The European Union has forged ahead with a groundbreaking initiative aimed at bolstering its clean tech industry, signaling a determined effort to counter the competitive challenges posed by the United States and China on the global stage, Bloomberg reports.

In a significant development, EU lawmakers and member states have reached a provisional agreement to accelerate support for the clean-tech sector, a pivotal component of the ambitious Net Zero Industry Act.

Under the terms of the deal, the EU will implement measures to streamline permitting processes and revamp auction mechanisms for new renewables projects, all geared toward enhancing the resilience and competitiveness of the clean-tech industry within the bloc.

The primary objective of the Net Zero Industry Act is to ensure that a substantial 40% of the EU’s clean tech requirements are manufactured domestically, signaling a bold step toward achieving climate goals while safeguarding economic competitiveness.

The impetus for this legislative push stems partly from the US Inflation Reduction Act, a comprehensive set of tax incentives designed to catalyze substantial investments in clean technologies. Additionally, the EU seeks to mitigate the threat posed by Chinese manufacturers, who often leverage substantial subsidies to undercut European counterparts on pricing.

However, the agreement has raised concerns among some stakeholders regarding the absence of fresh financial commitments from the EU.

Critics argue that while the deal identifies key technologies for support, such as wind, solar, green hydrogen, energy storage, and nuclear, it falls short of providing the necessary financial backing to fully realize these objectives.