Commission reports on EU policy initiatives to promote investments in clean technologies

In a Communication adopted on 24 October, the Commission is setting out what the EU has done to promote and support the development and deployment of clean technologies, by reinforcing the Single Market, ensuring a level-playing field, supporting research and innovation, expanding its network of trade agreements, and mitigating the impact of external developments. It also looks at first results materialising from the US Inflation Reduction Act (IRA), as requested by the European Council. Additionally, the Communication acknowledges that other actors, notably China, also have active public support programmes in place that are likely to affect the investment environment for clean technologies in the EU.  

Clean technologies play a key role in our green transition and in tackling climate change and biodiversity loss. Under the overall umbrella of the European Green Deal, and through a smart policy mix, the EU has built a regulatory framework and business environment that enhances growth and favours development, production, and deployment of clean technologies.

With the IRA, the US has stepped up its efforts to fight climate change, which is a welcome development. Although analysis to date points to a rapid acceleration of clean tech investments in the US, it is difficult at this stage to fully assess the impact of the IRA on the EU economy, and on the longer-term development of the EU's clean technology industrial base.

The overall impact of the IRA on EU clean technology investments will also depend on the effectiveness of the EU's response and on its policies to improve its long-term competitiveness and technological edge. A swift adoption of relevant EU legislation, such as the Net-Zero Industry Act, theCritical Raw Materials Act, and Strategic Technologies for Europe Platform (STEP), reinforced by the Multiannual Financial Framework mid-term revision, would help further improve the EU regulatory framework and address the heightened need for EU public investments in critical technologies.

The Commission will remain highly vigilant and continue monitoring global and domestic investment flows and public support policies from other countries. At the same time, it is constructively engaging with the US to mitigate potential effects of the IRA, and make sure that our respective policies are mutually reinforced to accelerate the green transition.

Further information is available in the dedicated press release and factsheet.

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