Briefly: The EU unveiled yesterday (16 March) its plans to jumpstart the bloc’s green transition, and compete with China and the US on green tech.
The proposed Net-Zero Industry and Critical Raw Materials laws offer easier rules and access to finance, to get the EU producing (rather than importing) 40% of key inputs for the green transition by 2030.
If you can’t beat ’em, join ’em: These proposed laws are basically Europe’s response to what China and the US have been up to lately.
Stay on top of your world from inside your inbox.
Subscribe for free today and receive way much more insights.
Trusted by 127,000+ subscribers
No spam. No noise. Unsubscribe any time.
China now supplies almost all of the EU’s rare earths, magnesium, and lithium, plus 90% of its solar panels. It’s the biggest monopoly since Ticketmaster.
The proposed laws don’t mention China, but they seek to curb imports from any “single source” with more than a 65% market share. So yeah, China.
Why bite the hand that manufactures? The EU says it’s learned the hard way (through the war and pandemic) the dangers of being over-reliant on any one country.
As for the US, its response to China was last year’s massive subsidies for green products. The EU loathed these advantages for US companies, so it’s now proposing some advantages of its own.
Intrigue’s take: Europe’s two proposed laws are clever: they hit climate, economic and geopolitical goals. And it’s not every day you get to kill three birds with two stones.
The proposed laws are also a sign that ‘industrial policy’ is sexy again. ‘Industrial policy’ is a dull term for a big idea: governments backing key sectors rather than leaving markets to decide.
The world’s three largest economies are now strutting their industrial policy. But not everyone has the resources to follow suit.
Also worth noting:
- Europe’s manufacturing activity has contracted for its eighth month in a row.
