Summary
- T&E finds leaked EU State Aid guidelines do not effectively support EU manufacturing of cleantech products
- State Aid spending in the EU has surged since COVID-19 pandemic
- Key recommendations include ending fossil fuel subsidies, implementing mandatory "Made in EU" criteria, supporting products over projects, pooling resources with EU funding
- The leaked Clean Industry State Aid Framework does not address the issues highlighted in T&E’s report
- Chip in a few dollars a month to support independent cleantech coverage that accelerates the cleantech revolution
Article
The European Union’s State Aid guidelines are not effectively supporting the manufacturing of cleantech products like batteries, according to a new report by Transport & Environment (T&E). T&E suggests that in order to compete globally, Europe needs a revised State Aid framework that includes “Made in EU” requirements to provide clear and performance-based support for sustainable product production. State Aid spending in the EU has increased significantly since the COVID-19 pandemic, reaching over 2% of GDP in 2020 and 2021, and must be re-calibrated and redesigned to better support cleantech manufacturing.
T&E recommends several key actions to improve the State Aid framework, including ending fossil fuel subsidies, implementing mandatory “Made in EU” criteria for manufacturing end products, supporting products rather than projects, and pooling resources with EU funding. By enforcing rules that exclude fossil fuel subsidies, tying aid to local control and content, and offering output-based support for products like battery cells, Europe can enhance competitiveness and foster a local supply chain. Additionally, T&E suggests that Member States allocate a fixed percentage of national State Aid to an EU fund to support a just transition and enhance EU competitiveness.
The leaked Clean Industry State Aid Framework does not adequately address the issues highlighted in T&E’s report, lacking clear requirements on local control or “Made-in-EU” standards that could boost the local supply chain. The framework also fails to integrate a performance-based approach, hindering the effectiveness of State Aid in supporting EU cleantech manufacturing. T&E emphasizes the importance of revising these guidelines to better align with the recommendations put forth in their report and support the development of sustainable products in Europe.
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In conclusion, the European Union’s State Aid guidelines require significant revisions to effectively support the manufacturing of cleantech products such as batteries. T&E’s recommendations for ending fossil fuel subsidies, implementing “Made in EU” criteria, supporting products over projects, and pooling resources with EU funding are essential steps to enhance the competitiveness of the EU in the cleantech sector. By aligning State Aid policies with these recommendations, Europe can promote the production of sustainable products, foster a local supply chain, and contribute to a just transition towards a greener economy.
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