EU Prioritizes Made in Europe for Public Procurement in Strategic Industries
The European Union (EU) has decided to prioritize Made in Europe products in public procurement for strategic industries such as solar energy and electric vehicles. Ursula von der Leyen, the President of the European Commission, announced this decision during her speech to the European Parliament on the 22nd of November. She emphasized the need to refocus efforts on supporting clean technology products produced in Europe, which include wind power, solar energy, batteries, and electric vehicles.
Von der Leyen explained that the public procurement market within Europe amounts to 14% of the EUs Gross Domestic Product (GDP). Given that this represents a significant financial tool controlled by the governments of European countries, it is argued that these funds should be allocated to European-made products. While it may be challenging to mandate a 100% requirement for European products in public procurement, it is likely that preference will be given to them.
This initiative comes against the backdrop of intensifying global competition in the clean technology sector. As of 2022, the export of clean technology products from the EU reached 80 billion euros (approximately 133.55 trillion won), marking a threefold increase over six years. However, Chinas clean technology exports are currently double that of the EU, posing a significant risk for European companies as they face increasing pressure in both domestic and international markets.
The solar energy industry serves as a prime example of this challenge. Von der Leyen pointed out that Europe once led the world in solar technology but has since lost its competitive edge due to Chinese companies leveraging government subsidies to launch aggressive pricing strategies, which have undercut the European solar industry.
Concerns regarding supply chain risks and economic security have also played a role in this decision. Europe faced an energy crisis after the supply of Russian gas was disrupted due to the ongoing conflict between Russia and Ukraine. Von der Leyen stated that it is crucial for Europe to secure its energy supply and produce more essential goods domestically to mitigate such risks in the future.
In summary, the EUs commitment to favoring European-made products in public procurement for strategic industries aims to bolster the region’s clean technology sector, enhance economic resilience, and address the competitive threat posed by global players, particularly in light of recent geopolitical challenges.
Von der Leyen explained that the public procurement market within Europe amounts to 14% of the EUs Gross Domestic Product (GDP). Given that this represents a significant financial tool controlled by the governments of European countries, it is argued that these funds should be allocated to European-made products. While it may be challenging to mandate a 100% requirement for European products in public procurement, it is likely that preference will be given to them.
This initiative comes against the backdrop of intensifying global competition in the clean technology sector. As of 2022, the export of clean technology products from the EU reached 80 billion euros (approximately 133.55 trillion won), marking a threefold increase over six years. However, Chinas clean technology exports are currently double that of the EU, posing a significant risk for European companies as they face increasing pressure in both domestic and international markets.
The solar energy industry serves as a prime example of this challenge. Von der Leyen pointed out that Europe once led the world in solar technology but has since lost its competitive edge due to Chinese companies leveraging government subsidies to launch aggressive pricing strategies, which have undercut the European solar industry.
Concerns regarding supply chain risks and economic security have also played a role in this decision. Europe faced an energy crisis after the supply of Russian gas was disrupted due to the ongoing conflict between Russia and Ukraine. Von der Leyen stated that it is crucial for Europe to secure its energy supply and produce more essential goods domestically to mitigate such risks in the future.
In summary, the EUs commitment to favoring European-made products in public procurement for strategic industries aims to bolster the region’s clean technology sector, enhance economic resilience, and address the competitive threat posed by global players, particularly in light of recent geopolitical challenges.
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