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European governments should channel public money into clean tech by buying equity in companies rather than giving direct subsidies, the EU’s competition chief has said.
Teresa Ribera told the Financial Times that while EU state aid rules restricted public subsidies to companies, there were still other ways to help Europe’s emerging green tech compete with China and the US.
Ribera and her powerful competition directorate have pushed back against an effort led by Stéphane Séjourné, the French commissioner for industry, to allow governments to “Buy European” and to grant exemptions from state aid rules to solar panel, wind turbine and battery producers.
Not only would such subsidies have been illegal, they would also be distortive, Ribera said. Instead, she encouraged governments to consider taking equity stakes. “If it succeeds, this public money could be paid back in terms of profits being returned to the public benefit,” she said.
The European Commission will on Wednesday adopt new guidance for state aid as part of a raft of industrial policy that aims to align Europe’s climate ambitions with its push to revive the bloc’s flagging competitiveness.
The framework will extend the EU’s lenient approach to encourage the green transition while seeking to maintain a level playing field between member states with vastly different fiscal firepower.
The EU is ready to compete in the global race, Ribera said.
“We are providing stability, predictability and reliability. We are ready to blend public and private [investment]. These are our big bets: energy, decarbonisation, clean manufacturing . . . Europe has a great opportunity to be an attractive destination for private investors.”
The Spanish centre-left politician pointed to the uncertainty about the US tax breaks and subsidies for green technologies adopted under the Biden administration amid reports that companies are cancelling investments in planned American battery factories.
“Do you want to invest in batteries? We welcome you. We have lots of strengths as an open, modern economy,” she said.
Ribera pushed back against the idea that the internal discussions over the new state aid framework epitomise the tension between the bloc’s more traditional competition enforcement and a more interventionist industrial policy.
“I don’t think there is any tension. In fact, I think there is a strong need for industrial policies that go beyond state aid.”
Ribera cited examples such as deepening the single market and upcoming changes to the EU’s public procurement rules, which are set to include “Buy European” clauses.
Competition policy should be used to achieve certain priorities for the European economy, she said, such as “modernise the industry, accelerate the energy transition and ensure good conditions to be attractive for clean tech manufacturing”. But all this had to be done in a responsible manner to ensure the level playing field in the single market, she added.
Additional reporting by Alice Hancock
