Net-Zero Industry Valleys in Europe

"From today's perspective, regions in south-west Germany, Austria and northern Italy are particularly suitable. These regions have the best starting conditions for net-zero clusters in Europe," says cep economist and study author André Wolf.

In order to avoid inefficient duplicate structures, cluster planning should be closely coordinated between the Member States. The aim should be a spatial distribution according to the comparative advantages of the regions. "Additional demand stimuli are needed to scale up domestic production. In addition to the use of public procurement, private demand should also be strengthened by temporarily offsetting the additional costs of domestic products," emphasises the cep expert.

In the global race for market share in strategic net-zero technologies, the EU is facing tough competition from all sides, according to Wolf. "Amidst strategic state subsidies, unintended knowledge leakage and the threat of escalating tariff wars, Europe is struggling to agree on its own industrial policy agenda. The temptation is great to respond with its own massive subsidy programmes or protectionist measures. So far, Europe has not consistently pursued either of these paths. And that's a good thing," says the cep researcher.