Food System

EU Green Deal Industrial Plan. The necessary ecological transition

February 1, 2023

110

On Feb. 1, 2023, the European Commission announced the ‘Green Deal Industrial Plan for the Net-Zero Age,’ where green transition is presented as the necessary way to justify public funding to safeguard production chains in the Old Continent (1,2,3).

Table of Contents

1) EU Green Deal Industrial Plan

Ursula von der Leyen today announced the Green Deal Industrial Plan to implement and update the
European Green Deal
(2019) to the current scenario. Indeed, European sanctions ‘on Russia’ have caused an unprecedented(announced) energy crisis to all production chains in the Old Continent. And their competitiveness in international markets has been further undermined by the U.S. Inflation Reduction Act.

The EU Green Deal Industrial Plan
, in Brussels’ design, should be articulated as follows.

1.1) Net-Zero Industry Act

Net-Zero Industry Act.
, a document being finalized, is expected to include a series of measures to shorten and simplify(one-stop-shop) permitting procedures for technologies essential to achieving climate goals.

Carbon sequestration
e
carbon farming
, renewable energy, renewable hydrogen production facilities and batteries.

Looking ahead to 2030, the Commission also aspires to set strategic goals and projects for the development of green technologies. As well as introducing EU standards to qualify products as ‘sustainable’ or ‘Net Zero‘ emission.

1.2) State aid and EU funding

Temporary Crisis and Transition Framework
. The European executive proposes to introduce temporary flexibility, for the three-year period 2023-2025, on state aid limits. So that the governments of the 27 member countries can support investment on renewable energy and de-carbonization of industry.

Member states will be able to reallocate for this purpose EU funding already received through the Recovery Plan (
Next Generation EU
) and not yet used. Equal to 225 billion euros in loans and 20 billion euros in grants, out of a total of 800 billion euros. Brussels will then propose the creation of a European Sovereignty Fund to invest in emerging technologies.

1.3) International trade

International free trade agreements, on the Brussels agenda, must be pursued with special attention to ‘Net Zero‘ goals. To provide access to essential raw materials (e.g., minerals, rare metals) and new export markets.

The toxic treaty season initiated by Jean-Claude Juncker thus seems destined for renewal. After agreements concluded with Mercosur, Chile, Mexico, and New Zealand, the focus is now on Australia.

New EU rules on foreign subsidies are also announced, with the aim of hindering-presumably, with anti-dumping duties and similar measures-the ‘unfair trade practices‘ of some third countries. Once again, it is feared, in an anti-Chinese key.

1.4) Critical Raw Materials Act

The Critical Raw Materials Act
, itself pending, should instead promote local extraction, processing and recycling of raw materials critical for unavailability and relevance in ‘green technologies’ (e.g., lithium, silicon).

2) Skills and employment

Workers in green technologies increased from 3.2 million to 4.5 million between 2000 and 2019, according to the European Commission. And the electric battery industry alone is estimated to require 800,000 new jobs by 2025.

InvestEU
. 14 industrial partnerships have been activated in various sectors, including agribusiness, to improve training and retrain the workforce. Commission and EU member states meanwhile work on mutual recognition of professional qualifications.

3) Next steps

This proposal is expected to be discussed at the March European Council.

Dario Dongo

Notes

(1) János Allenbach-Ammann. LEAK: EU Commission plan to counter US green subsidy bill. https://www.euractiv.com/section/economy-jobs/news/leak-eu-commission-plan-to-counter-us-green-subsidy-bill/ Euractiv. 31.1.23
(2) European Commission. The Green Deal Industrial Plan: putting Europe’s net-zero industry in the lead. https://ec.europa.eu/commission/presscorner/detail/en/IP_23_510 Press release 1.2.23
(3) Communication from the Commission to the European Parliament, the European Council, the European Economic and Social Committee and the Committee of the Regions. A Green Deal Industrial Plan for the Net-Zero Age. https://commission.%20Net-Zero% COM(2023) 62 final