On February 9, 2023, Olaf Scholz, the chancellor of Germany, will attend a summit of European leaders in Brussels, Belgium.
BRUXELLES – In order to secure Europe’s future as a manufacturing hub for green technology goods and to compete with the United States and China, European Union leaders decided on Friday that “targeted, temporary, and reasonable” support should be permitted.
In response to the U.S. Inflation Reduction Act, the European Commission has recommended relaxing regulations on state aid for investments in renewable energy, decarbonizing industries, hydrogen, or zero-emission automobiles (IRA).
Leaders of the EU have voiced worry that the $369 billion in IRA subsidies that have local content restrictions may push businesses to relocate to the US instead of Europe.
At a press conference following the leaders’ meeting in Brussels, he said, “When we are looking at our competitiveness, we need to do our own study and do everything to guarantee that we do not have an international subsidy race.”
According to the International Energy Agency, the market for renewable energy technologies that are mass-produced will quadruple to $650 billion annually by 2030.
While China commands a market share of well over 50% in a variety of industries, including wind turbine blades, automotive batteries, solar panels, and solar panels, Europe wants a piece of the action.
They will be delivered before to the next summit of EU leaders on March 22–23, according to Commission President Ursula von der Leyen.
Joint borrowing is generally opposed, and some people worry that weaker state aid regulations would generate instability in the EU internal market since subsidies in the two biggest economies, Germany and France, will dwarf alternatives everywhere.
Countries including the Netherlands, Ireland, the Czech Republic, and the Nordic region have voiced worry that this might result in excessive non-targeted subsidies and argue that it would be more beneficial to focus on enhancing the EU single market.