The European Commission plans to soften state aid rules to support green investments, in particular through tax incentives.
This will be the EU's response to the US Inflation Reduction Act (IRA), which EC Vice-President Margret Vestager said could have a toxic effect on some European industries, the Financial Times reports.
It is noted that part of the tax credits can be directed from the NextGenerationEU fund for recovery after the Covid-19 pandemic. The proposed measures have not yet been approved, but they are designed to prevent companies from moving to the US to take advantage of IRA subsidies.
The article emphasized that the European Commission is trying to follow the ideas of the IRA regarding ease of access for companies to federal tax credits. However, it will be easier for rich EU countries to hand out fiscal stimulus, which will contribute to inequality in the bloc.
"The temporary crisis and transitional framework would allow to increase aid to more mature technologies and renewable energy sources, going beyond those already defined by the current EU laws on renewable energy, in particular for green hydrogen and biofuels," the draft proposal says. - The provisions on tax benefits will allow Member States to align their national fiscal incentives with a common scheme and thus offer greater transparency and predictability for businesses across the EU."
The document is said to bring together several major legislative reforms that have already been planned, such as an overhaul of the EU's electricity market and a law to stimulate domestic production of raw materials such as cobalt and lithium, which are key elements for clean energy technologies.
The article emphasized that Brussels also intends to simplify and speed up the approval of projects of common European interest involving several countries, and will set common goals for green industry by 2030. According to EC estimates, the industry needs to invest €170 billion by 2030 in plants for the production of solar energy, wind, batteries, heat pumps and ecological hydrogen.
The draft proposal also said Brussels would seek to create a European sovereign wealth fund by mid-2023 to allow all 27 governments to finance state aid.
Earlier, EcoPolitic wrote, that in the USA, the Senate approved a draft law that provides for over $400 billion investment to fight climate change, reducing inflation and increasing the availability of health care within 10 years.
As EcoPolitic previously reported, the European Union is taking emergency measures for deployment of green energy, in particular, it speeds up permitting procedures and exempts some RES projects from undergoing an environmental impact assessment.
