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    States Von der Leyen announces "clean" industry investment plan in response to US green subsidies

    January 17, 2023 - CE Noticias Financieras



      According to Von der Leyen, the Green Pact Industrial Plan, as Brussels calls it, aims to cover the regulatory environment, financing, worker skills and international trade, and will focus on streamlining permits to facilitate investment in crucial sectors along the entire supply chain in order to achieve the goal of zero net emissions, including wind energy, heat pumps, solar energy, clean hydrogen and storage.

      To this end, the president has advanced that the Community Executive will present a new Net Zero Industry Act, similar to the draft legislation on chips, which will set "clear" targets for European clean technology from 2030.

      In addition, Von der Leyen has proposed creating a Critical Raw Materials Club to work with like-minded partners -- from the United States to Ukraine -- to collectively strengthen supply chains, diversify suppliers and reduce the EU's 98% dependence on China for the manufacture of key technologies such as wind power generation, hydrogen storage or batteries.

      Another aim of the plan is to temporarily adapt European state aid rules to "streamline and simplify" them, for example with simple tax relief models and targeted aid for cleantech production facilities to help counter the risks of offshoring from foreign subsidies such as the $369 billion U.S. cleantech investment plan.

      However, Von der Leyen stressed that state aid will be "a limited solution that only a few Member States will be able to use", and therefore insisted that, in the medium term, the solution to counteract the impact of US subsidies on the European economy will involve the creation of a sovereign fund that will also prevent the "fragmentation" of the market.


      The President of the Commission also stressed the need for the EU to take advantage of trade agreements and to make an effort to resolve its differences with powers such as Canada and the United Kingdom, while working to conclude agreements with Mexico, Chile, New Zealand and Australia, and to make progress with India and Indonesia.

      Similarly, he encouraged the resumption of talks on the agreement with Mercosur - deadlocked due to differences among the 27 and doubts about Brazil's climate commitment - since international trade is "key" to helping our industry reduce costs, create jobs and develop new products.

      "But when trade is not fair, we must respond more strongly," Von der Leyen objected, referring to countries like China, which has openly encouraged energy-intensive companies to offshore all or part of their production. "They do so with the promise of cheap energy, low labor costs and a more permissive regulatory environment, while China heavily subsidizes its industry and restricts EU companies' access to its market," she criticized.

      However, mindful of the need to work and trade with China, he has urged the EU to focus on "reducing the risk" and using all its tools to tackle unfair practices, including the new regulation on foreign subsidies. "We will not hesitate to open investigations if we believe that our procurement or other markets are being distorted by such subsidies," he has warned.


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