EU Allocates $4.8 Billion for Cleantech Projects to Reduce Dependence on China
Key Ideas
- The European Union is offering €4.6 billion in grants for cleantech projects targeting electric vehicle batteries, hydrogen, and other sectors to reduce reliance on Chinese suppliers.
- Projects in the battery sector scoring higher are those with less reliance on sourcing from China, recognizing the risk of dependency on one country for supplies.
- An additional €1.2 billion is earmarked for green hydrogen production in Europe, with restrictions on sourcing electrolysis stacks from China to meet resilience requirements.
- This move signifies a shift in EU policy by explicitly addressing concerns over reliance on Chinese imports in cleantech industries and seeking to diversify supply chains.
The European Union has announced a substantial investment of €4.6 billion (US$4.8 billion) in grants for cleantech projects, including electric vehicle battery and hydrogen initiatives. The primary objective behind this funding is to reduce the EU's dependence on Chinese suppliers, particularly in industries like battery manufacturing where Chinese firms currently dominate globally. The commission's proposal specifies that projects with limited sourcing from China will receive higher scores, reflecting concerns over the security of supply and the risk of irreversible dependency on a single country. In the hydrogen sector, projects can access €1.2 billion in grants, provided they adhere to restrictions on sourcing electrolysis stacks, ensuring a maximum of 25% from China. This new approach deviates from previous practices in Brussels, as it directly addresses the need to diversify supply chains and mitigate risks associated with overreliance on Chinese imports. By taking these steps, the EU aims to bolster its economic resilience, enhance security of supply, and promote the development of green technologies within its borders.