IPCEI: Germany and France bet on joint EU platform for sustainable industry

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www.cleanenergywire.org, Jul. 28, 2023 – 

The EU's 'Important Projects of Common European Interest' (IPCEI) scheme is one of the bloc's key instruments for transforming its economy in the name of climate neutrality. The EU's two largest economies, Germany and France, are among the states most eager to enter into multinational partnerships and revive or kickstart sustainable industries by making use of eased state aid rules and strategic cooperation for future technologies. Despite significant differences in other energy and climate policies, Paris and Berlin hope that the IPCEI will serve to boost the domestic production of batteries, hydrogen, and renewable power installations as a platform for their future competitiveness.

Achieving a sustainable transformation of the European economy is a vast and urgent project that can exceed the capacity of individual companies and entire countries. The Important Projects of Common European Interest (IPCEI) scheme is an European Union (EU) subsidy programme that aims to bridge the aims-capacity gap by fostering cross-border innovation and marketability of strategically relevant technologies in resource-intensive areas. The IPCEI framework in its current form was launched in 2014 under the aegis of the EU Commission's internal market and industry department. It does not involve support disbursements by the EU but rather sets clear rules for providing state aid when several member states work together.

The Strategic Forum for IPCEI, an expert group bringing together representatives of member states, industry and the research community, created in 2018, is meant to provide a "common vision" for creating key industrial value chains in the EU. In its first report, the forum identified six priority areas for where member states should come together towards:

Connected, clean and autonomous vehicles

Hydrogen technologies and systems

Smart health (digitally aided)

Industrial 'Internet of Things'

Low-CO2 emissions industry

Cybersecurity

Climate action and its impacts on economic and social stability is thus among the core priorities the EU intends to address with improved coordination under the IPCEI scheme. The forum concluded that the scheme can help to "fill funding gaps" and overcome "market failures" in the budding low-carbon industry. To this end, it aims to combine public and private funding and other resources from countries across the bloc. The scheme will therefore provide support, through target subsidies, to technologies that several member states deem require a certain level of progress and maturation.

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