EU mandating 'Made in Europe' label for green tech purchases
What's the story
The European Union (EU) is preparing to introduce "made in Europe" requirements for public procurement of key green technologies. The move, aimed at strengthening local industry and reducing dependence on Chinese imports, would apply to batteries, solar and wind components, and electric vehicles. The proposal comes as the EU seeks to bolster its industrial base amid high energy costs and cheaper Chinese imports.
Regulatory changes
New sourcing rules for government procurement
The draft European Commission proposal, set to be published next week, would establish new sourcing rules for government procurement of green technologies. Under these rules, battery systems purchased through public procurement would have to be assembled within the EU 12 months after the law comes into force. The battery management system and two other components would also have to be sourced from within the bloc.
Strategic shift
Stricter rules and EU's industrial strategy
After two years, the rules would become stricter, requiring the battery system itself to be Europe-made along with more of its core components, including cells. The draft proposal emphasizes that "the EU must act strategically to secure and further strengthen its industrial base." It also stresses the need for long-term competitiveness and ensuring that climate transition drives industrial prosperity instead of de-industrialization.
Market competition
EU's response to China's dominance in green tech
The EU is looking to reduce its reliance on China, which dominates the production of solar panels and batteries. The Asian giant is also increasingly competing in categories where Europe still has an edge, such as wind turbine manufacturing. The draft proposal highlights this as a "strategic warning signal," noting that the EU's share of global industry's gross value fell from 20.8% to 14.3% between 2000 and 2020.
Trade regulations
Proposed minimum shares for EU-made low-carbon goods
The proposal also suggests setting minimum shares in public contracts for EU-made low-carbon industrial goods. It would also need power cables and EV charging infrastructure to be Europe-made. Foreign direct investments over €100 million in strategic sectors will not be approved unless they meet new conditions on using Europe-made components and EU labor.