Speech by President von der Leyen at the European Parliament Plenary on the preparation of the European Council meeting of 15 December 2022

1. European Commission - Speech
Speech by President von der Leyen at the European Parliament Plenary on
the preparation of the European Council meeting of 15 December 2022
Strasbourg, 14 December 2022
President, dear Roberta,
Minister,
Honourable Members,
It is exactly three years ago that I stood here in front of the Parliament, presenting the European
Green Deal. Europe was the first continent to set out a path towards climate neutrality. Other
countries had pledges, we had a plan. Back then, we were concerned for our industry because of the
unfair competition of heavy polluters. Today, only three years later, the competition we face has
radically changed. A global clean-tech race has started. That is what we wanted, that is what we
need. Because only when the most advanced economies compete for a net-zero future will we reach
our common goals – to limit global warming and to protect our children's future.
But this new competition environment also calls for a rethink on our side of how we support our
industry's green transition and strengthen its global leadership. That is what we will discuss
tomorrow at the European Council. And this is what I would like to focus on today. Let me look first
at the challenging situation our companies are facing today. Global gas supply remains tight because
of Russia's war of aggression. Russia has cut 80% of its pipeline-gas supply to the European Union in
the last eight months. But we have been able to compensate. We have diversified, we are saving
energy. We have boosted the roll-out of renewables. We are skimming off the super profits from
energy-producing companies to take the money to support vulnerable households and vulnerable
businesses. We agreed to buy gas together. And we put forward a market correction mechanism to
limit the spikes in gas prices. Our storages are filled. So as a result, we are safe for the winter. I
think we can be very proud of what we have achieved despite the Russian blackmail. And I would
like to take the opportunity to thank the Czech Presidency for what you have achieved in the last six
months. This is great and thank you very much for that.
Yet, all we have done comes at a cost. Cheap supplies of Russian energy were part of the business
model of many European industries. That model has been shattered by Russia's attack on Ukraine.
And the inconvenient truth is: That model will not come back. The International Energy Agency has
just reminded us that in the absence of Russian gas, Europe now faces structurally higher fossil fuel
import prices. So the only sustainable way for our SMEs and our industries is the transition to
renewable energy. Renewable energy is not only affordable but it is of course also home-grown. And
it creates good jobs here in Europe.
But this transition will not happen overnight, and global competition is getting tougher. Just look at
the United States. They have recently approved a significant investment plan, which also sets
standards for clean-tech sectors, the so-called Inflation Reduction Act. And let us be very clear: First
of all, supporting the clean transition is the right thing to do if you do it right – in a transparent
manner, in a spirit of cooperation, and in a way that ensures a level playing field. It should be a race
against time, not a race against each other. It should be a race to the top, not a race to the bottom.
Yet, there is a risk that the Inflation Reduction Act can lead to unfair competition. Three aspects are
particularly worrying: First of all, the ‘Buy American' logic, that underpins large parts of the IRA.
Second, the tax breaks, that could lead to discrimination. And third, the production subsidies, that
could disadvantage European companies. We need to address these issues. We need to give our
answer, our European IRA. And I see four main strands of action. First of all, we have to adjust our
own rules to facilitate national public investments in the transition. Second, we have to re-assess the
need of further European public investment in the transition. A third point, we have to work with the
United States to address some of the most concerning aspects of this law. And of course, the fourth
topic is: We have to further accelerate our transition to green energy.
To my first point: We need to nurture the future generation of industrial production – our own clean-
tech industrial base. This one we have to strengthen. We need to make sure that investment aid and

2. tax credits reach the concerned sectors more easily and faster. This is why in January, we will put
forward a new framework to accelerate the transition. It will make our state aid rules simpler and
faster for the years to come. And it will close the existing gap to target the whole value chain of
strategic green sectors, including large-scale deployment and the access to raw materials. This new
framework will, for example, allow Member States to take into account global conditions – not only
the European ones– when providing aid for certain clean-tech manufacturing products. That means,
for some greenfield investments, Member States can match the subsidies of third countries. This will
give an incentive to companies to continue to invest in the Europe Union and not to invest in the
United States, but to be here, to stay here and to invest in the European Union.
At the same time, we have to protect our Single Market from fragmentation and uncoordinated
responses. So our unity as a Single Market, as 27. And we all know, not all Member States have the
same capacity for large-scale investments in strategic sectors – the famous ‘deep pockets', they are
not everywhere. This leads me to my second point. We need a fair green transition in all of Europe.
So, to foster clean tech across Europe, we need complementary European funding. And here,
REPowerEU is our tool. REPowerEU is the vehicle that supports SMEs and industries, while they
transition towards cheaper and cleaner energy. And in this context, I really want to congratulate you,
and I am very glad that REPowerEU has been adopted this morning, so late this night. And it will
enter into force at the beginning of next year. This is a big step forward. Many thanks to that. This is
an enormous achievement here in the Parliament. It is good that we have REPowerEU now. I think,
at the same time, the need for acceleration for the renewables will also require a boost of
REPowerEU, so that we can properly address the new circumstances that have been created through
the IRA. This is for the short term.
In the medium term, however, I think we need a more structural solution. Because we want
European industry to keep leading in the green transition. This is why I introduced the idea of a
sovereignty fund. And I think the upcoming mid-term review of the MFF around summer will be a
good opportunity to put forward our proposal in more detail. The idea behind it is very simple:
Europe is a continent full of strengths. Our Single Market is unique. We have the largest Single
Market worldwide; we have a highly skilled workforce; we have world-class universities; we have a
tightly woven network of renowned research institutions. But we also need to galvanise our strong
European industrial power in the global fight against climate change. That calls for a common
European industrial policy with common European funding. I am speaking of beefing up the
resources available for upstream research, innovation and strategic projects at EU level. Just think of
hydrogen, semiconductors, quantum computing, AI, biotechnologies – that is where we have to
invest now. And for the first time, we will also bring European funding to our successful Important
Projects of Common European Interest. These are strategic investments to maintain our global
leadership in the clean-tech sector.
My third point: We are working very closely with the Biden administration on the most concerning
aspects of the IRA. And we are discussing how to jointly strengthen our clean energy industrial base.
And we need to make sure in these discussions that our respective incentive programmes will be
reinforcing each other, and that they do not come at the expense of each other. Think for example
about the topic of critical raw materials that are needed for the clean tech. Today, the production and
the processing – and we know all that – of some of the most urgently needed critical raw materials
are controlled by one single country, and that country is China. So we share the US's concern about
this strategic vulnerability – that we do have. One of the possible solutions to overcome this
monopoly that China has – without any doubt – would be, for example, to create a raw materials
club with the United States and with other partners with the aim to have reliability, transparency,
fair conditions, value that stays in the country where these raw materials are being extracted. And
we stand ready to work hard on all this to achieve this kind of joined forces and strengthen our
industrial base.
Finally, let us recall. All these actions serve for a bridge. It is the bridge for our clean tech industry to
transform from today's costly fossil fuel energy into the clean and affordable energy – the
renewables. Therefore, we need this investment now because these industries and our SMEs need
the support now, until we have again achieved an energy environment which is affordable, which is
clean and which is secure.
Honourable Members,
Let us never forget the bigger picture. A war is raging at the borders of our Union. Russia is
escalating its attacks against civilians and civilian infrastructure. And the brave people of Ukraine
need all our help. Therefore, it is not the time for a trade war with our closest partner and ally. It is
time for our democracies to join forces even more, to stand up for Ukraine. I am very glad that we
have now agreed for the next round of our EUR 18 billion financial package, which will reach Ukraine
early January. Putin's war of aggression will fail mainly for two reasons. The first one is of course the

3. enormous bravery and the enormous courage of the Ukrainian people. But the second reason is the
international community's remarkable unity. Therefore, let us stay strong, let us stand up for
Ukraine, let us be united.
Slava Ukraini.
Merry Christmas and long live Europe.
SPEECH/22/7727
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