EU sets out green industry deal to take on US, China

Plans include repurposing of existing funds, more state aid and faster project approval

BRUSSELS – The European Commission has proposed allowing increased levels of state aid so that Europe can compete with the United States as a manufacturing hub for electric vehicles and other green products, and reduce its dependence on China.

European Commission chief Ursula von der Leyen on Wednesday announced, as part of the plan, a repurposing of existing EU funds, faster approval for green projects and drives to boost skills and to seal trade agreements to secure supplies of critical raw materials.

This is partly a response to multibillion-dollar support programmes of China and the US, including the latter’s Inflation Reduction Act.

“Major economies are rightly stepping up investment in net-zero industries,” Dr von der Leyen told a news conference.

“What we are looking at is that we have a global playing field.”

Many EU leaders are also concerned that the local content requirements of the US$369 billion (S$482 billion) of green subsidies in the US legislation will encourage companies to relocate, making the US a leader in green tech at Europe’s expense.