Wide-ranging proposals for a new Industrial Strategy to help the European Union lead “twin transitions towards climate neutrality and digital leadership” have been unveiled in Brussels, as the European Commission pushes forward with its flagship Green Deal vision.
The proposed Industrial Strategy just announced seeks to place environmental concerns and the European Commission’s proposed 2050 net zero target at its core, making up one of three key priorities alongside the roll out of digital technologies and boosting global competitiveness for European businesses.
Offering a framework for greening European business through the 2020s and beyond, the Strategy proposes a package of sector-specific efforts.
These include such as plans to modernise and decarbonise energy-intensive industries, boost smart and sustainable transport networks, and curb ‘carbon leakage’, whereby carbon intensive industries simply relocate to jurisdictions with more lax climate regulations and lower carbon prices.
President of the EC, Ursula von der Leyen, said a strong industrial strategy was “more important than ever as Europe embarks on its ambitious green and digital transitions in a more unsettled and unpredictable world”.
“Europe’s industry has everything it takes to lead the way and we will do everything we can to support it,” she said.
The Industrial Strategy builds on the EU Climate Law, announced by President von der Leyden last week, which aims to provide a legal basis to ensure the EC’s proposed 2050 net zero target is taken into account in all future policy decisions and legislation, along with mechanisms to encourage countries to ramp up their decarbonisation plans every five years.
However, while the Climate Law focused largely on governance measures, the new Industrial Strategy offers a framework for private sector companies and investors to drive low carbon investment and green growth in line with the EC’s aim to become the world’s first ‘carbon neutral’ continent.
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t aims to promote renewable energy and energy efficiency across EU industries and set up new sector-specific ‘Alliances’ to catalyse the development of green hydrogen, sustainable raw materials, and low carbon industrial processes in a similar mould to the existing European Battery Alliance and Circular Plastics Alliance.
Another crucial pillar of the Strategy would see an SME strategy developed to reduce red tape and help small and medium companies access financing to drive their transition towards a future net zero economy, as well as specific strategies for clean steel, sustainable construction, and greener chemicals.
Crucially it also confirms plans to introduce a ‘carbon border adjustment mechanism’ next year to combat carbon leakage from international trade, a move that is likely to prove controversial in some quarters and will spark fears of a trade war with economies that are less committed to the net zero transition.
Moreover, the plan includes proposes develop green procurement guidelines and legislation to ensure EU bodies lead by example in the goods and services they buy and create a market for low carbon industrial firms.
EU Commissioner for the Internal Market, Thierry Breton, said Europe had “the strongest industry in the world”, but that the continent needed to move rapidly to stay ahead of the major transformation and disruption that will occur as the global net zero transition plays out.
In order to reduce emissions across industry, it also proposes an “energy efficiency first” principle, as well as a new strategy for smart system integration, covering clean hydrogen, to more effectively use electricity, gas, and liquid fuels across different industries.
And the development of a raft of fresh sector-specific strategies are proposed, including plans to encourage sustainable and smart mobility, raw materials, sustainable chemicals, green buildings and construction, and textiles, to help build a greener economy.
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