Europe risks falling behind US on green investment, says business leader | Popgen Tech
Europe risks falling behind the US in attracting investment in its efforts to tackle climate change as regulatory burdens threaten to hold back growth, one of the region’s leading industrialists has warned.
ABB CEO Björn Rosengren said that while the “drive towards sustainability is quite clear”, the challenge was to “do it in a way that does not destroy Europe. . . when other people take different actions”.
“Fix the legislation, don’t over-administer things,” he told the Financial Times, echoing the fears of other executives that complicated regulations and reporting burdens could hamper business in the green transition.
Rosengren, whose Swiss company specializes in industrial automation and factory robots, urged Europe to take note of the American approach that offers “roots” to bring about change.
America’s new $369bn Inflation Reduction Act (IRA) involves incentives and tax credits for investments in green energy and technology.
The US reforms have sparked fears in Brussels that companies will invest there instead of in Europe at a time when the region is struggling with multiple headwinds, including rising energy costs and high inflation.
Companies have faced a greater reporting burden in Europe under legislation designed to reduce greenhouse gas emissions that includes the EU taxonomy, a classification system to guide private capital to low-carbon activities, Rosengren said.
“They only have roots for companies that invest in the US and transform to a more sustainable future. . . The US will get a lot of investment in the next five years because of the IRA and Europe has to do something, otherwise we have a big problem in Europe,” said Rosengren.
He noted that European leaders were aware of the need for action, with European Commission President Ursula von der Leyen reacting to the anti-competitive effects of the US legislation this month.
Rosengren, who is also a member of the European Round Table for Industry lobby group, has spent almost three years overhauling ABB, which pioneered the world’s first industrial robot in 1974. Today, the group’s activities span more than 100 countries with approximately 100,000 employees.
The company has set a target to achieve “carbon neutrality” across its operations by 2030.
The US is ABB’s biggest single market, where it makes everything from industrial electric motors to robots, followed by China. About 95 percent of all products and services the company manufactures in China are sourced locally.
Rosengren said the group’s strategy to manufacture as much as possible locally in its various regions will help ensure self-sufficiency at a time when the world is becoming “more fragmented”.
There would be “much more tension between nations . . . and we have to make sure that we are self-sufficient going forward,” he added.