The European Commission said the Clean Industrial Deal will mobilise over €100 billion ($104.94 billion) to support EU-made clean manufacturing.
The deal is a key pillar of its competitiveness plan, designed to support energy-intensive industries facing high costs and heavy bureaucracy as they challenge for market share with global rivals, Reuters news report said.
The Commission plans to launch together with the European Investment Bank guarantee schemes to ease costs for long-term renewable power contracts as well as to support grid manufacturers.
President Ursula von der Leyen said: “Europe is not only a continent of industrial innovation, but also a continent of industrial production. However, the demand for clean products has slowed down, and some investments have moved to other regions. The Clean Industrial Deal is to cut the ties that still hold our companies back and make a clear business case for Europe.”
The Commission also proposed creating an EU Critical Raw Material Centre to jointly purchase key metals and minerals required in the energy transition.
The deal is part of a wider plan that includes simplifying red tape and carbon duties and subject to approval in the European Parliament and amongst a reinforced majority of EU member states.
Chris Rosslowe, Senior Analyst at Ember, said: “The EU’s Affordable Energy action plan correctly diagnoses the root cause of Europe’s high energy prices: its dependence on imported fossil fuels. The proposed measures find a good balance between short-term relief for consumers and structural fixes to Europe’s fossil dependence.
“It’s positive to see concrete actions that will accelerate low-cost renewables, while at the same time putting Europe’s increasingly clean power to work towards electrification. Aside from concerns around gas investment support, the plan offers a feasible route to lower energy prices. Now we need Member States to get serious about implementation,” Chris Rosslowe said.
Ember’s key takeaways:
The plan prioritises accelerating low-cost renewables, and is set to boost critical enablers in demand flexibility, storage and grids. Includes another push to implement existing permitting rules and remove barriers to market access for demand flexibility and storage. Also provides guidance for Member States in designing renewables support schemes, and offers measures to de-risk corporate Power Purchase Agreements (PPAs) and grid components manufacturing.
Smart electrification is clearly signposted as the next big step towards a more efficient, cheaper, cleaner system. An indicative target of 32-33 percent by 2030 is a good start. The plan encourages Member States to shift taxes and levies off electricity bills, which will help bill-payers immediately while encouraging the switch to electrified tech.
The plans contain measures to support fossil infrastructure abroad and additional LNG purchase commitments. As well as being hard to implement, this could undermine certainty of demand for clean energy producers, and risk exacerbating the root cause of high energy prices: the EU’s dependence on expensive imported fossil fuels.
Baburajan Kizhakedath