Brussels accelerates the use of funds to finance ‘green innovation’
European Commission launches industrial plan to boost EU competitiveness in the sustainable transition
Increasing the competitiveness of Europe’s clean technology industry and supporting the rapid transition to climate neutrality. This is the aim of the European Green Deal Industrial Plan, presented yesterday by the European Commission, in which the promotion of funds to finance innovation plays a major role. In this way, Brussels hopes to create a more conducive environment for increasing the EU’s capacity to produce the carbon-neutral technologies and products needed to meet Europe’s ambitious climate targets.
The plan builds on previous initiatives and builds on the strengths of the EU’s single market, complementing ongoing efforts under the Green Deal and REPowerEU. One of the four pillars underpinning the Industrial Plan is accelerating access to finance.
In order to simplify the granting of aid, the European Commission will consult Member States on an amended Temporary Crisis and Transition Framework for State Aid and will revise the General Block Exemption Regulation in the light of the Green Deal, raising the notification thresholds for support for green investments. This will contribute to further streamlining and simplifying the approval of initiatives related to Major Projects of Common European Interest (IPCEI), among other things.
Leading the clean technology revolution
Brussels will also facilitate the use of existing EU funds to finance innovation, manufacturing and deployment of clean technologies. The European Commission is also exploring ways to achieve greater pooled funding at EU level to support investments in carbon-neutral manufacturing, based on an ongoing assessment of investment needs.
The European Commission will work with Member States in the short term, focusing on REPowerEU, InvestEU and the Innovation Fund programme, to find a bridging solution to provide rapid and targeted support. Brussels’ medium-term objective, however, is to provide a structural response to investment needs by proposing a European Sovereignty Fund in the context of the revision of the Multiannual Financial Framework, before next summer.
“Europe is determined to lead the clean technology revolution,” said European Commission President Ursula von der Leyen yesterday. “For our businesses and our citizens, this means turning innovation into mass production, thanks to a simpler and faster framework. Better access to finance will allow our key cleantech industries to grow rapidly,” she concluded.
New regulatory framework and competences
As for the other pillars of the Industrial Plan, Brussels will propose a Carbon Neutral Industry Act, with the aim of providing an appropriate regulatory framework for rapid deployment, ensuring simplified and fast-track permitting, promoting European strategic projects and developing rules to support the scaling 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, such as rare earths, that are vital for the manufacture of key technologies, and by reforming electricity market design, so that consumers benefit from the lower costs of renewables.
Furthermore, given that 35-40% 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 this.
Trade for the green transition
Finally, the fourth pillar will focus on global cooperation and putting trade at the service of the green transition, under the principles of fair competition and open trade, building on commitments with EU partners and the work of the World Trade Organisation. To this end, the Commission will further develop the EU’s network of free trade agreements and other forms of cooperation with partners to support the green transition.
It will also explore the creation of a Critical Raw Materials Club, bringing together raw materials 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.
The European Green Deal Industrial Plan was announced by Von der Leyen in her speech to the World Economic Forum in Davos last month as the initiative for the EU to sharpen its competitive edge through investment in clean technologies and continue to lead the way towards climate neutrality.