The European Union will prepare a law to make life easier for its green industry and back it up with state aid and a European Sovereignty Fund to keep firms from moving to the United States, the head of the European Commission said on Tuesday.

 

Ursula von der Leyen said in a speech the moves would be part of the EU's Green Deal industrial plan to make Europe the home of clean technology and industrial innovation on the road to net-zero CO2 emissions by 2050.

 

"To help make this happen, we will put forward a new Net-Zero Industry Act," she said. "The aim will be to focus investment on strategic projects along the entire supply chain. We will especially look at how to simplify and fast-track permitting for new clean tech production sites," she said.

 

The EU is concerned that European companies will move to the United States, which has a $369 billion scheme to subsidise green production. The EU will therefore provide money for its industry as well, von der Leyen said.

 

"To keep European industry attractive, there is a need to be competitive with the offers and incentives that are currently available outside the EU," she said.

 

"This is why we will propose to temporarily adapt our state aid rules to speed-up and simplify. Easier calculations. Simpler procedures. Accelerated approvals. For example, with simple tax-break models. And with targeted aid for production facilities in strategic clean tech value chains, to counter relocation risks from foreign subsidies," she said.

 

But she noted that, because not all countries in the 27-nation EU have the same capacity to support their companies, using state aid alone could result in unfair competition, "fragmentation" that would damage the EU single market.

 

"To avoid a fragmenting effect on the single market and to support the clean tech transition across the whole Union we must also step up EU funding. For the medium term, we will prepare a European Sovereignty Fund as part of the mid-term review of our budget later this year," von der Leyen said.

 

She did not give any details of the fund, an idea she first raised in September, which does not yet have the support of all EU governments, notably Germany.

 

"As this will take some time, we will look at a bridging solution to provide fast and targeted support where it is most needed," von der Leyen said, again without any details.

 

She said the Commission was now working on what the needs of the green industry were. (Reuters)