US Inflation Reduction Act fuels call for action on European clean energy policy

European clean energy leaders are looking to their policymakers for action on a clear industrial policy to achieve decarbonization goals in the wake of a historic legislative victory in the US.

The Inflation Reduction Act in the US stands to invest nearly $400 billion in clean energy deployment and climate change mitigation. The law also incentivizes domestic manufacturing of technologies like solar modules, electric vehicles, and heat pumps.

The breakthrough has left European clean energy counterparts longing for an industrial policy of their own. Europe, which was the epicenter of clean energy deployment in the 2010s, has watched manufacturing leave for more favorable markets.

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Jochen Hauff, the director of corporate strategy, energy policy, and sustainability at BayWa r.e. Global, and the vice president of Solar Power Europe, said he hopes the US action will serve as a wakeup call for European politicians.

"I don't think that Europe is anywhere close to the level of industrial policy readiness and willingness like now the US is," Hauff said during an interview with Renewable Energy World at Enlit Europe in Frankfurt, Germany.

The clean tech manufacturing exodus leaves Europe in a precarious position.

For one thing, Russia's invasion of Ukraine magnified an energy crisis that was already underway. And inaction on a clear clean energy industrial policy could imperil ambitious climate goals set across the European Union.

Hauff, who serves as vice president of Solar Power Europe, said he doesn't believe a European clean energy industrial policy needs to be a carbon copy of the American law. Instead, he advocates for establishing a framework with consistency across member states to support both CAPEX and OPEX costs for renewable energy production and manufacturing.

But the idea of a European Union-wide industrial policy runs foul of the EU's charter, which prevents member states from enacting harmful trade policies that target each other.

Hauff said that national and EU leaders need to rethink their approach if they are to realize any of the approaching climate targets.

"If we all fight for ourselves, likely, that's not going to be the best economic outcome," Hauff said.

Originally published by John Engel on renewableenergyworld.com