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April 2023

UE introduces new measures to promote the energy transition

Francesca Del Bello

The Net Zero Industry Act and the Critical Raw Materials Act, which integrate the Green Deal Industrial Plan, were presented in Brussels on March 16th. CLEPA replies: European measures are good, but they should match international competition
The European Green Deal, the broad package of strategic initiatives adopted by the European Union with the ultimate goal of achieving climate neutrality by 2050, was integrated with a specific industrial plan. This was presented by the European Commission on  February 1st, to strengthen the competitiveness of European industry with net zero emissions and support a fast transition towards climate neutrality. The industrial plan  lays its foundations on four pillars:
  • Establishing a rapid, simplified and predictable regulatory environment that guarantees the availability of adequate quantities of raw materials, allowing end users to benefit from low-cost renewable energies.
  • Ensuring faster access to finance for clean technology production in Europe.
  • Improving the skills of people employed in the sector, with the proposal (among others) to set up specific academies of the industry with net zero emissions.
  • Promoting open and fair trade by continuing to develop a network of free trade agreements.
Within this framework and as part of this industrial plan, a further step forward was taken on March 16th. Or better, two steps forward. In fact, the President of the European Commission Ursula von der Leyen announced two additional packages that integrate the industrial plan of the Green Deal, thus creating a favourable legislative context for the achievement of the goals already set: the adoption of the Net Zero Industry Act and the Critical Raw Material Act.
The Net Zero Industry Act will in fact allow an increase in terms of production of clean technologies within the European Union, improving the conditions for starting net zero projects in the continent and attracting investments. “We need a regulatory environment that allows us to scale up the clean energy transition quickly. The Net-Zero Industry Act will do just that.”, explained President von der Leyen; “[d]emand is growing in Europe and globally, and we are acting now to make sure we can meet more of this demand with European supply.” The strategic production of zero-emission technologies within the EU will need to reach a 40% share by 2030.
Alongside the Net Zero Industry Act, on 16 March was also introduced the Critical Raw Materials Act aimed at guaranteeing access by EU countries to a secure, diversified, economically accessible and sustainable supply of critical raw materials - materials of strategic importance in the process of ecological transition and progressive digitization, characterized by a high risk in terms of supply. As is known, almost the entire supply of critical raw materials in the EU today depends on a few countries that hold almost monopolist control over them. "Raw materials are vital for manufacturing key technologies for our twin transition – like wind power generation, hydrogen storage or batteries", commented von der Leyen. "And we're strengthening our cooperation with reliable trading partners globally to reduce the EU's current dependencies on just one or a few countries. It's in our mutual interest to ramp up production in a sustainable manner and at the same time ensure the highest level of diversification of supply chains for our European businesses”, concluded the President of the Commission.
From the automotive world, the reaction comes immediately from CLEPA, European Association of Automotive Suppliers, who welcomes the latest measures adopted by the EU but suggests at the same time four further principles to ensure a competitive transition. Firstly, according to the Association, the measures adopted by the EU will have to satisfy international competitiveness in terms of size and time, to prevent investments from being redirected. Secondly, CLEPA statement reads, a holistic and long-term industrial strategy must ensure that procedures and economic support are accelerated towards a transition in terms of green and intelligent production and mobility; moreover, CLEPA's wish is to have access to highly qualified and skilled workforce and, at the same time, to strengthen existing investment programs in terms of research and innovation. The last step highlighted by CLEPA refers to a reduction in regulatory burdens, in an open and strongly market-oriented technological perspective.

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