EU Slips in Bid to Keep Pace With US, China in Clean-Tech Race

(Bloomberg) -- Europe’s efforts to foster the investment needed to build a sustainable economy and fend off challenges from the US and China are still in the very early stages.

While the European Union has made an initial push to respond to a massive US green subsidies program, it’s only starting to wake up to the challenges involved in turning its bold vision for a climate-neutral trading bloc into reality.

Faced with losing investors to President Joe Biden’s $369 billion package of tax breaks, regulators in Brussels proposed a mix of measures this week including domestic production targets and quicker permitting for key clean-tech projects. But the response lacks the simple framework of the US’s Inflation Reduction Act and only addresses part of the problem.

On top of the race to attract investment, secure key raw materials and develop technology, the 27-nation EU has to contend with an unprecedented energy crisis, which pushed power and natural gas prices to all-time highs last year. Even as they’ve fallen dramatically, Europe’s new reliance on liquefied natural gas — including from the US — locks in higher costs.