EU should link Green Deal to industrial policy to ensure international competitiveness – German industry

The EU still lacks an ambitious industrial strategy to accompany the Green Deal to strengthen the bloc's industry and ensure it is able to keep up in the global race for the green technological development, according to a policy paper from the Federation of German Industries (BDI). Green Deal policy-making until now "illustrates that industrial competitiveness has clearly been shortchanged in the implementation of the Green Deal so far," the lobby group wrote in a paper outlining its priorities for the European Parliament's next legislative period. "It is now crucial to support industrial transformation, to promote the market ramp-up of net-zero technologies, to systematically accelerate licensing procedures," added BDI. Between 2024 and 2029, the EU should ensure internationally competitive electricity prices and rapidly expand supply on the electricity market to secure the competitiveness of its industry, according to the BDI. Additionally, policymakers should also "dismantle national barriers" to expand energy and transport infrastructure in the bloc, as well as increase support for investment in the green transition. A new balance between sustainability requirements and strategic economic interests also needed to be struck for future international agreements, especially in the areas of trade, investment, and raw material policy.

"Most of the major challenges of our time – such as systemic competition with autocracies, climate change or digitalisation – can only be solved at the European level, not at the national level, and only with a competitive and innovative industrial sector," the BDI wrote. The EU's dependence on certain forms of energy and raw materials was made evident by Russia's war of aggression in Ukraine, which also rapidly pushed up energy costs across the bloc. Industry associations have warned that comparatively high energy prices, excessive regulatory burdens, and a shortage of skilled workers put EU industry at an international disadvantage and risk a decline in investments in Europe as a business location.

In February, the EU proposed a “Green Deal Industrial Plan” intended to enhance the competitiveness of the bloc's industry on the path to net-zero greenhouse gas emissions. The European Commission’s plan, which aims to make funding more accessible and improve regulation and permit procedures, was the first step in the EU’s process of formulating a comprehensive response to other regions’ industry subsidies packages, most notably the U.S. Inflation Reduction Act.