(Bloomberg) -- The European Union is planning simpler, targeted state-aid rules to encourage clean tech investments and boost the region’s industrial competitiveness against the US and China.
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The European Commission, the bloc’s executive arm, is due to unveil the Clean Industrial Deal on Feb. 26. It will be accompanied by a new state-aid framework setting out how member countries can design measures to support the twin objectives of decarbonizing production and better positioning industry against global rivals, according to a draft document seen by Bloomberg News.
The plan, discussed as the EU grapples with stubbornly high energy prices, puts at member states’ disposal grants, tax advantages, subsidized loan and other tools. The goal is to accelerate the deployment of renewable energy and ensure sufficient manufacturing capacity of clean technologies.
To attract more private capital from risk-averse investors such as pension funds and insurers, the new rules would offer member states a possibility of de-risking of investments in portfolios or projects, according to the document, which may change before formal adoption. The commission has a policy of not commenting on draft measures.
National governments would also be able to introduce tax incentives in the form of accelerated depreciation for the acquisition of clean-tech assets.
Projects that would qualify for investment aid include the production of biofuels, biogas, renewable fuels of non-biological origin, and electricity storage, as well as mature technologies such as solar, wind and hydropower. The framework will include detailed criteria for granting the aid.
In some cases, member states also would be able to aid industrial decarbonization in the form of investments in carbon capture equipment.
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