European Commission President Ursula von der Leyen says the EU plans to mobilize state aid and a sovereign fund for renewable energy companies within a new Net-Zero Industry Act, as it looks to prevent firms from relocating to the United States.
Her announcement at the World Economic Forum’s Annual Meeting in Davos comes as high energy prices have led to the EU imposing revenue caps on wind and solar generators to protect consumers.
The US and Europe have both set ambitious renewable energy targets, but the financial support they are offering differs greatly, and developers in the EU are also facing permitting delays.
US President Joe Biden’s Inflation Reduction Act offers tax credits to American wind and solar projects, and to related manufacturing facilities. This has made the US far more attractive for wind supply chain investments, as European countries provide no direct incentives for domestic manufacturing.
“EU state aid rules prevent countries from providing direct support to domestic companies, and the European Commission will propose to “temporarily adapt” these rules in order to “speed up and simplify,” von der Leyen said.
“To keep European industry attractive, there is a need to be competitive with the offers and incentives that are currently available outside the EU,” she added.
