S.13. European Green Deal

D.

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New EU Industrial Strategy Package aims at holistic transformation of European industries

Friday, March 13, 2020


On 10 March, the EC released the latest package of files part of the European Green Deal consisting of four Communications including:

The Package delivers on the much-needed encouragement for businesses on the outlined path by the European Green Deal and gives reassurances to SMEs that they will not be left behind under the transition plans that the EU aims to undertake. However, it remains to be seen whether these reassurances will be enough in a highly volatile world and insecure markets disrupted by the multiple crises that the EU is currently facing.

The files were presented by Executive Vice-President Margrethe Vestager, Executive Vice-President Valdis Dombrovskis and Commissioner Thierry Breton – the Commissioners for Competition and Digitalisation, Economy, and the Internal Market respectively. The main focus of the Package is to “uphold Europe’s industrial leadership”, by delivering on three key priorities, namely (i) maintaining European industry’s global competitiveness and a level playing field, at home and globally, (ii) making Europe climate-neutral by 2050, and (iii) shaping Europe’s digital future.

The Industrial Strategy for Europe sets out a new approach to European industrial policy and outlines a range of actions to support all players of European industry, including large companies as well as SMEs, innovative start-ups, research centres, service providers, suppliers and social partners.

Furthermore, it “aims to reduce red tape and help Europe’s numerous SMEs to do business across the single market and beyond, access financing and help lead the way on the digital and green transitions”. The package also includes concrete steps to “address barriers to a well-functioning single market to allow all businesses to grow and compete in Europe and beyond”. The Communication on “Identifying and Addressing Barriers to the Single Market” addresses the root causes of the top 13 most frequently reported barriers and directions for further action at EU and national level. While the “Long Term Action Plan for Single Market Rules” is a list of 22 actions with the objective to maximise the effectiveness and efficiency of compliance and enforcement of rules across the EU by tackling a range of issues covering all phases and areas of possible implementation problems and enforcement activities at EU, national and regional level.

A major item of the new Industrial Strategy Plan seems to be the creation of a number of so-called alliances similar to the Important Projects of Common European Interest (IPCEI) on Batteries, to which will apply easier procurement, EU-funding, and state-aid rules. As a first step, in Summer/Autumn 2020, the EC will launch an Industrial Forum through which the so-called ecosystems will be identified. According to Executive Vice-President Vestager, the EC is aiming to work with interlinked ecosystems instead of separate sectors in silos – a cross-sectoral approach.

According to the New Industrial Strategy:

  • Building on the successful template of industrial alliances (i.e. the ones for Microelectronics and Batteries from 2019), a new European Clean Hydrogen Alliance will be launched. Alliances on low-carbon industries, Industrial Clouds and Platforms and raw materials should follow when ready.
  • The EC will undertake a thorough screening and analysis of industrial needs and identify ecosystems needing a tailor-made approach.
  • An inclusive and open Industrial Forum will be setup by September 2020 to support this work.

According to the new Package of strategic communications the EC will adopt or change a.o. the following to be in line with the European Green Deal and the 2050 climate neutrality target, proposed with the EU Climate Law on 04 March 2020:

  • An Intellectual Property Action Plan;
  • EU competition rules;
  • A White paper on an instrument on foreign subsidies by mid-2020, also looking at foreign access to public procurement and EU funding;
  • Securing the supply of critical raw materials through an Action Plan on Critical Raw Materials and pharmaceuticals based on a new EU Pharmaceutical Strategy;
  • Further legislation and guidance on green public procurement;
  • An action plan on the Customs Union; and
  • A long list of different guidance and harmonisation rules.

The proposed actions are thus aimed at achieving an industrial transformation across Europe in light of the new climate neutrality and digital leadership ambitions. However, in an increasingly volatile world it is to be seen whether these planned actions will be a celebrated success or will lead to more contention across the EU Member States.