The Green Plan Industrial Deal: Strengths and Weaknesses, and Lessons for SAARC Countries


In February 2023, the European Union launched the Green Deal Industrial Plan, a strategic initiative aimed at eliminating energy dependence and fostering the production of clean energy to achieve carbon neutrality. This meticulously designed plan boasts numerous strengths, yet it also faces challenges that could impact its effectiveness and scope in the long term. Moreover, the Green Deal Industrial Plan serves as a valuable blueprint for Pakistan and other SAARC nations, highlighting the intrinsic link between socioeconomic advancement and environmental sustainability. This article will explore the various dimensions of the plan and their implications.

The Green Plan Industrial Deal: Strengths and Weaknesses, and Lessons for SAARC Countries

Goals and Objectives of the Deal

The Green Deal Industrial Plan aims to enhance EU production of net-zero technologies, aligning with environmental goals, and international cooperation to support the green transition. The details are given below.

Objectives of the Green Deal Industrial Plan 

The core objective of this plan is to cultivate an ecosystem that bolsters the EU’s production capabilities for the essential net-zero technologies and products, aligning with Europe’s ambitious environmental goals.

Foundation and Response to Global Challenges 

Building on the foundation of the European Green Deal and REPowerEU, the latter being a response to the 2022 Russian invasion of Ukraine aiming to end the EU’s reliance on Russian fossil fuels by 2030, the Green Deal Industrial Plan leverages the strengths of the EU Single Market.

Pillars of the Deal

The plan focuses on simplifying regulations, accelerating clean technology funding, developing skills for green jobs, and fostering international partnerships for the green transition. The details are given below.

Regulatory Simplification

The first pillar focuses on creating a more straightforward regulatory environment through the Net-Zero Industry Act. This act aims to set objectives for net-zero industrial capacity and establish a legal framework for rapid deployment. It supports critical European initiatives, streamlines permitting processes, and sets standards to facilitate the scaling up of technology across the Single Market. The Critical Raw Materials Act. and the redesign of the electricity market are also part of this framework to support the transition.

Finance and Investment

The second pillar accelerates finance and investment in clean technology within Europe. It leverages public finance to unlock private funding for the green transition and advances the European Capital Markets Union. The Commission is committed to supporting a green transition while ensuring fair competition. Updates to the Block Exemption Regulation and consultations with Member States on an enhanced aid mechanism will simplify the approval of Important Projects of Common European Interest (IPCEI).

Skill Development

The third pillar addresses skill development, recognizing that 35–40% of jobs may be affected by the green transition. The European Year of Skills emphasizes building skills for quality jobs. The Commission plans to propose Net-Zero Industry Academies to roll out up-skilling and re-skilling programs, combining a “Skills-first” approach with existing qualification-focused methods. This initiative will also facilitate the entry of third-country nationals into high-demand sectors of the EU labor market and coordinate funding for skill development.

International Cooperation

The fourth pillar builds on collaborations with the EU and the World Trade Organization to emphasize international cooperation and fair trade for the green transition. The Commission will expand the EU’s network of free trade agreements and establish the Critical Raw Materials Club to ensure global supply security and foster Clean Tech/Net-Zero Industrial Partnerships. Additionally, the Commission will protect the Single Market from unfair trade practices and foreign subsidies.

Strengths of the Deal

The strengths of the deal for EU is carbon neutrality by 2050, with significant reductions by 2030. Investing in clean technology is crucial for Europe's competitiveness and carbon neutrality, as outlined in the European Green Deal Industrial Plan. The details are given below.

The Roadmap to Carbon Neutrality and Enhanced Competitiveness

By 2050, the European Green Deal seeks to achieve carbon neutrality in Europe. By 2030, the EU must be climate neutral and cut greenhouse gas emissions by 55%, according to the European Climate Law.

Investing in Clean Technology for a Competitive Europe 

The creation and manufacture of clean technology for a net-zero economy is essential to Europe’s competitiveness. The European Green Deal Industrial Plan seeks to achieve carbon neutrality while enhancing the EU’s competitiveness through investments in clean technology.

Weaknesses of the Deal

The critics have highlighted the following issues with the deal.

Unclear and Biased

The Commission's definition of clean technology is so nebulous that many analysts and business associations are unsure which industries will make the cut. Others criticized the lack of attention given to industrial decarbonization and energy efficiency. The plan "is too light on key EU clean tech sectors, such as energy efficiency and insulation," according to E3G, a climate and energy think tank.

Lack of Finances

The Commission's green industrial plan pointed out finance as another weak point, despite von der Leyen designating "about €250 billion" from the bloc's REPowerEU initiative, which was approved last year in response to Russia's invasion of Ukraine. Von der Leyen made reference to the "European Sovereignty Fund" in the long run, which will be presented this summer as part of a larger mid-term EU budgetary review. It was first announced in December of last year. In the meantime, the Commission began consulting EU member states on whether to loosen EU state aid regulations, which presently restrict governments' power to subsidize their sector. However, some claimed that doing so would unfairly favour nations like Germany and France, the only ones in Europe having the financial muscle to support their industries.

Furthermore, there is also a problem of regional disparities within EU. This point can be substantited by The Bertelsmann Stiftung

The green transition comes at a time when economic convergence in the EU has been improving, but regional disparities remain. According to the European Commission’s 8th Cohesion Report released in February 2022, capital and metropolitan regions in the EU are leading the way in GDP growth, while less developed regions, predominantly in the south but also in central Europe, have stagnated or declined economically.


Sustainable Development in SAARC Nations: Lessons from the Green Deal Industrial Plan

SAARC countries struggle with fossil fuel dependence, hindering a shift to a low-carbon economy. Additionally, Pakistan's CPEC offers sustainable development opportunities, particularly in climate change efforts. Innovation is vital for emission reduction, and strategic investments are needed for climate resilience in both the EU and SAARC nations.

Environmental Challenges and Opportunities 

SAARC nations face significant environmental and sustainability challenges. The region’s dependence on fossil fuels is a major source of emissions, hindering the transition to a low-carbon economy. Moreover, the current investment levels in clean energy are insufficient, and environmental regulations often lack the rigor needed to effectively combat pollution.

CPEC’s Role in Pakistan’s Sustainable Development 

Pakistan has the opportunity to develop a range of sustainable practices through the China-Pakistan Economic Corridor (CPEC). This initiative could greatly influence Pakistan’s efforts to address climate change. As noted by Romina Khurshid Alam in 2023, the collaboration under CPEC in energy, transport, agriculture, and industrial production has already contributed to Pakistan’s green and sustainable growth.

Innovation as a Driver for Change 

The Green Deal Industrial Plan emphasizes the critical role of innovation, built upon the latest technological advancements. This underscores the need for SAARC countries to invest in research and development, fostering new technologies that can reduce emissions and enhance climate resilience.

The Need for Strategic Investment 

Significant investment is essential for the success of the Green Deal Industrial Plan in the European Union. Similarly, SAARC nations must commit to investing in climate change mitigation and adaptation efforts to secure a sustainable future.

The Green Plan Industrial Deal: Strengths and Weaknesses, and Lessons for SAARC Countries


In fine, The Green Deal Industrial Plan, launched by the European Union in February 2023, aims to eliminate energy dependence and promote clean energy production to achieve carbon neutrality. The plan focuses on regulatory simplification, finance and investment, skill development, and international cooperation. It aims to create a more straightforward regulatory environment through the Net-Zero Industry Act, accelerate clean technology investment, and promote international cooperation. The plan also aims to achieve carbon neutrality by 2050 and enhance Europe's competitiveness through investments in clean technology. However, it faces challenges such as unclear definitions of clean technology, lack of finance, and a lack of focus on key EU clean tech sectors. The plan also highlights the importance of innovation, investment in research and development, and strategic investment in climate change mitigation and adaptation efforts for sustainable development.

Links and Resources for The Green Plan Industrial Deal

Post a Comment

Previous Post Next Post