10-Day Countdown to Unshackle EU Cleantech: #TalkingBusiness
Ann Mettler
Vice President, Europe at Breakthrough Energy. Previously, Director-General at European Commission. Views are my own, often rooted in 20+ years of experience in public policy.
Day 4 The Countdown to Unshackle EU Cleantech continues! For those catching up, each day until the European Council on 9-10 February, I'll be sharing one actionable #idea a day that can help accelerate the #energytransition and make Europe a leader in #cleantech #innovation and #deployment.
How the EU ‘talks’ to business – or not
One of the most serious accusations in the Brussel bubble is to be ‘pro-business’. As if business is a homogeneous entity that needs to be treated with universal suspicion. But now there’s a problem because we know that the EU's ambitious climate goals will not be achieved by public money and civil servants alone. So much now depends on private investors, entrepreneurs and big companies to take a bet on Europe. What is striking in that regard is how much the #inflationreductionact apparently ‘speaks’ to business. And how that differs from the EU.
?
Private-sector led, public-sector enabled
When I heard US Secretary of Energy, Jennifer Granholm, speak about the IRA last year, she said it was ‘private-sector led, public-sector enabled’. And it’s true, the #ira incentivizes private sector investment and home-grown production through tax credits. Is Europe really prepared to go down the same road? More often than not we seem to opt for ‘public-sector led, public-sector enabled’ – or in the best case ‘business incumbent-led, public-sector enabled’.
A level playing field for all companies – big and small
领英推荐
The standard procedure for companies to receive EU funding is by applying to various programs that might - or might not - select them after a minimum of 6 months of review. That’s a killer for any entrepreneur with a budget, a cash burn and a board on their back. The application process is onerous and the chance of success usually minimal. Take the EU’s Innovation Fund – chances of getting funding are 2%. Naturally, that’s a disappointing process for a super-large majority of companies. The tax credits in the IRA, by contrast, are designed to be simple, predictable and non-discriminatory. For instance, that means producers of green hydrogen already know the price they’ll receive in the future. And the tax credit will be dispersed to any company that produces green hydrogen, whether established incumbent or young startup. The fact that the rules of the game are so easily understood by businesses around the world should not only be seen as a threat but also instructive in how to draw up a scheme that really ‘speaks’ to companies.
Scouting for – and courting – the best
I was struck by a quote from a CEO of a green cement company based in Ireland, recently cited in the Financial Times. Speaking about the IRA he says ‘They [the US] are rolling out the carpet for green investment – we were surprised at how personal the contact was’. As I know from experience, there aren’t 100 companies at the technology frontier in decarbonizing cement in Europe. And there certainly aren’t many companies that can produce cement with carbon emissions that are 40 times lower than average, as this company can. So rather than put out complex calls that have a very low chance of success for even the best of companies and hope – fingers crossed! – that the firms at the #techfrontier apply, why not have more of an active scouting for the best solutions?
Bottom line is that while there is no shortage of good intentions to help clean companies, including with generous financial support, the reality is that something gets lost in translation between ‘Brussels’ and the tech pioneers on the ground. Vaitea Cowan , co-founder of Enapter , which has patented technology to produce green hydrogen, puts it aptly in the same FT article, saying she would need four people full time on her team just to understand what the EU had to offer in terms of funding and how they can access support. “The support schemes just for renewable hydrogen are extremely hard to navigate,” she says, ranging from the European Investment Bank to the Horizon science programme. “There are so many of them . . . we need Europe to have much more pragmatism.”
Maybe the recently announced Green Deal Industrial Plan can be a game changer is this regard, as it highlights the need to use existing funding instruments in streamlined and innovative ways. If one could add to that a more receptive and open attitude towards the clean tech entrepreneurs that are powering the energy transition, this may just be a recipe for success. #fingerscrossed?
That's a wrap for Day 4 of #unshackle #eu #cleantech
Senior Director Government Affairs Europe and Head of Brussels Office at Dow
1 年Ann Mettler, you nailed it! Decarbonisation = investment. If decarbonisation is urgent (it is!), then investment is urgent too. But investment cases for industrial decarbonisation often remain challenging - this is where private and public investment must combine more easily to accelerate decarbonisation. This is the opportunity of the Green Deal Industrial Plan. It should provide clarity for companies with a decarbonisation plan for their operations in Europe on: 1. Availability of sufficient funding to help decarbonization investment cases “across the line” to viability (public funding enabling private investment) 2. Where to turn to in order to receive uncomplicated funding support - ideally in a one-stop-shop that coordinates EU and national funding support (one interlocutor to help navigate and coordinate the complex funding landscape with one application) 3. Acceleration of both funding application processes and permitting processes to boost the early decarbonization needed to meet the 2030 emissions reduction targets. Much more funding needs to be made available now (not later) to keep companies in Europe on their decarbonisation trajectory despite the challenging economic environment. #fingerscrossed indeed!