Another week, another report on EU cleantech and industrial competitiveness. This time, it’s the Cleantech Reality Check from Breakthrough Energy and Cleantech for Europe—a well-structured, concise, and data-packed assessment of where European manufacturing stands. Some solid points, some wishful thinking, and a few glaring omissions.
What I Support
🔹 High energy costs are killing EU manufacturing. Europe’s industrial power prices are 2-3x higher than those in the U.S. and China. The report highlights this, but it stops short of prescribing solutions. If renewables are supposed to be cheaper than fossil fuels, why isn’t Europe proving it?
🔹 Prioritizing EU content. If you want local industry, you need policy-driven stimulus. Russia built a wind turbine manufacturing sector from scratch by tying local content requirements to lucrative tariffs. If Europe wants to scale clean manufacturing, it should set hard requirements and provide good stimuli.
What I Don’t Support
❌ Electrolysers are not the key to EU manufacturing competitiveness. The EU has poured billions into hydrogen, hoping for an economy that still hasn’t materialized. This fixation is a dead end. Time to cut losses and focus on what actually works.
❌ Batteries: The demand illusion. The report claims there’s strong demand and offtakes for EU battery manufacturers. Reality check: There is no robust market outside of VW, Stellantis, and BMW—and these players are actively looking for (misguided) alternatives.
What’s Missing?
🚗 Where are the EU’s pure-play EV manufacturers? The report acknowledges the lack of a vertically integrated European EV company but ignores the need to build one.
🤝 No mention of Asian partnerships. If Europe wants to scale battery manufacturing, it must collaborate with Korean and Japanese players. There’s no way around this, and yet the report sidesteps the issue entirely.
Europe needs to make some hard decisions and reports like this help to fuel the discussion. Apart from batteries and electrolyzers, the report also considers the situation in steel manufacturing. I have no first-hand knowledge there, so would love to hear your thoughts!