Green Deal Industrial Plan responds to U.S. IRA

On 1 February, the European Commission presented the Green Deal Industrial plan. This follows the United States' Inflation Reduction Act (IRA) as friction arises with regards to economic aspects of sustainable industry between the US and the EU.
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According the Commission’s official communication released on 1 February, the Green Deal Industrial Plan, building on the Green Deal and the Fit for 55 Framework, aims to work towards climate neutrality by scaling up, and boosting the competitiveness of European Sustainable Industry. The plan focuses on simplifying regulatory environments, boost investments by improving accessibility to funding and increasing supply chain resilience, as well as promoting skill development.

Many consider the Green Deal Industrial Plan as a much expected response for the United States’ IRA, which aims to subsidize a wide range of green industries within the states. This causes worries in the EU, as the IRA may attract industry to the states, and put European industry in a disadvantageous position. European Commission President Ursula von der Leyen acknowledged that getting ahead in the competition for green industry is important for the European Union in her statement regarding the plan.

However, the reception of the plan in the parliament was not positive – criticisms from all sides cited the lack of additional funding for industrial policy as well as research and innovation.

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