Brussels will clamp down on imports of Chinese green technology, reduce bidding for public contracts and make it harder for buyers to access subsidies.
The measures are expected to be announced by the European Commission on Thursday as part of a more aggressive drive to tackle China’s dominance in supplying products including solar panels and heat pumps.
According to a draft of the Zero Net Industry Act reviewed by the Financial Times, public procurement bids using products from countries with an EU market share of more than 65 percent will be downgraded. The same rules will apply to government programs that subsidize consumer purchases. “China is a prime example,” said a person familiar with the plan.
Ursula von der Leyen, the commission’s president, urged the EU to “de-risk” its exposure to China as Brussels seeks to reduce its reliance on the country’s manufactured goods and move closer to the US’s tough stance on the communist regime.
China is responsible for more than 90 percent of some parts used in solar panels, the document said, and is increasing its dominance of other supply chains including the production of wind turbines and electric vehicles. This trend has led policy makers to admit that the EU is replacing its dependence on Russian gas for clean technology from China.
But the commission’s trade director is concerned that proposed changes to the public procurement rulebook could violate international rules, according to people familiar with the situation.
“It is important to be consistent with WTO obligations, government procurement agreement obligations,” said one, referring to the World Trade Organization which prohibits discriminatory policies.
“An important element is to make sure that it doesn’t turn into some kind of green protectionism and that we don’t make the green transition more expensive for private companies and for taxpayers.”
The law is still subject to change after internal discussions between the commission’s departments before publication.
The draft proposal describes diversity of supply as a key component in bid evaluation. “The supply will . . . considered insufficiently diversified where third countries provide more than 65 percent of the demand for certain net zero technologies in the union,” he said.
It will also assess the sustainability of the tender environment, which can be considered to import China.
In sectors where EU industry is still strong, such as wind turbines and heat pumps, “our trade balance is deteriorating”, the draft warned, amid rising energy and input costs for European manufacturers. Brussels aims to reverse this trend by intervening in the market with the aim of increasing the European Union’s green technology production by 40 percent by 2030.
The commission will also seek to scale up new carbon capture technologies by requiring large oil and gas extractors to store up to 50 million tonnes of CO₂ per year by 2030, with each company given an individual target. Eadbhard Pernot, policy manager at the NGO Clean Air Task Force, said the target was a “first”.
A separate proposal on critical raw materials on Thursday will be aimed at facilitating domestic mining of lithium and other minerals used in green technology. Brussels intends to introduce tougher environmental measures to limit imports, according to a version of the draft text that is still being finalized.
After the commission publishes a proposal, the European parliament and member states must agree before it becomes law, a process that can take up to two years.
China on Wednesday demanded that European countries that have implemented significant environmental trade measures submit written reports to the WTO so that members can discuss the legal basis, their impact on trade, consistency with international rules and how these measures may affect developing countries. , a Geneva-based trade. the official said. Beijing wants to introduce an EU carbon border tax, which would force foreign importers to cover the cost of CO₂ emissions by 2026.