Written by Agnieszka Widuto.
Clean technologies are at the forefront of the EU’s ambition to pursue both decarbonisation and industrial competitiveness. The global clean tech market is expected to triple by 2035, covering sectors such as solar, wind, batteries, heat pumps and electrolysers for the production of hydrogen. While the roll-out of clean technologies is increasing in the EU, its global market share is falling and manufacturing is lagging behind. This is due to a combination of factors, such as high energy prices, import dependency on raw materials and key components, skills shortages and fierce international competition, fuelled by robust public support policies adopted by the EU’s main global competitors, such as China and the United States.
The EU has already taken some steps to boost manufacturing of clean technologies. The Net-Zero Industry Act of June 2024 seeks to enhance the manufacturing capacity of strategic net-zero technologies by streamlining administrative procedures, boosting investment and improving skills. It sets a target for domestic manufacturing capacity of strategic net-zero technologies to reach 40 % of EU annual deployment needs by 2030 and 15 % of global production by 2040. The Critical Raw Materials Act of April 2024 addresses the issue of import dependencies by seeking to diversify supplies and boost domestic capacity in mining, processing and recycling of critical raw materials.
However, some challenges remain for EU clean tech. These include ensuring adequate private and public funding, swiftly implementing the recently adopted legislative framework and reinforcing a favourable regulatory environment for investment. The Clean Industrial Deal to be announced in February 2025 by the new European Commission, together with the Competitiveness Fund under the future multiannual EU budget, are expected to provide an additional boost to clean technologies in Europe.
Read the complete briefing on ‘Clean tech in the energy sector‘ in the Think Tank pages of the European Parliament.
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