The European Union will fall far behind its ambitious energy transition targets for renewable energy, cleantech capacity and domestic supply chain investment, according to research and analysis by Rystad Energy.
Several EU cell manufacturing companies are now shifting their interest to the U.S., whose better tax credits and pro-renewable energy policies seem to be attracting some companies to look to the U.S. for better returns. A recent report by Rystad Energy, a global energy think tank, points to this shift.
Rystad Energy's report notes that unlike China, the European Union has invested less in its net-zero targets. This, the report says, could create a barrier to achieving its clean energy goals. The EU plans to reduce emissions by 92 percent by 2040 and achieve net zero by 2050.
However, the migration of EU cell manufacturers hints at another challenge the industry will face. The report attributes this trend largely to the U.S. Inflation Reduction Act (IRA) tax credit benefits.
Rystad reports,“Some European cell manufacturers are crossing the ocean in search of greener, greener fertile ground, emphasizing the need for competitive development conditions. For example, Norway-based FREYR Batteries has moved its headquarters to the U.S. and opened a large facility in Georgia to take advantage of the Inflation Reduction Act's tax benefits. "
It added,“The fact that Volkswagen, after initially investing heavily in Northvolt, is now exploring opportunities to align with the Inflation Reduction Act and maximize tax credits in Canada is indicative of a broader trend in the manufacturing sector to move towards taking advantage of a favourable policy environment and sends a clear signal to policymakers. "
According to Rystad Energy's research, the EU will lag far behind its ambitious energy transition targets for renewable cleantech capacity and domestic supply chain investment.The EU's total capital investment in cleantech (including renewables, carbon neutrality, hydrogen, battery storage, and nuclear energy) is $125 billion in 2023, which compares favorably with China's $390 billion in the same area This is dwarfed by China's $390 billion in the same area.
The U.S. currently trails the EU in annual cleantech spending, with $86 billion invested in 2023, but the Inflation Reduction Act will stimulate investment, while EU spending will stabilize over the next few years. By 2030, total U.S. clean energy spending will nearly equal that of the EU and accelerate to surpass the EU in subsequent years.
Earlier this year, the EU adopted the Net Zero Industry Act (NZIA), which serves as a roadmap for the EU to achieve its ambitious goal of cutting emissions by 92 percent from 1990 levels by 2040 and achieving net zero emissions by 2050.
In direct response to the U.S. Inflation Reduction Act, the EU, through NZIA, has set ambitious targets to support emerging industries, promote local supply chains, and make the EU an attractive investment destination through supplier incentives.
However, the EU's cleantech investment landscape is a story of conflicting ambitions and realities, and another dose of reality may be on the horizon.
Source:https://mp.weixin.qq.com/s/e2QqoSUXN_3tTWmCjmzVTw
