Europe Races to Catch Up in the Global Green Technology Race

The European Parliament passes the Net-Zero Industry Act, signaling Europe’s intent to compete with global powers in the green technology sector.

Europe is facing a race to secure its position in the global green technology race, as countries like the U.S. and China invest heavily in clean energy and manufacturing. In an effort to keep pace, the European Parliament recently passed the Net-Zero Industry Act, which aims to encourage the production of more green technology within the EU. This legislation, coupled with recent measures to increase domestic mining of minerals needed for these technologies, signals Europe’s determination to assert itself in the global market. However, the EU faces stiff competition and must undergo an ideological shift from free-market advocate to protectionist in order to succeed.

The Need for Domestic Production

The Net-Zero Industry Act sets a goal of producing 40 percent of the EU’s clean technology domestically by 2030. This legislation includes incentives such as fast-track permitting and easier access to funding for certain industries to help the bloc achieve its target. Additionally, lawmakers have added a goal for the EU to produce 25 percent of the world’s clean technology by 2030, injecting more global ambition into the plan. The Net-Zero Industry Act is a crucial component of the EU’s broader objective to achieve carbon neutrality by mid-century.

China’s Dominance and Europe’s Dependence

China poses a significant challenge to Europe’s green technology ambitions, as the EU heavily relies on Chinese firms for solar panels, lithium, and other key components. The Net-Zero Industry Act aims to reverse this trend by effectively excluding Chinese firms from public contracts for technology necessary to meet the EU’s climate goals. Lawmakers describe this approach as progressive and ambitious rather than protectionist. The EU seeks to build its own manufacturing and production capacity rather than relying solely on assembling products.

Protecting Against Technological Dependence

Internal Market Commissioner Thierry Breton warned the European Parliament of the dangers of technological dependence, drawing parallels to Europe’s past energy dependency on Russia. The EU cannot afford to become overly reliant on foreign suppliers and must prioritize building its own technological capacity. The Net-Zero Industry Act is a step towards reducing this dependence and ensuring Europe’s sovereignty in the green technology sector.

Pushing for Greater Priority for EU-Based Companies

While the legislation passed by the European Parliament already directs governments to consider factors beyond cost in awarding contracts, France is pushing for even greater priority for EU-based companies. The French government argues that non-price factors should receive a higher weighting in the decision-making process, emphasizing the need for ambition in supporting manufacturers setting up in Europe. This stance reflects a shift away from naivety in public tenders and a commitment to strengthening Europe’s domestic green technology industry.

The Challenge of Financing

While the Net-Zero Industry Act sets ambitious goals for domestic production, the EU still faces the challenge of financing these initiatives. The initial proposal to create a “sovereignty fund” through fresh debt was replaced with a weaker program that combines reallocated EU funds with €10 billion in new financing from member countries. However, this falls far short of the substantial investments made by the U.S. and China. To truly turn its ambitions into reality, the EU estimates it needs at least €80 billion to €90 billion. Despite the cost, investing in European manufacturing is seen as crucial for the success of the green transition.


The Net-Zero Industry Act represents a significant step forward for Europe in the global green technology race. By setting ambitious goals for domestic production and prioritizing EU-based companies, the EU aims to assert its position as a leader in the clean energy sector. However, the EU faces tough competition from the U.S. and China, and must overcome its past reliance on foreign suppliers. Adequate financing is also crucial for the success of these initiatives. The Net-Zero Industry Act is a clear signal of Europe’s determination to catch up and secure its place in the future of green technology.






Leave a Reply

Your email address will not be published. Required fields are marked *