BRUSSELS (Reuters) – Europe risks falling behind in innovation and investment in green energy if different pieces of legislation are not harmonized and simplified, the presidents of Volvo Group and Vattenfall said.
Swedish state-owned company Vattenfall is one of the world’s leading producers of solar, wind and hydroelectricity as well as nuclear power, and on Tuesday agreed a 10-year wind power supply contract with Volvo.
Volvo Chief Executive Martin Lundstedt told Reuters after an event in Brussels that Europe could fall behind in the race for innovation because the EU’s new emissions targets and other renewable energy rules are not in line with the impact assessment.
The European car industry group said on Tuesday that the proposed Euro 7 emissions standard would result in direct costs up to 10 times higher than forecasts from the European Commission.
“We will be deploying these technologies in both North America and Europe because of the need for regional value chains,” Lundstedt said. “If we are slow, (…) the power of innovation will happen where it happens first.”
Pointing to the US Inflation Reduction Act, Lundstedt said, legislation needed to be made more harmonized at the EU level, which includes $369 billion in subsidies for electric vehicles and other clean technologies.
“What Europe should think about is the demand signal. We are not going to build factories without demand. (…) The investor clarity that (US law) is providing in its current formulation is not only for us a clear signal, but also to aftermarket customers,” Lundstedt said.
“If it (US) overtakes Europe, we will have to plan accordingly. That’s how markets work. Momentum is everything.”