Denmark, Germany agree on bolstering EU’s green industry, differ over role of state aid

The EU’s efforts to bolster its own production capacities for green technologies must be strengthened to make the bloc ready for increased global competition on future growth markets, Denmark’s industry minister Morten Bodskov and Germany’s economy minister Robert Habeck have said at a meeting in Berlin. “It’s important to fill the Net Zero Industry Act with life,” Habeck said, adding that the EU’s Green Deal Industrial Plan would be the right tool for fostering investments and innovation in key net-zero technologies. He said licensing should be made easier for new projects and bureaucratic hurdles reduced across Europe to increase the pace of economic transformation. Danish minister Bodskov said both countries shared the aim of making the EU a global leader in green technologies and warned that there was a real risk that Europe loses out in the restructuring of global industrial production capacities. “We must create more incentives for private investments,“ Bodskov stressed, adding that both countries would soon present proposals to achieve this to the European Commission.

However, the Danish minister said he was opposed to continuing relaxed state aid rules in the EU that had been introduced in response to the energy crisis. “State aid is not the answer,” Bodskov told news website Euractiv, adding that the current practice “should be stopped” after 2027. The mechanism has been first used by Germany to lure investments by Swedish battery producer Northvolt. Habeck told Euractiv he generally agreed with his Danish colleague’s scepticism of open-ended state support but cautioned that countries like China extensively use subsidies to gain a foothold in key industries in Europe. “We must then distribute subsidies in some form so that the higher production costs do not actually destroy what we want to maintain, namely the competitiveness of the European or German economy,” Habeck argued.

Bolstering European producers of green technologies has become a key aim of the EU and its member states during the energy crisis to reduce dependence on other world regions as energy system suppliers. Germany's state governments earlier this month called for special support for solar power products manufactured in the EU to strengthen domestic industry, for example through higher feed-in tariffs.