As the EU prepares its response to the US Inflation Reduction Act (IRA), French Industry Minister Roland Lesquer told EURACTIV that Europe is on the brink of a “new green industrial revolution” – if only governments are ready to spend the necessary cash.

The IRA, which promises a $400 billion (€369 billion) tax break and an investment package to decarbonize the US economy, has acted as a wake-up call for Europe, Lesquier said.

“We finally realized the urgency and scope of the challenge [να καταστήσουμε τις ευρωπαϊκές βιομηχανίες ουδέτερες ως προς τον άνθρακα]”, he told France’s EURACTIV.

“Decarbonising” the economy is a two-part process: “greening existing industrial bodies and developing a new carbon-free industry,” the minister explained.

It is a long and difficult road, he admitted – especially given that the green economy does not generate profits from the start, so “public resources are required”.

The EU must rid itself of “industrial and ecological naivety” and proactively boost funding for the green transition, he argued.

At the same time, European leaders must realize that the geopolitical conditions between China, the US and the EU have changed, Lesquier said, adding that the EU’s free trade agenda must see these new conditions as they are, and not form a rosy view of globalization.

Does this mean entering a new era of protectionism?

“No,” he answered. “You see, I like football: I prefer offense to defense. I prefer conquest to protection.”

Joint borrowing remains up in the air

In early February, the European Commission unveiled its own “Industrial Plan for the Green Deal,” which includes cutting red tape, relaxing state aid rules and creating a new European Fund that France openly supports.

“We need fresh public money and a common industrial strategy at EU level,” Leskir said.

When asked if this would mean a new round of joint borrowing after the 800 billion euro recovery fund from the coronavirus in 2020, the minister preferred not to give a clear answer.

“I don’t want to get stuck in a specific financing tool. “Being hard-line might make me popular in Paris, but certainly not enough in Brussels,” the minister said.

In the short term, Lesquer favors redistributing €250 billion from the existing coronavirus fund to this new European Sovereignty Fund “before we start thinking about new sources of liquidity”. In addition, the EU must also do “everything it can to simplify the access of industries to state aid”, he added.

Germany, Austria and Finland have already rejected proposals to take on more EU debt, making any deal uncertain. The European Commission is expected to present its proposal for a European Sovereignty Fund in the summer of 2023, alongside a wider review of the EU budget.

Reform of the European electricity market

In the global race to net zero, Lesquier said he is convinced that France has a comparative advantage: nuclear power.

“It’s low-carbon and cheap electricity – even Japan is investing in nuclear power again, despite the 2011 Fukushima disaster.”

According to him, the development of nuclear technology throughout the EU is essential: “France is on the right side of history,” he said. And all this is also in line with the investment in renewable energy sources, Leskyr hastened to add.

To that end, “technological neutrality” must be preserved and cultivated, Leskyr said, referring to an EU principle that no technology should be favored over another to achieve net zero emissions.

Ultimately, this will give France plenty of room to develop its own nuclear capabilities while “contributing to the creation of a strong and dominant European electricity market,” he said.

Reform, he added, should not wait until the 2024 European elections, as suggested by Germany. “As long as the war in Ukraine rages and the energy supply is not stable, the electricity market will be under pressure,” he argued.

French industrial leaders and French power company EDF should sign long-term power contracts, he suggested, in a nod to power purchase deals backed by Berlin and Brussels to moderate price volatility.

Critical raw materials

Another fundamental issue is access to critical raw materials – such as lithium, cobalt, rare earths and others – which are essential for the manufacture of green technologies such as batteries, wind turbines and solar panels.

For these basic minerals, the EU is currently almost entirely dependent on imports, especially from China.

“We need to look for these materials all over Europe,” said Lesquer, insisting that a strategy is needed across the entire value chain – from the extraction of the metals to recycling.

Two lithium mining projects have been announced in France, “which must be sustainable, with minimal environmental damage,” the minister said. Large quantities of nickel can also be found in New Caledonia, a French island near Australia.

Only through high environmental standards can the extraction of critical raw materials become socially acceptable, Lesquier told EURACTIV. “We need to take responsibility and accept that decarbonisation is complex [ενώ εξορύσσεται πόρος στο ευρωπαϊκό έδαφος», δήλωσε ο υπουργός.

Μια πράξη της ΕΕ για τις κρίσιμες πρώτες ύλες αναμένεται να εκδοθεί από την Ευρωπαϊκή Επιτροπή στα μέσα Μαρτίου.

Ωστόσο, ο Λεσκύρ απέρριψε την άποψη ότι οι Ευρωπαίοι πρέπει να μειώσουν δραστικά την κατανάλωση για να επιτύχουν τους περιβαλλοντικούς στόχους.

«Διαφωνώ πλήρως με όσους πιστεύουν ότι η εξοικονόμηση ενέργειας και η παραγωγή δεν μπορούν να πάνε μαζί», δήλωσε. Αντίθετα, ο Γάλλος υπουργός πιστεύει ότι η μείωση της κατανάλωσης ενέργειας, όπου είναι δυνατόν, «είναι συμβατή με την ‘καλή’ ανάπτυξη», εφόσον οι κυβερνήσεις είναι εκεί για να υποστηρίξουν τη μετάβαση.

Η αποανάπτυξη, από την άλλη πλευρά, είναι «κατά της κοινωνίας», κατέληξε ο Λεσκύρ.