![Europe faces global competitors that, while investing heavily in clean technologies, haven’t adopted as stringent a decarbonisation agenda. For example China prioritizes gradually building clean industrial hubs that complement existing production before restricting its polluting industries. [Ashley Cooper/Construction Photography/Avalon/Getty Images]](/Uploads/Images/News/2024/11/Image-2665-20241114064247.webp)
EU Clean Industrial Deal: The make or break opportunity for post-carbon competitiveness
For Europe to remain both a decarbonisation pioneer and competitive, it must focus on three key priorities: common financing, strategic coordination, and support for demand.
Incoming European commissioners, Stéphane Séjourné and Teresa Ribera, have been tasked by Ursula von der Leyen to develop a Clean Industrial Deal within the first 100 days of the new European Commission.
As the global race towards a post-carbon economy accelerates, it’s vital that this initiative doesn't become just another Brussels program, extensively debated and then abandoned due to lack of means or concrete ambition.
Joseph Dellatte is Resident Fellow - Climate, Energy and Environment at Institut Montaigne.
With the industrial offensive of major powers like China and the US, the EU finds itself at a historic crossroads: it must not only decarbonise its industry but also restore its competitiveness.
Yet, the challenge is vast. Being a pioneer in decarbonisation doesn’t necessarily mean leading in the post-carbon era.
The winning technologies of this new economy are far from being set, and some technological bets could prove costly for the industries and states backing them. In this regard, China and other Asian industrial giants are adopting a posture of strategic observation: letting first movers test solutions and then replicating successes without bearing the initial risks.
Europe faces global competitors that, while investing heavily in clean technologies, haven’t adopted as stringent a decarbonisation agenda.
The U.S., through the Inflation Reduction Act , allows producers to excel in clean hydrogen while still producing fossil hydrogen—an industrial flexibility unimaginable in Europe.
Similarly, China prioritises gradually building clean industrial hubs that complement existing production before restricting its polluting industries.
For Europe to remain a pioneer while staying competitive, it must draw inspiration from other industrial strategies and adopt a pragmatic, targeted approach, focusing on three key priorities: common financing, strategic coordination, and support for demand.
A common financing mechanism fit for the challenge
Current financing solutions for industrial decarbonisation, such as national funding for industrial projects made possible by exceptions in EU competition law, are inadequate and widen the gaps between Member States. This risks undermining a coherent European industrial strategy.
Europe must equip itself with shared financing tools comparable to those deployed by China and the US.
Following Japan’s example, a European Clean Industrial Bond worth about €100 billion per year - a sort of climate debt - backed by future carbon market revenues, is worth considering.
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