What does the European Union's Green Deal industrial plan provide?

There are four pillars of the European industrial plan for climate neutrality, presented by the European Commission, which aims to stimulate sustainable development.Let's discover them together.

• The European Commission has presented the Green Deal Industrial Plan to achieve climate neutrality.
• There are four pillars that compose it with particular attention to regulatory simplification, faster access to financing, cultivation of skills for the energy transition and free competition in the European single market.
• The desire is to encourage the development and adoption of technologies with reduced environmental impact and to make its community more attractive compared to third countries.

She didn't wait.There European Commission published the Green deal industrial plan for the Net-zero age, announced by its president, Ursula von der Leyen, on the occasion of World Economic Forum last January.The plan confirms the desire to support the growth of a European industry attentive to the adoption of technologies with reduced environmental impact and toefficiency of its activities to contribute to the achievement of climate neutrality by 2050.

A simplification of the regulatory framework

There are four pillars of the proposal, as can be read on the dedicated page.Faster authorization processes for initiatives related to renewable sources, promotion of strategic projects on community land and development of standard that support the diffusion of technologies with reduced environmental impact in European single market, space of free movement of goods and people.

The regulatory framework designed by the European Commission with the Net-zero industry act, soon to be proposed.A frame that will be built together with two other pillars of the energy transition:The Critical raw materials act, which aims to regulate access to precious raw materials, such as rare earths used in many high-tech products, and the reform of the electricity market, even more urgent in light of the speculative effects on the price of gas induced by the explosion conflict in Ukraine.

The root of this position is the American political policy ofInflation Reduction Act, known as the IRA, which supports the technologies with the greatest growth potential to create national and European industrial supply chains that are sustainable and capable of competing with the Chinese economy.

Smoother and quicker access to financing

To allocate the investments and financing to sustainable industry in an ever-increasing manner quick and targeted, the European Commission has prepared and sent a draft of the Temporary state aid crisis and transition framework, in adaptation to State aid temporary crisis framework.

It is a tool designed for unlock public funding more quickly and, consequently, leverage private ones.In fact, the European executive wants to facilitate the granting of state aid within member countries, without prejudice to the desire to guarantee fair competition within the walls of the single market and avoid national fragmentation linked to the different types of support in times of pandemic.The European Commission has sent the draft framework to the individual Member States and, following their feedback, intends to adopt them over the next few weeks.

Cultivation of new skills

35-40 percent of new jobs it could fall – hopefully, with due caution – within the scope of the energy transition.Develop the right ones skills it is fundamental and is the third pillar of the Green deal industrial plan:the European year of skills.

The executive plans to establish the Net-zero industry academies to launch refresher and learning programs useful both for the positioning of new recruits in strategic sectors and for the convergence of public and private funding.

Free competition for resilient supply chains

Pandemic, difficulty in obtaining raw materials, conflict in Ukraine:these events have shown the points of weakness of logistics and supply chains on a global scale.To ensure the full development of technologies with reduced environmental impact, the European Commission highlights the importance of promoting its activity in full compliance with the principles of fair competition and of free trade, as well as working in collaboration with the World trade organisation, the World Trade Organization.

At the basis of the free trade agreements, which will be signed within the framework of the Free trade agreements or other forms of cooperation, there is a desire to protect the single market from distortions in unfair competition caused by foreign subsidies, China and the United States in particular.

Possible changes and future hopes

The plan is not definitive.With a view to further facilitating the decarbonisation of the industrial sector, the European Commission plans to grant aid to “less mature” technologies, such as‘renewable hydrogen, without a tender in the case of state aid, provided that there are safeguards to guarantee the principle of proportionality of public support.

Furthermore, it wants to more decisively fill the lack of investments in strategic sectors for the green transition so as to contain the possible drift of new investments in favor of third countries beyond the EU borders.For projects that will be promoted in more disadvantaged areas, where the gross domestic product per capita is less than 75 percent of the European average, or which involve an investment in several Member States and support from a third country, the proposal is to allow further aid proportional to the latter.

The intention is to cultivate and maintain leadership in the production of batteries, solar panels, wind turbines, heat pumps, electrolysers and CO2 capture and storage, as well as tosupply of critical raw materials necessary for the production of such equipment.In short, the protection of the fields on which the game of sustainable world leadership is played.

Positions on the topic

By its nature, the plan raises opposing positions within public opinion.There is the independent research center based in the Netherlands The Hague Center for Strategic Studies, for example, which considers it "a good step in the right direction", even if it lacks clarity on what clean and neutral technologies are and how they will work in practice.

The lack of clarity in the plan on the specific technologies that will help achieve the 2050 climate neutrality objective is also invoked by the association SolarPower Europe, which brings together European companies in the photovoltaic supply chain.Directly connected, the position of European producers of natural graphite which, as reported by the information site Euractiv, they ask for the implementation of diversified import policies that avoid excessive dependence on individual suppliers as well as unfair competition caused by more "attractive" subsidies from Asian countries, China in the foreground.

It is important to highlight, then, that there is some discontent among European politicians themselves:the massive use of state aid in the Green deal industrial plan could disadvantage countries with less financial capacity, they argue trade commissioner with a liberal orientation Valdis Dombrovskis and the Competition Commissioner Margrethe Vestager.Behind the issue of safeguarding the internal market, therefore, there could be the risk of further economic and social disparity between the members of the European Union.

Among the NGOs, the voice of the soloist Italian climate think tank ECCO:“If the objective is to compete in new markets, create value chains resilient to shocks and monopolies, boost innovation and reduce emissions, it will be necessary to support at European level the system proposed by President Von der Leyen but supported by some additional crucial elements,” he highlights in one communication.“At a national level – he continues – it will be necessary to make courageous choices on certain green technologies in order not to fall behind and avoid replacing dependence on Russian gas with dependence on gas from other supplier countries”.

Furthermore, “the National recovery and resilience plan Italian would need one revision in the green sense outlined in the new European Industrial Plan, given the low estimated impact on the climate.A review that should aim to support the development of industrial supply chains in the sectors of technologies enabling the reduction of emissions, such as the electric car, exactly as the US IRA does."