A European Sovereignty Fund to respond to new energy challenges
Ursula von der Leyen, president of the European Commission, last week took part in the 53rd World Economic Forum in Davos when she announced the preparation of a European Sovereignty Fund to “boost the resources available for upstream research, innovation and strategic industrial projects key to reaching net-zero”.
The idea is not new, since she already announced it last year during her speech on the State of the Union in September, when she presented it as a fundamental tool that will help Europe adapt to the new global realities and, more important, to defend the industry “Made in Europe” against the insidious US and China’s competition.
The European Sovereignty Fund was announced as part of the second pillar of the European Green Deal Industrial Plan, together with the new Net-zero Industry Act and the Critical Raw Materials Act (part of the first pillar), aiming to increase the resilience of the European Single Market and support the twin transition to a green and digital economy.
The European Green Deal Industrial Plan
The Green Deal Industrial Plan was introduced by von der Leyen at the World Economic Forum as the plan that will make “Europe the home of clean tech and industrial innovation on the road to net-zero”, but it isn’t difficult to imagine that that road will not be easy to follow and will mean developing and using a whole range of new clean technologies across European economy: in transport, buildings, manufacturing and - of course - energy.
In this mission to reach the ambitious goals that the Commission set, many programmes are involved, starting with the European Green Deal, which firstly set the path to climate neutrality by 2050, the investment plan Next Generation EU and the Just Transition Fund, just to mention some of them.
The Green Deal Industrial Plan will be covering four key pillars: the regulatory environment, financing, skills and trade.
The first pillar is all about speed and access: “we need to create a regulatory environment that allows us to scale up fast and to create conducive conditions for sectors crucial to reaching net-zero” said von der Leyen. It is in this context that she mentioned a new Net-Zero Industry Act, whose main goal will be to simplify and fast-track permitting for new clean-tech production sites.
Essential then will be to work on a way to make Important Projects of Common European Interest on clean tech faster to process, easier to fund and simpler to access for small businesses and for all Member States. This new Net-zero Industry Act will then work together with the Critical Raw Materials Act, since providing rare earths will be fundamental for manufacturing key technologies and at the moment Europe is dependent for the 98% from China for their supply.
The second pillar of the Green Deal Industrial Plan will concentrate on boosting investment and the financing of clean-tech production, and it is in this framework that the European Sovereignty Fund will be included, “as part of the midterm review of our budget this year”, said the European Commission’s president. But this fund seems to be a project for the medium term, so as we know it will take some time before it will be implemented.
The third pillar of the Plan will be developing the skills needed to make the transition happen, and the fourth will concentrate on how to facilitate open and fair trade for the benefit of all.