Today we attended an event hosted by the Representation of the State North Rhine- Westphalia to the EU, entitled “How to make the European Industrial Deal succeed – going beyond national approaches towards a European solution for clean industry”. The event co-organized by IDDRI, Forum Energii & Agora Industry addressed the conditions necessary for developing a clean European industry, the current shortfalls of EU policy regarding the matter, as well as the potential solutions to unlocking industrial capacity and potential for scaling up production of climate friendly technologies.

The panel discussion entitled “How to promote clean manufacturing in Europe in a globally competitive environment?” saw experts – dr Joanna Maćkowiak-Pandera (President at Forum Energii), Ann Mettler (Vice President Europe, Breakthrough Energy), Jacek Truszyczyński (Deputy Head of Unit at DG Growj) and, Karol Wolff (Strategy and Strategic Director Orlen) – debating the viability of enabling the development of clean industry amidst global challenges and competition from China and the US. Dr Maćkowiak-Pandera pointed towards overregulation as a potential problem in allowing proper growth of industry, citing tax deductions and strong industrial policy incentives as the right direction. She also stated that it is unfortunate that EU societies – particularly Poland – has had an increasingly negative view of the EGD, and that this would need to be counteracted by further exploring the pragmatic, and not the ideological, dimension of the deal.

Ann Mettler highlighted the necessity of considering the business case, which has been lost in the drafting of the European Green Deal. She pointed out EGD’s polarizing nature in EU societies and highlighted the necessity of creating new intellectual paradigms to approach its construing. She further posited that the EU needs to move up the value chains in the technological areas it wants to compete in and that it should do so off of its own industry. She deemed allowing foreign entities to perform on EU markets while being subsidized elsewhere a very bad strategy. Ultimately, she underlined the need to derisk innovation investment by calling on institutional investors and philanthropy into the innovation funding paradigm, stating that it is irresponsible to expect companies to take huge risks to fill particular EGD quotas in the distant future, without any framework for support.

Karol Wolff had showcased Orlen’s projects in the area of renewables, as well as the company’s forward approach to decarbonization of its business. He highlighted the potential of Small Modular reactors, with their electricity and heat production capabilities, as having an important role to play in the decarbonization of industrial plants, stating that CCS tech would need to be rolled out simultaneously, so as to utilize the emissions that are hard to abate. He also pointed out that the EU should create policy that would allow a rapid scaling up of promising clean technologies coming from industrial startups, which naturally do not have the capacity to do so on their own, mirroring Ann Mettler’s concerns.

Jacek Truszczynski had posited that the EU knows what direction it should be heading in terms of attainment of its 2030 goals – among others the investment and further development of renewables and the energy grid. He also underlined the need to match the demand with supply, by finding the right off-takers, as well as having a strong industrial leg that would complement the EGD’s fundamental tenets.

All of the panellists fundamentally agreed that there is a potential threat of deindustrialization happening in Europe, not the least because of cheaper competition, and that there would be a need for complementing of the EGD with proper pro-market incentives, and pointed out the pitfalls of overestimating regulatory power for dictating the proper direction of high-tech industrial paradigms to flourish.

BSP is and will be following the developments of the debate in the realm of future EU industrial policy.

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