Opinion: SGIs in the Clean Industrial Deal

Executive Summary

SGIs are essential to the development of Net-Zero industries.

• By providing the services which industries require, such as green energy, clean water, circular waste management and sustainable public transport, SGIs constitute the basis of the growth and competitiveness of the industries which contribute to the green transition.            
• At the same time, they independently develop innovative technologies which allow for the creation of a circular economy and reduction of import dependencies for raw materials.

Because Net-Zero industries rely on SGIs to innovate, upscale, and grow, it is not surprising that many of the challenges to upscaling Net-Zero industries mentioned in the Draghi Report and the Commission’s stocktaking of the Clean Transition Dialogues relate directly to the provision of SGIs. These include high energy prices, a lack of integrated value chains, insufficiently developed infrastructures, and high important dependencies for critical raw materials. In order to overcome them, the Clean Industrial Deal must:

• Strengthen the SGIs that provide clean energy production, storage and transmission;
• Create IPCEIs covering infrastructures and the entire value chain, involving SGIs;
• Support SGIs that recycle critical resources needed for production, including critical raw materials.

SGIs are at the forefront of the creation of a circular single market. Many SGIs recycle resources from waste and feed them back into the value chain, such as phosphorus and nitrogen from wastewater, biomethane from waste to energy systems, and black mass from batteries. However, these secondary products can often not compete with the lower price of primary products, and a lack of uniform technical norms and standards means that recycling is still unnecessarily complicated and costly. Therefore, the following elements must be part of the Clean Industrial Deal:

• Producers must be incentivized to use secondary products for a functioning circular single market to be created. This should be achieved by establishing recycled content criteria, which could take the form of tradeable quotas.
• Products should be made ‘recyclable by design’ through the creation of uniform technical norms and standards and by harmonising rules on the use of recycled products across Member States.

As specified in Article 14 TFEU, SGIs play a central role in promoting social, territorial and economic cohesion in the EU. Therefore, SGIs should be included as an essential pillar of the Clean Industrial Deal to ensure that it does not only increase the overall competitiveness of the EU but also strengthens the single market and local economy in all European territories. This will boost social cohesion and the long-term sustainability of Europe’s economic growth and competitiveness. For this reason, SGIs must be considered as a structural component of Europe’s competitiveness rather than as actors which only come into play in situations of market failure.