Why EU is hampered in global green race

EUROPE has long seen itself as the pre-eminent global centre for the green industrial revolution, with measures such as the European Union (EU) Emissions Trading System through to the Green Deal and RepowerEU schemes. Yet there is a growing sense in the continent that its edge in this “race” is imperilled. Through assertive industrial strategies, the United States and China are recognising the massive upfront costs of the energy transition in a bid to dominate the green economy of the future.

While the US$369 billion climate change component of the US Inflation Protection Act (IRA) has been in the EU’s firing line in recent weeks, European Commission President Ursula von der Leyen spent much more time focusing on China in her keynote address at the World Economic Forum last month.

The European Commission accuses Beijing of using “unfair” and “market distorting” subsidies to advance in the clean technology race. Solar is sometimes held up as a warning, given that technology developed in the EU has been used to build a Chinese industry that today accounts for 80 to 95 per cent of the global supply chain.