European Union Proposes Fundamental Overhaul of Green Tech Policies to Reduce Dependence on China

Strategic Insights -

The European Union has announced plans to fundamentally revamp its policies on promoting green technologies and dealing with critical raw materials, aiming to increase its strategic independence in a shifting world of geopolitical alliances. The plans aim to impose limits on imports from countries like China, while unleashing subsidies and other financial incentives to ramp up home production. The EU's executive arm, the European Commission, believes that its new economic strategy is essential in moving toward a climate-neutral economy, and has made a major economic turn away from the hands-off free-market economic gospel.

Key Takeaways:

  • The EU plans to produce at least 40% of the clean tech needed by 2030 within the 27-nation bloc.
  • The plan foresees that financial incentives from member states will be welcomed much more and get faster approval.
  • The EU aims to ensure that not more than 65% of consumption of any strategic raw material comes from a single third country, often China.
  • The EU's move comes after the $375 billion Inflation Reduction Act of last summer in the US, which pushed through an incentives-laden and America-first clean energy law.
  • The EU estimates that by the end of the decade the clean technology global market will be worth 600 billion euros a year.
  • The deployment of renewables will quadruple by 2050, the use of heat pumps will increase six-fold by 2050, and production of electric vehicles will increase 15-fold.

Statistics:

  • 98% of rare earth materials and 93% of magnesium used by the EU come from China.
  • The EU aims to produce 40% of clean tech needed by 2030 within the 27-nation bloc.
  • 65% of consumption of any strategic raw material is expected to come from a single third country, often China.
  • $375 billion: The amount of the Inflation Reduction Act in the US.
  • 600 billion euros: The estimated worth of the clean technology global market by the end of the decade.
  • 4-fold: The quadrupling of renewable energy deployment by 2050.
  • 6-fold: The increase in heat pump usage by 2050.
  • 15-fold: The increase in electric vehicle production by 2050.

Sources:

  • The Associated Press