Clean Industrial Deal adopted without any assessment of corporate relocation risks

Brussels – Sustainability and competitiveness: the EU is legislating without carrying out impact assessments. This “careless” approach risks having repercussions, as highlighted by Ioan-Rareş Bogdan, an EPP MEP who sees a risk of business relocation due to excessive EU regulation, whilst the United States, by contrast, offers incentives to do business. In the parliamentary question submitted by the EPP representative to the Commission, there is no allegation of unfair competition on the part of the US. On the contrary, there are doubts regarding the EU executive’s approach.

“How will the Commission ensure that the ‘Clean Industrial Deal’ does not speed up relocation to the USA, given that it adds new administrative costs rather than providing direct cost reductions or compensation for the energy price gap?” Bogdan asks, concerned about “boomerang effects” linked to the strategy for a low-carbon industry. Furthermore, “Does the Commission have a quantitative impact study assessing how many companies in energy-intensive sectors could choose subsidies in the USA over the new compliance schemes proposed by the EU?“ 

The questions highlight the ill-considered approach of von der Leyen’s team. “A quantitative study predicting potential company choices to opt for subsidies in the US versus EU compliance schemes has not been performed by the Commission”, the Executive Vice-President responsible for Industry, Stéphane Séjourné, admitted. The strategy launched in Brussels is based on the assumption that companies will remain, as Séjourné himself suggests when he points out that the Clean Industrial Deal “is designed to strengthen the business case for decarbonisation and competitiveness in Europe, by reinforcing Europe’s industrial base, and, as a result, reducing the risk of relocation.” 

However, no analyses or assessments have been produced, which once again raises the question of the European Commission’s working methods. This issue is not confined to the von der Leyen team. It is indeed the case that the current EU executive introduced new rules for the automotive sector without consulting businesses, later having to convene an automotive roundtable. Likewise, the previous von der Leyen Commission adopted migration rules without any impact assessment. But “quick-fix” legislation was also a hallmark of the Juncker Commission, during whose term of office one in two measures was adopted without assessing the consequences or scope of the new rules.