technological revolution we are experiencing. The US, China are leaders in research and innovation and the industry of the future. Europe cannot be left behind, our economy and democracy depend on it. This is a bet. The stakes are high, but not all countries understand this, and this fact is readily apparent in their budgetary contributions to the education and research sectors, the backbone of industry.

It is already known that this plan is the European Union’s intended response to the Inflation Reduction Act (IRA), which was introduced by the US to invest in the fight against inflation, invest in energy production and develop American industry, reducing carbon emissions by 40% by 2030. The IRA has thrown several balls into the net for the European Union, because the subsidies that are tested for the production of electric cars in the US, or the tax breaks that are offered for the purchase of products exclusively made in North America, are protectionist. practices that harm European industry.

However, there is a big difference between the European Green Industrial Plan and the US IRA: financing.

The IRA base consists of $369 billion for energy and climate policy investments. The EU offers… well, grades and opportunities. As ambitious as it is, it is loosely linked to funding sources, as the Commission invites governments to use already existing European funds. For the investment part of this green industrial plan, you can use, for example, unused loans from the Mechanism for Recovery and Resilience (PNRR), which are currently estimated at around €250 billion. The problem is that member states are encouraged to use these loans also for REPowerEU, the plan to deal with the energy crisis, so this is not a real solution. In fact, REPowerEU itself is a source of funding for this plan, if we consider that the objectives of the financial instrument coincide with the priorities of this industrial plan. In addition to REPowerEU, the Commission also recalls that Horizon Europe has €40 billion for investments in sustainable research and innovation, InvestEU, the Innovation Fund and the Cohesion Funds, where around €100 billion is available for going green. But without new resources that will lead to large-scale innovative investments in European industry, we will not be able to talk about great results in the medium term.

The Commission says it will present a new proposal for a financial instrument in the middle of this year, when the multiannual financial framework is reviewed: European sovereign fund, with which to respond to these criticisms and real investment needs. But negotiations are already difficult, as member states that make significant contributions to the European budget are very reluctant to borrow again in the markets in the context of inflation and uncertainty about the end of the war in Ukraine. The EU budget is under pressure and the contribution rule of 1% of member states’ gross national income (GNI) exceeds the real needs of European citizens, which are certainly at least 5% of each member state’s GNI.

The EU has proposed its own industrial plan, as ambitious as the IRA, and in some places even more so, structured around 4 pillars.

1A simpler and more predictable legal framework;

The Commission proposes that this Industrial Plan be accompanied by the Net-Zero Industry Act to simplify the legislative framework for the production capacity of batteries, windmills, heat pumps, solar and wind energy storage equipment and technologies. In essence, this Law will reduce administrative problems and simplify the procedure for issuing permits and licenses. It will also have a single window system i.e. a single point of contact for investors and industrial companies to facilitate their administrative procedures. It also aims to further encourage transnational projects by simplifying the procedures needed to launch them, as well as by increasing the flexibility of requirements for important projects of common European interest (IPCEI) that focus on clean technologies and their faster approval. The Industry Act will also introduce European standards that companies wishing to develop clean technology projects in the EU will have to meet. In addition, the Commission says that in March it will come up with a proposal to reform the EU electricity market, the legal framework for batteries and the regulation of the eco-design of environmentally friendly products.

2Faster access to financing;

The Commission proposes to relax the rules on state aid for any investments by governments in renewable energy sources, such as renewable technologies, renewable hydrogen sources and biomass storage, by extending the deadlines for these investments. It will also review the investment costs of decarbonising industry, for example for electrification or energy efficiency projects, and propose more flexible state aid limits for public aid schemes granted to citizens for this purpose. The Commission also proposes to increase support schemes for investments in zero-profit technology production and even offers more help to non-EU companies that want to invest in such projects on European territory. The commission also suggests that member states consider tax incentives for large and small companies that want to invest in clean technologies.

But all these state aid schemes can be supported by governments with stable and strong economies, so for countries like Romania that have not achieved the level of economic and fiscal predictability of Germany, France or the Netherlands, state aid will not be enough to be able to at least reach the current level of innovation . Therefore, Romania must turn the slogan of absorption of European funds into reality, so that it can keep up with the competitiveness of the Single European Market.

3competenciesincreased for future industries;

2023 has been declared the European Year of Skills in the EU, as the “green” transition also requires jobs adapted to new technologies, new industrial priorities and the new economy. In order for industries that are in a state of restructuring or development to have trained personnel, the Commission proposes to give priority to the training of the working population and to pay more attention to the involvement of women and young people in this process. Green skills, i.e. adapted to sustainable projects, are increasingly in demand and should be introduced into the education of Europeans. In addition, the European Skills Pact, which brings together public authorities, social partners, companies, SMEs, education and training institutions, aims to help 6 million European citizens improve their work skills.

4 Sustainable value chains.

The Commission explains that we cannot achieve a clean European transition without global cooperation, so it proposes economic and trade openness, especially in Africa, Eastern and Southern Europe, and cooperation with the World Trade Organization (WTO) to promote green investment. It also responds to voices claiming that the EU has taken a defensive stance towards the US since the IRA, and reveals that it is working in a joint task force with the US on the IRA to develop transatlantic value chains. The industrial plan also contains some hints about new initiatives that the EU is preparing for greater cooperation with other economic states: a club of critical raw materials for industry or clean technology industrial partnerships. Read the whole article and comment on Contributors.ro