EU launches net zero plan to rival US greentech incentives

Article by Adam Duckett

Alexandros Michailidis /

THE EU has outlined its plans for scaling-up the manufacturing of crucial clean technologies as it seeks to bolster the bloc’s competitiveness in the face of US incentives and reduce its reliance on imports from China.

At the centre of the proposed Net Zero Industry Act is a goal to have 40% of net zero technologies deployed in the bloc made within the EU by 2030.

Ursula von der Leyen (pictured above), president of the European Commission, said: “We need a regulatory environment that allows us to scale up the clean energy transition quickly. The Net-Zero Industry Act will do just that. It will create the best conditions for those sectors that are crucial for us to reach net-zero by 2050: technologies like wind turbines, heat pumps, solar panels, renewable hydrogen as well as CO2 storage.”

The act seeks to reduce the administrative burden of setting up projects and simplifying permit-granting processes.

It has also set a target of reaching 50m t/y of CO2 injection capacity at EU sites by 2030, and will introduce requirements for oil and gas producers to help establish the sites. It says this will overcome a major barrier to the development of CCS as an economically-viable solution for hard to abate sectors.

Concerns about the IRA

The legislation follows the introduction last year of the US Inflation Reduction Act (IRA) which will inject more than US$370bn into green technologies and infrastructure. While the flood of subsidies and incentives was initially lauded as a landmark moment for green transformation, concerns have since been raised that they will sponge up private investment from overseas and disrupt supply chains.

In December, von der Leyen said the EU must “take action to rebalance the playing field where the IRA or other measures create distortions.”

While the UK’s trade secretary Kemi Badenoch has described the IRA as protectionist.

“It is onshoring in a way that could actually create problems with the supply chain for everybody else,” she said.

In March, Volkswagen committed to building an electric vehicle battery plant in Canada that could take advantage of IRA subsidies, and may build fewer plants in Europe, the FT reported.

This article is adapted from an earlier online version.

Article by Adam Duckett

Editor, The Chemical Engineer

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