Tabled as the EU’s response to the US’ $369bn green subsidy package, the Inflation Reduction Act (IRA), as well as in reaction to Chinese subsidies for the production of green technologies and the raw materials on which they depend, the new Green Deal Industrial Plan 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’.
 

Building on previous initiatives, the new Plan complements 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.
 

However, the EEB, the largest network of NGOs in Europe, says the new EU Plan ‘seems to be an aid scheme proposal for the European industry, instead of a comprehensive plan to depollute and decarbonise the sector, although its name might suggest otherwise’.
 

Noting that the proposal ‘lays the foundation for a much-needed boost to the green industry in Europe’, the EEB calls for it ‘to be better, not just bigger’. It also warns that the Plan ‘raises concerns among environmental groups due to the unclear definition of “net zero” technology, the deregulatory temptation and the unfair nature of subsidies’.

Subsidies alone will not deliver
Luke Haywood, Head of Climate Policy at the EEB, explains: ‘Green subsidies are good but not enough to have a meaningful effect on climate. Without cutting fossil fuel subsidies, pricing carbon properly and introducing measures to reduce demand, these financial efforts will be toothless. The EU will not deliver this transition in time by throwing money at clean technologies. It also needs to make dirty production more expensive and phase out harmful tech.’

Meanwhile, Marco Musso, Policy Officer for Fiscal Reform, EEB, adds: ‘Regulation provides a much greater competitive advantage for the EU than handing out subsidies. The EU Green Deal Industry proposal overlooks the key role that the regulatory framework plays in orienting businesses’ investment decisions. Facilitating the uptake of green tech should not be taken as an excuse for vast deregulation. Access to public funding can be eased while ensuring rigorous environmental standards – there is no reason to pitch one against the other.’

Lastly, Christian Schaible, EEB Head of Zero Pollution Industry, points out that although the draft includes talk around ‘net zero’, ‘clean’, ‘innovative’ or ‘breakthrough’ technology, it doesn’t clarify what is actually meant by these terms.