The European Commission proposed on Thursday (March 16, 2023) draft regulations on raw materials, as well as on supporting industry, which will have to be approved by the European Parliament and EU governments in the EU Council in the coming months.
Fierce disputes are about to take place between hard-core free marketers, such as the Netherlands, and supporters of bold government interventions in the economy (this is the direction of today’s Commission proposals), such as France. Germany and Poland in the debates of recent months have presented a more nuanced approach. In the case of Germany, this is partly – as is often heard in Brussels – due to differences in the governing coalition. In turn, in the case of Poland – focusing on Ukraine and, as critics point out, lack of attention to other EU topics.
An energetic race
According to the Commission’s new projects, the EU should have production capacity of 40% by 2030 at the latest. EU demand in the field of key green or “clean” technologies. It is about the solar energy industry, batteries, electrolysers. And also – in the wind energy and heat pump sectors, where the targets for some parts are increased up to 85 percent. It is not so much about regaining a place in the global race dominated by, for example, China, how much about maintaining the Union’s current strong position.
Small nuclear reactors have also been added to this list of supported technologies after fierce disputes between EU commissioners today.
EU countries would support green projects in these industries by e.g. streamlining permitting procedures, prioritizing them in court procedures, giving them public interest status, which would allow authorities more latitude to address environmental concerns, and, most controversially, facilitated access to finance, including through subsidized off-take contracts; and through government guarantees.
In addition, the European Commission wants impediments to access to public procurement for green technologies from non-EU countries that have at least 65 percent. share in the EU market. An obvious example is China, where 90% of parts for solar panels currently sold in the Union.
Less raw materials from China
EU countries are expected to extract at least 10% of their coal by 2030. raw materials needed for green technologies and process 40 percent of them in the EU.
“Our demand for rare earth metals needed to make wind turbines will be five to six times higher by 2030 and six or seven times higher by 2050. We expect the demand for lithium needed for electric car batteries to be 12 times greater by 2030 and 21 times greater by 2050, Valdis Dombrovskis, deputy head of the European Commission, said today.
The extraction, processing and recycling of raw materials needed by green industries is to be supported by administrative facilitations and subsidies.
Despite Brussels’ hesitations, finally coking coal was also included on the list of “critical raw materials”. – It is a good day for the Silesian Voivodeship, because the largest supplier of coking coal in the EU is Jastrzębska Spółka Węglowa. Today’s decision means that it will still be easier for it to raise funds for future investments or creating jobs. At the same time, access to coking coal is necessary for our steel industry, while steel is needed to build wind farms, photovoltaic installations or develop rail transport – commented today MEP Jerzy Buzek.
In addition, the Commission would like the largest companies that live from the extraction of fossil fuels to set targets for the underground storage capacity of captured CO2 in 2030.
More and more subsidies
China’s growing role in the green technology market was one of the reasons for the US “Inflation Reduction Act” (IRA) last year, i.e. generous subsidies for green industries in the US. joined negotiations with Washington, which are still ongoing, to mitigate the influence of the IRA on, among others, EU car drivers.
In addition, Brussels opens the way for more generous subsidies, e.g. thanks to the loosening of state aid rules in the EU, strongly supported by Berlin and Paris, which the Commission approved last week. And he also wants support for the EU industry through regulatory and financial facilitations for green industries, which at the same time sets ambitious production targets, which is the main novelty of today’s package.
For its critics, the new ideas of the European Commission mean joining the harmful “subsidy race” and show nostalgia for central planning. – This is open protectionism – warn experts from the Bruegel center in Brussels, pointing out that limiting free market rules will bring effects to the cleantech sector in the EU in the long run opposite to intended.
On the other hand, for the Commission’s defenders, its recent projects are the result of abandoning free-market dogmatism, which equals naivety in the conditions of increasing competition with the US and often unreliable competition from China.
– It would be a false conclusion from the past mistakes of industrial policy to abandon any industrial policy. For too long we thought the market would take care of everything. We now understand that we must make strategic choices regarding development in the coming decades. We are doing the right thing in the era of the ongoing industrial revolution – argued today Frans Timmermans, the deputy head of the European Commission responsible for the Green Deal.
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Author Tomasz Bielecki
The article comes from the Deutsche Welle website
Source: Gazeta
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