State aid changes strengthen EU clean tech sovereignty – German econ min

German economy minister Robert Habeck has welcomed the European Commission’s decision to further relax state aid rules for clean technologies as part of the bloc’s response to subsidies under the U.S. Inflation Reduction Act (IRA). “The new state aid rules set the course for more investment in green technologies in Europe,” Habeck said in a press release. Due to this “important step,” the production of batteries, solar panels, heat pumps or electrolysers could receive state support “significantly more comprehensively” than before, he said. “This will enable us to achieve more climate action more quickly and strengthen the strategic and technological sovereignty of the EU.”

EU state aid rules had already been relaxed in response to the energy crisis fuelled by Russia’s war against Ukraine. Now, as part of its Green Deal Industrial Plan – presented in February and seen as the EU’s reply to the U.S. IRA – the Commission decided a new ‘Temporary Crisis and Transition Framework’ to foster support measures in sectors that are key for the transition to a net-zero economy. The new rules will apply until the end of 2025. A major criticism of laxer state aid rules is that while they enable richer countries to support their industries, poorer countries can not make use of them to the same extent and are thus at a disadvantage. On 14 March, the Commission is set to present another part of the industrial plan – the Net-Zero Industry Act, alongside a proposal for a Critical Raw Materials Act, which Commission president Ursula von der Leyen had already promised in a speech last year.  

The Financial Times reported that U.S. energy secretary Jennifer Granholm said that the U.S. and the EU were in talks about a free trade-style deal around clean technology, seeking to avoid trade rivalry. “We don’t want to see any trade rivalry. And we’re in discussion with our EU counterparts about how to make sure we can do this in a way that lifts all,” she told the newspaper. The New York Times and Reuters also reported that negotiations on a deal could formally be agreed when European Commission president von der Leyen meets U.S. president Joe Biden in Washington today (10 March).