Discussion with 

• Elisabetta Cornago, Assistant Director, Centre for European Reform 

• Birgit Schwenk, Head of Division G II, Fundamental Issues – Economy and Social Affairs, Sustainability, Transport, Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety (BMUKN) 

• Marek Tiits, Research Director, Institute of Baltic Studies (IBS)  

• Chris Heron, Secretary General, E-Mobility Europe 

Europe faces the task of embedding climate neutrality in a coherent industrial strategy that strengthens European sovereignty, economic resilience and competitiveness. But can betting on clean technology actually help Europe to foster climate-neutral economic growth? What is needed politically to make this progress a reality? And how can European industrial, trade and investment policies harness climate action as a driver of sustainable growth and strategic autonomy? 

In Elisabetta Cornago’s view, clean industrial development in Europe is being held back by fear on the part of some stakeholders. While the European Commission pushes forward, national concerns about their traditional automotive industries being adversely impacted – in Germany and Italy, for example – slow down the process. However, she stresses that Europe is an open economy and that the idea of closing it off would be painful. Europe’s dependency on imported raw materials makes it vulnerable, so building more resilience is essential, but that takes time, she said.  

According to Birgit Schwenk, Europe’s unique selling point is its reliability, as world markets have changed dramatically. She hears from industry leaders that they are struggling but still prefer stability over drastic policy changes for secure investment. She called on the EU to become more flexible on subsidies. “If China subsidises its industry, we also have to subsidise in order to succeed,” she said. Marek Tiits added that more private capital is needed for the green transition, which – unlike digitalisation – is still mainly state-driven. 

Addressing the situation in smaller Central and Eastern European countries, Marek Tiits argued that more detailed market data – as provided by the EUKI’s Data-Driven Roadmaps for Catalysing Green Growth project – are key for these countries, because they can highlight business opportunities in low-carbon technologies. Smaller countries need to give more thought to export opportunities, reduce their import dependencies, find investors for clean technologies and focus on their energy security.  

Chris Heron highlighted that despite significant investments in electric mobility in Europe, e.g. in batteries, it is difficult to compete against China. “We have not put enough cash into our industries,” he said. In addition, Europe is often too slow in a rapidly changing world, due to the need to reconcile many different opinions. He cannot make out a consensus on how to deal with China yet and sees Europe as being at an inflection point: It has to focus on its electrification and needs Chinese technical expertise for that. But on what terms? He argues that Europe should not make it too hard for China to invest in Europe.  

It is a difficult balance to reach, remarked Elisabetta Cornago: More production in Europe serves our resilience and keeps Europe in control, whereas production elsewhere is cheaper. “We should also not forget that subsidies are public money,” she said. So under which conditions should they be provided?  

Birgit Schwenk sees a need to diversify Europe’s industry. Trade policy plays a key role here and negotiating trade agreements with other regions and cooperation with middle powers are crucial if we are to become less dependent on China, she said. The panel agreed that revising the rules and regulations is necessary to scale clean technologies and speed up Europe’s green transition.  

Finally, the social dimension of a green transition was put into focus. The workforce, e.g. in the automotive industry, will shrink, said Elisabetta Cornago. That would need to be addressed with specific measures similar to those applied via the Just Transition Fund for traditional coal mining regions. Birgit Schwenk added that Germany also considers this social dimension by subsidising electric vehicles, particularly for middle- and lower-income households.  

Additionally Birgit Schwenk emphasised three key roles for the EUKI community: exchanging best practices, acting as multipliers who can reach communities beyond conventional political communication, and providing policymakers with practical feedback on what works. She noted that these roles are essential and that she personally benefits from the community’s knowledge sharing.