Leaders of European Union EU Agree to Support Green Tech Manufacturing and have reached a consensus on Friday to the support of green tech manufacturing in Europe. The aim is to ensure Europe’s future as a leading producer of renewable energy and sustainable products, and to counter competition from the United States and China.

EU Agree to Support Green Tech Manufacturing

The European Commission has proposed changes to state aid rules for investments in sustainable industries such as renewable energy, decarbonized manufacturing, hydrogen, and zero-emission vehicles. The proposal was partially motivated by the United States’ Inflation Reduction Act (IRA), which provides $369 billion in subsidies with local content requirements. These requirements have caused concern among EU leaders, who fear that companies may choose to abandon Europe for the US.

German Chancellor Olaf Scholz expressed confidence in the ability of EU and US leaders to limit discrimination against European companies. He emphasized the importance of ensuring competitiveness and avoiding an international subsidy race.

The global market for clean energy technologies is expected to reach $650 billion annually by 2030, according to the International Energy Agency. While Europe wants to participate in this growth, currently, many green tech sectors such as solar panels, wind turbine blades, and vehicle batteries are dominated by China.

To address this, the European Commission is planning to introduce a Net-Zero Industry Act to speed up permits for green projects and a Critical Raw Materials Act to boost recycling and reduce reliance on Chinese processors. Commission President Ursula von der Leyen announced that these acts will be presented at the next EU leaders meeting on March 22-23.

However, funding remains a controversial aspect of the plan. There is opposition to joint borrowing, and some countries such as the Netherlands, Ireland, the Czech Republic, and the Nordics are concerned about excessive subsidies and prefer to focus on improving the EU single market.

Leaders of EU Agree to Support Green Tech Manufacturing have agreed to support the growth of green tech manufacturing in Europe as a means of competing with the US and China and ensuring a sustainable future. The next steps will be to finalize funding and implement the Net-Zero Industry Act and Critical Raw Materials Act.