According to Ursula von der Leyen's Commission, the EU must invest hundreds of billions of euros in climate-friendly technologies to save Europe as an industrial location. The local industry is under strong pressure, not least because subsidies in countries such as the USA and China are distorting the competitive conditions, according to the authority's recommendations presented on Wednesday. This makes it necessary to expand and accelerate access to subsidies for climate-neutral industry.

Von der Leyen did not say exactly how much money is needed. She wants to make a proposal for a so-called sovereignty fund towards the middle of the year. This should ensure that funds are available for climate-friendly technologies throughout the EU. However, the Commission also emphasizes that hundreds of billions are already available in existing funds for a climate-friendly transition. "At the moment, we have to work with what we have", said von der Leyen.

The EU Commission also wants to give the EU states more freedom to grant subsidies. However, these would be limited to certain areas and limited in time. It is envisaged that the state aid rules could be relaxed by the end of 2025. "We need this first funding step now, so we can't wait too long," said von der Leyen with regard to state aid.

Response to subsidy programs in the USA and China

The plans are, among other things, a response to state aid in the hundreds of billions that the USA wants to invest in industries to combat climate change. However, as the Commission emphasizes, other regions of the world are also gearing up in the race for corresponding industrial sectors with similarly large sums. China has announced investments in clean technologies amounting to more than 280 billion US dollars (around 258 billion euros). Japan wants to raise around 140 billion euros through bonds for a green transition and the USA has mobilized more than 360 billion dollars (331 billion euros) with its so-called Inflation Reduction Act.

Because of these financial injections, there are fears in the EU that domestic companies could set up new sites in other regions of the world or relocate jobs there if they are not also supported here with taxpayers' money. At the same time, the EU Commission wants to use the initiative to strengthen climate-friendly energy production in Europe, for example.

Concerns about growing inequality

However, there are also concerns within the EU that large countries such as Germany, which can invest more money than others, could now distort competition. The Commission's proposal would be extremely helpful to Germany and France, says Green MEP Rasmus Andresen. For many other countries, however, it "doesn't actually help at all". "It could lead to more inequality", said the spokesperson for the German Greens in the European Parliament.

The EU Commission addresses this debate in its proposals. It emphasizes that more EU funds are needed for the green restructuring of industry. This should avoid exacerbating regional differences and close gaps between different levels of financial strength.

Angelika Niebler, Co-Chair of the CDU/CSU Group in the EU Parliament, emphasized: "Unfortunately, the answers presented today are only partially convincing." The announced further softening of state aid rules should not be used as an excuse for new debt funds. Bernd Lange, trade politician for the SPD, on the other hand, said: "The measures are a step in the right direction and have been chosen so precisely that they will not lead to new trade conflicts." The proposals could become a "game changer".

The Commission's proposals are to be discussed with the member states at an EU summit next week. Legislative proposals are then to be presented in March, which will then be discussed by the EU heads of state and government.