Eu's automotive sector endorses the Green Deal Industry Strategy

The Green and Digital Innovation Project (GDIP), coordinated by the United Nations Development Programme (UNDP), is offering a potential solution to the significant challenges faced by European industries.

European industries are grappling with the need to implement decarbonisation pathways, maintain global competitiveness, and secure jobs and industrial production within the EU. These challenges are further compounded by the COVID-19 pandemic and the war in Ukraine, which have highlighted weaknesses in global supply chains and increased the cost of energy for European industry.

The GDIP aims to provide a balanced approach, striking a delicate balance between member states' interests and maintaining the economic level playing field in the Single Market. It proposes a non-discriminatory framework to avoid replicating trade protectionist elements, while also advocating for a substantial investment framework for green and digital industries with more flexible implementation of state aid rules.

One of the key concerns for European industries is the potential for investment leakage out of the EU, as highlighted by the United States' Inflation Reduction Act (IRA) which offers substantial subsidies for green and advanced technologies. The GDIP seeks to address this issue by streamlining access to funding, reducing bureaucratic red tape, and emphasising strict coherence between EU policy initiatives in industrial policy, decarbonisation, and strategic autonomy.

The GDIP also focuses on the need to transform the European labor force to green and digital technology capabilities, as well as access to low-carbon energy at competitive prices, which is identified as a key part of the transition. European automobile manufacturers, committed to decarbonising road transport, require the right framework conditions to achieve this goal.

The GDIP is not without its own scrutiny, though. It closely examines proposals like Euro 7 that could risk slowing the green transformation of the sector. Additionally, the Temporary Crisis and Transition Framework (TCTF)'s strict eligibility criteria and bureaucratic demands are a concern for beneficiaries, and the GDIP seeks to address this.

Clear leadership from European institutions and member states is needed to address these challenges. The GDIP, including the Net Zero Industry Plan, REPowerEU, the EU Sovereignty Fund, and the revised TCTF, could provide support to keep investment in the EU and ensure a sustainable future for European industries.