BusinessEurope Headlines No. 2020-09
"In today’s world, where Europe is accelerating its green and digital transformations and where other parts of the world use aggressive policies, with some playing outside of the rules, Europe needs to act more strategically. The industrial ecosystems and strategic value chains like batteries, hydrogen or the Internet of Things will be key to pool public-private finance and bring new technologies to the market”, stressed BusinessEurope President Pierre Gattaz in a meeting with the European Commissioner for Internal Market Thierry Breton and Markus J. Beyrer, Director General of BusinessEurope. The meeting took place on 11 March – one day after the publication of the European Commission’s new industrial strategy. In the context of the Green Deal, which BusinessEurope supports, Beyrer emphasised the importance of addressing the risk of carbon and investment leakage in order to maintain Europe’s attractive business location in the long-run. To this end, strengthening our existing tools to tackle carbon and investment leakage is essential. Lastly, President Gattaz underlined the importance to urgently take action responding to the economic consequences of the current COVID-19 situation in the spirit of responsibility and solidarity.
Contact: Antonia Bierbaumer
EU industry to lead green and digital transitions
By Antonia Bierbaumer, Adviser on Industrial Affairs
The EU has decided to take the lead in transforming to a new model. The Green Deal will only be an economic success if the EU Industrial Strategy ensures industry competitiveness throughout this massive transformation. The strategy pitches the narrative that assigns EU industry the role of leading the “twin transition” (green and digital).
The stakes are high for European industry. Companies fully stand behind the EU’s objective of becoming climate neutral. To reach that objective, it is key to equip industry with the right framework conditions to stay competitive to successfully master the challenges ahead. Although the Green Deal offers new possibilities and markets for clean technologies to companies, it would be a mistake to neglect the challenges it accompanies. For instance, in the absence of comparable ambitions from our main global competitors, we run the risk of carbon and investment leakage towards more attractive business locations. This topic is now in debate with the Carbon Border Adjustment (CBA) mechanism. But we should be careful that CBA does not cannibalise everything. The strengthening of existing tools such as free allowances and state aid for indirect costs in the emissions trading system will be decisive.
Unfair competition and market distortions must be addressed on all fronts. European competition policy should be adjusted to today’s market realities by taking better into account the international dimension of markets. A fair level playing field has become a critical issue as European companies increasingly face unfair competition around the world. Many of the distortions stem from foreign subsidies and state-owned enterprises. The initiative to develop a tool to address foreign subsidies and mitigate market distorting practices from third country’s companies, that are heavily subsidised, is a step in the right direction.
Europe needs to act more strategically and see the bigger picture. The strategy introduces a new approach of “industrial ecosystems” as the new way of thinking and working to lead the twin transition. While the Strategic Value Chains (SVC) concept is not very prominent, the strategy revives the concept of “Industrial Alliances” building on the experiences of the European Battery Alliance. New alliances should be established in the areas of hydrogen, low-carbon industries and industrial cloud and platforms. It remains to be seen how the ecosystems will integrate the SVC concept.
The true value of the industrial strategy will be determined by the Commission’s implementation of concrete measures. The progress of implementation will be regularly monitored based on a set of key performance indicators (KPIs). Although these KPIs still need to be defined, it gives prove of the Commission’s dedication to the strategy. To really make a change this time, we proposed the establishment of a “sounding board” consisting of high-level business representatives. The business representatives would support the Commission in the challenges ahead and serve as a strategic resource. The strategy foresees an inclusive “Industrial Forum” with representatives from various stakeholders, EU Member States and EU institutions.
With the right framework and measures in place, EU industry stands ready to take on the leading role in the transition process.
Contact: Antonia Bierbaumer
see our submission to the public consultation.
Contact: Leon de Graaf
new China strategy consists of four key goals and 130 recommendations on how to achieve them. “Connecting both the foreign and trade agendas with other domestic agendas is an important element of the whole-of-government approach required to rebalance the relationship”, he concluded.
Contact: Maurice Fermont
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