EU could loosen state aid regulations to push investment on renewables

The decision comes as an answer to Joe Biden’s green subsidy scheme in the U.S. and aims to redirect part of the Covid-19 recovery fund towards tax credits.

The European Union is considering softening its regulations for renewable energy investment after the U.S. Government announced the $369 billion Inflation Reduction Act. The initiative, which aims to largely develop alternative energy assets, prompted European policymakers to pressure the confederation into stepping up its strategy as an answer.

A report by The Financial Times states that the European Commission seeks to loosen state aid rules to gather interest in investing into green industries’ production facilities. However, the media outlet clarifies that EU’s member states are divided on introducing new rules and for how long.

The news is also proof of the effects that Russia’s invasion of Ukraine is having on the European energy system, as Moscow’s gas supply for the rest of Europe continues to take its toll. Reportedly, draft proposals hint at a €800 billion redirection of the Covid-19 recovery fund towards tax credits.

The site also mentions an intention to set new targets for green industrial capacity as well as simplifying the approval process for renewables projects. It appears that the Union seeks to increase the commission’s level of scrutinisation for deals under state aid rules.