The Green Deal Industrial Plan: What’s in it and how does it affect research and innovation stakeholders?
On 1 February 2023, the European Commission (EC) presented its plan to enhance Europe’s competitiveness in the net-zero industry, called the Green Deal Industrial Plan. The Plan sets out to promote a fast transition to climate neutrality by providing a more supportive environment for green technologies. Against the backdrop of the EU’s ambitious goal of climate neutrality by 2050, the Plan will form part of the European Green Deal and hopes to scale up the EU’s manufacturing capacity by building on four pillars: a predictable and simplified regulatory environment, faster access to sufficient funding, skills, and open trade for resilient supply chains.
The proposal arrives after the United States (US) rolled out its Inflation Reduction Act late last year, which included the most significant climate-related funding support for industry in US history. To dissuade the clean-tech industry from leaving Europe for subsidies in the US or elsewhere, the EU’s Plan promises simplified funding applications and sped up permit processes. Additional use of existing EU funds for financing clean tech innovation, manufacturing and deployment will be facilitated further both in the short-term by focusing on the REPowerEU Plan, InvestEU and the Innovation Fund, and in the mid-term with the ‘European Sovereignty Fund’ (see SwissCore article). Most notably, the Plan proposes to temporarily loosen state aid rules until the end of 2025, whilst simultaneously allowing countries to draw from the €225 billion of loans and €20 billion of grants that remain from the EU’s post-pandemic recovery fund under NextGenerationEU (see SwissCore article).
Although there is no dedicated pillar on Research, Development and Innovation (RD&I) included in the EU’s Plan, the research and innovation fields are mentioned several times. Referring to its “world-leading scientists and researchers”, the EU hopes to build on its existing expertise to step up and seize the transition to climate neutrality. Furthermore, when introducing the need for a simplified regulatory environment, the Plan also makes the case for a Critical Raw Materials Act, which highlights the importance of reduced dependency on third countries, but also the need for continuing research and innovation. The research and innovation field would be especially important in reducing raw materials use and developing bio-based substitutes, which has already happened with lignin stemming substitutes for graphite in batteries for example. In terms of funding, the Plan mentions that €40 billion of Horizon Europe’s budget are dedicated to Green Deal research and innovation.
Criticism of the Plan for not obviously considering the RD&I community were voiced by the European Association of Research & Technology Organisations (EARTO). Although welcoming the proposal, EARTO fears that the Plan lacks a clear link between the EU’s goal of climate neutrality and investments in RD&I, as well as between RD&I and technologies’ development, maturation and scaling-up. Therefore, EARTO recommends building a Research, Development and Innovation Pillar to support industrial objectives, and refers to successes under the EU Chips Act (see SwissCore article). The Pillar would be crucial in deploying existing EU instruments to link RD&I components to green tech industries, whilst simultaneously identifying gaps for EU investments. By linking RD&I strategy to industrial policy, EARTO argues that the EU would build on its existing knowledge by bringing together the different stakeholders. Linking the two could be done via participation of Research and Technology Organisations (RTOs) in Important Projects of Common European Interest (IPCEIs) or other already running EU RD&I programmes.
The Plan was discussed during the Special European Council on 09-10 February, in which EU heads of state discussed the plan to ensure the EU’s long-term competitiveness, prosperity and role on the global stage. The EC will publish a final proposal of the Plan by mid-March, which will be discussed and reconsidered at the next European Council summit on 23-24 March. Subsequently, it will undergo the ordinary legislative procedure.