Green Industrial Policy in Europe: Past, Present, and Prospects

This paper critically examines the concept of green industrial policy in the context of the European Union (EU) under the European Green Deal-an initiative aimed at achieving climate neutrality by 2050. While the European Green Deal emphasizes climate targets, it did not fully address the economic and social sustainability dimensions of the green transition. The EU, considering the growing concerns over the potential consequences of the United States Inflation Reduction Act (IRA) and China's assertiveness in the value chains of clean technologies, reassessed its green industrial policy approach in the Net Zero Industry Act proposal. Considering these developments, this study delves into the historical evolution of European industrial policy, evaluates the current proposals presented by the European Commission, and puts forth principles and recommendations for a green industrial policy that can effectively facilitate the green transition within the EU.