Response to Inflation Reduction Act envisions up to five new trade deals and easing of state aid for industry.
With a major package of industrial policy measures, the European Union aims to secure its competitiveness in the field of climate-friendly technologies, along with the supply of raw materials needed for them. The Green Deal Industrial Plan, which was officially unveiled Wednesday, is a reaction to the policies of China and especially the U.S., writes Reuters, which are planning billion-dollar subsidy programs for their domestic green tech industry.
New raw materials partnerships are intended to help reduce one-sided dependencies on China in particular. The People’s Republic has dominated the processing of rare earths and lithium, key raw materials for technologies such as electromobility and wind power, for decades. “In record time,” the EU wants to conclude up to five trade agreements for this purpose, according to news portal Euronews, with the world’s largest lithium producers Australia and Chile, as well as the South American Mercosur countries, Mexico and New Zealand. Some of these have been on hold for years. Europe must also invest in its own refining and recycling of raw materials, EU Commission President Ursula von der Leyen announced.
Furthermore, the plan provides for more than 170 billion euros in investments by 2030 to promote the production of climate-friendly technologies such as solar and wind power, batteries, heat pumps and hydrogen, writes the FAZ. Similarly, EU state aid rules are to be temporarily eased to allow for greater subsidies to industry.
In addition to the planned Critical Raw Materials Act legislative package, the Commission’s draft also announces the idea of a “critical raw materials club” with like-minded partners, according to Euractiv, to ensure a “secure, sustainable and affordable global supply” of the materials needed for the green and digital transformation.