Brussels to target 40% of clean tech manufacturing in Europe by 2030, leaked documents show
The European Commission is drafting a new target to have at least 40% of clean technologies manufactured in the EU by 2030 as part of a drive to meet its climate goals and strengthen energy independence. Eligible technologies include renewables, nuclear power and carbon capture and storage, among others.
The draft law, seen by EURACTIV and due to be published on Tuesday 14 March, looks at increasing support for key technologies that will help Europe reduce its emissions and switch to carbon-free energy production.
“Europe is determined to lead the clean tech revolution,” said European Commission President Ursula von der Leyen when she announced the Green Deal Industrial Plan in February.
“We have a once-in-a-generation opportunity to show the way with speed, ambition and a sense of purpose to secure the EU’s industrial lead in the fast-growing net-zero technology sector,” she added.
The new law marks a “make-or-break moment for Europe”, according to Ann Mettler, the European vice president of Breakthrough Energy, an initiative by US billionaire Bill Gates aimed at supporting clean technologies.
“Accelerating the energy transition is the defining generational challenge of our times. The Green Deal Industrial Plan and net zero industry act must quickly address gaping shortcomings that have exposed existential vulnerabilities,” Mettler said.
Alongside an overall target for Europe’s net-zero technology manufacturing capacity, the draft includes specific targets for certain industries.
This includes meeting 40% of annual solar PV deployment, 50% of electrolysers, and 60% of heat pump deployment with EU manufacturing by 2030. For batteries and wind energy, the percentage goes up to 85% by 2030.
This could be a challenge for Europe. For instance, according to industry body WindEurope, the “wind energy supply chain is struggling as a result of low market volumes and cost pressure due to slow and cumbersome permitting, poor auction design and uncoordinated EU trade policies”.
“Europe’s wind energy supply chain is not big enough to meet the huge volume of new wind farms Europe wants,” said Fred van Beers, CEO of SIF, a company in the wind energy supply chain.
“The need for investments in new manufacturing is especially acute for offshore wind. There are particular bottlenecks in making the foundations for offshore turbines. Europe can make around 500 of them a year today but needs to be making 1,500,” he explained.
For solar, the target “is possible, depending on how far the financial support frameworks will go”, according to Dries Acke, policy director at SolarPower Europe. It will also depend what the 40% is based on, he added, saying it is strange that it is a percentage rather than a gigawatts target, which would provide more investor clarity and is closer to the EU’s normal approach.
Europe would also need to wrestle back solar manufacturing from China, which dominates the market.
“While our continent has been an innovator in the photovoltaic sector since day one, we lost our market shares and are struggling to tap into the job potential – one million jobs by 2030 – of this sector,” said EU internal market chief Thierry Breton in December 2022.
According to the leaked draft, if the EU fails to achieve the individual or overall targets, the European Commission will propose “without delay additional measures aimed at covering the identified gaps”.
The law follows concerns about a lack of support for Europe’s industry in light of the US’ green subsidy drive and fears that an overreliance on China could derail the green transition.
“The EU has understood that an energy transition that’s entirely reliant on China for the supply of pretty much all that is necessary […] is not only an acute vulnerability for energy security but also particularly poor industrial policy,” said Mettler.
The draft looks at reducing red tape, including improving permitting and access to finance, for certain “strategic technologies”. Those are listed in an annex to the draft regulation and include the following:
- Solar Photovoltaic and solar thermal technologies
- Onshore and offshore wind technologies
- Battery technologies
- Heat Pumps [and geothermal energy]
- Renewable hydrogen technologies
- Biomethane technologies
- Nuclear technologies (fission)
- Carbon capture, usage and storage (CCUS)
- Grid technologies
The Commission plans to boost the domestic production of these through ‘Net Zero Resilience Projects’ that build up the EU supply chain and boost competitiveness as well as local development.
Groups can submit applications for this label and, once approved, are eligible to get quicker permits. According to the draft, permitting for a Net Zero Resilience Project will not exceeded 12 months for construction or expansion if yearly output exceeds one gigawatt and nine months if it is less than this.
Similarly, permits for the construction of clean tech manufacturing projects with a yearly output of over one gigawatt should not exceed 18 months and 12 months for less than one gigawatt.
However, these numbers could change before the final proposal.
Projects should be granted priority status, with national authorities ensuring “processes are treated in the most rapid way possible” and that projects are “granted the status of the highest national significance possible”.
These could be implemented in so-called ‘Net-Zero Industry Valleys’, which would be “a specific area, on land, which has been designated by a Member State as particularly suitable for the construction or expansion of manufacturing facilities of the net-zero industry supply chain”.
The draft also includes several ways in which projects can access EU funding, although it does not specify how much this would amount to.
For instance, the draft foresees a target for the amount of national revenues from the EU carbon market that countries should put towards implementing the law. The amount is not yet decided.
EU countries may also provide financial support to specific projects, including guarantees to decrease borrowing costs and reduce financial risk in the early stages.
In addition, the European Commission will set up a Net Zero Industry Platform to “identify financial needs and bottlenecks” as well as best practices, “based on regular exchanges with the relevant industrial alliances”.
The law is due to be tabled by the European Commission on 14 March. It will then be debated by EU countries and the European Parliament.
You can access a full copy of the leaked documents here.
Kira Taylor, EurActiv.com
This article first appeared on EurActiv.com, an edie content partner
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