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A Green Deal Industrial Plan: Transition into Net-zero age is already here

This decade will be crucial for the globe to limit global temperature increase and achieve net-zero objectives. New markets, clean technologies, and energy systems will characterize the net-zero economy this decade. Thus, those that invest early and nurture advancing net-zero technologies will preserve their place in this new economy, generate employment for newly skilled workers, reinvigorate industrial manufacturing bases, reduce operational costs for people and business, and be in a great influential position to help other countries to decarbonize.

The European Commission published a Green Deal Industrial Plan to boost net-zero industrial competitiveness and carbon neutrality. The Plan aims to enhance the EU's industrial environment for net-zero technologies and products to meet climate targets. The Green Deal Industrial Plan is predicated on the need of accelerating the technological development, industrial output, and deployment of net-zero products and energy resources over the next decade, as well as the additional benefit of an EU-wide strategy to face this problem collectively.

The Plan leverages the advantages of the EU Single Market and expands upon initiatives already in motion, such as the European Green Deal and REPowerEU.

Green Deal Industrial Plan is outlined based on four pillars:

1.      A predictable and simplified regulatory environment

2.      Faster access to sufficient funding

3.      Enhancing skills

4.      Open trade for resilient supply chains.

First Pillar

The Commission plans to introduce a Net-Zero Industry Act to establish targets for zero-emissions industrial capacity and provide a regulatory framework conducive to its rapid deployment. This will be accomplished through the promotion of European strategic projects, the simplification of permitting processes, and the creation of standards to facilitate the widespread adoption of net-zero technologies throughout the Single Market.

To guarantee that all possible competitiveness implications are addressed, and excessive costs are avoided, the Commission has instituted an extra "competitiveness check" on any new regulation. In order to increase industrial competitiveness, it will be necessary to reskill and upskill the workforce as well as to significantly accelerate and expand the use of renewable energy sources.

Additionally, the reform of the energy market structure will help customers take advantage of the decreased prices of renewables, and the Critical Raw Materials Act will guarantee enough availability to materials like rare earth elements that are essential for producing crucial technologies.

Second Pillar

The EU industry's market shares are under pressure due to foreign subsidies. Therefore, there is a need for more net-zero industry funding. Net-zero innovation, production, roll-out, and grid and infrastructure upgrading are supported by EU and national funding. Furthermore, The Commission seeks to level the Single Market and make it simpler for Member States to provide green transition aid under competition rules. EU competition policy helps to develop and implement cutting-edge technologies for the green and digital transitions while conserving the Single Market and meeting EU international requirements.

The Commission intends to adapt state aid rules along five axes. Four of these axes will be implemented through Temporary Crisis and Transition Framework (TCTF), and these concern simplifying aid for renewable energy deployments and decarbonizing industrial processes, enhanced investment support schemes for production of strategic net-zero technologies, and more targeted aid for major new production projects in net-zero value chains. The Green Deal General Block Exemption Regulation will be revised to significantly raise notification thresholds for state aid for implementing the fifth axis. The commission noted that applying these will accelerate and simplify IPCEI project application.

The Commission will help to utilize EU funding for clean tech research, manufacture, and implementation. Based on an ongoing investment requirements assessment, the Commission is also considering ways to increase EU-level finance for net-zero technology production. REPowerEU, InvestEU, and the Innovation Fund will be the focus of the Commission's short-term bridging solution with Member States. Before summer 2023, the Commission will propose a European Sovereignty Fund to address investment requirements for the mid-term.


Third Pillar

The European Year of Skills and third pillar will concentrate on improving skills for well-paid, quality employment, since between 35% and 40% of all occupations may be impacted by the green transition. The green transition will increase demand for new skills at all levels, necessitating a large-scale workforce up-skilling and re-skilling. By 2025, for instance, the battery sector alone will require 800,000 extra workers.

All EU regions will need to acquire and cultivate the skills necessary for the green transition, and the recent Communication on leveraging talents in Europe supports policies to that end.

The Commission will propose setting up Net-Zero Industry Academies to carry out up-skilling and re-skilling program in strategic sectors in order to build the skills necessary for a people-centered green transformation. Measures to foster and align public and private funding for skills development will also be considered, as well as how to combine a “Skills-first” approach, recognizing actual skills, with current solutions based on qualifications, and how to remove barriers of third country nationals to EU labor markets in priority sectors.


Fourth Pillar

Building on the engagements with the EU's partners and the work of the World Trade Organization, the fourth pillar will focus on global collaboration and enabling trade work for the green transition in accordance with the fundamentals of fair competition and open trade. In order to facilitate the green transition, the Commission will expand the European Union's network of Free Trade Agreements and other kinds of collaboration with partners. To help insure worldwide supply security through a competitive and varied industrial bases, the report will also examine the feasibility of forming Clean Tech/Net-Zero Industrial Partnerships and a Critical Raw Materials Club to bring together raw material "consumers" and resource-rich countries.

To even further guarantee that foreign subsidies do not disrupt competition in the Single Market, the Commission will therefore utilize its authorities to prevent unfair trade in the clean technology sector.

With the right policies in place, Europe's net-zero sector can become a driving force in the continent's transition to a green economy, bringing prosperity to the European Union while also setting the global standard in terms of technological innovation and the reduction of harmful environmental pollution.

The Commission is calling on leaders, states, legislators, and social partners to embrace this approach and stated they were ready to transform the provided concepts into precise proposals according to the ongoing needs assessment before the March European Council.

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