WEBVTT - Does Europe Need to Become More Protectionist? 0:00:00.480 --> 0:00:03.480 This is Dana Perkins and you're listening to Switched on 0:00:03.800 --> 0:00:07.640 the BNAF podcast. BNF hosts a series of summits and 0:00:07.680 --> 0:00:10.600 forums around the world, and some of these events take 0:00:10.640 --> 0:00:14.080 on distinct themes within the energy transition. Our summit in 0:00:14.160 --> 0:00:17.440 Munich was a great example where the conversations on stage 0:00:17.600 --> 0:00:21.639 focused on industrial decarbonization. On today's show, we're bringing you 0:00:21.760 --> 0:00:25.000 the opening panel from the BNF Summit in Munich, which 0:00:25.040 --> 0:00:28.480 took place earlier in June. The panel was titled the 0:00:28.520 --> 0:00:32.280 Next Decade of Clean Industry Manufacturing Does Europe need to 0:00:32.320 --> 0:00:35.760 become more protectionist? The panelists were open about their views. 0:00:35.840 --> 0:00:39.520 They discussed policy from import tariffs to domestic content targets 0:00:39.680 --> 0:00:42.559 and whether these policies recently are showing a sign of 0:00:42.600 --> 0:00:45.960 a more protectionist stance coming out of the EU when 0:00:46.000 --> 0:00:48.680 it comes to manufacturing. They get into how these could 0:00:48.760 --> 0:00:52.919 impact clean energy and electric vehicles. On this panel, we 0:00:52.920 --> 0:00:56.640 were joined by Herbert Diese, Chairman of Infinion and the 0:00:56.640 --> 0:01:01.120 Mobility House, alongside Yasek Trucinsky, Deputy head of Unit net 0:01:01.200 --> 0:01:05.039 zero Industries Sustainable in Circular Products at the European Commission, 0:01:05.360 --> 0:01:09.600 along with Jan Vincent, Chief Executive officer of Automotive Sales Company, 0:01:09.800 --> 0:01:14.120 and Hawkan Voldaal, chief executive officer at Nell Hydrogen. The 0:01:14.160 --> 0:01:17.840 conversation was moderated by John Moore, chief executive officer at 0:01:17.840 --> 0:01:20.680 Bloomberg and EF. To find out more about BNF's events 0:01:20.720 --> 0:01:22.600 and to see some of the videos coming out of 0:01:22.640 --> 0:01:26.919 this and other events, head to BNEF dot com Forward 0:01:26.920 --> 0:01:29.440 Slash Summit. But now let's listen to this panel and 0:01:29.480 --> 0:01:37.520 hear what they think about the future of clean industry manufacturing. 0:01:43.240 --> 0:01:46.840 So the energy transition, it's a two hundred trillion dollar opportunity, 0:01:46.920 --> 0:01:52.480 it's multidecade. Also, you know, three four decades, the question 0:01:52.600 --> 0:01:56.480 of how will regions change, how will they be transformed 0:01:56.880 --> 0:02:00.920 is on everyone's lips. The IRA sort of eighteen months 0:02:00.960 --> 0:02:03.960 or so ago really changed the game and really raise 0:02:04.040 --> 0:02:08.720 the focus on manufacturing and what should be built in 0:02:09.120 --> 0:02:11.320 what region. So that's really what we're talking about here 0:02:11.360 --> 0:02:14.800 is how does Europe now position itself to be a 0:02:14.840 --> 0:02:19.000 winner and a leader in the new clean economy. And 0:02:19.320 --> 0:02:21.240 we're really going to talk about this in terms of 0:02:21.800 --> 0:02:24.720 two questions. One is what should be made in Europe? 0:02:24.880 --> 0:02:29.079 How do we decide what gets made? And then we're 0:02:29.120 --> 0:02:31.720 going to talk about trade and then how should things 0:02:31.760 --> 0:02:35.119 be bought and sold and traded from Europe with other 0:02:35.440 --> 0:02:38.760 parts of the world. So first off, I am going 0:02:38.800 --> 0:02:43.440 to talk to as Yes from European Commission about the 0:02:43.480 --> 0:02:46.400 net Zero Industry Act. So it's popularly described as the 0:02:46.520 --> 0:02:49.800 response to IRA. Maybe you could say a little bit 0:02:49.840 --> 0:02:53.120 about the act, the goal of the act and the 0:02:53.200 --> 0:02:53.960 key features. 0:02:54.800 --> 0:02:55.320 Thanks a lot. 0:02:55.440 --> 0:02:58.200 Indeed, it's part of the response, I would say. So 0:02:58.240 --> 0:03:00.760 the Nazer Industry Act, it's all about scaling up the 0:03:00.800 --> 0:03:05.240 production in the EU of nazero technologies solar, pv heat pumps, 0:03:05.240 --> 0:03:08.720 wind turbines and so on. It enters into force next month. 0:03:09.960 --> 0:03:13.320 This objective of scaling up production is quantified. We want 0:03:13.360 --> 0:03:16.720 to ensure that by twenty thirty at least forty percent 0:03:16.880 --> 0:03:20.680 of those technologies that we deploy in Europe are made here. 0:03:20.919 --> 0:03:23.079 This is the kind of a minimum that takes into 0:03:23.120 --> 0:03:25.880 account that some of these technologies like solar we are 0:03:26.000 --> 0:03:29.840 very low today, or some of the components like magnets 0:03:29.880 --> 0:03:30.960 for wind turbines. 0:03:31.200 --> 0:03:31.440 Two. 0:03:32.960 --> 0:03:36.640 Now, for other technologies where we already have a big 0:03:36.680 --> 0:03:39.120 market share, like heat pumps or wind turbines, we want 0:03:39.160 --> 0:03:42.200 to maintain that market share as the deployment grows. And 0:03:42.280 --> 0:03:45.760 that means that in absolute terms, since this deployment will 0:03:45.760 --> 0:03:50.119 have to grow, also the manufacturing by twenty thirty will 0:03:50.160 --> 0:03:53.360 have to be scaled up significantly. Very concretely, that means 0:03:53.560 --> 0:03:56.280 that for wind turbines we want to have an increase 0:03:56.320 --> 0:03:59.680 of factor three by twenty thirty, for batteries factor seven, 0:04:00.040 --> 0:04:03.800 for solar factor twenty And of course this is a 0:04:03.840 --> 0:04:07.160 big challenge, but we are setting in place the right 0:04:07.240 --> 0:04:09.800 rules to support that. The Nazer Industry Act is the 0:04:09.840 --> 0:04:12.040 central piece of that. And I don't have the time here, 0:04:12.040 --> 0:04:14.760 of course to present the datayls, just to mention two things. 0:04:15.280 --> 0:04:18.960 One thing permitting we have to make sure that the 0:04:19.000 --> 0:04:23.000 ease of doing business is really top notch. We heard 0:04:23.120 --> 0:04:25.640 in Europe in the past that some of those giga 0:04:25.640 --> 0:04:28.400 factories we're waiting for five years to get the right permits. 0:04:28.600 --> 0:04:31.520 Now public authorities will have from nine to eighteen months 0:04:31.520 --> 0:04:35.279 to deliver the permits. Second element, access to markets. By 0:04:35.320 --> 0:04:40.520 access to markets, we mean auctions for green power, public procurement. 0:04:40.120 --> 0:04:41.320 Subsidies to households. 0:04:41.600 --> 0:04:44.640 For all of those schemes, public authorities will have to 0:04:44.640 --> 0:04:48.640 make sure that through eligibility criteria or award criteria. They 0:04:48.760 --> 0:04:53.800 favor a diversified supply chain, so not everything from China, 0:04:54.520 --> 0:04:57.800 but diversified. These are not local content requirements. This can 0:04:57.839 --> 0:05:01.720 be US or other entities, but also so very specifically 0:05:02.040 --> 0:05:05.080 for procurement, authorities will have to ensure that not more 0:05:05.120 --> 0:05:08.840 than fifty percent of the contract value, including for solar PV, 0:05:09.520 --> 0:05:12.400 would come from a single source of supply on which 0:05:12.400 --> 0:05:16.040 we depend in this case China. Last point I would 0:05:16.040 --> 0:05:18.600 like to make in terms of the IRA comparison. A 0:05:18.640 --> 0:05:20.960 lot has been said about the lack of funding, but 0:05:21.120 --> 0:05:23.799 here this is not the Nager Industry Act, but other elements. 0:05:23.839 --> 0:05:26.280 We have relaxed state aged rules specifically for. 0:05:26.240 --> 0:05:31.120 That objective of manufacturing nazero technologies. As much as fourteen 0:05:31.160 --> 0:05:33.960 billion euros have been approved so far by the Commission 0:05:34.000 --> 0:05:35.840 for those schemes and we have to make sure that 0:05:35.880 --> 0:05:36.839 they are now deployed. 0:05:37.120 --> 0:05:38.960 Also for private capital. 0:05:39.279 --> 0:05:42.680 I have looked at the numbers venture capital this year 0:05:42.839 --> 0:05:48.800 three billion euros invested in or committed in those projects 0:05:48.800 --> 0:05:52.920 compared to four in the US. This is narrowest gap 0:05:53.000 --> 0:05:56.160 since the IRA was put in place. So things are 0:05:56.160 --> 0:05:58.560 going in the right direction, although of course there are 0:05:58.560 --> 0:05:59.480 major challenges that. 0:05:59.440 --> 0:06:04.080 Had right and those sort of relaxing state aid et cetera. 0:06:04.440 --> 0:06:07.599 The're sort of and some of the investment versus the 0:06:07.640 --> 0:06:10.800 sort of tax credit approach that the IRA is put 0:06:10.839 --> 0:06:11.239 in place. 0:06:11.720 --> 0:06:15.560 Yes, well, indeed, I mean we also I think one 0:06:15.640 --> 0:06:17.520 conclusion that we drove from the IRA is that we 0:06:17.600 --> 0:06:21.960 have to really simplify the way we channel investment supporting 0:06:22.000 --> 0:06:24.640 the EU, and so we have to move towards more 0:06:24.680 --> 0:06:27.960 like contracts. For difference, if you look at what France 0:06:28.120 --> 0:06:31.520 is doing for supporting manufacturing of batteries or solar pvs 0:06:31.600 --> 0:06:34.680 also through tax credits. So we are, you know, joining 0:06:34.720 --> 0:06:38.080 conclusions from the way the US is doing and trying 0:06:38.120 --> 0:06:39.880 to accelerate things here as well. 0:06:40.120 --> 0:06:42.520 Okay, thank you and Herbert. 0:06:42.520 --> 0:06:44.920 You've been involved in many different parts of this, as 0:06:44.960 --> 0:06:47.839 you mentioned, you've been involved in solar for a very 0:06:47.880 --> 0:06:52.880 long time and now you know also industry batteries, et cetera. 0:06:54.360 --> 0:06:57.279 What's your view in terms of Europe and sort of 0:06:57.279 --> 0:07:00.480 where it can be really competitive and so what should 0:07:00.520 --> 0:07:03.160 be done to make that realized? 0:07:04.440 --> 0:07:07.000 I think, first of all, and it is probably something 0:07:07.080 --> 0:07:09.560 very prerogative. I think we should be very very happy 0:07:09.600 --> 0:07:13.000 that China did that. They started very early. They probably 0:07:13.000 --> 0:07:16.280 invested more in renewables than the rest of the world together. 0:07:17.240 --> 0:07:21.880 They took over from Germany solar twenty twelve, and Germany 0:07:22.000 --> 0:07:24.680 was giving it up, and I think there was would 0:07:24.800 --> 0:07:28.560 be no other nation being able to scale it up 0:07:28.640 --> 0:07:32.200 so fast and to make it so cheap. And that's 0:07:32.240 --> 0:07:37.240 that's the same for solar. For batteries, EBIs let's wait 0:07:37.320 --> 0:07:40.520 and see. But wind for sure on sure wind off, 0:07:40.520 --> 0:07:44.320 sure wind may be And I think that's very good 0:07:44.320 --> 0:07:48.000 news for the energy transition because only China made it 0:07:48.080 --> 0:07:53.440 possible that now we have a basically a ban on 0:07:53.640 --> 0:07:58.280 coal fired plants in India, not because the Indians want 0:07:58.360 --> 0:08:00.600 to save the world, but solar is so much cheaper, 0:08:01.120 --> 0:08:03.160 and I think in hindsight, and there's. 0:08:03.000 --> 0:08:04.920 Probably also a bit provocative here. 0:08:05.480 --> 0:08:10.440 In handsight, we might say that China basically stopped climate 0:08:10.520 --> 0:08:15.160 change in handsight in ten or fifteen years. So now 0:08:15.280 --> 0:08:17.720 on the other side, yes, there's a lot of value 0:08:17.760 --> 0:08:22.640 add in China technology, in China scale and those industries 0:08:22.680 --> 0:08:25.440 are growing fast, and we are losing out on our 0:08:25.520 --> 0:08:29.120 participation in that value now because solar is said to 0:08:29.160 --> 0:08:32.839 become more important than our automotive industry by twenty thirty 0:08:32.920 --> 0:08:35.720 or thirty five. So this is a really big chunk 0:08:35.800 --> 0:08:39.120 of industrial meat which is to be newly reparted. 0:08:39.160 --> 0:08:40.920 So it's a concern I understand. 0:08:40.960 --> 0:08:43.800 That's why I'm still filing to bring solar back to Europe, 0:08:44.000 --> 0:08:46.560 which I think would make a lot of sense. But 0:08:46.679 --> 0:08:49.319 first of all, I think a great job by China, 0:08:49.480 --> 0:08:55.079 and don't let's say compromise it now with input duties, 0:08:55.080 --> 0:08:58.480 because that will make solar more expensive. Heb is more expensive, 0:08:58.520 --> 0:09:01.440 better is more expensive, and that will then slow down 0:09:01.520 --> 0:09:03.240 the energy energy transition. 0:09:03.360 --> 0:09:06.439 So that's that's the wrong way the. 0:09:07.559 --> 0:09:08.920 So what'should Europe do you? 0:09:09.880 --> 0:09:11.680 I'm I think you know we should. 0:09:11.720 --> 0:09:13.880 We should And if you look in those industry and 0:09:14.200 --> 0:09:17.640 SOLA have deep insights because I know most of the 0:09:17.720 --> 0:09:21.720 of the suppliers. Yes, China did a great job, but 0:09:22.160 --> 0:09:23.600 they're living poorly from it. 0:09:24.360 --> 0:09:25.800 Half of the solar. 0:09:26.440 --> 0:09:31.520 Energy manufacturers aren't aren't earning any money. The others are 0:09:32.120 --> 0:09:35.920 borderline when it comes to cash flows, and the same 0:09:36.040 --> 0:09:38.840 applies to batteries. There are two very profitable ones, which 0:09:38.880 --> 0:09:42.079 is COETL, but the rest of the battery manufacturers are 0:09:42.520 --> 0:09:43.720 making huge losses. 0:09:44.240 --> 0:09:44.520 Uh. 0:09:44.559 --> 0:09:46.840 And if you look then in the value chain, then 0:09:47.040 --> 0:09:49.920 in the value chain of solar, the solar cell and 0:09:49.960 --> 0:09:58.199 the module are not profitable. But then downstream selling, reselling, installing, 0:09:58.880 --> 0:10:02.640 running the solar manners is usually profitable. And this business 0:10:02.640 --> 0:10:07.280 normally is in Western hands in Europe. So I think 0:10:07.320 --> 0:10:10.640 it's a situation where which we can we can live on. 0:10:10.720 --> 0:10:14.240 Surely what we should do is encouraged to Chinese to 0:10:14.280 --> 0:10:16.079 come here and build up plants here in. 0:10:16.040 --> 0:10:19.000 Europe, okay, and then you'd have Europe focus on the 0:10:19.000 --> 0:10:22.160 downstream applications and integration and those kinds. 0:10:22.160 --> 0:10:24.480 And the other thing is but I just have been 0:10:24.840 --> 0:10:30.000 telling China is very strong in if it's not too 0:10:30.040 --> 0:10:33.319 complex to max all ourselves, which is a technology now 0:10:33.360 --> 0:10:36.040 fifty years or basically to refine. 0:10:35.600 --> 0:10:37.760 That and make it even better day by day. 0:10:39.000 --> 0:10:42.080 It's very difficult to compete against China with sixty percent 0:10:42.120 --> 0:10:48.520 of the world market now, with really extreme competition from entrepreneurs. 0:10:48.679 --> 0:10:53.240 When it becomes more complex, for instance, no software which 0:10:53.280 --> 0:10:58.800 makes use which combines the cars with the renewable energy 0:10:58.800 --> 0:11:00.760 flexible energy market they don't have. 0:11:00.880 --> 0:11:04.439 So the more sophisticated, the more complex the. 0:11:04.440 --> 0:11:07.880 Solutions become, the more Europe and the US have a 0:11:08.000 --> 0:11:10.720 chance to compete and probably have an advantage to compete. 0:11:10.760 --> 0:11:12.679 So we should do what we can do best, and 0:11:12.760 --> 0:11:16.240 we should have China making what they can do cheapest 0:11:16.280 --> 0:11:17.160 than inco quality. 0:11:17.440 --> 0:11:19.440 Okay, so I'm going to ask two people who are 0:11:19.440 --> 0:11:25.120 definitely involved in the manufacturing side and not just downstream. So, yeah, 0:11:25.240 --> 0:11:27.400 what's your thoughts in terms of what should Europe be 0:11:27.480 --> 0:11:30.720 doing to be to have a sort of strong, healthy, 0:11:31.320 --> 0:11:35.200 clean green industry in the future. 0:11:35.920 --> 0:11:39.040 Well, the first point is I would agree with your 0:11:39.080 --> 0:11:42.160 point of view. I don't know if we have to 0:11:42.240 --> 0:11:45.800 be happy with the Chinese supremacy, but it's a fact. 0:11:46.080 --> 0:11:51.160 It's a fact that on that way side, China is leading. 0:11:51.760 --> 0:11:56.280 China is leading the pack. I didn't say that, and 0:11:56.520 --> 0:12:01.040 that's the reason why a SEC what's created three four 0:12:01.120 --> 0:12:06.000 years ago. We have to acknowledge that for the immobility 0:12:06.320 --> 0:12:10.720 E affordable mobility, we can't rely on the supply which 0:12:11.200 --> 0:12:14.280 would be one hundred percent an Asian one, not to 0:12:14.320 --> 0:12:17.480 say you're Chinese one. So there's a need for there's 0:12:17.480 --> 0:12:21.880 a need for Europe to to build a strong battery 0:12:22.440 --> 0:12:28.360 uh industry, and that's what Norswall starts a few years ago. 0:12:28.480 --> 0:12:30.920 That's what we are doing nowadays with the with the 0:12:31.000 --> 0:12:33.839 ramp up or for first the first Giga factory. 0:12:34.679 --> 0:12:37.680 And that's for resilience. You're saying, sorry, that's for resilience. 0:12:37.720 --> 0:12:40.840 So you're not reliant on just sort of point sources. 0:12:40.920 --> 0:12:41.880 Yeah, yeah, yeah. 0:12:41.920 --> 0:12:46.439 So it's not to say that we are immediately competitive. 0:12:46.720 --> 0:12:49.079 There is there is a There is clearly an issue. 0:12:50.559 --> 0:12:53.680 All strong believe is that we shouldn't rely on tariffs. 0:12:53.760 --> 0:12:58.440 We shouldn't rely on tariffs because tariffs will will create 0:12:58.520 --> 0:13:02.320 an illusion in in the European market, an illusion to 0:13:02.360 --> 0:13:07.760 be protected. The customers will see higher prices. So we 0:13:07.880 --> 0:13:10.280 believe that we have to work hard. We have to 0:13:10.320 --> 0:13:12.720 work hard in order to catch up. And when we 0:13:12.760 --> 0:13:18.760 look at the the EV market for today, we've seen 0:13:19.080 --> 0:13:22.720 and it has been previously mentioned, we've seen a slow 0:13:22.800 --> 0:13:26.599 down of the growth. It's not stopping, it's not declining, 0:13:26.720 --> 0:13:30.040 but it's slowing down. And it's slowing down because the 0:13:30.480 --> 0:13:33.640 affordability of the e cars is not sufficient. 0:13:33.920 --> 0:13:35.920 So we need to we need to increase. 0:13:36.679 --> 0:13:39.120 We need to decrease the cost of the of the 0:13:39.200 --> 0:13:41.880 of the of the batteries. We need to decrease the 0:13:41.920 --> 0:13:45.920 cost of the E cars. And for that one, I 0:13:46.200 --> 0:13:54.839 strongly believe on partnerships within Europe, partnerships between labs, universities, 0:13:55.559 --> 0:13:58.320 in thus world companies. That's what we that's what we 0:13:58.360 --> 0:14:01.240 are doing in order to be able to catch up. 0:14:01.559 --> 0:14:05.360 And the last point, when we when we consider the 0:14:06.240 --> 0:14:11.200 let's say low cost solution for batteries, UH, we're not 0:14:11.360 --> 0:14:15.240 that far from a technological point of view at the time, 0:14:15.320 --> 0:14:19.400 being from A from A from Chinese companies, So it's 0:14:19.520 --> 0:14:23.920 we're not We're not ten years, tenures behind, one or 0:14:23.920 --> 0:14:26.760 two years behind, so it's possible to catch up. 0:14:27.600 --> 0:14:30.480 And the EV slow down is that causing you to 0:14:30.480 --> 0:14:34.040 to to sort of change the speed with which you're moving. Sorry, 0:14:34.280 --> 0:14:37.120 the sort of slow down in ev uptake is that 0:14:37.360 --> 0:14:40.200 is that having an impact on well. 0:14:40.120 --> 0:14:40.600 I mean. 0:14:41.920 --> 0:14:44.920 Investing in a in a giga factory is a huge cost. 0:14:45.120 --> 0:14:47.960 I mean it's a fifteen gig out hour does cost 0:14:48.040 --> 0:14:51.560 you one billion euros. So ans we need to be 0:14:51.760 --> 0:14:55.960 we need to be cautious under timing of of investment. 0:14:56.720 --> 0:14:57.080 Uh. 0:14:57.160 --> 0:14:59.920 And second point, which are the reasons for the slowdown 0:15:00.080 --> 0:15:02.720 of the market, They are very simple. The EV car 0:15:02.840 --> 0:15:05.640 is too expensive, very simple. I mean, if you look 0:15:05.640 --> 0:15:10.560 at the the thousand market in Europe, Spain, Italy, Greece, 0:15:10.880 --> 0:15:14.840 even France, I mean the market share of TV it 0:15:14.920 --> 0:15:17.560 is not that high. It's not that high. Italy two percent, 0:15:17.800 --> 0:15:22.800 Spain four percent, France hopefully a bit higher. But that's 0:15:22.800 --> 0:15:28.720 because fares on the infrastructure. But more important the fact 0:15:28.760 --> 0:15:31.440 that the cost of the EV is too too, too expensive. 0:15:31.760 --> 0:15:38.080 So we consider that to to to to improve the 0:15:38.120 --> 0:15:42.200 situation of the market, to to go back to a 0:15:42.320 --> 0:15:46.920 steep increase of this market, we need to bring affordable 0:15:46.960 --> 0:15:49.520 solutions and that's why we're take in some time. 0:15:50.720 --> 0:15:55.480 Okay, thank you and then hack on from a from 0:15:55.680 --> 0:15:59.160 your your electroizer. So hydrogen is a much more early 0:15:59.200 --> 0:16:03.840 stage industry, so we call it phase two technology. What 0:16:03.880 --> 0:16:06.680 are your thoughts on you know, you're at the beginning 0:16:06.680 --> 0:16:07.680 of the game. 0:16:07.480 --> 0:16:09.520 If you like, in many ways. What are your thoughts 0:16:09.600 --> 0:16:11.800 on what Europe should be focused on? 0:16:13.840 --> 0:16:19.200 Well, according to a lot of experts, I'm picking a 0:16:19.240 --> 0:16:24.760 suicide mission here and it's hard to fight against China. 0:16:25.000 --> 0:16:29.080 But as a European and probably also as an engineer, 0:16:29.240 --> 0:16:33.400 I have higher aspirations for Europe than you know, making 0:16:33.480 --> 0:16:36.840 food and cutting here you know, obviously I'm not a 0:16:36.880 --> 0:16:39.880 good customer, but I think in Europe we need to 0:16:40.400 --> 0:16:44.840 have the goal of doing more than just services. And 0:16:44.920 --> 0:16:48.280 I agree on the high value work, but that will 0:16:48.320 --> 0:16:52.360 not create enough jobs. I think we need to also, 0:16:52.400 --> 0:16:56.920 for resilience reasons, have certain core industries in Europe. And 0:16:57.040 --> 0:17:00.160 if there's one thing, you know, the past cop all 0:17:00.240 --> 0:17:03.080 of years have told us is that, you know, creating 0:17:03.120 --> 0:17:07.800 these dependencies on regimes that you cannot fully trust due 0:17:07.800 --> 0:17:13.120 to difficult geopolitical situations, we need to have some local 0:17:13.320 --> 0:17:17.320 production and content in Europe. So I'm not against important 0:17:17.400 --> 0:17:22.639 things from China, but I do think we need to try, 0:17:22.680 --> 0:17:26.639 at least in Europe to be involved in key industries 0:17:26.720 --> 0:17:30.560 going forward. We're not as disciplined, we're not as you know, 0:17:30.840 --> 0:17:35.040 strategic about it as the Chinese. They picked certain industries 0:17:35.080 --> 0:17:38.000 that they said, we've got to dominate these industries. Europe 0:17:38.000 --> 0:17:40.919 hasn't done the same, but we we still have a 0:17:41.040 --> 0:17:43.760 chance on the more difficult things. And I believe that 0:17:43.880 --> 0:17:49.840 hydrogen is much more difficult than solar. It's not only kapex, 0:17:50.040 --> 0:17:54.080 it's also efficiency. So the energy efficiency is much more 0:17:54.080 --> 0:17:56.879 important than just you know, the cost of steel and 0:17:56.920 --> 0:18:01.040 that's why we try to do it in Europe. And 0:18:01.080 --> 0:18:03.520 I think, you know, what we're asking for is sort 0:18:03.520 --> 0:18:07.600 of a level playing field where the Chinese are held 0:18:07.640 --> 0:18:10.920 to the same standards as I am as a European. 0:18:11.320 --> 0:18:14.280 So I think it's a bit fascinating that they are 0:18:14.359 --> 0:18:16.800 allowed to do things and sell it to Europe and 0:18:16.880 --> 0:18:18.520 if I did the same things, I will go to 0:18:18.560 --> 0:18:21.479 prison or see the big fine. And that's what I 0:18:21.720 --> 0:18:25.399 don't like about it, other than that's pro global trade 0:18:25.440 --> 0:18:26.679 and pro competition. 0:18:28.640 --> 0:18:33.000 Great so, and that level playing field is that? Yes, 0:18:33.480 --> 0:18:36.240 how you say it's sort of the goal of the 0:18:36.320 --> 0:18:37.640 European Commission. 0:18:37.400 --> 0:18:40.560 Yeah, absolutely, I think you know, speaking about the title 0:18:40.600 --> 0:18:43.840 of the session, should we be more protectionist? I think 0:18:43.840 --> 0:18:47.080 we all agree we shouldn't be protectionists, and I think 0:18:47.080 --> 0:18:49.879 this is not what the Commission aims at. It's all 0:18:49.920 --> 0:18:53.879 about indeed, resilience, it's all about level playing field. I 0:18:53.960 --> 0:18:56.640 heard the criticism of tariffs, but you know, tariffs they 0:18:57.000 --> 0:19:00.000 can play a role in those cases where there are 0:19:00.080 --> 0:19:03.800 unfair practices by third countries. We apply them to steal 0:19:03.880 --> 0:19:06.280 and it works rather well. We tried with solar there 0:19:06.280 --> 0:19:10.080 it didn't work. So tariffs have their advantages and droplets. 0:19:10.160 --> 0:19:13.720 We are complementing them with other tools to ensure that 0:19:13.800 --> 0:19:17.040 level playing field. We have, for example, the Foreign Subsidiest Regulation. 0:19:17.520 --> 0:19:20.560 We have the International Procurement instruments. So if EU companies 0:19:20.600 --> 0:19:23.720 do not have access to procurement in third countries, companies 0:19:23.720 --> 0:19:26.439 from those countries should not have access to procurement here. 0:19:26.640 --> 0:19:28.520 This is as simple as that, and so we will 0:19:28.560 --> 0:19:32.240 be applying that. And finally we have other instruments that 0:19:33.000 --> 0:19:35.280 try to ensure that we have a level playing field. 0:19:35.280 --> 0:19:40.320 Also across other dimensions such as climate protection or forced labor. 0:19:40.560 --> 0:19:43.800 We have the SEABUM, we have the Forced Labor regulation, 0:19:44.160 --> 0:19:46.600 and all of these tools will be increasingly applied in 0:19:46.640 --> 0:19:47.399 the coming years. 0:19:48.320 --> 0:19:50.600 Yeah, just to CLI, I think you alluded to this 0:19:50.720 --> 0:19:55.239 in terms of ownership of facilities, so sort of you know, 0:19:55.640 --> 0:20:00.400 Chinese ownership, Chinese companies setting up within Europe, so still skills, etc. 0:20:01.240 --> 0:20:03.320 What's your views on that. 0:20:04.280 --> 0:20:08.560 I mean, I think it's a classical yes, but you know, 0:20:09.400 --> 0:20:13.080 because I think for investments into existing companies, we heard 0:20:13.119 --> 0:20:16.320 that in Europe we are very good at innovative solutions 0:20:16.520 --> 0:20:18.880 and we have to be careful with Chinese companies coming here. 0:20:19.000 --> 0:20:23.720 Just to simply take over ips and shift production to China. 0:20:23.760 --> 0:20:26.600 And we actually have seen we have the so called 0:20:26.840 --> 0:20:32.800 foreign Investment Screening instrument, we had cases where such investments 0:20:32.800 --> 0:20:35.119 have been blocked. Of course, with this tool, we have 0:20:35.160 --> 0:20:37.480 to be very selective and careful because it's not always 0:20:37.520 --> 0:20:41.040 good for the companies. In terms of greenfield investments, indeed, 0:20:41.119 --> 0:20:44.680 again as we heard today, already China is the innovator currently, 0:20:44.720 --> 0:20:47.160 so we have to allow for those investments in the EU. 0:20:47.400 --> 0:20:51.280 But again we have to apply certain conditions. All of 0:20:51.320 --> 0:20:54.680 those battery manufacturing sites, for example in Hungary that are 0:20:54.720 --> 0:21:02.679 simple simply assembling cells from existing supplies located in China. 0:21:03.160 --> 0:21:07.000 This does not improve our resilience. Also, in terms of 0:21:07.040 --> 0:21:10.879 sharing intellectual property, I think we have to draw conclusions 0:21:10.880 --> 0:21:14.440 from what China was doing to our companies, so encourage 0:21:14.560 --> 0:21:18.840 Chinese companies to have joint ventures with local partners, share knowledge, 0:21:18.880 --> 0:21:20.960 share R and D and so on. 0:21:21.280 --> 0:21:24.160 So it's it's sort of leveling the pailfin I don't 0:21:24.200 --> 0:21:27.120 ownership level as well, thinking about that, okay, thank you 0:21:27.640 --> 0:21:31.400 and Herbert. In terms of there's been some discussion about 0:21:31.400 --> 0:21:33.560 what should we be done a country level versus at 0:21:33.600 --> 0:21:36.879 the European commission level. How do you how do you 0:21:36.920 --> 0:21:39.240 think about that? 0:21:39.240 --> 0:21:43.440 That's probably I'm not sure. I'm probably not the right 0:21:43.560 --> 0:21:46.760 one to answer the question. Europe is not the state. 0:21:46.600 --> 0:21:50.440 Now and and we have those aspirations that we would 0:21:50.480 --> 0:21:54.280 speak with one voice. But then we have all Chinese 0:21:54.359 --> 0:21:57.680 investing in Hungary because they are received more friendly there. 0:21:58.240 --> 0:21:59.720 So he said good, I said bad. 0:22:00.840 --> 0:22:02.920 I'm not sure because you know, at the end, I'm 0:22:02.960 --> 0:22:06.280 convinced that we need this Chinese investment with source conditions. Yeah, 0:22:06.600 --> 0:22:10.280 joint venturing, sharing technology, bring the technology over. Then we 0:22:10.320 --> 0:22:15.480 have a chance to restart like China basically try it 0:22:15.520 --> 0:22:17.720 now for thirty five years to get hold on the 0:22:17.760 --> 0:22:24.639 automotive industry. Yeah, inviting external Western investors like Volkswagen to 0:22:24.800 --> 0:22:29.639 joint venture voyks Wargen still is a minority investments in China, 0:22:30.000 --> 0:22:32.119 bringing the technology and then growing together. 0:22:32.160 --> 0:22:35.080 And we should do the same. And this is why I. 0:22:35.000 --> 0:22:39.359 Think it's positive what Hungary does, inviting China, subsidizing China, 0:22:39.400 --> 0:22:40.560 bringing the technology. 0:22:40.880 --> 0:22:43.040 And I agree at the first stage this is assembly. 0:22:43.080 --> 0:22:45.720 But it was at the first stage also assembly when 0:22:45.760 --> 0:22:48.680 we brought the cars to China. Yeah, we started this assembly, 0:22:48.800 --> 0:22:54.480 then we integrated. But I think to dream of building 0:22:54.560 --> 0:22:59.520 up a solar industry from Europe out of the most 0:22:59.520 --> 0:23:02.760 important market, which is China. Sixty percent of this is 0:23:02.800 --> 0:23:06.840 a cluster in itself. And I'm not sure whether this 0:23:07.520 --> 0:23:10.719 defense line of this is forced labor and this is 0:23:10.720 --> 0:23:12.600 not green energy we'll hold for long. 0:23:12.640 --> 0:23:14.160 I've seen most of the plants. 0:23:14.160 --> 0:23:18.000 The plants are excellent, they're highly automized. Most of the 0:23:18.040 --> 0:23:21.080 plants are running on green energy already now on solar 0:23:21.280 --> 0:23:24.639 and wind. And so this is something you just you 0:23:24.680 --> 0:23:28.320 have to be able to compete against the cluster where 0:23:28.359 --> 0:23:33.680 the smallest producer in viable conditions would produce twenty gigawards 0:23:33.680 --> 0:23:38.399 per year, and the European player would produce one, and 0:23:38.480 --> 0:23:41.920 the startups we are financing would produce one and then 0:23:42.000 --> 0:23:44.679