The European Union must preserve its competitiveness in clean technology manufacturing and will take decisive steps to keep Europe in the lead in the industry in the face of the U.S. Inflation Reduction Act and massive subsidies in China, the leaders of the bloc agreed in talks late on Thursday and early Friday.
"We need to preserve our competitiveness in the development, manufacturing and rollout of clean technologies. And this especially against the backdrop of the Inflation Reduction Act-that was the main topic of the debate," European Commission President Ursula von der Leyen said at a press conference late on Thursday.
Since the United States passed the Inflation Reduction Act (IRA), the European Union has discussed ways to preserve Europe's competitiveness and prevent an exodus of production to the U.S.
Signs have already emerged that several U.S. states are looking to attract European clean energy and clean technology companies to invest in American production and operations as they will benefit from the clean energy provisions in the IRA.
The IRA has nearly $370 billion in climate and clean energy provisions, including investment and production credits for solar, wind, storage, critical minerals, funding for energy research, and credits for clean energy technology manufacturing such as wind turbines and solar panels.
European Union officials, for their part, are concerned that the IRA-along with its incentives and tax breaks-is a "protectionist" measure from America that puts European business at a disadvantage if the EU doesn't come up soon with its own legislation or at least with easing some rules regarding state aid.
Early this month, the European Commission presented a Green Deal Industrial Plan "to enhance the competitiveness of Europe's net-zero industry and support the fast transition to climate neutrality." The plan 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.
In a joint statement on Friday, carried by the Financial Times, the EU leaders said, "In the face of the new geopolitical reality, the European Union will act decisively to ensure its long-term competitiveness, prosperity and role on the global stage."
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More