European industry is not what it used to be. After decades of being the continent’s economic engine, the sector has been in decline for years, and today we are more dependent than ever on third countries for the supply of basic products, from microchips to solar panel components. In addition to losing competitiveness, the industry generates fewer jobs. In Spain, 2.2 million people work in this sector today, 600,000 less than in 1991, and its weight in GDP has dropped from 18.7% at the beginning of the century to 15.3% in 2021.
Faced with this scenario, Brussels wants to revitalize European industry and turn it into a powerhouse in the production of materials for so-called clean technologies, from wind energy to electric car batteries. In March, the European Commission presented the Zero Emissions Industry law, which should serve to speed up the launch of new projects, but the most important thing remains unspecified: how the transformation of a sector that will have to invest 150,000 million euros in new plants so that Europe can cover 100% of the demand for these technologies by 2030.
Europe is once again stumped to waste time and effort passing regulations, rules and laws, while the Americans get straight to the point. In 2002, the Biden Administration passed the Inflation Reduction Act (IRA), a 300-page document that clearly defines its decarbonization strategy for the next decade and will involve an injection of more than $350 billion in aid, which makes the US a more attractive market than Europe when it comes to investing, and more predictable.
However, what is most striking about his strategy is that the US does not ban any decarbonization technology, and gives tax incentives to all projects that contribute to reducing CO2 emissions. Faced with this position, Europe continues to be obstinate, in the name of sustainability, to put obstacles in the way of certain technologies, which has been conditioning its industrial activity for years and holding back the realization of new investments.
Europe has led the reduction of CO2 emissions in the last decade, but it has done so at the expense of its industry, with closures and relocations that have made us more dependent on third countries. In this period, for example, twenty refineries have been closed, which has reduced our refining capacity by 10% and forced us to import nearly one and a half million barrels of diesel every day, which causes tensions inevitable in the price of this fuel.
The EU needs a less complex industrial policy, which gives as much importance to decarbonisation as to the competitiveness of companies. The example of the United States shows that it is possible, that industrial activity can be encouraged while emissions are reduced, thus strengthening a sector on which millions of jobs depend.
