As the European Commission (EU) Commission is about to announce the Carbon Neutral Industry Act and the Core Raw Materials Act (CRMA) on the 16th (local time), analysts say that the bills can be a check on Chinese eco-friendly technologies. The executive committee announced that it would unveil two bills within this month aimed at responding to the US Inflation Reduction Act (IRA) and strengthening the supply chain of key minerals and raw materials in the region.
According to the draft of the Carbon Neutral Industry Act obtained by the Financial Times (FT) in the UK, in the future, if an eco-friendly product from a specific country occupies more than 65% of the market share in the EU, the product operator may be downgraded in public procurement bidding. Similar regulations will be applied to government subsidy policies applied to consumers when purchasing eco-friendly products. An official familiar with the matter said, “China is the representative country (the target of this bill),” the FT reported.
China is increasing its dominance in the eco-friendly industry market with bold subsidy policies. Currently, China is the world’s largest producer of solar products and monopolizes about 80% of the entire solar panel and component supply chain. In particular, as solar energy emerged as an alternative to the supply of natural gas from Russia to Europe last year, imports of Chinese panels in the EU surged. Even in this draft, EU authorities expressed concern by pointing out that about 90% of the components used in solar panels are made in China.
However, there are concerns that this bill could degenerate into ‘green protectionism’, a part of the new protectionism. In particular, it is pointed out that restricting products from certain countries in public bidding may violate the World Trade Organization (WTO)’s ‘non-discrimination’ regulations. An official said, “This bill should not end up passing on larger costs to private companies or taxpayers preparing for an eco-friendly transition.”
Meanwhile, the Carbon Neutral Industry Act, which is scheduled to be released on this day, aims to produce at least 40% of the clean technology needed in the EU by 2030. In the case of CRMA, the goal is to increase raw material processing capacity in the EU to at least 40% of annual demand. European Commission President Ursula von der Leyen added on the 15th, “The lesson that the COVID-19 pandemic and war taught us is that if we want to be ‘independent’, we need to strengthen and diversify our partner countries and supply chains.” In order for this draft to become law, a vote by the European Parliament is required. It may take up to two years.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.