r/europeanunion • u/GreenTransitionForum • 2d ago

Can the EU Green Deal Industrial Plan compete with the US IRA?

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Industrial policy is back in fashion - on both sides of the Atlantic.

  • 🇪🇺 The EU’s Green Deal Industrial Plan (2024) is estimated at $350B in funding.
  • 🇺🇸 The US Inflation Reduction Act (IRA) dwarfs it at $780B.

Supporters of the EU approach argue that it focuses on sustainability, regulation, and competitiveness rather than raw subsidies. Critics warn the scale of US spending could pull green industry investments away from Europe.

💡 Our Question:
Do you think the EU can truly compete with the US in clean tech and green industry - or is the money gap just too big?

39 Upvotes

80% Upvoted

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66

u/augustus331 2d ago

Yes. Yes it can.

Because unlike the US, the EU can enact long-term policy that's not ripped up every Midterm election or Presidential election.

The EU and its voters have much more distance than voters have with their national governments and that is a good thing.

16

u/Sky-is-here 2d ago

Unironically (and not saying it's a perfect government system in case it isn't clear lol) that's also a big advantage china has, probably one of the biggest. Xi can enter into power in 2012 and enact a plan that won't give results until 2030. Such long planing is impossible in most places. The ideal system allows both long and short term planning depending on what you are working with

38

u/Wide-Annual-4858 2d ago

Wasn't IRA mostly dismantled by Trump?

12

u/Zardrastra 2d ago

Had you asked this question last year I would have said the EU's plan would not be anywhere near as impactful as the US plan. However with the incumbent administration in the US I wholly expect the money to be sequestered into the pockets of the people sucking up to the regime and less of it going directly to projects and works which directly benefit the US economy...

As of right now, I think the EU's green new deal will have much more of an impact than the US plan.

5

u/bate_Vladi_1904 2d ago

Comparison of just two absolute figures without full context and analysis is meaningless. And also in addition the comparison is between apple and orange - double meaningless.

3

u/NecroVecro 2d ago

Well... while the EU Green Deal offers a stable market for green tech with little competiton from non-green alternatives, there's no motivation like money.

Also the US is the biggest consumer market in the world so when they offer you large subsidies, tax credits and tax breaks, you just gotta go for it.

Imo the EU can compete, but many investors will likely go for the easy big buck in the US before investing in the EU.

Right now though, Trump has made IRA less effective and he has introduced a lot of uncertainty. This is a good opportunity for the EU to attract back investors and to take some advantage back.

Other than that a big challenge might be how to keep the green industry European.

The EU has a big problem with companies either moving to the US or getting purchased by foreign holding companies.

1

u/VicenteOlisipo 2d ago

No, because the moment Trump demands it we'll dismantle our plans too.