All of Europe sees the “Industrial Green Deal Plan” as a response to the decline in the competitiveness of companies in the Old Continent compared to the rest of the world, experts from the Association of Auto Parts Distributors and Manufacturers (SDCM) write in a study.
As we read, the European economy and its individual industries - such as the automotive industry - are struggling with problems that rival companies operating in the US or Asia are not feeling, such as high prices for electricity or raw materials. According to industry experts, the industry cannot cover such high costs in the long run, especially in the face of competition from other large markets.
As Commissioner Breton noted some time ago, energy prices in Europe are several times higher than in the US. This clearly weakens the global competitiveness of EU industry. The US Inflation Reduction Act (IRA) added fuel to the fire. Despite its name, it has less to do with inflation and much more to do with climate policy and industrial transformation.
The Biden administration’s initiative has generated much controversy among US economic partners. On the one hand, the commitment to climate protection and support for accelerating energy transformation is understandable and valuable. On the other hand, the IRA contains openly protectionist elements capable of damaging the functioning of the international economy and provoking serious political conflicts, including among the closest allies. The fears of the European automotive industry and countries where it is strong (for example, Germany) are caused by the announcement of strong support for the American production of electric vehicles and batteries, which could weaken the competitive position of European concerns in this market. Europe may also be concerned about the impact of the IRA on its industry’s decisions about where to produce. The proposed subsidies could encourage companies to move production to the US. The US is trying to attract companies from all over the world through the IRA Act and its creation of $370 billion in support mechanisms. This amount will strongly support the US industrial and energy transition. However, this will not necessarily be beneficial for the European automotive industry. The media has already reported an increase in investment in the United States, which has become an attractive place for investment in green technologies. Europe cannot be left in debt, and experts hope for the publication of the “Green Deal Industrial Plan” by the European Commission in early February. This does not appear to be the end of the road to protecting the competitiveness of European industry and ensuring a fair transition in the automotive industry. Without simplification of procedures, changes in state aid rules and incentives for private investors, the climate goals set by the EU will not be achieved or will be achieved at the expense of the European economy and the automotive industry - says Tomasz Benben, managing director of the Association of Automotive Parts Distributors and Manufacturers (SDCM).
Europe’s (re)active response?
The Industrial Green Deal is intended to complement the European Green Deal and the REPowerEU plan. It is based on four pillars: a predictable and simplified regulatory environment, faster access to finance, skills development, and open trade for sustainable supply chains. For obvious reasons, it does not mention the price dumping of Asian or IRA producers, but the whole of Europe interprets the “Green Deal Industrial Plan” as a response to the decline in the competitiveness of companies in the Old Continent compared to the rest of the countries. world.
The plan includes accelerating the financing of the energy transition by amending the Time Frame for State Assistance so that the Commission can more quickly notify such forms of support that will serve industrial projects in the Union.
Competitiveness must be built
As we read further in the SDCM expert study, the issues surrounding US rules for the European economy and the EU’s response were debated last week in the European Parliament. All political factions actively participated in the discussions, where they expressed their concern and criticism of the European Commission. A draft ECR resolution presented by former Deputy Minister of Energy Grzegorz Tobiszowski states that “the real challenge to the competitiveness of European industry is not the clean technology investment programs proposed by our global partners, but rather the failure of European decision makers to provide regulatory and financial support.” . industry, which was to become part of the Green Deal. Criticism also came from the European People’s Party, which pointed out that “Once again it was reacting rather than preemptive, and that it was only because of the US Inflation Reduction Act (IRA) and higher energy prices that Europe’s industrial competitiveness became a priority.” European political agenda”.
Source: Wprost
I am Jason Root. I work in the news website industry and mostly cover the automobile industry. I have also written for Daily News Hack. My work revolves around new car models, prices, and features. In addition, I often write about used cars and tips for buying them. My articles are meant to be helpful for those who are in the market for a new or used car.
