(Bloomberg) — The European Union needs to refocus on boosting its industrial base and its competitiveness as a response to a US law that provides domestic green energy subsidies, Belgium’s prime minister said.
(Bloomberg) — The European Union needs to refocus on boosting its industrial base and its competitiveness as a response to a US law that provides domestic green energy subsidies, Belgium’s prime minister said.
“We really need to act as a European bloc,” Alexander De Croo said Tuesday in an interview with Bloomberg TV. “Today, everyone understands that keeping industrial activity, keeping heavy industry — chemistry and so on — keeping that here in Europe is of geopolitical importance.”
De Croo said elements of the US President Joe Biden’s climate law are unfair to Europe and should be addressed, but that a trade war should be avoided.
The US law, known as the Inflation Reduction Act, has sparked a renewed push for greater state aid in Europe as governments fear cutting-edge, low-emission industry will be tempted to set up production across the Atlantic. Earlier in January, French Finance Minister Bruno Le Maire said he will present a “green industry” bill soon as Europe seeks to stop businesses from being lured away by billions of dollars of subsidies under the US climate law.
The Belgian leader also said fears of a recession in Europe are diminishing, with the economy gaining a boost from lower energy prices. European energy prices have been falling as warmer-than-usual temperatures curb demand for heating. Mild weather has reduced pressure on the region’s gas inventories, with storage levels roughly steady over the past three weeks, at a time of year when countries normally tap their reserves.
European nations reached a deal last month to cap natural gas prices at €180 ($193), ending months of political wrangling over how much to intervene in the energy crisis. The so-called gas market correction mechanism — a temporary measure designed to prevent extreme price swings — will apply for one year from Feb. 15.
De Croo also hailed an agreement reached Monday between the Belgian government and Engie SA to extend the life of two nuclear reactors in Belgium for another 10 years, a move that will help to boost its energy security when it’s most needed.
“This is an important sign to show that we are taking back control of our energy supply,” he said. “This will not hamper our development of renewables.”
The utility agreed to extend the operation of the Doel 4 and Tihange 3 reactors, concluding months of talks with the federal government. The country had planned a full phaseout of its atomic energy at the end of 2025.
–With assistance from Katharina Rosskopf.
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