German industry hails EU competitiveness plan as NGOs warn red tape cuts threaten climate action
The German industry has broadly welcomed the European Commission's proposal for securing the future competitiveness of the bloc's industrial sector, calling the Clean Industrial Deal an important step for combining climate protection and competitiveness.
"Only through targeted investment in climate-friendly industry and the pooling of European and national funds can the EU fulfil its role as a global pioneer in climate protection," said Peter Leibinger, director of industry association BDI. "A comprehensive reduction in regulatory burden must be an absolute priority so that Europe can once again become a robust international competitor," he added.
However, environmental organisations warned that the bloc risked undoing its landmark Green Deal – the bloc's strategy for growth and sustainability, and core of European climate policy – under the guise of simplification.
The Clean Industrial Deal, unveiled on 26 February, is the European Commission's strategy to strengthen the EU's industrial competitiveness and help it decarbonise. The package comes at a time of growing geopolitical tensions and increased competition from the U.S. and China. Germany’s likely next chancellor, Friedrich Merz from the conservative Christian Democrat Union (CDU) has said he will focus on reinvigorating the German economy after taking office. His stated aim to put economic recovery and competitiveness front and centre has caused concerns that this could stifle the EU’s overall climate action ambition.
Main elements of the plan include a focus on affordable energy, for example by speeding up the rollout of clean energy and accelerating electrification; boosting demand for clean products, for example by setting preference criteria in public procurement; mobilising capital to support EU-made clean manufacturing by accelerating state aid approvals in key sectors or tapping into the carbon market; and stepping up circularity through a Circular Economy Act, with the aim of having 24 percent of materials circular by 2030. In addition, the Commission presented its "omnibus" package, a plan to reduce bureaucracy by amending or delaying reporting rules under the EU’s sustainable finance scheme.
Rapid implementation of Clean Industrial Deal now key, says industry
The German association of energy intensive businesses (VIK) said that Europe now needs concrete measures to improve its competitiveness in order to survive in the face of stiff international competition. "Energy costs must be drastically reduced to an internationally competitive level if we do not want to jeopardise further investment and jobs," said VIK head Christian Seyfert. The success of the Clean Industrial Deal, alongside the action plan for affordable energy and the "omnibus" package to cut red tape would depend on implementation and effective protection against carbon leakage, VIK added.
The BDI supports the plan’s clear focus on developing a fully integrated European internal energy market as a long-term measure, but called for short and medium-term relief from the next German government, for example by reducing the electricity tax to the European minimum level for the manufacturing industry or by co-financing transmission grid fees. The association also called for stable and reliably lower electricity prices, the consolidation of the European internal market, new free trade deals and bureaucracy cuts as important areas to address to make European industry more competitive.
"Europe must reinvent itself and once again focus on its strengths: the power of the internal market, the diverse research landscape and, above all, the innovative industrial base. Today, the EU has laid a good foundation for this," said Wolfgang Große Entrup, head of the German Chemical Industry Association (VCI). "The EU and the new German government must work together to eliminate the EU's competitive disadvantage in terms of energy prices as quickly as possible."
The call for speed was echoed by renewable energy association BEE. "Properly designed, the Clean Industrial Deal can become the necessary comprehensive strategy to make European industry fit for the future and climate-neutral," BEE head Simone Peter said.
Environmental organisations call red tape cuts “devastating blow” to sustainability objectives
The European Commission also presented its "omnibus" simplification package, with proposed amendments to four key aspects of its European Green Deal: the corporate sustainability reporting directive (CSRD), the corporate sustainability due diligence directive (CSDDD), the EU taxonomy on sustainable investments and the carbon border tax (CBAM). It aims at reducing reporting requirements, with exemptions for smaller companies and giving more time to implement requirements.
The changes "constitute a major setback for transparency, accountability and sustainable finance," environmental NGO WWF commented, calling the deregulation "a devastating blow to EU environmental objectives". It added that the delay in the corporate sustainability reporting law would "significantly undermine companies that have already invested in compliance while signalling that the environment and human rights are not a priority."
German technical inspection provider TÜV, which certifies climate compliance labels for companies, also voiced concerns that sustainability goals could be missed through deregulation. "Instead of streamlining and simplifying” reporting requirements Commission’s omnibus law “is watering down the requirements on a large scale," said Johannes Kröhnert, head of the TÜV Association's Brussels office. This was especially true for "the original goals of sustainability regulation – more climate protection and fewer human rights violations."
Silvie Kreibiehl, head of NGO Germanwatch, added that the proposed cuts were not the right approach, saying that "We are not supporting small and medium-sized businesses by generally exempting them from dealing with the impact of their actions on the environment and people."
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