European Green Deal: an effective answer for the (Flemish) cleantech industry to the U.S. Inflation Reduction Act?

Posted on 7 Feb 2023

"Both the Old Continent and the New World are fighting inflation to avert an actual or impending recession. Will the Inflation Reduction Act (IRA), U.S. President Biden's economic measure, represent an opportunity or a threat to European, and therefore Flemish cleantech? Will cleantech solutions from the United States gain a foothold at the expense of European ones? That will depend on Europe's reaction." Frans Snijkers, Director Cleantech Flanders, reacts to the European Green Deal Industrial Plan as a response to the U.S. IRA investment plan of no less than 337 billion euros to companies, the Inflation Reduction Act.

Climate Plan

With 337 billion euros, U.S. President Joe Biden wants to drastically address the climate issue in specific and therefore financially support companies that invest in green technology. Not only American companies, but also European businesses are looking at the option of enjoying this incentive in Uncle Sam's country.

Flexible rules for state aid

The European green technology industry has a lot of know-how and assets. It’s a matter of developing this expertise even further and ensuring that this European sector can continue in a strong position in terms of competition through this European Green Deal. This cannot be done without funding Europe's own companies and in all renewable energy sources. The European Commission has a budget of 270 billion euros. In addition, there would be more flexible state aid rules for member states and across borders, and member states should be able to cooperate in a simpler way.

Member states can provide financial support to the green industry in their countries through tax credits and other tax incentives. Efforts are underway to broaden the REPowerEU project, which aims to expedite the phasing out of fossil fuels, and the creation of a new investment fund in the near future. Finally, plans are being considered to speed up procedures for permits for green industrial projects by developing a Net Zero Industry Act.

Source (in Dutch):

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