With an eye on China and the US, the EU hopes a boost for clean technology will stimulate growth. February 22, 2025

Europe's response to reviving its economy will be a battery of measures, including stimulating the clean technology sector (Ina FASSBENDER)

By AFP - Agence France Presse

With an eye on China and the US, the EU hopes a boost for clean technology will stimulate growth.

Raziye Akkoc

How can Europe's lagging economic growth be resolved and its industrial decline reversed? This is the challenge facing the EU, as the bloc comes under heavy pressure from US President Donald Trump's tariffs and a rising China.

Europe's answer to bringing its economy back to life is a battery of measures to be announced next week, including boosting its clean-tech sector and supporting energy-intensive industries by cutting red tape and costs.

There will be an effort to reduce energy prices for homes and businesses, as well as promote cheaper and cleaner alternatives to fossil fuels.

European companies lament Europe's “over-regulation” - especially the environmental rules promoted by von der Leyen during her first term - and high energy costs as impediments to competing with their American and Chinese rivals.

EU chief Ursula von der Leyen has made it clear that she is listening and has changed tack at the start of her second term, focusing on making life easier for businesses.

With Trump pushing against his predecessor's clean tech efforts, Brussels believes there is an opportunity for Europe to attract clean tech investment.

The EU's strategy - dubbed the “Clean Industrial Deal” - will consist of six pillars to decarbonize the bloc's industry, including encouraging more investment.

“At a time when several international players are questioning the European model, the best response is first and foremost to strengthen our model,” said EU industry chief Stephane Sejourne this week.

Sejourne will unveil the measures on February 26, together with competition commissioner Teresa Ribera.

- Protecting EU industry

Von der Leyen's set of measures includes favoring European companies and products and simplifying state aid rules, but there is little information on financing.

There will be a proposal to “make European preference criteria a structural feature” for public tenders in “strategic sectors”, according to the document.

The EU will establish a center dedicated to critical raw materials - key elements used in electronics and clean technology - for joint purchases by groups of European companies.

In the face of Trump's tariffs and growing protectionism, the EU will defend its industries by ensuring the “swift and efficient use” of its trade defense instruments, the 22-page document states.

“Energy-intensive sectors (...) need urgent support to tackle high energy costs, unfair global competition, and complex regulations that hamper their competitiveness,” the Commission said.

The EU will also publish an “Affordable Energy Action Plan” on February 26, a separate document in which Brussels sets out how it will reduce energy costs.

A draft of the document seen by AFP will tell states to reduce taxes on electricity bills and pool demand for joint purchases of liquefied natural gas for EU companies.

The document does not refer to Trump or his impending tariffs, but von der Leyen has previously suggested replacing Russian LNG imports with US gas.

Greg Van Elsen, from Climate Action Network Europe, welcomed the fact that the EU had not backed down on its promise to cut emissions but pointed to loopholes.

“What is disappointing is that the draft fails to have energy savings or reduced resource use as drivers for more resilient economies. And as the financing part still lacks detail and ambition, the big question remains: who will foot the bill?” he said.

- 'Play to our strengths'

EU lawmakers, however, welcomed the EU initiative.

“It's the first EU instrument that puts industrial competitiveness at the heart of EU policy,” said Christian Ehler, a German MEP from the right-wing EPP parliamentary group.

“The Trump administration's retreat towards an old, 20th-century carbon economy makes the US Inflation Reduction Act less attractive and could redirect global investment, especially about net-zero emission technologies, towards Europe,” he added.

Trump froze funding for a law passed by his predecessor, which injected billions of dollars into clean energy projects in the United States and caused consternation in the EU.

Dutch liberal MEP Gerben-Jan Gerbrandy said the commission's proposals represent a repudiation of the false narrative that decarbonization is holding back the European economy.

“It's the area where we are leaders. Let's build on our strengths,” he said.

raz/del/rl