According to reports, the European Commission proposed a draft document titled "Green Trading Industry Plan for the Net Zero Era" in response to the US Inflation Reduction Act (IRA). The EU is considering proposing green industrial capacity targets, reducing the regulatory burden on the application of new technologies, and allowing EU countries to provide subsidies, tax credits and other incentives for clean i technologies.
The draft document proposes a net zero industry bill to support industrial manufacturing of key technologies in the EU. As part of the Net Zero Industry Act, the European Commission wants to "set targets for industrial capacity up to 2030 where necessary to ensure that external dependencies do not jeopardize the green transition". In addition, the Net Zero Industry Act will establish common EU standards and help the technology to spread. Especially for new industrial value chains, European standards can provide EU industry with an important competitive advantage globally.
Since the start of the pandemic in 2020, the EU's restrictions on subsidies to its industries by member states have been greatly relaxed, and have been further relaxed since the Russo-Ukraine war. Now, in response to the U.S. government’s IRA funding of cleantech, the European Commission wants to ease restrictions on subsidies even further by establishing a “temporary crisis and transition framework.” The framework will simplify the national subsidy process for all renewable technology projects and allow member states to offer higher levels of subsidy if needed in response to subsidies "from similar projects from competitors outside the EU". In addition, the new framework will allow member states to offer tax incentives to attract new investment in production facilities in "strategic net zero sectors". An important part of the U.S. IRA is the tax benefits.
The European Commission is also considering allowing emerging technologies not to go through the public tender process. Typically, public tenders are made to prevent abuse and corruption. However, the draft document states that "tenders may not work well" for less mature technologies. The draft document recommends that member states introduce a "one-stop shop" for the licensing of renewable energy and clean technology projects, to streamline the process, use tax incentives to encourage green investment, and invest in workforce training.
Finally, the draft EU document also proposes the establishment of a "critical raw material club" with like-minded partners to ensure a "safe, sustainable and affordable global supply" of raw materials needed for green and digital transformation.