Europe should simplify state aid rules, mitigate risks involved in power purchase deals and soften rules governing winter gas storage to lower costs for energy-hungry industry and make it more competitive, a draft European Commission document showed.
The Commission President Ursula von der Leyen has made reversing Europe's industrial decline a major focus of her second term.
One of the pillars of the Commission's competitiveness plan for the next two years is the Clean Industrial Deal in which the EU executive pledges support for energy-intensive industries that face "high energy costs, unfair global competition and complex regulations" while also boosting the clean-tech sector.
The Commission's proposals to tackle high energy prices include a pilot programme with the European Investment Bank to mitigate the risks of power purchase agreements with a focus on small and medium-sized companies, according to a draft of the Clean Industrial Deal seen by Reuters.
Under the plan, the EIB will also provide guarantees for manufacturers of grid components to help EU countries revamp and expand their power grids in order to meet the EU's climate change targets, which depend on electrification.
The Commission also intends to simplify state aid rules by July this year and carbon duties, work on dynamic gas storage targets and tell member states to "lower taxes on electricity to the legal minimum thresholds."
European utility companies said last year the heavy tax burden was hampering new investments.
The Commission also wants to mobilise funds from the current budget, known as the MFF, to provide "short-term relief ...to improve the business case for EU-made clean manufacturing" while a Competitiveness Fund will be introduced in the next budget.
As part of the deal, the Commission wants "to make fast and efficient use" of instruments such as anti-dumping or anti-subsidy duties and shorten investigation timelines.
The EU also intends to work more closely and coordinate with Group of Seven nations to combat protectionist measures, a veiled reference to U.S. President Donald Trump's tariff threats and China's industrial subsidies.
"The draft Clean Industrial Deal paper includes encouraging messages on key themes like energy costs, circularity, trade defence and carbon leakage protection," Paul Voss, the head of industry group Europe Aluminium, told Reuters.
"This is welcome progress but it will only matter if these positive signals are quickly transformed into substantive policy."
