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Lead­ing indus­tri­al­ists have delivered a damning ver­dict on EU.

Electric vehicle
Lead­ing indus­tri­al­ists have delivered a damning ver­dict on EU efforts to pre­vent com­pan­ies shift­ing invest­ment to the US, warn­ing the bloc’s com­pet­it­ive­ness is rap­idly erod­ing. Exec­ut­ives from Solvay, Merck and Dow have warned that Europe’s Net Zero Industry Act, announced last week, will not be suf­fi­cient to com­pete with $369bn of green tax incent­ives and sub­sidies on offer in the US under Pres­id­ent Joe Biden’s Infla­tion Reduc­tion Act. «Belén Gar­ijo, head of Ger­man biotech and mater­i­als giant Merck, said Europe «urgently needs a hol­istic indus­trial policy that enables sus­tain­able change and makes this change a com­pet­it­ive advant­age. » The alarm was echoed by Neil Carr, European head of Dow, the US chem­ic­als group, who warned that US incent­ives made invest­ment in the decar­bon­isa­tion of EU industry «less attract­ive» in com­par­ison. »

«The act ignores the crit­ical import­ance of enabling invest­ment in indus­trial decar­bon­isa­tion to achieve EU cli­mate tar­gets,» he said. The EU last week pub­lished pro­pos­als that would allow author­it­ies to waive reg­u­lat­ory con­straints for stra­tegic projects, stream­line per­mit­ting pro­cesses, boost power grid infra­struc­ture and incentiv­ise invest­ment in sup­ply chains across the bloc. More than $90bn in green invest­ment has poured into the US since last year’s pas­sage of the IRA, which seeks to reduce emis­sions to half their 2005 levels by 2030. «If my cus­tom­ers leave Europe, that’s not good for us,» said Solvay’s Kadri.

«The US has a busi­ness case, and Europe makes a law». The com­ments come as organ­isa­tions across the bloc warn of the EU’s erod­ing com­pet­it­ive­ness.

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  1. Andreea22 March 2023 at 11:50

    The EU wasn't ready for the IRA and I'm not sure how they will cope with it. It's clear that many companies will go to the US or at least move part of their business to the US. The US doesn't have the capacity to meet that $369bn.

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    1. Jude22 March 2023 at 18:56

      I'm sure the EU can do something about this. They may not be able to offer as much incentives in cash but they can find other ways to attract investors. The Net Zero Industry Act needs to be better than it is. At this point it doesn't help much.

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