Net-zero industry: EU policy measures need to match international competition
Brussels, 16 March – CLEPA, the European Association of Automotive Suppliers, welcomes the Commission’s proposal for a Critical Raw Materials and a Net-Zero Industry Act as part of the green industrial transformation in Europe. However, the association calls for the inclusion of the following principles to ensure a successful and competitive transition to a net-zero industry:
- EU policy measures should match international competition in magnitude and time horizon to avoid investments being redirected
- A holistic long-term industrial strategy should fast track permitting procedures and financially support upscaling of green and smart mobility and manufacturing
- Access to skilled workforce and reinforcement of existing R&I programs will be essential enablers of a successful net-zero industry
- Reduction of regulatory burden, and a technology open and market oriented approach will be key
Automotive suppliers fulfill a crucial role in five of the six identified critical value chains, however, the Inflation Reduction Act (IRA) and high energy costs increasingly impact investment decisions . Therefore, EU-funded instruments and policy measures should match policies of other trade blocks to avoid investments being redirected.
CLEPA Secretary General, Benjamin Krieger states, “The EU needs a holistic industrial strategy and the proposals are a first step. However, focusing on production targets for specific technologies overlooks the crucial role of critical value chains and smart manufacturing towards the long-term success of Europe. Industrial strategic objectives risk being undermined by incoherent regulations, an overload of bureaucratic requirements and a focus on technologies instead of objectives.”
The green transition will require increased focus on access to raw materials, circularity and resilient sourcing from as many trade partners as possible. The CRMA can support automotive suppliers in diversifying sourcing, strengthening the EU’s material supply chain and fostering circularity. Nevertheless, supply chain related reporting requirements and targets for use of recovered materials should be reasonable to avoid undermining business cases. The Act could contribute to our industry’s resilience, but will not secure the EU’s competitiveness.
The NZIA should anchor the EU’s long-term industrial strategy and provide investors with certainty that the EU is committed to stay an attractive place to invest. An EU funded program would be the best instrument to implement a strategy that will enable an unprecedented industrial transformation, both in terms of scale and pace.
The Commission and member states together have mobilised significant funds, but opportunities are scattered, lack scale and are difficult to access. The temporary adjustment of state aid framework can therefore, at best, be an intermediate solution to allow member states to limit the worst impact of the IRA and energy costs.
The Commission must develop a five to ten-year funding framework based on objectives linked to the green and digital transition for the fourteen industrial ecosystems and six critical value chains identified in 2021, building on globally integrated value chains and driving the further integration of the EU Single Market. Companies can then invest with confidence to scale the production of green and circular technologies and manufacturing processes.
In: CLEPA News