Tokio Marine dR analyzes the European Commission's comprehensive clean industry competitiveness enhancement policy announced in February 2025, focusing on critical raw material supply chain strengthening and the Clean Industry Deal.
Key Points
1. Urgency of Critical Raw Material Supply Chain Strengthening
- EU's import dependency on critical raw materials for clean technology reaches 90%, with 98% of rare earth elements supplied by China
- Critical Raw Materials Act (CRMA) implementation in May 2024 set targets: 10% domestic extraction, 40% domestic processing, 25% recycling by 2030
- Identified 51 strategic raw materials including lithium, cobalt, and nickel, establishing monitoring systems
- Strategic autonomy in clean technology supply chains positioned as urgent issue alongside decarbonization
2. Framework and Objectives of the Clean Industry Deal
- Comprehensive policy package to be formulated within first 100 days of new Commission (by February 2025)
- Aims to accelerate clean technology industry development while ensuring fair competition
- Plans to integrate existing policies (Green Deal, CRMA, Net Zero Industry Act) into cohesive framework
- Addresses three challenges: cost competitiveness with China, regulatory burden reduction, and innovation acceleration
3. Specific Support Measures and Funding Mechanisms
- Establishment of dedicated Clean Tech Fund with several hundred billion euros scale
- Utilization of European Investment Bank (EIB) and InvestEU programs for private investment mobilization
- Introduction of fast-track procedures for clean technology manufacturing facility permits
- R&D support enhancement including next-generation battery and hydrogen technology development
4. International Cooperation and Supply Chain Diversification
- Strengthening strategic partnerships with resource-rich countries (Australia, Canada, African nations)
- Promotion of 'friend-shoring' to reduce dependency on specific countries
- Advancement of joint investment projects with like-minded countries in critical raw material development
- Balancing global supply chain participation with risk management
5. Policy Challenges and Future Outlook
- Securing massive funding while maintaining fiscal discipline among member states
- Risk of market distortion and retaliation from trading partners due to protective measures
- Need for coordination with climate policies while maintaining industrial competitiveness
- Creating framework ensuring benefits reach SMEs, not just large corporations
The article concludes that the EU's clean industry competitiveness policy represents a strategic choice balancing climate leadership with economic security, requiring continuous policy coordination and international cooperation for success.