Green Deal Industrial Plan

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    • European Commission recently presented a Green Deal Industrial Plan to enhance the competitiveness of Europe’s industry

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    • The  Green Deal Industrial Plan involves building a simpler regulatory framework, providing faster access to funds, enhancing skills and improving the EU’s trade network.
    • The proposal aims to bring changes in the following areas:
    • Regulatory Framework
      • The plan seeks to formulate a “Net-Zero Industry Act”, which will not only simplify rules but also speed up the issuance of permits for green projects
      • It also includes a “Critical Raw Materials Act”, which will provide access to materials like rare earths that are crucial for developing net-zero technology.
    • Access to funds
      • Loosening of state aid rules to help EU’s 27 governments with investment  in clean energy projects.
      • The plan enables countries with minor economies to take money from existing EU funds.
      • Aims to set up a “European Sovereignty Fund” in the future to give a structural answer to the investment needs.
    • Enhancing skills
      • The plan aims to establish “Net-Zero Industry Academies” that will provide up-skilling and re-skilling programmes in strategic industries. 
    •  Trade network
      • seeks to further develop the EU’s network of Free Trade Agreements to support the green transition.
    • Implications
      • Will increase europe’s competitiveness in green industries
      • When seen together with USA’s Inflation Reduction Act (IRA) which will direct $390 billion towards clean energy projects the plan might trigger a global subsidy war.

    Source: IE