The EU’s green subsidy scheme for ‘clean technologies’ unveiled today as a response to the US Inflation Reduction Act (IRA) must go beyond subsidies to challenge the climate crisis and decarbonise the sector, the EEB says.

Tabled as the EU’s response to the US $369 billion green subsidy package, the EU Green Deal Industry plan seems to be an aid scheme proposal for the European industry, instead of a comprehensive plan to depollute and decarbonise the sector, although its name might suggest otherwise.

While the proposal lays the foundation for a much-needed boost to the green industry in Europe, it raises concerns among environmental groups due to the unclear definition of “net-zero” technology, the deregulatory temptation and the unfair nature of subsidies.

Subsidies alone will not deliver

Luke Haywood, Head of Climate Policy at the EEB, said:

“Green subsidies are good but not enough to have a meaningful effect on climate. Without cutting fossil fuel subsidies, pricing carbon properly and introducing measures to reduce demand, these financial efforts will be toothless. The EU will not deliver this transition in time by throwing money at clean technologies. It also needs to make dirty production more expensive and phase out harmful tech,” 

Resist push for deregulation

Marco Musso, Policy Officer for Fiscal Reform at the EEB, said:

“Good regulation provides a much greater competitive advantage for the EU than handing out subsidies. The EU Green Deal Industry proposal overlooks the key role that the regulatory framework plays in orienting businesses’ investment decisions. Facilitating the uptake of green tech should not be taken as an excuse for vast deregulation. Access to public funding can be eased while ensuring rigorous environmental standards – there is no reason to pitch one against the other”,

Deceptive “net-zero” label

Christian Schaible, Head of Zero Pollution Industry at the EEB, said:

“The draft includes a lot of nice talk around ‘net-zero’, ‘clean’, ‘innovative’ or ‘breakthrough’ technology without clarifying what is actually meant. The European Commission’s communication does not even mention the zero pollution ambition. How will the EU ensure the return of investment ratio for society and public interest? Claiming the EU industry has a track record as a proven trendsetter is a myth, we need sound environmental regulation and conditionalities to build a truly sustainable European industry,”

Skills and gender gap

Katy Wiese, Policy Officer for Economic Transition and Gender Equality at EEB, said:

“We celebrate the EU’s aim to bridge the gap of skilled people needed for the green transition. But education training needs to focus on cost-effective, green and socially compatible technologies like solar panels, heat pumps, and building renovation and not on flawed tech solutions like Carbon and Capture Storage or biofuels. The ‘green jobs’ vision must also go beyond the industrial sector and address low-carbon sectors, such as care and education, which is crucial to enhance gender and social equality,”

Voracity for raw materials

Diego Marin, Policy Officer for Environmental Justice at the EEB, said:

“The current draft erroneously assumes that free trade has created “win-win” partnerships between the EU and countries in the Global South or neighbouring countries. Raw material extraction has largely been outsourced to other countries paying the human rights and environmental impact toll while the profits and final goods go to European economies. Any arrangement for the access of raw materials by the Critical Raw Materials Club must make clear provisions on recycled content, to facilitate secondary raw materials industries in the EU and abroad,”

ENDS