Green Technologies: Ursula von der Leyen’s “Plan” to Win the Industrial Struggle

Green Technologies: Ursula von der Leyen’s “Plan” to Win the Industrial Struggle

While China and the United States have entered hostilities to win the green technology battle, the European Union (EU) is preparing its response. “We Europeans have a plan”, affirmed Ursula von der Leyen on Tuesday 17 January in Davos, and it will allow the old continent to “take part in this race for innovation that will reshape the industry of tomorrow to position the tip”.

In her speech, Ursula von der Leyen denounced “aggressive attempts” to lure European industrialists, particularly in the clean energy sector, “to China and elsewhere”. She also mentioned the “concerns” raised by the United States’ Inflation Reduction Act (IRA), the $369 billion (€342 billion) climate investment plan that envisages big bailouts for US-based companies. “We will not hesitate to initiate investigations if we believe that our markets (…) are being distorted by such subsidies,” promised Ursula von der Leyen.

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The community executive has held talks with Washington in hopes of getting the United States to amend the IRA, but no one in Brussels or in the capitals envisions them changing the situation significantly. “The reaction from other countries shouldn’t be, ‘Oh my god, you shouldn’t do this, it puts us in an unfair position.’ Do it too, everyone has to do the same thing to further speed up this process,” said the American special envoy for the climate, John Kerry, in Davos.

Grant race

Sure, but the EU now fears that its manufacturers will give in to the sirens of Washington or Beijing and leave the old continent. It is true that it combines the weaknesses. First of all, its green industry is very dependent on China, India or the United States. “For rare earths, indispensable for the production of key technologies [énergie éolienne, stockage de l’hydrogène ou batteries]”Today, Europe is 98 percent dependent on China,” Ursula von der Leyen recalled. “To produce green electricity in 2050, Europeans will have to spend 450 billion euros a year. This money should not be used to buy non-European products and export our jobs,” concludes Thierry Breton, Commissioner for the Internal Market.

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In addition, the EU is very slow in approving certain state aids on which strategic projects may depend: industrial alliances generally take two years to see the light of day. After all, the Twenty-Seven do not have equal resources and a subsidy race between them to attract investment would be devastating for the internal market. To be honest, it has already started: In the next ten years, Germany wants to support its companies with the climate change with 100 billion euros, the Netherlands with around 40 billion and France with around 50 billion.

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