Green industry: the game is kicking off

12 May 2023 - Foreword of the week - By : Solène METAYER

Faced with international competition exacerbated by the US Inflation Reduction Act, Team Europe (and longtime team member, France) is preparing its response. The team’s tactics tackle two challenges: greening existing industrial sectors such as steel or cement, and industrialising the production of green goods, particularly those cleantechs that will make the transition a reality, such as heat pumps or electrolysers. To meet the first challenge, the French government has put 5 to 10 billion euros of public money on the table to decarbonise the most polluting production sites, in return for private investment. But has the extent of the industrial investment needs been properly assessed?

 

In a study we are publishing today, available in this newsletter, we have analysed the investment needs of four heavy-industry sector in France. The study shows that investment needs vary by a factor of 4 depending on the decarbonisation scenarios selected! For example, a scenario with a very energy-sufficient and material-efficient economy requires less steel or cement, and therefore less decarbonisation investment. This highlights the importance of anticipating, planning, of agreeing on tomorrow’s needs, to avoid both risks of over-investment and under-investment.

 

To meet the second challenge, industrialising cleantech, France, with its green industry bill, and the European Commission, with its Net Zero Industry Act, want to speed up the granting of permits for the installation of new sites. This is essential. However, the French legislation is not focused on cleantech and thus fails to give it a comparative advantage. As for the European Union and its member states, they must invest in their institutional capacities to speed-up the permitting processes without cutting back on environmental safeguards. This is one of the proposals in our new blog post on the Net Zero Industry Act, which outlines how to make it a launch pad for a European Investment Plan for cleantech and climate. Greening industry and industrializing the green sector – two distinct challenges that need to be tackled simultaneously, with French and European policies working in harmony. It’s teamwork that wins matches.

 

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