The European Union is seeking to rapidly accelerate production of clean technologies by offering tax credits and domestic subsidies to companies in a bid to catch up with US President Joe Biden’s landmark green package.
The European Commission, the EU’s executive arm, will propose a plan enabling the bloc to avoid strategic dependencies on key clean technologies by diversifying suppliers and developing local production, according to a draft of the commission’s Green Deal Industrial Plan seen by Bloomberg News.
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The initiative, which is still subject to change ahead of its adoption on Wednesday, would ease state-aid rules to compete with the US Inflation Reduction Act, which includes roughly $500 billion in new spending and tax breaks over a decade. Some member states have expressed concerns that the EU plan could unfairly benefit wealthier countries that have more fiscal capacity.
“We need to be cautious in relaxing state-aid rules,” Italian Prime Minister Giorgia Meloni told reporters in Rome on Monday. “We should help companies but we can’t risk weakening the single market — we should guarantee a level playing field.”